Court Opinion

ID: 9668142
Source: CourtListenerOpinion
Date Created: 2023-08-24 02:03:42.769042+00
Date Added: 2024-06-11T18:15:43.279096
License: Public Domain

GONZALEZ, Justice,
dissenting.
My dissenting opinion of January 11, 1996 is withdrawn, and the following is substituted in its place.
This dispute over 247 head of cattle began in 1988. It involves W.H. “Bill” O’Brien, and others of Texas Beef Cattle Company (O’Brien), and Jeff Green, a small cattle dealer. There have been three jury trials, and Green has won every time. Two of these juries found that O’Brien had no rights to the cattle in question. In addition, the jury in *213the present case found that O’Brien tortiously interfered with Green’s rights, engaged in malicious prosecution, and acted with ill will, spite, and evil motives toward Green. The judgments in these cases have been reviewed three times by courts of appeals and twice by our Court. Green has prevailed every time as to the cattle in question. Today, the Court holds that the jury finding that O’Brien acted with actual malice towards Green is “irrelevant,” renders judgment for O’Brien on tortious interference, and renders judgment for O’Brien on Green’s malicious prosecution claim. For the reasons stated below, I would affirm the judgment of the court of appeals.

Facts

In December 1988, Jeff Green was contacted by Doug Florence, a joint-venture partner of and buyer for Texas Beef, who requested that Green ship 253 head of cattle from East Texas to the Beck Ranch, located in the Texas Panhandle, in Hartley County, Texas. Florence wanted to see if Texas Beef would purchase the cattle. Green complied, and the cattle Florence requested were segregated from other cattle when they arrived at the Beck Ranch. Green offered to sell the cattle to Texas Beef, but its managing partner, W.H. “Bill” O’Brien, declined because he felt the price was too high. At Florence’s suggestion, Green agreed to sell 247 of the 253 head of cattle to Cargill Agricultural Credit Corporation. Green informed O’Brien that he was relocating this shipment of cattle to the Caprock IV feedyard in Dalhart to close the deal. Cargill paid Green $102,853.65, and Green warranted title to the cattle.
Florence later confessed to Texas Beef that he had stolen a large number of Texas Beefs cattle that were pastured at the Beck Ranch. O’Brien informed Cargill that some or all of the cattle delivered to Caprock IV belonged to Texas Beef, even though he knew that these were the same 247 head he had chosen not to buy a week before. Car-gill responded by selling 233 head of the cattle at auction, the proceeds of which were interpleaded into the registry of the Hartley County district court.
In December 1988, Texas Beef filed suit in Hartley County against Cargill for conversion of the cattle. Two days later, Green filed suit in Liberty County against Florence, Texas Beef, and Texas Beefs partners for nonpayment on several other shipments of cattle. Green alleged that he delivered cattle to Florence but was never paid for the cattle or was paid with checks dishonored because of insufficient funds. In this suit, Green asserted that Florence was the agent of Texas Beef and its partners and that they were jointly and severally liable. Texas Beef counterclaimed, contending that it had paid for all cattle received and alleging conversion by Green of the 247 head of cattle, negligent grazing, and wrongful sequestration of other cattle. During the course of the Liberty County proceeding, O’Brien threatened to ruin Green financially by endlessly dragging him into court.
O’Brien made good on his threat by adding Green as a defendant in the Hartley County litigation. In fact, O’Brien and Texas Beef filed pleadings identical to those used in their Liberty County counterclaim. At O’Brien’s request, the Hartley County court entered a temporary injunction as to the 247 head of cattle, and Cargill cross-claimed against Green on his warranty of title.

Liberty County Suit and Appeal

Green’s Liberty County suit was tried first before a jury on theories of joint venture and partnership, agency, promissory estoppel, conversion, fraud, and exemplary damages.1 Based on favorable jury findings, the East Texas trial court rendered judgment for Green for $258,658.80 in actual damages, $6,372 in incidental damages, prejudgment interest, and $125,000 in attorney’s fees. The judgment ordered Texas Beef, O’Brien, and O’Brien’s partners to take nothing on their counterclaim. In an unpublished opinion, the court of appeals affirmed the judgment of the trial court. This Court denied Texas Beefs application for writ of error.

Hartley County Suit and Appeal

Following the Liberty County judgment, O’Brien and Texas Beef sought to re-litigate *214issues in their home county that they had lost in Liberty County. Texas Beef restated its allegations of fraud and conspiracy between Green and Florence to convert Texas Beefs cattle. It further sought to quiet title to the 247 head of cattle. As previously noted, Texas Beefs pleadings in this action were identical to those in the Liberty County suit with respect to Green. Texas Beefs attorney refused to enter an agreed plea in abatement in the Hartley County suit pending the outcome of their appeal of the Liberty County judgment and insisted that this ease be tried. The trial court denied Green’s plea in abatement, plea at bar, motion to dismiss, and motion for summary judgment. However, the Hartley County trial court ordered a separate trial on Green’s affirmative defenses of res judicata and collateral estop-pel.
If O’Brien hoped for a home-field advantage with a Texas Panhandle jury, it did not materialize. O’Brien lost again. The jury-found that Texas Beefs conspiracy claims were asserted, or could have been asserted with reasonable diligence, in the Liberty County case. The jury also found that Texas Beef was afforded a full and fair trial of its claims to ownership and possession of the cattle in question. The trial court rendered judgment for Green.
The court of appeals affirmed the Hartley County judgment in part and reversed in part. Texas Beef Cattle Co. v. Green, 860 S.W.2d 722, 725 (Tex.App.—Amarillo 1993, writ denied). It held that the first Liberty County judgment was res judicata as to the “Group B” cattle, the 247 head, but not controlling as to “Group A” cattle, the other cattle in which Green had not asserted a proprietary interest. Thus, for our purposes, Green prevailed in this appeal in all relevant respects.

Present Suit

Green filed the instant case in Liberty County ten days after the trial court signed the judgment in Hartley County. Green alleged malicious prosecution and tortious interference with contract against Texas Beef and O’Brien based on the pursuit of their Hartley County claims after the original judgment was rendered in Liberty County. The case was tried before a jury, and based on favorable jury findings, the trial court rendered judgment for Green on both claims. O’Brien appealed, and the court of appeals affirmed. 883 S.W.2d 415. It is this appeal that is before us now.

Malicious Prosecution

Today, the Court reverses a jury verdict in favor of Green because the underlying suit forming the basis of his malicious prosecution claim was still on appeal and because Green failed to show special injury. I do not agree with these holdings because they unnecessarily create new law while ignoring precedent. As discussed below, the underlying litigation has terminated sufficiently to bring a malicious prosecution claim, and Green has shown evidence of special injury.

Termination

In Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1, 6 (Tex.1986), this Court held that a trial court judgment is final for purposes of issue and claim preclusion, regardless of whether an appeal is taken, unless the appeal amounts to a trial de novo. I see no reason why this holding should not be applied to underlying judgments in malicious prosecution actions.
Moreover, the Court not only misconstrues Smithwick, it mistakenly concludes that the court of appeals’ reversal of part of the Hart-ley County suit, which was the subject of Green’s malicious prosecution ease, rendered the trial court’s termination finding erroneous. However, this conclusion ignores what the court of appeals actually did. The court of appeals affirmed the trial court as to the 247 head of cattle and reversed as to the Group A cattle only. See Texas Beef, 860 S.W.2d at 725. Green’s malicious prosecution action was based solely on the trial court’s decision as to the Group B cattle; thus, the court of appeals did not make a finding adverse to Green germane to his malicious prosecution action, and any error by the trial court on this issue was harmless.

*215
Special Injury

Before a plaintiff may recover damages for malicious prosecution, he must show that he suffered a special injury in the form of a physical interference with his person or property. Pye v. Cardwell, 110 Tex. 572, 222 S.W. 153, 153 (1920). Because I believe Green presented some evidence of special injury, I would affirm the jury finding on this issue.
The record shows that Texas Beef obtained an injunction in Hartley County against Cargill’s interest in the 247 head sold to it by Green. Although the Group B cattle were not in Green’s possession at the time the injunction was issued, the record shows that Green’s bill of sale to Cargill contained a general warranty promising that Green would defend title to the Group B cattle against any person and certifying to the buyer of the cattle and Cargill that there were no liens or security interests as to those cattle. This warranty vested in Green a continuing interest in the 247 head. The injunction sought by and granted to Texas Beef interfered with this interest. Even though the injunction was issued directly against a third party, the interference with Green’s property interest is evident and provides some evidence of special injury from which the jury could have made its finding. See Miller Surfacing Co. v. Bridgers, 269 S.W. 838, 839 (Tex.Civ.App.—Austin 1924, no writ) (concluding that injunction proceeding against third party, when party seeking injunction knows it will directly affect others, can form basis of malicious prosecution action). Thus, the jury’s finding that Green suffered special injury should be affirmed.

Malice and the Justification Defense

The Court today also reverses and renders on Green’s claim against O’Brien for tortious interference with contract. The Court holds that the trial court erred in concluding that the jury’s finding that O’Brien acted with malice negated the jury’s finding that O’Brien was privileged or justified in interfering with Green’s contract. This holding ignores clear precedent requiring good faith to be shown before the defense of justification can protect a defendant’s actions.
The elements of a cause of action for tor-tious interference with contract are; (1) the existence of a contract subject to interference; (2) a willful and intentional act of interference; (3) the act was a proximate cause of the plaintiff’s damages; and (4) actual damage or loss. Holloway v. Skinner, 898 S.W.2d 793, 795-96 (Tex.1995). If a plaintiff succeeds in proving these elements, the defendant can still prevail if he proves the affirmative defense of justification. This defense can be proved upon a showing that the interference was done “in a bona fide exercise of [the interferer’s] rights” or that the interferer “has an equal or superior right in the subject matter to that of the other party.” Murray v. Crest Constr. Inc., 900 S.W.2d 342, 344 (Tex.1995). However, this defense “only protects good faith assertions of legal rights.” Victoria Bank & Trust Co. v. Brady, 811 S.W.2d 931, 939 (Tex.1991). Thus, the justification privilege is a qualified privilege. In this case, the jury found that O’Brien acted with malice in interfering with Green’s contract. The trial court, following the clear language of Brady, held that this finding negated the jury finding that O’Brien was justified in his actions.
It is indisputable that Texas courts have required a showing of good faith before holding that a parly is justified in interfering with contractual relations. Holloway, 898 S.W.2d at 796 n. 3; Brady, 811 S.W.2d at 939-40; Maxey v. Citizens Nat’l Bank of Lubbock, 507 S.W.2d 722, 726 (Tex.1974); American Petrofina, Inc. v. PPG Indus., Inc., 679 S.W.2d 740, 758-59 (Tex.App.—Fort Worth 1984, writ dism’d); Hardin v. Majors, 246 S.W. 100, 102 (Tex.Civ.App.—Amarillo 1923, no writ). In addition, keeping good faith as part of the justification inquiry is consistent with section 773 of the Restatement (Second) of Torts and the law of a large number of other jurisdictions.2 The Court *216cites section 772 of the Restatement in support of its position; however, that section relates only to whether an action for intentional interference can be based on the honest advice of a professional adviser and is therefore irrelevant to our inquiry. On the other hand, section 773 is directly applicable. It states:
One who, by asserting in good faith a legally protected interest of his own or threatening in good faith to protect the interest by appropriate means, intentionally causes a third person not to perform an existing contract or enter into a prospective contractual relation with another does not interfere improperly with the other’s relation if the actor believes that his interest may otherwise be impaired or destroyed by the performance of the contract or transaction.
Restatement (Second) of Torts § 773 (1979). The comments to section 773 reiterate that without good faith, the defense of justification does not apply. See id. at cmt. a. The question of how to define good faith, however, remains open.
In American Petrofina, the Fort Worth Court of Appeals attempted to define good faith in the context of the justification defense to a tortious interference claim. The court stated that “such complete innocence and perfect good faith might very well be the basis of the justification which constitutes a defense to a claim for tortious interference with a contract.” American Petrofina, 679 S.W.2d at 759. This definition shows that one’s motives in interfering with a contract are germane to the defense of justification.
The Court claims that a requirement of good faith does not change the result in this case because the trial court instructed the jury that O’Brien’s assertion of his legal rights must have been done in good faith for it to find that he was justified in his actions. However, this conclusion ignores the fact that the jury also found that O’Brien acted with actual malice, which was defined in the jury instruction as ill will, spite, evil motive, or purposely injuring another. That these contradictory jury findings can possibly be reconciled defies common sense. How can one assert a colorable legal right in good faith while at the same time acting with ill will, spite, evil motives, and with an intent to injure another? It simply cannot be done.
As shown by the facts of this case, O’Brien acted in anything but good faith. As stated earlier, after Green filed the original suit in Liberty County, O’Brien threatened to ruin Green financially by dragging him into court as many times as necessary. O’Brien made good on his threat by filing suit against Green in Hartley County using pleadings identical to the ones he employed in his Liberty County counterclaim. After the Liberty County trial judge rendered a take-nothing judgment on Texas Beefs counterclaims against Green, Texas Beef and O’Brien continued their suit on the identical pleadings in Hartley County. These actions more than support the jury’s finding of actual malice on the part of O’Brien, and the trial judge correctly concluded that this finding nullifies the jury’s finding of justification.
Moreover, the Court’s reliance on our decision in Clements v. Withers, 437 S.W.2d 818 *217(Tex.1969), for the proposition that a finding of “actual malice is relevant only to the plaintiffs potential recovery of exemplary damages” in tortious interference cases is incorrect. 921 S.W.2d at 210-11 (emphasis added). In Clements, this Court merely explained that actual malice is not a necessary element of a cause of action for tortious interference with contract, but that it is a required showing when a plaintiff seeks to recover punitive damages. Clements, 437 S.W.2d at 822. Nowhere in Clements did we conclude that actual malice is irrelevant to the justification defense. In fact, in Clements this Court never even addressed the justification defense. Thus, our decision in Clements does not support the majority’s position and is wholly irrelevant to the case before us.
This case illustrates why good faith should play a part in the legal justification defense. Texas Beef had every right to submit its claims for decision — but only once. Filing identical claims after the first suit was resolved against it is, as the jury found, nothing but vexatious, malicious prosecution. Thus, because good faith is an element of the defense of justification, I would hold that the jury’s finding that O’Brien acted with actual malice negates the jury’s finding of justification.
For the above reasons, I dissent.

. The cause of action against Florence was severed from this suit.

. See, e.g., Waldinger Corp. v. CRS Group Eng’rs, Inc., 775 F.2d 781, 790 (7th Cir.1985) (applying Illinois law); Johnson v. Educational Testing Serv., 754 F.2d 20, 26 (1st Cir.) (applying California law), cert. denied, 472 U.S. 1029, 105 S.Ct. 3504, 87 L.Ed.2d 635 (1985); Northeast Airlines, Inc. v. World Airways, Inc., 262 F.Supp. 316, 320 (D.Mass.1966); Evans v. Swaim, 245 Ala. 641, 18 *216So.2d 400, 404 (1944); McReynolds v. Short, 115 Ariz. 166, 564 P.2d 389, 394 (Ct.App.1977); Conway Corp. v. Construction Eng'rs, Inc., 300 Ark. 225, 782 S.W.2d 36, 40 (1989), cert. denied, 494 U.S. 1080, 110 S.Ct. 1809, 108 L.Ed.2d 939 (1990); Masoni v. Board of Trade of San Francisco, 119 Cal.App.2d 738, 260 P.2d 205, 208 (Cal.Dist.Ct.App.1953); Westfield Dev. Co. v. Rifle Inv. Assocs., 786 P.2d 1112, 1118 (Colo.1990); Dunshee v. Standard Oil Co., 152 Iowa 618, 132 N.W. 371, 375 (1911); Dickens v. Snodgrass, Dunlap & Co., 255 Kan. 164, 872 P.2d 252, 257 (1994); National Collegiate Athletic Ass’n v. Hornung, 754 S.W.2d 855, 859-60 (Ky.1988); Beane v. McMullen, 265 Md. 585, 291 A.2d 37, 47 (1972); Tuttle v. Buck, 107 Minn. 145, 119 N.W. 946, 948 (1909); Shaw v. Burchfield, 481 So.2d 247, 255 (Miss.1985); Huskier. Griffin, 75 N.H. 345, 74 A. 595, 598-99 (1909); Leslie Blau Co. v. Alfieri, 157 N.J.Super. 173, 384 A.2d 859, 867 (Ct.App.Div.1978); Williams v. Ashcraft, 72 N.M. 120, 381 P.2d 55, 56-57 (1963); Terry v. Dairymen's League Coop. Ass’n, 2 A.D.2d 494, 157 N.Y.S.2d 71, 78-80 (N.Y.App.Div.1956); Embree Constr. Group, Inc. v. Rafcor, Inc., 330 N.C. 487, 411 S.E.2d 916, 924-25 (1992); Smith v. Ameriflora 1992, Inc., 96 Ohio App.3d 179, 644 N.E.2d 1038, 1044 (1994); Banaitis v. Mitsubishi Bank, Ltd., 129 Or.App. 371, 879 P.2d 1288, 1298-99 (1994); Ruffing v. 84 Lumber Co., 410 Pa.Super. 459, 600 A.2d 545, 549-50 (1991); West Virginia Transp. Co. v. Standard Oil Co., 50 W.Va. 611, 40 S.E. 591, 596 (1901); Wartensleben v. Willey, 415 P.2d 613, 614 (Wyo.1966).