Opinion ID: 405374
Heading Depth: 1
Heading Rank: 3

Heading: Carter's Cross-Appeal

Text: 41 On cross-appeal, Carter alleges the district court erred in three ways. First, Carter claims the district court erred by directing a verdict against Carter on its claim that Deere was guilty of tortious interference with contractual rights. Second, Carter claims the Court erred in instructing the jury concerning Deere's alleged breach of implied warranties of merchantability. Finally, Carter complains the district court erred in refusing to submit the issue of punitive damages to the jury. 42 At the outset, this Court determines the district court did not err in directing a verdict against Carter on the claim that Deere tortiously interfered with Carter's contractual rights. The appropriate standard to be applied is set out in the 1960 Mississippi case of Irby v. Citizen's National Bank of Meridian, 239 Miss. 64, 121 So.2d 118 (1960). In that case, the Mississippi Supreme Court commented, A prima facie case of wrongful interference with a contract is made out if it is alleged (1) that the acts were intentional and wilful; (2) that they were calculated to cause damage to the plaintiffs in their lawful business; (3) that they were done with the unlawful purpose of causing damage and loss, without right or justifiable cause on the part of the defendant (which constitutes malice); and (4) that actual damage and loss resulted. Id. 121 So.2d at 119 (emphasis added). These requirements have been interpreted as establishing that the interference complained of must be wrongful in order to be actionable and that any interference is not wrongful and actionable if undertaken by someone in the exercise of a legitimate interest or right. Martin v. Texaco, Inc., 304 F.Supp. 498, 502 (S.D.Miss.1969), citing id. 43 Reviewing all of the evidence in the light most favorable to Carter, there is not substantial evidence such that a jury would reach a conclusion that Deere engaged in wrongful interference. Deere directs the Court's attention to evidence demonstrating it had a legitimate interest in not accepting Norwel as a buyer of the Carter business. The evidence indicates that, if Norwel had assumed the area of service by Carter, Deere would have been reliant upon one dealer to cover an extremely large, contiguous area. Guy Eaves, the designated representative of Deere, 17 explained Deere's position: 44 The decision to turn Norwel down was based on a management decision of several of us who had input to that decision. My input might be a little bit different in some respects than the Sales Department's input, since I deal primarily with finance. We all determined that there were too many reasons not to extend this franchise to Norwel Equipment Company. The Sales Department's primary reason was that it would constitute to Norwel much too large of a contiguous area and that effect on sales, as a dilution of the effectiveness of Norwel, as it was constituted at the time they were trying to extend themselves into Mississippi and virtually have two-thirds of the State of Mississippi. It was my contention from a finance point of view that the extension of additional territory to Norwel could easily increase their financial burden beyond what was safe, and that I felt they were just getting their feet on the ground, they were doing an acceptably good job over in Louisiana, we were proud of that and we didn't want to put them in jeopardy. 45 A lack of justification or cause for interfering with a contractual arrangement is a necessary element of a plaintiff's prima facie case. Carter provides no evidence that indicates Deere did not have a justifiable interest and reason for refusing to accept Norwel as a buyer of the Carter business. Accordingly, the district court's granting a directed verdict against Carter on the wrongful interference cause of action was not error. See Frank Coulson, Inc.-Buick v. General Motors Corp., 488 F.2d 202, 205 (5th Cir. 1974) (interpreting Florida law); Harrison v. Prather, 435 F.2d 1168, 1173 (5th Cir. 1970); Cranford v. Shelton, 378 So.2d 652, 655 (Miss.1980); Bailey v. Richards, 236 Miss. 523, 111 So.2d 402 (1959). 46 Carter also argues on cross-appeal that the district court's instruction concerning Deere's alleged breach of implied warranties of merchantability was error. In this regard, the district court instructed the jury: 47 You are further instructed that the plaintiff is not entitled to recover any damages because of any alleged breach of any implied warranty of merchantability, since the plaintiffs failed to plead or prove that they had given the defendant notice of any such alleged breach within a reasonable time after Carter Equipment Company discovered or should have discovered the alleged breach, and since Carter Equipment Company continued, after the alleged breach had occurred, to order the machines in question. 48 Carter's argument is that the district court erred by not allowing the jury to determine whether Carter had properly notified Deere of alleged defects in the machinery and, as a result, preserve its claim that Deere breached implied warranties of merchantability. 49 Mississippi Code Annotated § 75-2-607(3), together with its corresponding comments, provides the appropriate definition of notice. (W)hether the notice requirement has been complied with is a question which is particularly within the province of the jury. Eastern Air Lines, Inc. v. McDonnell-Douglas Corp., 532 F.2d 957, 973 (5th Cir. 1976). 18 50 Finally, Carter complains the district court erred in refusing to submit the issue of punitive damages to the jury. The district court instructed the jury that as a matter of law the plaintiff (Carter) is not entitled to recover any punitive or exemplary damages against the defendant. In Mississippi, Punitive damages are not recoverable for breach of contract unless such breach is attended by intentional wrong, insult, abuse, or such gross negligence that amounts to an independent tort. Gulf Guaranty Life Insurance Co. v. Kelley, 389 So.2d 920, 922 (Miss.1980). The record does not reveal such action by Deere. 51 In addition, fiduciary duties are creatures of equity, DeTenorio v. McGowan, 510 F.2d at 103 (Godbold, J. dissenting); Parker, 153 So.2d at 276, and, in Mississippi, punitive damages are not recoverable in a court of equity. Subscribers Casualty Reciprocal Exchange v. Totaro, 370 So.2d 1342 (Miss.1979); Avant v. Whitten, 253 So.2d 394, 396 (Miss.1971). Accordingly, the district court's instruction regarding punitive damages was not error.