Smith Enterprises, Inc. v. In-Touch Phone Cards, Inc.

2004 ND 169, 685 N.W.2d 741, 2004 N.D. LEXIS 297, 2004 WL 1925366
CourtNorth Dakota Supreme Court
DecidedAugust 31, 2004
Docket20040039
StatusPublished
Cited by23 cases

This text of 2004 ND 169 (Smith Enterprises, Inc. v. In-Touch Phone Cards, Inc.) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Smith Enterprises, Inc. v. In-Touch Phone Cards, Inc., 2004 ND 169, 685 N.W.2d 741, 2004 N.D. LEXIS 297, 2004 WL 1925366 (N.D. 2004).

Opinion

KAPSNER, Justice.

[¶ 1] Smith Enterprises, Inc., doing business as D & M Phone Cards, appealed from an order denying its post-trial motions and from a judgment dismissing its complaint against In-Touch Phone Cards, Inc., and its general manager and co-owner, James Wolf, and awarding In-Touch and Wolf $9,520.23, plus interest and costs, on their counterclaim. We affirm.

I

[¶ 2] In-Touch is in the business of acquiring long distance telephone services from long distance service providers and selling prepaid phone cards for those services. In-Touch sells prepaid phone cards directly to retailers and also produces prepaid phone cards for sale to other companies, who sell those cards to retailers. Dennis Smith is the president and principal officer of Smith Enterprises, an entity that purchases prepaid phone cards from suppliers and sells those cards to retailers.

[¶ 3] In April or May 2000, Smith and Wolf met at a Fargo restaurant to discuss a potential business relationship. Wolf agreed to print some In-Touch phone cards for Smith Enterprises to determine whether there was a viable market for those phone cards. Smith and Wolf subsequently entered into an oral business relationship in which Smith Enterprises bought phone cards from In-Touch for a percentage of the face value of the card, and Smith Enterprises sold those cards to retailers. In-Touch initially developed two logo or custom phone cards for Smith Enterprises. One card, with a windmill on the faceplate, had a two cent per minute charge for long distance services plus a connection fee. The other ’card had a golfer on the faceplate carried a five cent per minute charge with no connection fee. Both cards identified “D <& M Phone Cards” on the faceplate and were available in $5, $10, and $20 denominations.

[¶ 4] In-Touch subsequently developed a “dual” barn card for Smith Enterprises. The dual card had a barn on the faceplate and offered two different rates per minute with different connection fees. The dual *743 barn card also named “D & M Phone Cards” on the faceplate and was available in $5, $10, and $20 denominations. In May 2001, In-Touch permitted Smith Enterprises to return some windmill and golfer cards from Smith Enterprises’ inventory in exchange for dual barn cards. In-Touch also developed a Stop-N-Go card and a Cenex card for Smith Enterprises to sell to those customers.

[¶ 5] In-Touch claimed Smith Enterprises had agreed to exclusively sell In-Touch’s phone cards, and in May 2001, Wolf learned Smith Enterprises was selling other brands of phone cards. Wolf testified Dennis Smith advised him that Smith Enterprises had received a better deal from another supplier and “it was just business.” Dennis Smith testified one of his salespersons informed him that In-Touch had terminated its relationship with Smith Enterprises. In May 2001, In-Touch sent Dennis Smith an undated letter advising Smith that In-Touch would continue to sell Smith Enterprises dual barn cards for the same percentage of the face value of the card with no exchanges and with all sales final and payable by cashiers check on delivery. The letter also indicated In-Touch had incurred expenses for producing 60,000 phone cards for Smith Enterprises. On June 22, 2001, Dennis Smith made a final purchase of phone cards from In-Touch under the terms of that undated letter.

[¶ 6] In-Touch later made one sale of Stop-N-Go phone cards directly to Stop-N-Go. Wolf testified he was attempting to liquidate unsold Stop-N-Go cards that had been produced for Smith Enterprises. In June or July 2001, In-Touch also began doing business directly with a Cenex promotional group, an entity that had been a customer of Smith Enterprises. According to Clark Erickson, a representative of the Cenex promotional group, Erickson contacted In-Touch after Smith Enterprises terminated its relationship with the Ce-nex promotional group.

[¶ 7] Smith Enterprises claimed it had a distributorship agreement with In-Touch, and In-Touch terminated the agreement without notice. Smith Enterprises sued In-Touch and Wolf, alleging they tortiously interfered with Smith Enterprises’ contractual rights, tortiously interfered with its economic advantage, breached the parties’ oral distribution agreement, and breached the parties’ implied contracts. In-Touch counterclaimed for production costs for cards that In-Touch had produced specifically for Smith Enterprises and that In-Touch retained in its inventory. After a bench trial, the court entered judgment dismissing Smith Enterprises’ claims against In-Touch and Wolf and awarding In-Touch and Wolf $9,520.23, plus interest and costs, on their counterclaim. The trial court denied Smith Enterprises’ post-trial motions for a new trial and to alter or amend the judgment.

II

[¶ 8] Smith Enterprises argues the trial court’s findings are clearly erroneous and the court erred in dismissing its complaint against In-Touch and Wolf.

[¶ 9] A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if no evidence exists to support the finding, or if, on the entire record, we are left with a definite and firm conviction a mistake has been made. Hogan v. Hogan, 2003 ND 105, ¶ 6, 665 N.W.2d 672. A trial court’s choice between two permissible views of the weight of the evidence is not clearly erroneous, and simply because we may have viewed the evidence differently does not entitle us to reverse the trial court. Id. (quoting Schmaltz v. Schmaltz, 1998 ND 212, ¶ 6, *744 586 N.W.2d 852). On appeal, we do not reweigh conflicts in the evidence, see Center Mut. Ins. Co. v. Thompson, 2000 ND 192, ¶ 20, 618 N.W.2d 505, and we give due regard to the opportunity of the trial court to judge the credibility of the witnesses. N.D.R.Civ.P. 52(a).

A

[¶ 10] Smith Enterprises initially claims the trial court’s adoption of In-Touch’s proposed findings of fact and conclusions of law without any changes requires reversal of the court’s decision.

[¶ 11] After trial, the judge asked both parties to prepare proposed findings of fact. The trial court adopted In-Touch’s proposed findings of fact and conclusions of law. The court did not prepare its own findings of fact, and we do not approve as a practice the court’s wholesale adoption of one party’s proposed findings of fact. See Schmidkunz v. Schmidkunz, 529 N.W.2d 857, 858-59 (N.D.1995); Warner v. Johnson, 213 N.W.2d 895, 898-99 (N.D.1973). However, when the court signed In-Touch’s proposed findings, those findings became the court’s findings, and if they adequately explain the basis of the court’s decision, they will be upheld on appeal unless clearly erroneous under N.D.R.Civ.P. 52(a). See McDowell v. McDowell, 2003 ND 174, ¶ 8, 670 N.W.2d 876; Hendrickson v. Hendrickson, 553 N.W.2d 215, 218 (N.D.1996); Schmidkunz, at 858-59.

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Bluebook (online)
2004 ND 169, 685 N.W.2d 741, 2004 N.D. LEXIS 297, 2004 WL 1925366, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-enterprises-inc-v-in-touch-phone-cards-inc-nd-2004.