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Jerry Janvrin v. Continental Resources, Inc., 17-2661 (2019)

Court: Court of Appeals for the Eighth Circuit Number: 17-2661 Visitors: 19
Filed: Aug. 20, 2019
Latest Update: Mar. 03, 2020
Summary: United States Court of Appeals For the Eighth Circuit _ No. 17-2661 _ Jerry Janvrin, doing business as J&J Trucking lllllllllllllllllllllPlaintiff - Appellee v. Continental Resources, Inc., an Oklahoma corporation lllllllllllllllllllllDefendant - Appellant _ Appeal from United States District Court for the District of South Dakota - Sioux Falls _ Submitted: June 13, 2018 Filed: August 20, 2019 _ Before WOLLMAN, ARNOLD, and KELLY, Circuit Judges. _ WOLLMAN, Circuit Judge. A jury determined that C
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                 United States Court of Appeals
                            For the Eighth Circuit
                        ___________________________

                                No. 17-2661
                        ___________________________

                  Jerry Janvrin, doing business as J&J Trucking

                        lllllllllllllllllllllPlaintiff - Appellee

                                           v.

              Continental Resources, Inc., an Oklahoma corporation

                       lllllllllllllllllllllDefendant - Appellant
                                       ____________

                     Appeal from United States District Court
                   for the District of South Dakota - Sioux Falls
                                   ____________

                             Submitted: June 13, 2018
                              Filed: August 20, 2019
                                  ____________

Before WOLLMAN, ARNOLD, and KELLY, Circuit Judges.
                         ____________

WOLLMAN, Circuit Judge.

       A jury determined that Continental Resources, Inc. (Continental), had
tortiously interfered with the business relationship between Jerry Janvrin and CTAP,
LLC (CTAP). Continental appeals, challenging the sufficiency of evidence at trial,
the amount of damages awarded, and the district court’s1 instruction to the jury
regarding improper interference. We affirm.


                                          I.


       At the time of trial in January 2017, Jerry Janvrin was a hired hand and
overseer of unit operations at the Jim Clarkson ranch some seventeen miles north of
Buffalo, Harding County, South Dakota, where he also raised sheep. In years past,
he had done aerial depredation work exterminating coyotes and fox under a county-
funded, state-sponsored depredation program in addition to his work as a ranch hand.
He learned about the oil business from others knowledgeable in the industry and in
2010 organized J&J Trucking to haul materials for oil equipment suppliers on an as-
needed basis. Roughly 96% of J&J’s income came from CTAP, an equipment
supplier having several supply terminals, including one in Bowman, North Dakota,
in the Bakken region, which comprises South Dakota, North Dakota, Montana, and
parts of southern Canada.


        Janvrin himself did not hold a commercial drivers license, and so as an
independent contractor he employed others to drive the trucks for J&J Trucking. He
testified that most of those he hired, some 29 in total, were local ranchers, attesting
to their reliability and punctuality in meeting their schedules. He also acknowledged
on cross-examination that he had fired one of his drivers after receiving a complaint
about her from CTAP, saying, “I had a mandatory three strikes and you are out, and
the third time that happened it was done for,” referring to other documented
circumstances regarding that driver.




      1
       The Honorable Karen E. Schreier, United States District Judge for the District
of South Dakota.

                                         -2-
       Continental, a top-10 oil producer in the United States and the largest
leaseholder in the Bakken region, was CTAP’s largest customer in that region from
2010 to 2014.2 It accounted for roughly 60% of CTAP’s business from the Bowman
terminal, which served Continental’s “Buffalo District,” located in the northwest part
of Harding County. Gordon Carlson supervises this district from Continental’s field
office in Harding County, which is located on South Hills Cave Road, a paved road
surrounded by open range where local ranchers graze their animals. Although
Janvrin’s company hauled almost exclusively out of the Bowman terminal, less than
1% of Janvrin’s work for CTAP involved hauling to the Buffalo District.


       During a February 2014 blizzard, a Continental pick-up truck driver struck and
killed two cows belonging to Janvrin’s relatives that were standing on South Hills
Cave Road. His relatives told Janvrin about the accident and contacted the local
newspaper. Janvrin testified that, concerned that many drivers were going too fast
for the rural road conditions and recalling that he had lost several sheep on that road
in the past, he also called the local newspaper, which published an article about the
cow-truck collision and paraphrased his remarks.


      Though Janvrin’s comments made no mention of Continental or its drivers,
Carlson read the article and thought Janvrin was “biting the hand that feeds him” by
“pointing the finger at Continental as the cause of the accident.” Carlson testified that
because of the “disrespectful” comments and because of previous incidents in which
Janvrin allegedly visited Continental’s well locations without proper safety
equipment, Carlson contacted his superiors to request that Janvrin no longer haul
materials to Continental’s Buffalo District sites. He spoke with the senior engineer
in charge of the Buffalo District, who in turn spoke with Ollis Anderson,
Continental’s Director of Supply Chain Management, located in Oklahoma City,


      2
       About Us, Continental Resources, http://www.clr.com/about (last visited Mar.
22, 2019).

                                          -3-
Oklahoma, purportedly to ask that Continental prohibit Janvrin from delivering to its
well locations in the Buffalo District.


      Director Anderson called Michael “Stoney” McCarrell, Senior Vice-President
of Operations at CTAP’s headquarters in Lafayette, Colorado. The two had a long-
standing professional relationship and had gone hunting in the past. Shortly after the
call, McCarrell spoke to Ron Spidahl, the supervisor responsible for assigning
independent drivers to CTAP’s deliveries from the Bowman terminal. McCarrell
asked if Spidahl would have enough trucks for deliveries if they removed Janvrin
from their “lineup” of drivers. After Spidahl affirmed that they would, McCarrell
responded, “We are not going to use [Janvrin] anymore. [He is] not going to haul for
me.” Spidahl asked why, and McCarrell replied, “It doesn’t make a difference what
happened. When I get a call from the big guy—.” Spidahl understood “big guy” to
mean Ollis Anderson, and thereafter called Janvrin to inform him that he had been
removed from the Bowman terminal lineup. Janvrin testified that he received the call
on the evening of February 19, 2014, hours after his published remarks in the local
newspaper had been distributed.


        Carlson testified that he learned about CTAP’s decision to completely remove
Janvrin from its lineup approximately one week later. Director Anderson testified
that, upon his inquiry in a later phone call, Senior Vice President McCarrell
confirmed that Janvrin was no longer hauling from the Bowman terminal. Anderson
testified that he had not asked McCarrell to return Janvrin to the lineup. Around that
time, a Continental employee told one of Janvrin’s truckers—a former Continental
employee—that he had overheard Carlson bragging that he had shut down a trucking
firm.


      Janvrin filed a tortious interference claim in state court, alleging that
Continental had induced or otherwise pressured CTAP to end its business relationship
with J&J in retaliation for Janvrin’s newspaper comment. Continental removed the

                                         -4-
case to federal district court based on diversity jurisdiction. See 28 U.S.C. § 1441(a).
The case proceeded to trial, at which the district court instructed the jury that
Continental had the right to refuse to do business with Janvrin, but that it could not
interfere with Janvrin and CTAP’s business relationship. The jury returned a verdict
for Janvrin, awarding him $123,669 in compensatory damages and $123,669 in
punitive damages. The district court denied Continental’s motions for judgment as
a matter of law and its motion for a new trial.


                                          II.


                                          A.


       Continental argues that the district court erred in denying its motions for
judgment as a matter of law. It claims that the evidence presented at trial was
insufficient to support the jury’s verdict that Continental had tortiously interfered
with the Janvrin-CTAP business relationship. We review de novo the denial of a
motion for judgment as a matter of law, and we may affirm on any basis the record
supports. HOK Sport, Inc. v. FC Des Moines, L.C., 
495 F.3d 927
, 934 (8th Cir.
2007). We will set aside a jury verdict only if “the evidence adduced at trial is
entirely insufficient to support the verdict.” Schooley v. Orkin Extermination, Co.,
502 F.3d 759
, 764 (8th Cir. 2007). We “consider all evidence in the record without
weighing credibility, and resolve conflicts and make all reasonable inferences in favor
of the non-moving party.” 
Id. A reasonable
inference is one that “may be drawn
from the evidence without resort to speculation.” 
Id. (quoting Arabian
Agric. Servs.
Co. v. Chief Indus., Inc., 
309 F.3d 479
, 482 (8th Cir. 2002)).


      A plaintiff alleging tortious interference with a business relationship under
South Dakota law must show (1) the existence of a valid business relationship or
expectancy; (2) knowledge by the interferer of the relationship or expectancy; (3) an


                                          -5-
intentional and improper act of interference by the interferer; (4) proof that the
interference caused the harm sustained; and (5) damage to the party whose
relationship or expectancy was disrupted. See Dykstra v. Page Holding Co., 
766 N.W.2d 491
, 499 (S.D. 2009); Gruhlke v. Sioux Empire Fed. Credit Union, Inc., 
756 N.W.2d 399
, 408 (S.D. 2008). Continental argues that Janvrin failed to prove the
final three elements.


       Continental contends that any interference with the Janvrin-CTAP business
relationship was neither intentional nor improper. South Dakota courts follow the
Restatement (Second) of Torts (1979), see 
Gruhlke, 756 N.W.2d at 406
, which
defines an act of interference as intentional “if the actor desires to bring it about or
if he knows that the interference is certain or substantially certain to occur as a result
of his action.” Restatement (Second) of Torts § 766B cmt. d. Continental argues that
any interference was not intentional because the evidence shows that it asked CTAP
to stop using Janvrin to haul to Continental’s well sites, and that CTAP thereafter
decided of its own volition to remove Janvrin from its trucking lineup to avoid
confusion at the Bowman terminal.


       We conclude that when viewed most favorably to the jury’s verdict, the
evidence is sufficient to support a conclusion that Continental acted with intent to
interfere in the Janvrin-CTAP business relationship, either by desiring to bring the
interference about or knowing that the interference was substantially certain to occur.
Anderson testified that he had requested that Janvrin be prohibited from delivering
to Continental sites in the Buffalo District. McCarrell testified that Anderson had
asked him to stop using Janvrin to deliver to Continental sites from the Bowman
terminal. Spidahl testified, however, that McCarrell had instructed him to remove
Janvrin from the Bowman lineup entirely because he had received a call from
Anderson—the “big guy.” A reasonable jury could reject Anderson and McCarrell’s
conflicting testimony and instead infer from Spidahl’s testimony that McCarrell had
removed Janvrin at Anderson’s request. The jury could have reasonably inferred that

                                           -6-
Continental knew CTAP was substantially certain to heed its request, owing both to
Anderson and McCarrell’s long-standing personal and professional relationship and
to Continental’s status as CTAP’s largest customer in the Bakken region. Evidence
that Carlson bragged about shutting down a trucking company supports an inference
that Continental desired to interrupt the Janvrin-CTAP business relationship. That
Continental and CTAP ignored Janvrin’s post-termination inquiries bolsters these
inferences: Spidahl told Janvrin that he had no information on the termination;
Carlson neither answered nor returned Janvrin’s calls; and two other Continental
employees lacked information and failed to follow up despite Janvrin’s request that
they do so. Neither company responded to a letter sent on Janvrin’s behalf by an
attorney with connections to the Buffalo area. Collectively, this evidence, although
not overwhelming, was sufficient to allow the jury to conclude that Continental either
desired to bring about interference or knew that such interference was substantially
certain to occur.


       Continental also disputes the jury’s determination that its interference was
improper. Whether interference is improper “depends upon a judgment and choice
of values in each situation.” Restatement (Second) of Torts § 767 cmt. b. A non-
exhaustive list of factors to be considered includes (a) the nature of the actor’s
conduct, (b) the actor’s motive, (c) the interests of the other with which the actor’s
conduct interferes, (d) the interests sought to be advanced by the actor, (e) the societal
interests in protecting the freedom of action of the actor and the contractual interests
of the other, (f) the proximity or remoteness of the actor’s conduct to the interference,
and (g) the relations between the parties. See 
Dykstra, 766 N.W.2d at 499-500
; see
also Restatement (Second) of Torts § 767. In considering the nature of the actor’s
conduct and the actor’s motive, the actor’s intent, discussed above, will likely factor
into whether its conduct was improper. While the Restatement cautions that intent
alone “may not be sufficient to make the interference improper,” it also instructs that
“it may become very important to ascertain whether the actor was motivated, in whole
or in part, by a desire to interfere with the other’s contractual relations,” as such a

                                           -7-
motive “to injure another or to vent one’s ill will on him serves no socially useful
purpose” and “is almost certain to be held improper.” Restatement (Second) of Torts
§ 767 cmt. d.


       We conclude that sufficient evidence existed to permit the jury to find that
Continental’s interference was improper. Testimony of a tense relationship between
Continental and Janvrin’s family members that predated the February 2014 cow-truck
accident, combined with Janvrin’s testimony that he was dropped from CTAP’s
lineup the same day his comments on the accident were published, supports an
inference that Continental’s motive was retaliatory. The dearth of documented safety
violations and complaints involving Janvrin prior to his termination further bolsters
such an inference. The jury could have reasonably concluded that Continental acted
to injure another or to vent its ill will; that, prompted by Carlson’s pique at what he
considered to be Janvrin’s ungrateful comments, Continental’s management team
decided to rid itself of this troublesome trucker, and that its conduct in doing so led
to Janvrin’s banishment from the Bowman terminal.


       Continental argues with some vehemence that it had an absolute right to
exclude Janvrin from its property and to refuse to accept his services, and that “there
is no liability for procuring a breach of contract where such breach is caused by the
exercise of an absolute right.” Johnson v. Schmitt, 
309 N.W.2d 838
, 840 (S.D. 1981)
(quoting defendant’s proposed jury instruction). Indeed, Continental could have,
“deliberately and at [its] pleasure,” refused to deal with Janvrin. Restatement
(Second) of Torts § 766 cmt. b. But the jury determined that it did more than that,
that it either explicitly or implicitly asked CTAP to terminate Janvrin’s services
altogether. Continental had no absolute right to do that.


       It is this fact that distinguishes our case from DBI Services, Inc. v. Amerada
Hess Corp., 
907 F.2d 506
(5th Cir. 1990), a case on which Continental relies. There,
oil producer Amerada Hess had learned that trucking service DBI “had engaged in

                                         -8-
lavish entertainment of certain local Amerada Hess employees with responsibility for
awarding work to vendors on Amerada Hess’s wells.” 
Id. at 507.
Amerada Hess
subsequently ceased all dealings with DBI and refused to enter into contracts with
bidders who utilized DBI’s services. The Fifth Circuit determined that it had not
improperly interfered with DBI’s contracts with third parties because it had merely
exercised its common law right to refuse to do business with DBI. 
Id. at 509.
The
court explained that it was “undisputed” that “Amerada Hess refused only to allow
DBI to provide water or services on Amerada Hess projects” and that “[i]t never
demanded that contractors refrain from dealing with DBI in other matters.” 
Id. Here, it
was disputed whether Continental asked CTAP stop using Janvrin for delivery to
Continental sites, or whether it asked CTAP to refrain from dealing with Janvrin
altogether. In concluding that Continental interfered with Janvrin and CTAP’s
business relationship, the jury determined that the latter occurred.


        Continental also contends that Janvrin failed to prove that it was the legal cause
of his injuries. Evidence establishing that Janvrin’s business relationship with CTAP
would have continued but for Continental’s conduct is sufficient to prove this element
of tortious interference. See St. Onge Livestock Co. v. Curtis, 
650 N.W.2d 537
, 542
(S.D. 2002). Although Continental argues that McCarrell unilaterally decided to
remove Janvrin from CTAP’s lineup, McCarrell testified that he would not have
removed Janvrin if he had not received Anderson’s call. Both McCarrell and Spidahl
also testified that, according to their knowledge, CTAP had never received a
complaint about the quality of Janvrin’s trucking service. The jury could thus
reasonably conclude that Janvrin would have realized continuing income by
remaining in CTAP’s lineup but for Continental’s conduct.


       Continental further argues that Janvrin’s damages claims were not supported
by the evidence because his claims for lost income included depreciation and expense
deductions. South Dakota follows the “reasonable certainty test” for proving
damages, which requires “proof of a rational basis for measuring loss, without

                                           -9-
allowing a jury to speculate.” Lord v. Hy-Vee Food Stores, 
720 N.W.2d 443
, 454
(S.D. 2006); see also Cedar v. Johnson, 
921 N.W.2d 178
, 183-84 (S.D. 2018) (stating
that although uncertainty as to the fact of damages is fatal to recovery, uncertainty as
to the amount, if merited, is not). Janvrin used his 2012 and 2013 tax return
information to explain the value of depreciation for his trucks and the expenses he
incurred after J&J lost CTAP’s business. The jury was permitted to weigh the
credibility of the evidence and award the compensatory damages as it did. See
Brenden v. Anderson, 
327 N.W.2d 136
, 139 (S.D. 1982) (holding that juries may use
tax returns in part to “mold their damages remedy”).


       Substantial evidence also supports the jury’s award of punitive damages.
“Malice is an essential element of a claim for punitive damages” in South Dakota.
Dahl v. Sittner, 
474 N.W.2d 897
, 900 (S.D. 1991). Malice may be shown by, inter
alia, a “desire and intention to injure another” (actual malice) or by the conduct of a
person who “acts willfully or wantonly to the injury of the other” (presumed, legal
malice). 
Id. As recounted
above, Carlson took offense at Janvrin’s newspaper
comment. As a result, Continental caused CTAP to remove Janvrin from its Bowman
terminal lineup. Thereafter, Carlson boasted about putting Janvrin out of business.
Although Continental disputes this characterization of the evidence, a jury could
reasonably infer that Continental acted willfully when it caused injury to Janvrin’s
business and Janvrin’s relationship with CTAP.


       Continental alternatively argues that the district court erred in denying its
motion for a new trial, alleging the same grounds asserted in its appeal from the
denial of its motion for judgment as a matter of law. For the reasons discussed above,
we conclude that the district court did not abuse its discretion in denying
Continental’s motion for a new trial. See Peerless Corp. v. United States, 
185 F.3d 922
, 927 (8th Cir. 1999) (“A district court’s denial of a motion for new trial is
virtually unassailable when the verdict is claimed to be against the weight of the
evidence. . . . [W]e reverse for a clear abuse of discretion only where there is an

                                         -10-
absolute absence of evidence to support the jury’s verdict.” (internal quotation marks
and citations omitted)).


                                           B.


       Continental contends that the district court erred when instructing the jury on
improper interference. We review a district court’s jury instruction for abuse of
discretion, but we review de novo whether the district court correctly interpreted the
state law within the instruction. Arkwright Mut. Ins. Co. v. Gwinner Oil, Inc., 
125 F.3d 1176
, 1180 (8th Cir. 1997). “It is well established that a party is entitled to have
the jury instructed on its theories if the proposed instructions are correct statements
of the law and supported by the evidence.” 
Id. The district
court, however, “has
broad discretion in choosing the form and the language of the instructions.” 
Id. There is
no reversible error if the instructions, taken as a whole, “fairly and
adequately represent the evidence and applicable law in light of the issues presented
to the jury in a particular case.” Linden v. CNH Am., LLC, 
673 F.3d 829
, 836 (8th
Cir. 2012) (quoting McCoy v. Augusta Fiberglass Coatings, Inc., 
593 F.3d 737
, 744
(8th Cir. 2010)).


       Continental contends that the district court’s jury instruction confused and
misled the jury because it placed a condition on Continental’s ability to exercise its
rights. The contested instruction stated in pertinent part:


      1.     Continental Resources has the right to refuse to do business with
             Jerry Janvrin and to exclude Janvrin from its property.
      2.     But Continental Resources cannot improperly interfere with Jerry
             Janvrin’s business interest with CTAP.


Continental stresses that it must be permitted to exercise its rights even if doing so
happens to affect a third-party relationship. It contends that the district court should

                                          -11-
have instructed the jury that it had the “absolute right” both to exclude Janvrin from
its property and to refuse to deal with Janvrin, that “[t]he mere exercise of this right
cannot constitute tortious interference,” and that “there is no liability for procuring
a breach of contract where such breach is caused by the exercise of an absolute right.”


        We conclude that the district court’s instruction was proper, turning as it does
on the difference between the Janvrin-Continental relationship and the Janvrin-CTAP
relationship. The instruction recognizes Continental’s right to refuse to do business
with Janvrin and at the same time precludes Continental from interfering with the
third-party Janvrin-CTAP relationship, as to do so would exceed the mere exercise
of its rights. See, e.g., Table Steaks v. First Premier Bank, N.A., 
650 N.W.2d 829
,
837 (S.D. 2002) (holding that a defendant may be found liable after asserting a right
if the act prevented the plaintiff from entering into new agreements with third
parties). This is an accurate statement of South Dakota law and the Restatement on
which it is based, which states that “[t]here is no general duty to do business with all
who offer their services, wares or patronage; but there is a general duty not to
interfere intentionally with another’s reasonable business expectancies of trade with
third persons . . . unless the interference is not improper under the circumstances.”
Restatement (Second) of Torts § 766 cmt. b; see also Tibke v. McDougall, 
479 N.W.2d 898
, 908 (S.D. 1992). Thus, in viewing the instruction as a whole and in
applying the law to the issues presented to the jury, we conclude that the district court
did not err in instructing the jury as it did.


       The judgment is affirmed. Janvrin’s motion to strike a portion of Continental’s
reply brief is denied as moot.
                        ______________________________




                                          -12-

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