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Smart Summary

Factual and Procedural Background

This is an appeal from a temporary restraining order entered pursuant to Fla.R. App.P. 9.130(a)(3)(B). Appellee Lehigh Corporation develops and sells real property in Lehigh Acres and owns and operates the only motel in the community; appellee First United Investors, Inc. is Lehigh's sales agent. Part of appellees' promotion is to bring prospective purchasers to Lehigh Acres and provide lodging at appellees' expense. Appellant, a former Lehigh sales employee, allegedly followed prospective customers to the Lehigh Motel, solicited them in their motel rooms to rescind contracts with Lehigh, and offered to sell them lots at lower prices. After an evidentiary hearing, the trial court entered a temporary restraining order prohibiting appellant from contacting or soliciting appellees' prospective or actual customers on the premises of the Lehigh Resort Motel or at appellees' sales offices when such purchasers are in Lee County as guests of appellees. The order defined "guests" and "invited" and included persons acting on appellant's behalf. Appellant seeks review of that order.

Legal Issues Presented

  1. Whether appellant's conduct constituted tortious interference with appellees' advantageous business relationships with prospective purchasers.
  2. Whether the trial court abused its discretion in entering a temporary restraining order enjoining appellant's contact with appellees' guests.
  3. Whether the terms of the restraining order were sufficiently precise to inform appellant of prohibited conduct and the identity of protected persons.

Arguments of the Parties

Appellant's Arguments

  • Appellant asserted prospective purchasers have a federal three-day right to rescind and he was merely giving them an opportunity to rescind and obtain comparable property at lower prices.
  • Appellant noted the customers' "vacation certificates" used for lodging do not obligate them to buy or even to view the lots.

Appellees' Arguments

  • Appellees alleged appellant was tortiously interfering with their advantageous business relationships by soliciting appellees' prospective customers while the customers were guests of appellees.
  • Appellees charged appellant was obtaining customer lists surreptitiously from their employees (an allegation noted in the opinion).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Symon v. J. Rolfe Davis, Inc., 245 So.2d 278 (Fla.4th DCA 1971) Elements of tort for interference with prospective business advantage: (1) existence of business relationship under which plaintiff has legal rights, (2) intentional and unjustified interference by defendant, (3) damage to plaintiff. The court used this formulation as the governing standard for evaluating appellees' claim of tortious interference.
Franklin v. Brown, 159 So.2d 893 (Fla.1st DCA 1964) Business relationship need not be founded upon an enforceable contract to support a claim for interference. Supported the proposition that appellees' claim could stand even without an enforceable contract between appellees and purchasers.
Calvary Church, Inc. v. Siegel, 358 So.2d 1134 (Fla.3d DCA 1978) Interference with an agreement to purchase property can support liability even if the agreement is not necessarily enforceable against the seller. Used as an example affirming liability for interference with a non-enforceable agreement.
Smith v. Ocean State Bank, 335 So.2d 641 (Fla.1st DCA 1976) Proof of fraud is not required to sustain an action for interference with prospective advantage. Supported the court's view that appellees need not prove fraud to obtain relief for interference.
North Dade Water Co. v. Adken Land Co., 114 So.2d 347 (Fla.3d DCA 1958) Trial judge has broad discretion to enter temporary restraining orders. The court relied on this authority in upholding the trial court's exercise of discretion in entering the TRO.
Lake Gateway Motor Inn v. Matt's Sunshine Gift Shops, Inc., 361 So.2d 769 (Fla.4th DCA 1978) Discussed in opinion relied upon by appellant (distinguishing case facts). The court found it "substantially distinguishable" because the business relationship in Lake Gateway had deteriorated and could not be considered mutually advantageous.

Court's Reasoning and Analysis

The court framed appellees' claim under the tort of interference with prospective advantage and recited the elements from Symon. It observed that a plaintiff's business relationship need not arise from an enforceable contract (Franklin) and that fraud need not be proven (Smith). Quoting Prosser, the court recognized a line between vigorous competition and unfair methods (defamation, disparagement, intimidation, harassment, annoyance). Applying these principles to the evidentiary record, the court concluded there was sufficient evidence to support the trial court's issuance of the temporary restraining order and that the terms of the order were sufficiently precise for appellant to determine who qualified as appellees' "guests." The court also distinguished appellant's reliance on Lake Gateway as factually different. The court relied on precedent recognizing the trial court's broad discretion to issue temporary relief (North Dade).

Holding and Implications

AFFIRMED

Direct effect: The temporary restraining order enjoining appellant from contacting or soliciting appellees' prospective or actual customers on the Lehigh Resort Motel premises or at appellees' sales offices (as defined in the order) is affirmed. The opinion does not announce a new rule of law beyond applying established tort principles and upholding the trial court's discretionary relief.

LEROY G. AZAR, INDIVIDUALLY AND AS TRUSTEE, APPELLANT, v. LEHIGH CORPORATION AND FIRST UNITED INVESTORS, INC., A FLORIDA CORPORATION, APPELLEES.

GRIMES, Chief Judge.

This is an appeal from a temporary restraining order filed pursuant to Fla.R. App.P. 9.130(a)(3)(B).

Appellee, Lehigh Corporation, is engaged in the business of developing and selling real property in a large development project in Lee County known as Lehigh Acres. Appellee, First United Investors, Inc., is a registered real estate broker and the sales agent in the State of Florida for Lehigh Corporation. The only motel in the community is owned and operated by Lehigh. The motel is open to the public. Part of Lehigh's promotional campaign for the sale of property is to bring prospective purchasers to Lehigh Acres where they are provided accommodations at Lehigh's expense and given the opportunity to see Lehigh's property and to talk to salesmen regarding the property available for purchase.

Appellant was formerly an employee of Lehigh in the sales department. Since his termination, the appellant has pursued a practice of following prospective customers to the Lehigh Motel and persuading them to rescind their contracts with Lehigh for the purchase of property and to purchase property from him at a lower price. The appellees charged that appellant was surreptitiously obtaining customer lists from some of their employees, but appellant said he could spot their customers by following people down the street and observing whether they were carrying the big envelopes full of sales literature supplied by appellee. Appellant would then seek out the customer in his motel room and offer to handle the rescission of his contract if the customer would move out of the motel and buy a lot from appellant.

Following an evidentiary hearing, the court issued the following temporary restraining order, to wit:

IT IS HEREBY ORDERED AND ADJUDGED that the Defendant, Leroy Azar, is hereby restrained and enjoined from directly or indirectly contacting or soliciting the Plaintiff's perspective [sic] or actual customers on the premises of the Lehigh Resort Motel or at the sales offices of the Plaintiffs if such purchasers are in Lee County as guests of the Plaintiffs. "Guests" of the Plaintiffs shall mean persons who have been invited by the Plaintiffs, either directly or indirectly, to view the Lehigh Acres community and real estate situate therein. "Invited" shall mean those persons who have come to the Lehigh Acres community as a result of any promotional activities of the Plaintiffs wherein some incentive of value has been given or offered to said persons. The "Defendant", Leroy Azar, shall include any person or entity acting in the Defendant's behalf or at the urging of the Defendant, Leroy Azar.

Appellant seeks review of this order.

Before appellant took this appeal, appellees sought to expand the order to include another of appellant's sales techniques. He would equip his automobile with a large sign advertising the sale of his lots and follow appellees' tour bus full of prospective customers. However, we need not be concerned with this practice because appellees have not sought review of the court's decision not to extend the restraining order.

The appellant asserts that appellees' customers have a right under federal law to rescind their contracts within three days and that he is merely providing them with an opportunity to be relieved of their contract and to obtain comparable property for lower prices. He points out that the customers' "vacation certificates" under which they obtain lodging at no cost or at reduced rates does not obligate them to buy or even to look at the lots offered for sale by Lehigh.

The allegations of the complaint are broader in scope, but the theory upon which the appellees obtained the temporary restraining order was that the appellant was tortiously interfering with the advantageous business relationship between them and their customers.

In Symon v. J. Rolfe Davis, Inc., 245 So.2d 278 (Fla.4th DCA 1971), the court enumerated the elements of this tort as follows:

(1) the existence of a business relationship under which the plaintiff has legal rights, (2) an intentional and unjustified interference with that relationship by the defendant, and (3) damage to the plaintiff as a result of the breach of the business relationship. . . .

It is not essential, however, that the business relationship be founded upon an enforceable contract. Franklin v. Brown, 159 So.2d 893 (Fla.1st DCA 1964). Thus, in Calvary Church, Inc. v. Siegel, 358 So.2d 1134 (Fla.3d DCA 1978), the court affirmed a judgment against a corporation for interfering with the plaintiff's agreement to purchase property from another even though the agreement was not necessarily enforceable against the seller. Moreover, proof of fraud is not required to sustain a cause of action for this tort. Smith v. Ocean State Bank, 335 So.2d 641 (Fla.1st DCA 1976).

There is a narrow line between what constitutes vigorous competition in a free enterprise society and malicious interference with a favorable business relationship. Under the heading of "Interference with prospective advantage," Prosser states:

Though trade warfare may be waged to the bitter end, there are certain rules of combat which must be observed. . . W. Prosser, Law of Torts (4th ed. 1971) at 956.

He goes on to say that the courts have generally prohibited such activities as defamation of the competitor, disparagement of his goods and his business methods, and intimidation, harassment and annoyance of his customers. In the final analysis, the issue seems to turn upon whether the subject conduct is considered to be "unfair" according to contemporary business standards.

Keeping in mind the trial judge's broad discretion to enter temporary restraining orders, we believe there is sufficient evidence in this record to support the court's decision. North Dade Water Co. v. Adken Land Co., 114 So.2d 347 (Fla.3d DCA 1958). Moreover, we believe the terms of the order are precise enough for the appellant to understand what he cannot do. Considering appellant's knowledge of Lehigh's operation, we are confident that he will have no difficulty in ascertaining which of the motel patrons constitute appellees' guests as defined in the temporary restraining order.

We find the case of Lake Gateway Motor Inn v. Matt's Sunshine Gift Shops, Inc., 361 So.2d 769 (Fla.4th DCA 1978), so strongly relied upon by appellant, substantially distinguishable in that the business relationship allegedly interfered with had already deteriorated to the point that it could hardly be considered mutually advantageous.

AFFIRMED.

SCHEB and OTT, JJ., concur.

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AZAR v. LEHIGH CORP
(Nov 29, 1978)