Communication & Info. v. Expressions

675 So. 2d 1164, 1996 WL 252703
CourtLouisiana Court of Appeal
DecidedMay 15, 1996
Docket95-CA-1070
StatusPublished
Cited by7 cases

This text of 675 So. 2d 1164 (Communication & Info. v. Expressions) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Communication & Info. v. Expressions, 675 So. 2d 1164, 1996 WL 252703 (La. Ct. App. 1996).

Opinion

675 So.2d 1164 (1996)

COMMUNICATION AND INFORMATION RESOURCES, INC.
v.
EXPRESSIONS ACQUISITION CORPORATION.

No. 95-CA-1070.

Court of Appeal of Louisiana, Fifth Circuit.

May 15, 1996.

L. Kevin Coleman, New Orleans, William C. Credo, III, Metairie, for Appellant Communication and Information Resources, Inc.

Brent B. Barriere, Robert S. Eitel, Gerardo R. Barrios, Phelps Dunbar, New Orleans, for Appellee/Defendant Kenneth J. Kwit.

William W. Hall, William W. Hall & Associates, Metairie, for Appellees/Defendants Charles E. Garvin and Greg A. Rosenbaum.

Before GOTHARD and CANNELLA, JJ., and CUSIMANO, J. Pro Tem.

CANNELLA, Judge.

Plaintiff, Communication and Information Resources, Inc. (CIRCA), appeals from a summary judgment that dismisses defendants, Kenneth Kwit, Charles Garvin and Greg Rosenbaum, in a suit for breach of contract. We reverse and remand.

In 1992, Eric Aschaffenburg, the owner of a custom furniture manufacturing business (Expressions Custom Furniture), began to investigate obtaining a computer system to connect his manufacturing plant in Tupelo, Mississippi to his numerous franchisees in order to provide them with swift access to information about the products supplied by the factory. Nancy Mathis, the daughter of one of his long-time employees worked for CIRCA and had based her college computer thesis on Aschaffenburg's company. Because of this relationship, Aschaffenburg offered CIRCA, through its President, James Morris, the opportunity to develop the computer system. On April 3, 1992, Aschaffenburg and Morris signed a letter "agreement", provided by Morris, which set out various terms for the development of the "Custom Furniture Accounting System." A few handwritten changes were made by Aschaffenburg and initialed by him.

Shortly after this document was signed, Aschaffenburg sold the business to a new group of investors. The business collectively hereinafter referred to as Expressions is comprised of five separate companies, Expressions (Delaware), Inc., Expressions in Fabrics, Ltd., Westwood Industries, Inc. *1165 (hereinafter referred to as Westwood) (the manufacturing plant), Expressions Custom Furniture, Ltd. (erroneously cited as Expressions Custom Furniture, Inc.) and The Ad Home Agency, Inc. The new investors were Heller Equity Capital (hereinafter referred to as Heller)—60%, a partnership of Charles Garvin and Palisades Associates, Inc. (owned by Mr. and Mrs. Rosenbaum)—10% and Kenneth Kwit—30%. Heller was represented on the Board of Directors of each of the individual companies by Ned Jessen and Brian Boorstein. Rosenbaum, Garvin and Kwit were the other three members of the five member Board of Directors of all of the companies, except Westwood. Kwit and Rosenbaum comprised the Board of Directors of Westwood. For all of the companies, Kwit was the Chairman of the Board and Chief Executive Officer and Rosenbaum was the secretary. The other officers were not named in the suit. Garvin, because of his prior retail and computer expertise, was not an officer, but was a member of the Board of Directors and acted as a consultant in the matter of the development of the computer program.

A few months after the sale, in July 1992, Garvin began to express his doubts that CIRCA could timely, and even eventually, develop the computer system. He also expressed concern that the cost of the system was too high. In addition, Garvin and Kwit refused to acknowledge the letter "agreement" as a binding contract, although Morris continued to assert that it was the contract for the development of the program. Because the new owners were not happy with the arrangement that was made between Aschaffenburg and CIRCA, Garvin, Kwit and Morris corresponded, discussed the system and tried to work out Garvin's and Kwit's concerns. When it was apparent that the parties would not come to a satisfactory arrangement, Morris declared that CIRCA would perform solely according to the written letter "agreement" and that there would not be any changes to that agreement. Garvin advised the Board of Directors to terminate the relationship. Subsequently, the Board of Directors voted to do so.

CIRCA filed suit against Expressions on September 24, 1992. Defendant filed a reconventional demand. Subsequently, several Motions for Summary Judgment were filed, and all were denied. On March 15, 1994, CIRCA filed a third amended petition, adding Kwit, Garvin and Rosenbaum as defendants. CIRCA alleged that they intentionally, and without justification, interfered with the contract between Expressions and CIRCA. Various other pleadings were filed and an application for supervisory writs was applied for and denied. On August 16, 1995, all of the defendants filed a joint Motion For Summary Judgment, contending that the letter was not a valid contract, that the Directors were within the scope of their authority and were justified in voting to terminate CIRCA's "ineffectual effort" to develop the program, that they did not act for personal gain and that the actions of the Directors did not violate the "business judgment rule." On September 7, 1995, the trial judge denied the motion. Defendants filed a Motion to Reconsider and on November 9, 1995, the trial judge granted the motion for summary judgment as to Garvin, Kwit and Rosenbaum, but denied it as to the companies.

On appeal, CIRCA contends that the trial judge erred in granting the motion for summary judgment and in dismissing Garvin, Kwit and Rosenbaum.

CIRCA contends that there are numerous issues of contested fact precluding a summary judgment. It contends that it pled and proved a prima facie cause of action against appellees for intentionally inducing Expressions to breach its contract with CIRCA. CIRCA cites 9 to 5 Fashions, Inc. v. Spurney, 538 So.2d 228 (La.1989) and its progeny and refers generally to the numerous documents contained in the record.

Appellees assert that summary judgment was appropriate because CIRCA produced only allegations, but no evidence, that it satisfied the Spurney criteria for intentional interference with contract. Further, they contend that, even presuming that a contract existed, which appellees deny, and presuming that appellees induced Expressions to breach it, they can not be liable under Spurney because they acted within the scope of their *1166 authority and with justification. In addition, appellees assert that Garvin is not a corporate officer and that his actions do not fall under the Spurney exception to the long-standing immunity from suit for interference with contract.

In Spurney, 538 So.2d at 231, 232, the Louisiana Supreme Court stated:

Referring to these basic principles, we conclude that, in the light of modern empirical considerations and the objectives of delictual law, an officer of a corporation owes an obligation to a third person having a contractual relationship with the corporation to refrain from acts intentionally causing the company to breach the contract or to make performance more burdensome, difficult or impossible or of less value to the one entitled to performance, unless the officer has reasonable justification for his conduct. The officer's action is justified, and he is entitled to a privilege of immunity, if he acted within the scope of his corporate authority and in the reasonable belief that his action was for the benefit of the corporation.

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Cite This Page — Counsel Stack

Bluebook (online)
675 So. 2d 1164, 1996 WL 252703, Counsel Stack Legal Research, https://law.counselstack.com/opinion/communication-info-v-expressions-lactapp-1996.