Piedmont Cedar Homes v. Southern Originals

THE STATE OF SOUTH CAROLINA In The Court of Appeals Piedmont Cedar Homes and Sunrooms, Inc., Respondent, v. Southern Originals, L.L.C., Appellant. Appeal From Greenville County C. Victor Pyle, Jr., Circuit Court Judge Unpublished Opinion No. 2003-UP-113 Submitted June 3, 2002 - Filed February 12, 2003 REVERSED J. Thomas Falls, Jr., for appellant. T.S. Stern, Jr. and Karen Creech, for respondent. PER CURIAM: Southern Originals, L.L.C., appeals a jury verdict awarding Piedmont Cedar Homes and Sunrooms, Inc. $115,000.00 in actual damages for intentional interference with a contract, arguing the trial court erred in failing to direct a verdict or grant a JNOV. We agree and reverse. FACTS/PROCEDURAL HISTORY In 1994 Dan Rogers decided to establish a dealership for distributing home packages manufactured by Lindal Cedar Homes, Inc. and began negotiating with Lindal's southeastern regional manager, Shanna Sheppard. As a result, Rogers purchased a model home business previously operated as a Lindal dealership in Pelzer, South Carolina. On May 17, 1994, Rogers submitted a dealer-distributorship form contract to Lindal on behalf of Piedmont Cedar Homes and Sunrooms, Inc., a South Carolina corporation wholly owned by him. Inserted into the typed form agreement were the handwritten words "Area for zip code leads 293**, 296**," which both Sheppard, on behalf of Lindal, and Rogers initialed. The words appeared immediately after a provision in the agreement stating that Lindal may increase a distributor's area of primary responsibility. (1) Under the agreement, Lindal was required to refer Rogers all leads for customers within his area of primary responsibility. Zip code leads described a practice whereby Lindal would refer to a dealer names and addresses of people within a certain zip code who inquired about home packages. Although a dealer's area of primary responsibility remained the same, the zip code leads given by Lindal changed whenever the company gained or lost a dealer in the area. Lindal's president, Robert Lindal, reviewed the contract upon receipt from Rogers. Prior to signing the document, he marked through a portion of the handwritten words inserted by Rogers and wrote "zip code leads assigned may exceed AOPR and be changed from time to time." When Rogers received the contract back with Lindal's changes he contacted Sheppard. According to Rogers, "[Sheppard's] response to me was that Lindal has to have control over the territories, that don't worry, I still have 293 and 296, but this allowed them to either increase that area sometime in the future or decrease it." From June 1994 to approximately July 1996, Piedmont received leads from zip code areas beginning with 293 and 296. In 1996, Sheppard resigned from Lindal and negotiated with the company to begin operating her own distributorship. As a result, in April she organized a business known as Southern Originals, and subsequently entered into a dealer-distributorship agreement with Lindal dated July 8, 1996. The agreement assigned Southern Originals an area of primary responsibility within a ten-mile radius of its proposed business location in Travelers Rest, South Carolina, in territory previously marketed by Rogers though it was not part of his area of primary responsibility. In July 1996, Lindal began forwarding inquiries from prospective customers within zip code areas beginning with 293 and 296 to either Piedmont or Southern Originals. In April 1999, Piedmont brought this action against Southern Originals alleging an intentional interference with contract. Following a trial held May 30-31, 2000, a jury awarded Piedmont $115,000 in actual damages. This appeal followed. LAW/ANALYSIS Standard of Review In deciding a motion for directed verdict or judgment notwithstanding the verdict, the trial court "is required to view the evidence and the inferences that reasonably can be drawn therefrom in the light most favorable to the party opposing the motions." South Carolina Prop. & Cas. Guar. Ass'n v. Yensen, 345 S.C. 512, 521, 548 S.E.2d 880, 884-5 (Ct. App. 2001). On the other hand, the court must deny the motion "when the evidence yields more than one inference or its inference is in doubt." Id. at 521, 548 S.E.2d at 885. This Court will only reverse the trial court's decision when there is no evidence to support its ruling. Creech v. S.C. Wildlife & Marine Res. Dep't, 328 S.C. 24, 491 S.E.2d 571 (1997). Discussion Southern Originals argues the trial court erred in denying its motions for directed verdict and judgment notwithstanding the verdict, in part because there was no breach in the contract between Piedmont and Lindal. We agree. The tort of intentional interference with a contractual relationship requires a plaintiff to prove the existence of a contract and the wrongdoer's knowledge thereof, the intentional procurement of its breach without justification, and resulting damages. See Kinard v. Crosby, 315 S.C. 237, 433 S.E.2d 835 (1993); Camp v. Springs Mortgage Co., 310 S.C. 514, 426 S.E.2d 304 (1992). The agreement between Rogers and Lindal was comprised of a form distributorship contract created by Lindal which expressly stated: "The manufacturer may also increase the Distributor's Area of Primary Responsibility, and may increase the quota for deliveries." Next to this, Rogers had added the language concerning "area of zip codes leads 293** and 296**." Although Rogers and Sheppard initialed the change, it was not accepted by Robert Lindal, who revised the language upon receipt to "zip codes leads assigned may exceed AOPR and be changed from time to time." Piedmont's contract with Lindal provided: "The Dealer's area of primary responsibility under this Agreement shall be a ten (10) mile radius of the Lindal home or store or office described in Section 1." Section 1 indicates Rogers' demo home was located at 115 White Plains Road in Pelzer, South Carolina. It is undisputed Piedmont received all customer leads within a ten-mile radius of this location and that Southern Originals' demo home was not located within Piedmont's area of primary responsibility. Moreover, nothing in the contract indicates the zip codes were in any way related to or part of Rogers' area of primary responsibility. And, as Rogers admitted at trial, he understood Lindal's revision of the contract permitted the company to increase or decrease his AOPR in the future. "In construing a contract, the primary concern of the court is to ascertain and give effect to the intent of the parties." Worley v. Yarborough Ford, Inc., 317 S.C. 206, 209, 452 S.E.2d 622, 624 (Ct. App. 1994). In so doing, the court first looks to the language of the contract itself. Id. Then, "[i]f the language is clear and unambiguous, the language alone determines the contract's force and effect." Sphere Drake Ins. Co. v. Litchfield, 313 S.C. 471, 473, 438 S.E.2d 275, 277 (Ct. App. 1993). When a contract is facially unambiguous, "it must be construed according to the terms the parties have used, to be taken and understood in their plain, ordinary, and popular sense." Id. The final contract between Rogers and Lindal unambiguously permitted Lindal to decrease the area of Rogers' zip code leads. Although Southern Originals began getting some leads Piedmont had previously been receiving, Lindal had the right, by the express terms of the contract, to change the zip code areas assigned. Hence, because Rogers received all he was entitled to under the contract--everything within his area of primary responsibility--no breach occurred. As the existence of a breach is prerequisite to recovery under the tort, the trial court erred in sending the case to the jury. We note that, in an effort to prove contractual ambiguity at trial, Piedmont introduced testimony concerning the terms of the contract and intent of the parties despite the fact the contract was unambiguous. This was error. The parol evidence rule prohibits admitting evidence that contradicts or adds to the terms of an unambiguous contract. In re Estate of Holden, 343 S.C. 267, 275-76, 539 S.E.2d 703, 708 (2000) ("Where a written instrument is unambiguous, parol evidence is inadmissible to ascertain the true intent and meaning of the parties."); Crafton v. Brown, 346 S.C. 347, 351, 550 S.E.2d 904, 906 (Ct. App. 2001) ("The parol evidence rule prevents the introduction of extrinsic evidence of agreements or understandings contemporaneous with or prior to execution of a written instrument when the extrinsic evidence is to be used to contradict, vary, or explain the written instrument.") (footnote omitted). This is true even though Rogers offered the testimony without objection. Holden, 343 S.C. at 276, 539 S.E.2d at 708 ("The parol evidence rule is a rule of substantive law, not a rule of evidence. Accordingly, admission of evidence violating the parol evidence rule is legally incompetent and should not be considered even if no objection is made at trial."); Penton v. J.F. Cleckley & Co., 326 S.C. 275, 282 n.4, 486 S.E.2d 742, 746 n.4 (1997) (same). REVERSED. CURETON, STILWELL, and SHULER, JJ., concur. 1. The agreement defined "area of primary responsibility" as "a ten (10) mile radius of the Lindal home or store or office."