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contracttortdamagesappealtrialwill
contractappealtrial

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RTL Distributing, Inc. v. Double S Batteries, Inc., 545 N.W.2d 587

Facts

In 1990, Van Schroeder and Marie Schulte incorporated Double S to operate a battery wholesale business after purchasing accounts from Gary Doerrfeld, who continued to operate a competing business, RTL. Doerrfeld had a non-compete clause with Double S but began servicing accounts for Double S after leaving RTL. RTL sued Double S for interference with the employment contract between RTL and Doerrfeld. The trial court found in favor of RTL, awarding damages, but Double S appealed, arguing that there was insufficient evidence of improper interference.

In 1990 Van Schroeder and Marie Schulte incorporated Double S for the purpose of operating a small battery wholesale business. The business started after Shroeder and Schulte purchased the right to service approximately sixty percent of the retail battery accounts of Gary Doerrfeld, who also operated a small battery wholesale business in the Cedar Rapids area.

Issue

Whether substantial evidence supports the trial court's judgment that Double S intentionally and improperly interfered with the contract between RTL and Doerrfeld.

Whether substantial evidence supports the trial court's judgment that Double S intentionally and improperly interfered with the contract between RTL and Doerrfeld.

Rule

A person who intentionally and improperly interferes with the performance of a contract between another and a third person commits a tort. The elements required to establish this tort include the existence of a valid contractual relationship, knowledge of the relationship, intentional and improper interference inducing or causing a breach or termination of the relationship, and resultant damage to the party whose relationship has been disrupted. The standard of proof is more demanding for at-will employment contracts, requiring evidence of improper motive.

Analysis

The court analyzed whether Double S's actions constituted improper interference with Doerrfeld's at-will employment contract with RTL. Although Double S violated accepted business practices and its own non-compete agreement, the court found no substantial evidence that Double S acted with a predominant improper motive to terminate the contract. The court emphasized that the motive behind the interference is crucial in determining whether it is actionable.

The evidence showing Double S violated accepted business practices, as well as its own agreement, may support a finding it used wrongful means to interfere. However, no evidence presented at trial indicated those wrongful means further revealed a predominant motive by Double S to terminate the contract for improper reasons.

Conclusion

The court reversed the trial court's judgment in favor of RTL, concluding that there was insufficient evidence to support a finding of intentional and improper interference by Double S.

In conclusion, we reverse the judgment of the district court. We remand to enter judgment for Double S. Costs to RTL.

Who won?

Double S Batteries, Inc. prevailed in the appeal as the court found that the evidence did not support the trial court's conclusion that Double S had intentionally and improperly interfered with the contract between RTL and Doerrfeld. The court highlighted that the findings of the trial court were not supported by substantial evidence, particularly regarding the motive behind Double S's actions.

Double S Batteries, Inc. appeals a district court judgment entered in favor of RTL Distributing, Inc., based on intentional interference with a contract. The question presented on appeal is whether substantial evidence supports the judgment. We are unable to find substantial evidence in the record and reverse.

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