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Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

JOHN A. HENRY & CO., LTD., ) 

) 

Plaintiff-Appellee, ) 

) 

v. ) 

) 

FI LED 

Uaited Stotes Cautt of Appeals 

Tenth Circuit 

AUG 12 1991 

ROBERT L. HOECKER 

Clerk 

No. 90-6110 

T. G. & Y. STORES co.; McCRORY ) 

CORPORATION; STERIK co. I ) 

and 

JOHN A. 

) 

Defendants-Appellants, ) 

) 

) 

) 

HENRY, III, an individual, ) 

) 

Counterclaim-Defendant. ) 

Appeal from the United States District Court 

for the Western District of Oklahoma 

(D.C. No. CIV-89-344-P) 

John T. Edwards (Randall A. Breshears, also of Monnet, Hayes, 

Bullis, Thompson & Edwards, with him on the briefs), Oklahoma 

City, Oklahoma, for defendants-appellants. 

Anton J. Rupert (Marks. Grossman and Robert E. Bacharach, also of 

Crowe & Dunlevy, with him on the brief), Oklahoma City, Oklahoma, 

for plaintiff-appellee. 

Before LOGAN, BRIGHT,* and BALDOCK, Circuit Judges. 

LOGAN, Circuit Judge. 

* The Honorable Myron H. Bright, United States Circuit Judge, 

United States Court of Appeals for the Eighth Circuit, sitting by 

designation. 

Appellate Case: 90-6110 Document: 01019695084 Date Filed: 08/12/1991 Page: 1 
Defendants, T. G. & Y. Stores Co., McCrory Corporation, and 

Sterik Co., appeal a jury verdict awarding actual and punitive 

damages to John A. Henry & Co., Ltd. (Henry) for breach of 

contract and wrongful interference with contract. On appeal, 

defendants contend that the district court erred by 

(1) submitting Henry's contract claim to the jury; (2) failing to 

grant a directed verdict or judgment n.o.v. on Henry's wrongful 

interference with contract claim; (3) permitting an award of 

punitive damages in excess of actual damages; and (4) giving the 

jury copies of the instructions the day before their 

deliberations. We affirm. 

I 

This case arose out of a 1979 lease agreement for a 

T. G. & Y. store at a shopping center owned by Henry in Yukon, 

Oklahoma. Henry promised to build, at its expense, a 60,000 

square-foot building in exchange for T. G. & Y.'s promise to enter 

into a twenty-year lease. To enable Henry to obtain funding for 

the building's construction, the lease prohibited T. G. & Y. from 

halting rental payments, even in the event of a landlord default, 

for as long as Henry owned the property. By pledging the lease as 

security, Henry was able to borrow approximately $1.5 million to 

construct the building. 

T. G. & Y. first occupied the building in 1981 and began 

making the required rental payments. In 1986, McCrory Corporation 

acquired T. G. & Y., including all of its stores throughout the 

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Appellate Case: 90-6110 Document: 01019695084 Date Filed: 08/12/1991 Page: 2 
United States. 1 As part of a change in business philosophy and to 

strengthen itself financially, McCrory planned to close all of the 

T. G. & Y. large family stores, including the one on the Henry 

lease, and focus only on smaller store operations. McCrory 

closed 202 stores but was able to sublease or assign only 46 of 

the stores' leases. McCrory then employed Sterik Company to 

address the remaining lease obligations. 

Sterik attempted to terminate the majority of the remaining 

leases by withholding rent and offering lump-sum payments in 

exchange for lease cancellations. McCrory sent Henry a closure 

notice and offered a cash payment to cancel the lease. The 

parties failed to reach an agreement, however, and in March 1987, 

McCrory withheld its $14,250 monthly rental payment. McCrory then 

wrote a letter to Henry which contained several false allegations 

of maintenance defects, 2 sending a copy of this letter to 

Southland Insurance Company (Southland), Henry's lender. When 

Southland received this letter it insisted that Henry correct any 

existing defects. 

McCrory again withheld the rent for the month of April 1987. 

Henry was forced to request relief from Southland because it was 

unable to pay the mortgage without McCrory's rental payments. At 

McCrory's request and in exchange for payment of the March and 

1 T. G. & Y. has apparently been dissolved and its assets are now 

a part of McCrory Corporation. It is conceded that "their 

interests are identical." Appellants' Opening Brief at 2 n.1. 

Hereafter in this opinion we use McCrory for T. G. &Y. when 

referencing any correspondence or actions after the acquisition. 

2 These allegations, even if true, did not excuse 

paying rent under the lease. 

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McCrory from 

Appellate Case: 90-6110 Document: 01019695084 Date Filed: 08/12/1991 Page: 3 
April rent, Henry met with a consultant paid by a corporation set 

up by Sterik to discuss cancellation of the lease, but again no 

agreement was reached. Thereafter, McCrory withheld rent from 

July 1987 to March 1988. Henry avoided foreclosure during this 

period by restructuring its loan. 

Because of Henry's continued persistence in holding McCrory 

to the terms of the lease, McCrory resumed rental payments and in 

March 1988, paid all back rent due. 3 Thereafter, Henry filed the 

instant action, alleging breach of the lease agreement and 

wrongful interference with Henry's mortgage contract. At the 

conclusion of trial the jury found for Henry on both claims, 

awarding $100,000 actual damages and $2,000,000 punitive damages 

in connection with the interference with contract claim. 

II 

Defendants contend that Henry's contract claim should not 

have been submitted to the jury because Henry presented no 

competent evidence of damages. Defendants argue that the evidence 

that their actions diminished the value of the property is too 

speculative absent proof that Henry attempted to sell the 

property, and that the terms of the lease do not allow an award of 

interest on the withheld rental payments. 

In Oklahoma, the measure of damages from a breach of contract 

"is the amount which will compensate the party aggrieved for all 

the detriment proximately caused thereby. " Okla. Stat. Ann. 

tit. 23, § 21. The amount, however, must be ascertainable "in 

3 Through its employment of Sterik, however, McCrory was able to 

reduce its other lease liabilities by over $41.5 million. 

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Appellate Case: 90-6110 Document: 01019695084 Date Filed: 08/12/1991 Page: 4 
some manner other than by mere speculation, conjecture or surmise, 

and by reference to some definite standard." Great Western Motor 

Lines v. Cozard, 417 P.2d 575, 578 (Okla. 1966) (citations 

omitted); see also Okla. Stat. Ann. tit. 23, § 21 ("No damages can 

be recovered for a breach of contract, which are not clearly 

ascertainable in both their nature and origin."). 

In the instant case, Henry's evidence of diminished value was 

sufficiently certain in nature and origin to warrant submission of 

Henry's contract claim to the jury. James Hoyt, an experienced 

real estate appraiser, testified that the value of the property 

was diminished by approximately $223,000 to $280,000 because 

McCrory's history as a defaulting, recalcitrant tenant would make 

the property much more difficult to sell. Although Hoyt's damage 

calculations were not based on actual efforts to sell the property 

in the market place, such direct and specific evidence is not 

required. "[W]hen a breach of a contractual obligation with 

resulting damages has once been established, the mere uncertainty 

as to the exact amount of damages will not preclude the right of 

recovery. It will be sufficient if the evidence shows the extent 

of the damages as a matter of just and reasonable inference." 

Larrance Tank Corp. v. Burrough, 476 P.2d 346, 350 (Okla. 1970) 

(citations omitted). After examining the record, we are convinced 

that the extent of damages can be reasonably inferred from Henry's 

evidence on diminution in value. See Hornwood v. Smith's Food 

King No. 1, 772 P.2d 1284, 1286 (Nev. 1989) (damages inferred from 

diminution in value of shopping center when anchor tenant left). 

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Appellate Case: 90-6110 Document: 01019695084 Date Filed: 08/12/1991 Page: 5 
Henry's claim for interest on the withheld rent was also 

proper in this case. Nothing in the lease agreement limits 

recovery of interest, and Oklahoma law allows an aggrieved party 

in a breach of contract case to have interest from the day its 

right to recover becomes vested, provided the amount recoverable 

is fixed. See Metropolitan Elec. Co. v. Mel-Jae Constr. Co., 576 

P.2d 323, 326 (Okla. Ct. App. 1978); see also Okla. Stat. Ann. 

tit. 23, § 22 ("The detriment caused by the breach of an 

obligation to pay money only is deemed to be the amount due by the 

terms of the obligation, with interest thereon."). In this case, 

Henry's right to recover interest vested each month McCrory failed 

to pay the rent specified in the lease. Therefore, the district 

court did not err in permitting Henry to present evidence of lost 

interest. 

III 

Defendants next contend that the district court erred in 

failing to grant their motions for directed verdict and for 

judgment n.o.v. on Henry's wrongful interference with contract 

claim. Defendants argue that Henry's tort claim, as presented, is 

not based on a viable theory of recovery in Oklahoma. 

That argument centers around § 766A of the Restatement 

(Second) of Torts, which states: 

"One who intentionally and improperly interferes with 

the performance of a contract (except a contract to 

marry) between another and a third person, by preventing 

the other from performing the contract or causing his 

performance to be more expensive and burdensome, is 

subject to liability to the other for the pecuniary loss 

resulting to him." 

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Defendants contend that Henry should not have been allowed to 

proceed under § 766A because no Oklahoma court has adopted this 

theory of recovery. 

We are satisfied that a claim under § 766A is actionable in 

Oklahoma. Oklahoma has recognized a cause of action for malicious 

or intentional interference with contractual relationship. See 

Overbeck v. Quaker Life Ins. Co., 757 P.2d 846, 848 & n.2 (Okla. 

Ct. App. 1984). Although no Oklahoma court has ruled on the 

viability of a claim under § 766A, intentional interference with 

another's performance of its own contract has been "consistently 

recognized" in other states as an actionable form of the more 

general tort of interference with a contractual relationship. 

Restatement (Second) of Torts, § 766A comment b. Moreover, under 

§ 766A, the interference must be both intentional and improper, 

id. comment e, which is consistent with Oklahoma's requirement to 

show tortious interference with contractual relations, ~ 

Overbeck, 757 P.2d at 848. Accordingly, the district court did 

not err in permitting Henry to proceed under § 766A. 

Defendants contend that even if Oklahoma would recognize a 

cause of action under § 766A, Henry failed to prove that he was 

damaged by the tort. Defendants argue that the damage evidence 

presented at trial supported, if at all, only Henry's breach of 

contract claim; it did not show that their contacts with Southland 

resulted in any increased cost or reduction in benefits. 

We find sufficient evidence in the record of damages to 

warrant submitting Henry's tort claim to the jury. Through 

Sterik, McCrory undertook a precisely conceived plan to eliminate 

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Appellate Case: 90-6110 Document: 01019695084 Date Filed: 08/12/1991 Page: 7 
leases by exerting financial pressure on the landlords. In 

Henry's case, McCrory withheld rent and reported false claims of 

default to Henry's lender in an apparent effort to jeopardize 

Henry's standing with Southland and to force Henry to capitulate. 

As discussed above, Henry presented evidence at trial that the 

value of the leased property diminished as a result of these 

actions. Based on this evidence and defendants' overall plan, a 

jury could find that they intentionally interfered with Henry's 

mortgage contract with Southland and that some of the resulting 

damage was attributable to this interference. The district court 

did not err in denying defendants' motions for directed verdict 

and judgment n.o.v. motion on the intentional interference with 

contract claim. 

For the same reason, we reject defendants' argument that the 

district court improperly attributed evidence of damages for the 

breach of contract claim as evidence of damages for Henry's tort 

claim for determining the availability of punitive damages. Henry 

asserted two claims--breach of contract and intentional 

interference with contract. Henry, however, sought only one 

remedy--damages. Henry's damage evidence, which was characterized 

as diminution in value, was properly offered as proof of damages 

for both claims. See Barnes v. McKinney, 589 P.2d 698, 700-01 

(Okla. Ct. App. 1978). Accordingly, an instruction on punitive 

damages was warranted in this case. See Silkwood v. Kerr-McGee 

Corp., 769 F.2d 1451, 1460-61 (10th Cir. 1985), cert. denied, 476 

U.S. 1104 (1986). 

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IV 

Defendants argue that the district court should have limited 

the amount of punitive damages to the actual damages suffered by 

Henry. They contend that the court misapplied Oklahoma's punitive 

damages statute when it found that defendants' conduct satisfied 

the statutory requirement for lifting the "cap" on punitive 

damages. 

Under Oklahoma law, punitive damages are available when a 

defendant has been found "guilty of conduct evincing a wanton or 

reckless disregard for the rights of another, oppression, fraud or 

malice, actual or presumed." Okla. Stat. Ann. tit 23, § 9. The 

amount of punitve damages that may be awarded, however, is limited 

to an amount not exceeding actual damages awarded unless: 

"at the conclusion of the evidence and prior to the 

submission of the case to the jury, the court shall 

find, on the record and out of the presence of the jury, 

that there is clear and convincing evidence that the 

defendant is guilty of conduct evincing a wanton or 

reckless disregard for the rights of another, oppression 

fraud or malice, actual or presumed." 

Id. Defendants argue that the district court's findings related 

only to the availability of punitive damages and not to whether 

there was sufficient evidence to justify an award of damages in 

excess of actual damages. 

We reject this argument also. To give a punitive damages 

instruction not limited to the cap, the court must find clear and 

convincing evidence of the defendant's "wanton or reckless 

disregard for the rights of another . . . II Id. The court does 

not have to find that punitive damages in excess of actual damages 

should be awarded, but only that the evidence is such that a jury 

award in excess of the cap can be upheld. It is then for the jury 

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to decide whether to exercise the option of awarding punitive 

damages in excess of actual damages. Id. 

In the instant case, the court found that defendants' 

business strategy and the manner in which it was carried out 

evinced a wanton and reckless disregard to Henry's rights and that 

the jury could therefore consider Henry's request for punitive 

damages in excess of any actual damages awarded. We conclude that 

these findings satisfy the statutory requirement. 

Defendants next contend that the court erred in limiting the 

punitive damages to $2,000,000 on the verdict form, arguing that 

this improperly suggested to the jury that it should award such an 

amount if punitive damages were justified. We disagree. 

The inclusion of the $2,000,000 limitation on the verdict 

form did not improperly invade the jury's role of determining damages. The verdict form directed the jury to specify on a blank 

line the amount of punitive damages, provided that it not "exceed 

$2 million." IR. tab 218. We see no error or improper 

suggestion in this form. If any prejudice occurred, it was to 

Henry because the jury was not permitted to exceed $2,000,000. 

v 

Finally, defendants argue that the district court erred in 

giving the jury copies of the instructions the day before their 

deliberations; they assert that predeliberation access to the 

instructions was improper because it provided individual jurors 

with the opportunity to seek other sources and deliberate on the 

facts independently and outside of the trial setting. 

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( 

The argument is unpersuasive. It is established that the 

district court may give the jury copies of the instructions before 

deliberations begin. See United States v. Standard Oil Co., 316 

F.2d 884, 896 (7th Cir. 1963) (trial judge has wide discretion to 

submit written instructions to jury). Defendants did not object 

at the time of the court's decision, see Fed. R. Civ. P. 51, and 

have not identified any juror misconduct in connection with the 

district court's order. Under these circumstances, we hold the 

district court did not err in giving the predeliberation 

instructions. 

AFFIRMED. 

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