Technical Control Systems, Inc. v. Green

809 So. 2d 1204, 2002 WL 304379
CourtLouisiana Court of Appeal
DecidedFebruary 27, 2002
Docket01-0955
StatusPublished
Cited by10 cases

This text of 809 So. 2d 1204 (Technical Control Systems, Inc. v. Green) 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
Technical Control Systems, Inc. v. Green, 809 So. 2d 1204, 2002 WL 304379 (La. Ct. App. 2002).

Opinion

809 So.2d 1204 (2002)

TECHNICAL CONTROL SYSTEMS, INC.
v.
Vernon L. GREEN, Paul Aymond, Christopher Broussard and Mary Broussard.

No. 01-0955.

Court of Appeal of Louisiana, Third Circuit.

February 27, 2002.

*1205 Randal Paul McCann, Borne, Wilkes & Brady, Lafayette, LA, Counsel for Plaintiff/Appellant Technical Control Systems, Inc.

William Edward Lewis, Halpern, Danner, et al., Randy George McKee, New Orleans, LA, Counsel for Defendant/Appellee Vernon L. Green, Paul Aymond.

Kyle Patrick Polozola, Jamie D. Rhymes, George Hardy Robinson, Liskow & Lewis, Lafayette, LA, Counsel for Defendant/Appellee KF Industries, Inc.

Court composed of JOHN D. SAUNDERS, OSWALD A. DECUIR, and GLENN B. GREMILLION, Judges.

GLENN B. GREMILLION, Judge.

In this case, the plaintiff, Technical Control Systems, Inc., appeals the judgment of the trial court in favor of the defendant, KF Industries, Inc., granting its motion for summary judgment regarding TCS's claims for tortious interference with contract, conspiracy to tortiously interfere with its contract, and failure to perform in good faith.

FACTUAL AND PROCEDURAL BACKGROUND

TCS is involved in the business of developing and selling compact ball valves used in the oil and gas industry. It originally *1206 had an exclusive contract with KF to purchase the "N" series valves it used in its business. TCS filed suit in May 1997, against Vernon Green, Paul Aymond, Christopher Broussard, and Mary Broussard (all former employees of TCS) alleging that the defendants breached their fiduciary duty of loyalty and duty to act in good faith. It further alleged that Green tortiously interfered with its contract with KF.

In September 1999, TCS added KF as a defendant alleging that it tortiously interfered with the contract existing between them and conspired with Green to tortiously interfere with its contract because KF knew that Green was forming a competitive company, it conducted business with Green regarding his new company, Compact Manifolds, Inc., while he was still employed by TCS, and it gave certain preferences to Compact in detriment to TCS. After a hearing in February 2001, the trial court entered judgment in favor of KF finding that no genuine issue of material fact existed as to TCS's claim for tortious interference with contractual relations and civil conspiracy to commit tortious interference with contractual relations. This appeal followed.

SUMMARY JUDGMENT

On appeal, summary judgments are reviewed de novo. Magnon v. Collins, 98-2822 (La.7/7/99), 739 So.2d 191. Thus, the appellate court asks the same questions the trial court asks to determine whether summary judgment is appropriate. Id. This inquiry seeks to determine whether any genuine issues of material fact exist and whether the movant is entitled to judgment as a matter of law. La.Code Civ.P. art. 966(B)(C). This means that judgment should be rendered in favor of the movant if the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits show a lack of factual support for an essential element of the opposing party's claim. If the opposing party cannot produce any evidence to suggest that it will be able to meet its evidentiary burden at trial, no genuine issues of material fact exist. Id.

Material facts are those that determine the outcome of the legal dispute. Soileau v. D & J Tire, Inc., 97-318 (La.App. 3 Cir. 10/8/97), 702 So.2d 818, writ denied, 97-2737 (La.1/16/98), 706 So.2d 979. In deciding whether certain facts are material to an action, we look to the applicable substantive law. Id. Finally, summary judgment procedure is favored and designed to secure the just, speedy, and inexpensive determination of every action. La.Code Civ.P. art. 966(A)(2).

ISSUES

TCS assigns as error:

1. The trial court incorrectly concluded that a cause of action did not exist against a corporate entity defendant for the actions of tortiously interfering with a contract.
2. The trial court incorrectly concluded that a cause of action did not exist against a corporate entity defendant for conspiracy to aid and abet another to tortiously interfere with a contract.
3. The trial court incorrectly concluded that TCS did not put forth evidence of genuine issues of material fact on the claims of unfair trade practices, fraud, and bad faith breach of contract such that KF should have been maintained in the lawsuit.

TORTIOUS INTERFERENCE WITH CONTRACT

The issue before us is whether a cause of action can be maintained against a corporate *1207 entity defendant for tortious interference with contract. In 9 to 5 Fashions, Inc. v. Spurney, 538 So.2d 228 (La.1989), the supreme court, for the first time, allowed a cause of action against a corporate officer to be maintained for tortious interference with contract. TCS now urges that we extend this holding to allow a cause of action against a corporate entity defendant. We decline to do so and affirm the trial court's grant of summary judgment in favor of KF.

TCS urges that the trial court's interpretation of the holding in Spurney was too narrow because the supreme court did not actually state that there cannot be a cause of action against a corporate entity defendant. In Spurney, 9 to 5 contracted with Spurney's employer (LWE) to supply uniforms to its employees. However, LWE did not pay what it owed under the contract because it had filed for bankruptcy. 9 to 5 thereafter sued Spurney, the CEO of LWE, and his insurer, alleging that he intentionally and negligently caused the performance of the uniform supply contract to be more burdensome and costly. It was alleged that Spurney's delays in appointing a uniform coordinator caused 9 to 5 to order more material than was actually required, which resulted in a loss of profits on its contract. Both the trial and appellate court found Spurney personally liable to 9 to 5.

The supreme court concluded that:

[A]n 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.
Thus, an officer is privileged to induce the corporation to violate a contractual relation, or make its performance more burdensome, provided that the officer does not exceed the scope of his authority or knowingly commit acts that are adverse to the interests of his corporation. Where officers knowingly and intentionally act against the best interest of the corporation or outside the scope of their authority, they can be held liable by the party whose contract right has been damaged.

Id. at 231.

The supreme court went on to say, "In the present case we recognize, as set forth particularly herein, only a corporate officer's duty to refrain from intentional and unjustified interference with the contractual relation between his employer and a third person." Id. at 234 (emphasis added). The elements of this cause of action are:

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Cite This Page — Counsel Stack

Bluebook (online)
809 So. 2d 1204, 2002 WL 304379, Counsel Stack Legal Research, https://law.counselstack.com/opinion/technical-control-systems-inc-v-green-lactapp-2002.