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Unpublished Opinion No. 2003-UP-113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."