Empire Trucking Co. v. Reading Anthracite Coal Co.
71 A.3d 923
| Pa. Super. Ct. | 2013Background
- Appellant Reading Anthracite Company appealed a March 7, 2012 judgment following a jury verdict against it for breach of contract with Empire Trucking and intentional interference with Empire’s contractual relationships.
- The jury awarded Empire $271,000 in compensatory damages and $1.5 million in punitive damages; Appellant also faced a verdict denying judgment notwithstanding the verdict (JNOV) and denying post-trial relief.
- Empire and its subcontractors operated under agreements with Empire that leased trucks to Empire and placed their drivers under Empire’s control; the subs were paid a base rate, with Empire retaining 8% and remitting base rates to subs.
- Diesel fuel costs spiked in 2000, leading to a fuel surcharge schedule used by both Empire and the subs; the surcharge was applied to processed coal loads and later extended to raw coal loads.
- Beginning in mid-2008, Appellant stopped paying Empire and its subs, while continuing to bill customers for surcharges; Appellant then encouraged subs to haul directly for Appellant without paying surcharges, effectively coordinating a scheme to reduce Empire’s payments.
- Empire’s damages were calculated based on lost payments due to Appellant’s withholding of funds and interference with subcontractors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court abused its discretion sending the tortious interference claim to the jury | Empire argues elements satisfied; jury could find interference | Appellant alleges gist of the action doctrine bars the claim | Waived; gist of the action doctrine not preserved |
| Whether Empire proved all elements of tortious interference with a contract | Empire showed a contract existed and Appellant interfered to harm Empire | Appellant claims no improper interference or intent | Evidence supported jury finding of tortious interference |
| Whether punitive damages were properly awarded based on outrageous conduct | Empire contends Appellant’s deceit and withholding payments were outrageous | Appellant argues conduct was just business interest protection | No abuse; punitive damages upheld as not shocking to conscience |
| Whether the punitive damages award was constitutionally and factually proportionate to compensatory damages | Ratio supported by substantial wealth and conduct | Ratio excessive relative to compensatory damages | Ratio of 5.6 to 1 not punitive-violative; not grossly disproportionate |
Key Cases Cited
- Walnut St. Assoc., Inc. v. Brokerage Concepts, Inc., 982 A.2d 94 (Pa.Super.2009) (elements of tortious interference include existence of contract and improper interference)
- Richette v. Solomon, 410 Pa. 6 (Pa.1963) (logic and sequence justify jury finding of deceptive tactics)
- Hollock v. Erie Ins. Exch., 842 A.2d 409 (Pa.Super.2004) (ten-to-one punitive damages ratio approved in appropriate circumstances)
- Feld v. Merriam, 506 Pa. 383 (Pa.1984) (punitive damages require outrageous conduct and willful/reckless disregard)
- Chambers v. Montgomery, 192 A.2d 355 (Pa.1963) (restatement on outrageous conduct and punitive standards)
- Sprague v. Walter, 656 A.2d 890 (Pa.1995) (standards for reviewing punitive damages on appeal)