APPEAL FROM THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT GREGORY COUNTY, SOUTH DAKOTA. HONORABLE KATHLEEN F. TRANDAHL Judge.
The opinion of the court was delivered by: Zinter, Justice
[¶1.] James and Rosemary Selle (Selles) sued James Tozser for tortious interference with Selles' business relationship with Frank Tozser, James Tozser's brother. Selles also asserted liability on a theory of civil conspiracy. The jury returned a verdict for Selles in an amount representing the balance of Frank's unpaid promissory note to Selles, prejudgment interest on the unpaid note, and punitive damages. James appeals the denial of his renewed motion for judgment as a matter of law or new trial. We affirm.
Facts and Procedural History
[¶2.] We restate the facts in a light most favorable to the jury's verdict. Between 1990 and 1999, Selles operated a trailer distribution business called Dakota Pacific Inc. (DPI) in Bonesteel, South Dakota. DPI bought, sold, and distributed recreational trailers to dealers in fourteen states. DPI's most profitable products were trailers manufactured by Triton Corporation. Triton products generated over 75% of DPI's gross revenues and profits.
[¶3.] In March 2000, Selles sold DPI to Frank and Barbara Tozser by selling its assets for slightly less than $1,000,000. At the time of sale, DPI was making a net profit of almost $300,000 per year. The franchises between DPI and its trailer manufacturers -- particularly the Triton franchise -- were critical to the business. Frank testified that he understood the importance of the Triton franchise:
Q: Clearly, when the purchase of assets agreement was signed . . . you understood if you didn't get those same arrangements with Triton -- whether you call it a franchise or relationship or whatever -- it was a dead deal, wasn't it?
Selles testified that without those franchises there was no business. Consequently, the purchase agreement was "contingent upon [Frank] receiving substantially the same territory that [Selles had] with major suppliers: Triton . . . [etc.]."
[¶4.] Frank financed the purchase with a $400,000 loan from CIT Small Business Lending Corporation (CIT), a $300,000 loan from Selles, and a $200,000 loan from James. Both CIT and Selles obtained blanket security interests in all assets included in the sale. Selles subordinated their interest to CIT and executed a "standby creditor" agreement. James's loan was unsecured.
[¶5.] Frank operated the business through his own corporation called Dakota Pacific Industries, Inc. (DPI2). Frank began repaying Selles' promissory note in March 2000, making monthly payments of $3,719.57. In September 2004, Frank's monthly payment was delinquent. In October 2004, Frank brought the note current.
[¶6.] At the same time (October 2004), Frank's brother James formed a limited liability company called Aspen Industries. James testified that he formed Aspen to purchase a building in Woodbine, Iowa. He leased the building to DPI2, and Frank moved DPI2 from South Dakota to Aspen's building in Iowa.
[¶7.] In March 2005, Frank stopped making payments on Selles' note. In December 2005, Frank and James traveled together to Triton's headquarters in Wisconsin so Frank could introduce James to Triton's president and solicit the Triton franchise for Aspen. James conceded that he "asked [Triton] if Aspen Industries could be the distributor for the territory that was -- that [DPI2] currently had." In April 2006, Triton granted Aspen the distribution rights for Triton trailers.*fn1 Two months later, DPI2 wound up its business without paying Selles. At that time, just six years after the sale, DPI2's only remaining assets were appraised at $36,000. James purchased the assets from a third party for $2,600.*fn2
[¶8.] Aspen began selling Triton trailers in July 2006, using DPI2's equipment, D.O.T. number, phone numbers, and address. In fact, almost everything was the same, including use of DPI2's loading forklift, delivery trailers, and business forms. Faxes, invoices, and sales orders from Frank dated July 1, 2006, to December 28, 2006, reflect that Frank continued selling trailers, but he was doing so for Aspen. In fact, a July 1, 2006, Aspen sales order listing Frank as the representative stated: "This was originally from a sales order for Dakota Pacific." A document on Aspen letterhead advised Aspen staff that "Frank and the entire staff are now working for Aspen. DO NOT SAY-Dakota Pacific has been sold[,] bought out[,] taken over[,] assumed[,] Etc." In instructing the staff how to answer questions, such as, "Why did Dakota Pacific change it's [sic] Name ?," staff was instructed to say, "I'm not sure. You will have to speak with Frank." (Emphasis added.) Selles testified that Frank was a decision maker at Aspen and that Frank was the person who obtained the requisite licensing for Aspen to do business in other states. Aspen's distribution license application for the State of Colorado indicated Frank was the "President of Aspen."
[¶9.] Selles subsequently sued Frank for failing to pay the promissory note. Frank confessed judgment, filed for bankruptcy, and the debt was discharged. Selles then sued James for tortious interference and civil conspiracy to tortiously interfere with Selles' business relationship with Frank. Selles sought $104,371.37 in damages, representing the unpaid balance of Selles' promissory note. Selles also sought prejudgment interest and punitive damages.
[¶10.] Throughout trial, Selles contended that James and Frank "gutted" DPI2. Selles specifically contended that the Triton franchise was critical to DPI2 and that James and Frank "wiggled" the Triton franchise away from DPI2 to provide consideration for James's $200,000 loan. Selles argued that even under bad management with only "a couple franchises," especially the Triton franchise, DPI2 could have repaid Selles' note. But without the Triton franchise, Selles argued that repayment was impossible because the going concern was destroyed. As the circuit court described Selles' argument, "[b]asically, the position of the plaintiffs is that if the Triton relationship would have been in place, that that (sic) in and of itself would have been enough to pay for the note and to make those payments."
[¶11.] The jury returned a unanimous verdict awarding Selles $104,371.37 for tortious interference. The jury inserted this award on the tortious interference line of the verdict form. Selles had also requested $46,220.67 in prejudgment interest but there was no line on the verdict form for that award. The jury awarded $46,220.67 and inserted that amount on the verdict form's line designated for civil conspiracy. The jury finally awarded $30,000 in punitive damages.
[¶12.] After trial, James moved for a renewed judgment as a matter of law or new trial. James contended that there was insufficient evidence of improper conduct, causation, and damages to support a tortious interference award. He also challenged the legal validity of Selles' civil conspiracy theory. James finally challenged the award of punitive damages.
[¶13.] The circuit court denied James's motions, finding sufficient evidence to support the jury's verdict. The court found that reasonable minds could differ regarding improper conduct, causation, and damages. The court concluded that James's other arguments were without legal merit. James appeals.
[¶14.] "In reviewing a renewed motion for judgment as a matter of law after the jury verdict, the evidence is reviewed 'in a light most favorable to the verdict or to the nonmoving party.'" Alvine Family Ltd. P'ship v. Hagemann, 2010 SD 28, ¶ 18, 780 NW2d 507, 512 (citing Harmon v. Washburn, 2008 SD 42, ¶ 9, 751 NW2d 297, 300). "Then, '[w]ithout weighing the evidence, [the ...