# Johnson v. Telesat Cablevision

> Court of Appeals for the Eleventh Circuit · December 18, 1998 · 162 F.3d 1290

URL: https://www.frixlaw.com/law-library/cases/73360

## Case

- **Court:** Court of Appeals for the Eleventh Circuit
- **Decided:** December 18, 1998
- **Citations:** 162 F.3d 1290
- **Precedential status:** Published
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/73360

## How later opinions describe it (automated extraction)

- finding that statute of frauds barred both breach of contract and fraud in the inducement claims because alleged oral agreement could not be performed within one year

## Opinion text

PUBLISH

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

FILED
No. 94-3324 U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
12/18/98
D. C. Docket No. 89-893-CIV-J-16
THOMAS K. KAHN
CLERK
JOHNSON ENTERPRISES OF JACKSONVILLE, INC.,
a Florida corporation,

Plaintiff-Appellee-Cross-Appellant,

versus

FPL GROUP, INC., a Florida corporation, FPL GROUP CAPITAL,
INC., a Florida corporation, and TELESAT CABLEVISION, INC.,
a Florida corporation,

Defendants-Appellants-Cross-Appellees.

Appeals from the United States District Court
for the Middle District of Florida

(December 18, 1998)

Before TJOFLAT and COX, Circuit Judges, and VINING*, Senior District Judge.

______________________
*Honorable Robert L. Vining, Senior U.S. District Judge for the Northern District of Georgia,
sitting by designation.
TJOFLAT, Circuit Judge:

A dispute arose between the parties to a construction contract, leading to a fifteen-claim

lawsuit by the contractor alleging violations of federal and state criminal statutes and Florida tort

law, in addition to breach of contract. Twelve of the claims went to trial. At the close of the

evidence, the district court granted judgment as a matter of law on nine of these claims. The jury

thereafter returned verdicts for the plaintiff contractor totaling $5.6 million; the district court

ultimately entered a final judgment totaling $5.5 million. All parties now appeal: The plaintiff

seeks the reinstatement of the claims the district court dismissed; the defendants contest the

sufficiency of the evidence to support the jury’s verdicts.

In this opinion, we sustain the district court’s rulings granting the defendants judgment as

a matter of law, set aside the jury’s verdicts on damages and limit the plaintiff’s recovery to

nominal damages of one dollar for breach of contract, and remand the case for the imposition of

attorneys’ fees and costs in light of our disposition. The structure of the opinion is as follows:

Part I provides the factual background to the dispute. Part II describes the claims brought by the

plaintiff and the district court’s resolution of those claims. Part III examines the issues raised on

cross-appeal by the plaintiff. Parts IV and V examine the issues raised on appeal by the

defendants. Part VI addresses the issues of attorneys’ fees and costs. Finally, Part VII offers

some concluding thoughts.

I.

The legislative backdrop against which this controversy arose was the Cable

Communications Policy Act of 1984 (the “Cable Act”). After describing the Cable Act’s

2
influence on the cable television market, we discuss the parties, the construction contract, and

the dispute that ultimately led to this lawsuit.

A. Background – The Cable Communications Policy Act of 1984

The Cable Act deregulated rates in the cable television industry. See Cable

Communications Policy Act of 1984, Pub. L. No. 98-549, 98 Stat. 2779 (codified at 47 U.S.C. §§

521-559) (1984) (amended 1992 and 1996). Prior to the Cable Act, municipalities generally

regulated rates for “basic” cable service as a term of the franchise agreement with the cable

operator. See H.R. Rep. No. 98-934, at 19, 23 (1984), reprinted in 1984 U.S.C.C.A.N. 4656,

4660. In exchange for submitting to rate regulation, cable operators were generally given

monopolies – once they were granted a franchise, they would not have to compete with another

cable operator for customers within the geographic region covered by their franchise. See

Thomas W. Hazlett, Duopolistic Competition in Cable Television: Implications for Public

Policy, 7 Yale J. on Reg. 65, 68-69 (1990) (noting that “out of a universe of 9,010 cable

systems” in 1987, “municipalities had issued only 165 multiple, overlapping franchise awards”);

Michael I. Meyerson, The Cable Communications Policy Act of 1984: A Balancing Act on the

Coaxial Wires, 19 Ga. L. Rev. 543, 552 n.57 (1985) (stating that “over 99% of the cable systems

do not face direct competition from another cable system for subscribers”).

The Cable Act affected this model by curtailing the power of municipalities to regulate

rates for the provision of basic cable service. The initial effect of this deregulation was to allow

incumbent cable operators to extract the monopoly profits previously unavailable to them. See

Albert K. Smiley, Regulation and Competition in Cable Television, 7 Yale J. on Reg. 121, 121

3
(1990). The long-term effect of rate deregulation, however, was supposed to be competition in

the cable television market.1 Cable companies would now have an incentive to acquire

franchises in areas being serviced by an incumbent cable operator and to “overbuild” the

incumbent’s system by constructing a second cable system, thereby enabling them to compete

with the incumbent cable operator for subscribers.2

B. The Parties

It was against the backdrop of the Cable Act that FPL Group, Inc. (“Group”), a

publically-owned holding company, sought to enter the cable television business. Group

acquired all of the common stock of the Florida-based Telesat Cablevision, Inc. (“Telesat”) in

1985. Group subsequently formed FPL Group Capital, Inc. (“Capital”) as a wholly owned

subsidiary corporation, and transferred its shares in Telesat to Capital.

Before its acquisition by Group, Telesat was a private cable company – that is, it

provided cable television service to multiple-unit dwellings, such as condominiums and

apartment complexes, via satellite dish antennas. Because Telesat usually used satellite dish

1
Indeed, Congress had relied on the incentive for competition to ensure that rates
remained reasonable. See H.R. Rep. No. 98-934, at 25, reprinted in 1984 U.S.C.C.A.N. at 4662
(“The Committee believes that the availability of competing sources of programming in a given
market will keep the rates for basic cable services reasonable in that market without the need for
regulation.”).
2
An “overbuild” refers to the phenomenon of direct competition between cable systems
whereby the new operator builds its cables over top of the cables of the existing operator. See
Terry S. Bienstock & James C. Cunningham, Jr., Florida’s Excursion into the Realm of Cable
Television Franchising (Part II), Fla. B.J., Feb. 1988, at 31, 34 n.2; Hazlett, supra at 65 (“An
overbuild occurs when at least two cable operators have been awarded franchises for the same
geographical area, and each of them lays duplicate plants in the rights-of-way.”)

4
antennas located on the grounds of the housing unit to provide this cable service, it was not

necessary that Telesat install cable on public rights-of-way. It was thus not necessary for Telesat

to obtain cable franchises from the local government. After Group acquired Telesat, Telesat

took steps to acquire such franchises.

In the spring and summer of 1986, Telesat applied for and received six franchises

throughout Florida. In each case, an incumbent cable operator was servicing the franchise area;

thus, Telesat applied for these franchises with the stated intent of overbuilding the existing

system. At this time, Telesat decided to use one independent contractor to perform all of its

construction work. After considering the qualifications of at least nine companies, Telesat

selected Johnson Enterprises of Jacksonville, Inc. (“JEJ”).

C. The Agreement

The initial contract between Telesat and JEJ, signed on August 21, 1986 (the “1986

Contract”), was for an indefinite term and was subject to cancellation by either party without

cause on sixty days notice. It was drafted by JEJ’s attorney.3 The key provision of that contract,

entitled “Non-exclusive Contract; Right of First Refusal,” read:

The parties agree that this is a non-exclusive contract for the construction of
Systems throughout the State of Florida, that is, [Telesat] may employ other
contractors to do work similar to the work performed by [JEJ] and [JEJ] may
perform such work for other [cable system developers], as long as not working in
the same franchised area with the exception of Centel Cable. Provided, however,
before [Telesat] may offer any major work to other contractors, [Telesat] shall
offer such work to [JEJ] and, unless such work is declined by [JEJ] or the parties
mutually agree that [JEJ] cannot reasonably perform such additional work in a

3
Telesat’s attorneys made a few minor modifications, which JEJ’s attorneys approved.

5
workmanlike and timely manner, then such work shall be performed by [JEJ] in
accordance with this Agreement.

In effect, the contract obligated Telesat to give JEJ first crack at any major construction work

Telesat undertook but imposed no obligation on JEJ in return. JEJ could either accept or reject

any construction work Telesat offered.

The contract had a number of other important provisions. Under the “Restoration”

provision, JEJ agreed that:

[n]ormal restoration to original or better condition of landscape and/or structures,
i.e., fences, lawn sprinkler systems, utility lines, and the like, damaged or
destroyed will be repaired by [JEJ] at no cost to [Telesat] no later than seven days
after notification by [Telesat].

Under the “Indemnification of Owner” provision, JEJ agreed to indemnify Telesat for claims

arising from the negligence of JEJ’s employees or subcontractors; this indemnification included

claims resulting from “termination, disturbance, interruption or other interference with services

of any type of aerial or underground installation, utility or other facility damaged, harmed or

disturbed or caused to be disturbed by [JEJ].” The “Contractor’s Default” provision gave

Telesat the right to perform JEJ’s obligations and charge JEJ for costs incurred in the event that

JEJ defaulted by failing to complete work promptly or to comply with material terms of the

contract. This section further provided that Telesat could terminate the contract if such default

continued for thirty days or more. The contract also included an integration clause requiring that

any changes, modifications, or alterations of the agreement be in writing:

This Agreement contains the entire Agreement between [Telesat] and [JEJ].
There are no other agreements or understandings stated or implied except as are
contained herein. It is hereby further understood that any changes, modifications
or alterations of this Agreement shall be in writing and executed by all parties
hereto.

6
Finally, the parties agreed that the contract would be governed by Florida law, and that the

prevailing party in any disagreement would be entitled to attorney fees.

If JEJ accepted work offered by Telesat, JEJ’s compensation would be governed by two

price lists attached to the contract as Exhibits “A” and “B.”4 Because Telesat would provide all

necessary materials, these price lists dealt only with the equipment and labor costs that JEJ

would incur in installing the cable system. The price Telesat would pay JEJ for performing a

given construction contract would be determined by adding up the units of work involved: For

example, in south Florida, Telesat would pay JEJ $3.65 per trench foot for the labor involved in

installing cable “at the 30" depth . . . except for bores greater than 2" in diameter,” and would

pay $18.00 per hour for JEJ’s use of a small trencher to dig the trench.5

The procedure Telesat used to offer JEJ construction work was as follows: After Telesat

either acquired a franchise or entered into a contract to provide cable service to an apartment

complex or other multiple dwelling unit, Telesat sent JEJ a “Notice to Proceed.” The notice,

which constituted an offer, provided JEJ basic information about the job to be performed, such as

the location of the project and the commencement date. At the same time, Telesat provided JEJ

a set of plans and specifications for the job. If JEJ accepted the offer, it would commence

4
Exhibit A recited composite, per-foot, labor prices for both underground and aerial
cable construction, with different prices for the Northern and Southern regions of Telesat’s
Florida operations. Exhibit A also included a general list of what labor components were
included in the composite prices. Exhibit B recited hourly prices for equipment and
supplemental personnel. The 1986 Contract also incorporated by attachment Exhibit “C,” a list
of the materials that JEJ was to purchase and incorporate into the cable system under
construction. Exhibit C stated “NONE,” however, because Telesat provided all of the materials.
5
Note, however, that if JEJ thought the prices quoted in Exhibits A and B were too low,
JEJ could simply refuse to take the job unless Telesat agreed to certain price increases. If
Telesat accepted JEJ’s counteroffer, JEJ would perform the construction work for a new price.

7
construction according to Telesat’s plans and specifications, sending Telesat monthly invoices

for work performed in accordance with the price lists in the contract.6

JEJ performed work for Telesat under the terms and conditions set out in the 1986

Contract for approximately fifteen months, after which time both parties desired certain

modifications. For Telesat, the price lists attached to the 1986 Contract made it difficult to

process JEJ’s invoices because the Exhibit A list recited composite per-foot labor prices, rather

than a breakdown of prices for the individual items included in the composite prices. To

eliminate this problem, Telesat asked JEJ to reconstitute the price list. JEJ, in response, asked

Telesat to modify the 1986 Contract to provide for a three-year term; such a term would allow

JEJ to increase its bank line of credit. JEJ also asked that the price lists in Exhibits A and B be

adjusted annually to take into account cost-of-living increases.

In response to these concerns, Glenn Johnson, JEJ’s president, and Brian McNamara,

Telesat’s vice-president for administration, negotiated a new agreement (the “1987 Contract”).

The 1987 Contract, signed on November 13, 1987, had a term of two years (thus eliminating a

party’s right to terminate the contract on sixty days notice), and included a new set of more

detailed price lists. The price lists were attached to the contract as Exhibits “A,” “B,” and “C.”7

6
As the previous discussion should have made clear, the 1986 Contract was merely
anticipatory – in signing it, the parties were looking forward to a series of contracts, each calling
for the construction of a separate cable system, that would incorporate the provisions of the 1986
Contract. At trial, the parties did not introduce into evidence any of the notices to proceed that
Telesat issued to JEJ following the execution of the 1986 Contract; therefore, we do not know
whether the notices explicitly referred to any of the terms or conditions of that contract. The
parties, however, appear to have conducted themselves as though the notices incorporated the
relevant terms and conditions of the 1986 Contract.
7
Exhibit A was identical to Exhibit “A” of the 1986 Contract in that it recited composite
per-foot labor prices for both underground and aerial cable construction with different prices for

8
In all other material respects, the 1987 Contract merely repeated verbatim the provisions of the

1986 Contract, including the “Non-exclusive Contract; Right of First Refusal” provision.8

Furthermore, the procedure by which Telesat offered, and JEJ accepted (or rejected),

construction work following the signing of the 1987 Contract remained the same as it had been

following the signing of the 1986 Contract.

Johnson contends, and he so testified at the trial of this case, that on November 13, 1987,

before he and McNamara signed the 1987 Contract, he asked McNamara how much construction

work McNamara thought Telesat would offer JEJ during the two-year term of the agreement. In

response, McNamara showed him a two-page document, entitled “1988 Materials Requisition

the Northern and Southern regions of Telesat’s Florida operations. The exhibit also included a
detailed “A la Carte” price list that recited prices for individual items. Exhibit B was identical in
all respects to Exhibit “B” of the 1986 Contract, quoting hourly rates for the use of equipment
and supplemental personnel. As was the case with the 1986 Contract, all of the prices quoted in
Exhibits A and B included an undisclosed amount for JEJ’s overhead and profit. Exhibit C
listed the materials that JEJ would provide for aerial construction; a per-foot price for these
materials appeared in Exhibit A. (With the exception of the materials listed in Exhibit C, Section
16 of the contract, entitled “Materials,” stated that Telesat would provide all necessary materials
required to build the cable system and that JEJ would provide “all necessary tools and
construction equipment and . . . employ sufficient and competent personnel to do the work in an
expeditious and acceptable manner.”)
The 1987 Contract also included another exhibit, treated by the parties as Exhibit “D” but
not labeled as such, that was not part of the 1986 Contract. This exhibit, entitled “Construction
Policy and Procedure Manual,” was delivered by Telesat to JEJ at a construction meeting on
November 23, 1987. This document contained the “specifications” referred to in the 1987
Contract.
8
In addition to the 1987 Contract, Johnson gave McNamara a letter that (according to
Johnson) McNamara had requested. The letter was dated November 12, 1987 (the day before the
1987 contract was signed), addressed to Brian McNamara, and signed by Glenn Johnson; it
recites that it was written to “comfort” Telesat regarding the contract’s right-of-first-refusal
provision. The letter states that the provision will be construed as it has in the past – “in the
spirit of mutual cooperation and benefit rather than in strict adherence to the letter of the
contract” – and that JEJ will not exercise its first refusal option when either Telesat’s or JEJ’s
best interests suggest that the use of another contractor would be “mutually beneficial.”

9
Budget,” that Telesat had recently submitted to Group; the document represented Telesat’s

estimate of the miles of cable system that, assuming the availability of sufficient funding, Telesat

anticipated building in several Florida counties in 1988. The document listed fourteen projects

totaling 1255.8 miles of cable system. According to Johnson, McNamara then said, “How’s that

for a guarantee?” When asked how many miles Telesat planned to build in 1989, McNamara

allegedly stated that 1989 would be “as good as 1988,” if not better.

At trial, Johnson testified that he construed McNamara’s representation as a 1250 miles-

per-year mileage guarantee, and that he would not have signed the contract without it. He

readily acknowledged, however, that the 1987 Contract contained no mention of this guarantee,

and he offered no explanation as to why he failed to have the guarantee written into the

agreement before he and McNamara signed it.

D. The Dispute

In July 1988, Telesat offered JEJ a contract to rebuild the underground cable lines at the

Pines, a townhouse community in West Palm Beach. JEJ accepted the offer. Testimony at trial

indicated that before construction commenced, JEJ personnel met with the Pines’ property

management staff to ensure that the construction work would not damage the Pines’ fragile

hydraulic sprinkler system. Sometime after construction began, however, the Pines’ sprinkler

system sustained extensive damage; the hydraulic tubing lines had been cut, and much of the

system was inoperable.

In August, JEJ authorized the Pines to repair the damage to the sprinkler system and send

it the bill. JEJ did not pay the bill, however, because it believed that much of the damage had

10
been caused by other contractors hired by Telesat to drop the cable lines into the ground, and

that some parts of the sprinkler system repaired by the Pines were inoperable before JEJ began

construction. After much communication between JEJ and the Pines, the Pines’ property

manager informed JEJ, in December 1988, that he was going to send the matter to their attorney.

The Pines’ attorney subsequently demanded that Telesat pay the repair bill; Telesat, in turn,

demanded that JEJ pay for the repairs. When, by March, JEJ had failed to resolve the matter,

Telesat informed the Pines’ attorney that it would pay for the repairs to the sprinkler system.

Telesat then sent JEJ a letter on April 13, 1989, notifying JEJ that it was terminating the 1987

Contract pursuant to the “Contractor’s Default” provision, and stating:

[JEJ] is in default of the [1987 Contract] for its failures to comply with material
terms and provisions of the [1987 Contract]. These failures, and [JEJ’s] failures
to cure after proper notice, have caused injury to Telesat’s reputation and business
relationships with customers and communities where we seek to do business and
have caused Telesat to incur additional costs. [JEJ] and its subcontractors have
failed to construct cable systems “in a good and workmanlike manner” as
promised, and Telesat can no longer tolerate what appears to be a continuing
pattern of unsatisfactory performance.

The letter further stated that JEJ should have all of its construction work completed by April 30,

1989, and that it would be paid for all work performed, and accepted as satisfactory by Telesat,

through that date, minus costs incurred by Telesat for restoration, damage, or any other claims

arising from JEJ’s work.

II.

The facts outlined in Part I would seem to set the stage for a fairly simple breach of

contract action: Telesat claims that JEJ defaulted on its obligations and thus Telesat was justified

in terminating their relationship; JEJ claims that it did not default and thus Telesat was in breach

11
of the right-of-first-refusal provision by ceasing to offer work to JEJ. As detailed below,

however, the dispute between Telesat and JEJ led to allegations against multiple defendants of

fraud, conspiracy, racketeering, defamation, conversion, theft, negligence, promissory estoppel,

tortious interference, and breach of fiduciary duty – as well as allegations of breach of contract.

A. The Complaint

JEJ filed a fifteen-count complaint against Telesat, Group, and Capital in the United

States District Court for the Middle District of Florida.9 Fourteen of the counts sought relief

under Florida common law and statutes;10 one count of the complaint sought relief under federal

law, specifically, the Racketeer Influenced and Corrupt Organizations Act (“federal RICO”), 18

U.S.C. § 1964(c) (1994).11

The fifteen counts of the complaint were preceded by thirty-seven paragraphs of

“General Allegations,” which, with minor exceptions, were incorporated by reference into each

count of the complaint.12 The “General Allegations” stated that, prior to entering into the 1986

9
Glenn Johnson and Robert Johnson (JEJ’s vice president) were also plaintiffs in one of
these counts (the defamation claim). Because they were not plaintiffs in the federal RICO claim,
however, the district court dismissed their defamation claim for lack of subject matter
jurisdiction. These individual claims were not appealed; we therefore do not discuss them any
further.
10
Prior to bringing the federal action, JEJ, Glenn Johnson, and Robert Johnson brought a
similar suit in the Circuit Court of Duval County, Florida. That suit was voluntarily dismissed
on the same day that the federal suit was filed.
11
The district court had subject matter jurisdiction over the federal RICO claim under 18
U.S.C. § 1964(c) and 28 U.S.C. § 1331. The court had supplemental jurisdiction over the
remaining claims under 28 U.S.C. § 1367(a).
12
The complaint totaled 173 paragraphs and 51 pages, not including exhibits.

12
Contract with JEJ, Telesat devised a corporate plan – in consultation with Group and Capital

(both of whom provided Telesat with funding and allegedly controlled its operations) – to carry

out a “greenmail” scheme.

The alleged greenmail scheme operated as follows: Telesat applied to local authorities to

obtain franchises identical to those held by the incumbent cable operators. In its applications,

Telesat stated that if granted a franchise it would (with the financial backing of Group and

Capital) build and operate a cable system throughout the franchise area and thus compete with

the incumbent cable operator. Accepting Telesat’s representations as true, the local authorities

approved Telesat’s applications and Telesat commenced construction. According to the

complaint, however, Telesat was bluffing – it had no intention of actually building a cable

system. Instead, Telesat planned to pressure the incumbent cable operators – faced with the

prospect of losing their monopoly – into buying it out, at a substantial profit to Telesat’s owners,

Group and Capital.13 Meanwhile, the incumbent operators increased the monthly fees charged to

their subscribers to cover the cost of Telesat’s greenmail activity.

The “General Allegations” stated that Telesat, and thus Group and Capital, duped JEJ

into assisting it in carrying out their greenmail scheme. In order to obtain franchises, Telesat

needed to show the franchising authorities that it had the technical ability to construct a cable

system. To make that showing, Telesat claimed that it had a contractor aboard, JEJ, who had

considerable experience constructing cable systems in various areas of the country. Telesat was

13
The buyout could be structured in one of two ways: (1) the incumbent operator could
form a joint venture with Telesat; or (2) the incumbent operator could purchase Telesat’s
franchise. Another possibility would have been for Telesat to purchase the incumbent operator’s
franchise, but there is no evidence that this ever occurred.

13
able to make this claim, the allegations continued, because it had induced JEJ to enter into a

contract – first in 1986 and then in 1987 – by falsely representing to JEJ that it intended to

overbuild and operate a cable system in every location in which it obtained a franchise and that it

would give JEJ the first crack, under a right-of-first-refusal clause, at installing these cable

systems.

After making these general allegations, JEJ’s complaint presented its claims for relief in

fifteen separate counts. JEJ’s first claim (Count I) was based on federal RICO, which creates a

private right of action for persons injured by a “pattern of racketeering activity.”14 Specifically,

JEJ alleged that Telesat, Group, and Capital committed mail and wire fraud (18 U.S.C. §§ 1341

and 1343), which are considered “acts of racketeering” under RICO. See 18 U.S.C. § 1961(1)

(1994). The fraud operated as follows:

[Telesat, Group, and Capital] conducted or participated in a pattern
of racketeering activity . . . by fraudulently inducing . . . JEJ to
expend substantial funds to lease and open offices for the
construction of 1250 miles per year of cable television
construction, to forego other opportunities, to engage personnel
and purchase or lease equipment . . . when, in fact, Defendants
Telesat, [Group, and Capital] concealed their present intention to
sell all rights to various respective franchises and not fulfill their
representations.15

14
Federal RICO has four separate provisions relating to racketeering activity, 18 U.S.C. §
1962(a), (b), (c), and (d). JEJ alleged violations of all four provisions. For further discussion of
JEJ’s RICO claims, see part III.E, infra.
15
JEJ’s complaint subsequently was amended to include an allegation of criminal intent.

14
Based on these allegations, JEJ sought damages of $72,992,646 – consisting of actual damages

of $24,330,882,16 which were then trebled in accordance with RICO’s treble damages provision,

18 U.S.C. § 1964(c).

Count II, entitled “Claim under the Florida RICO Act,” sought treble damages, again in

the amount of $72,992,646, under the Florida Civil Remedies for Criminal Practices Act

(“Florida civil RICO”), Fla. Stat. ch. 772.104 (1997), and equitable relief17 under the Florida

RICO Act (“Florida criminal RICO”), Fla. Stat. ch. 895.03(1), (2), (3), and (4) (1997).18 Count

II essentially replicated the allegations underpinning the Count I federal RICO claim, tailoring

those allegations to the requirements of Florida law.

Count III, entitled “Breach of Contract,” stated that the 1987 Contract consisted of three

documents: (1) the signed contractual agreement, (2) the letter Johnson wrote to McNamara on

November 12, 1987, and (3) the “1988 Materials Requisition Budget” that McNamara had

shown to Glenn Johnson on November 13, 1987. Count III alleged that “[a]n essential element

of this contract provided that JEJ would have first refusal on construction for . . . Telesat, of at

16
The calculation of actual damages was based primarily on lost profits from Telesat’s
failure to provide 1250 miles of construction work per year, but also included a claim for
$977,000 that JEJ alleged was owed it in unpaid invoices.
17
Count II asked the district court to enter an order (1) enjoining the defendants from
engaging in “further criminal activity,” (2) providing for “the forfeiture of . . . Telesat’s
corporate charter, and for the divestiture or suspension of any cable television franchises,” and
(3) for “such other and further relief as the Court may deem proper.”
18
The Florida criminal RICO statute allows a private plaintiff to bring a civil suit for
equitable relief only. See Fla. Stat. ch. 895.05(6) (1997). The Florida civil RICO statute, which
“basically tracks the provisions”of the Florida criminal RICO statute (which in turn tracks the
“key provisions” of the federal RICO statute), allows a private plaintiff to bring a civil suit for
treble damages. See 2 David R. McCormack, RICO § 9.06, at 9-49 (1997).

15
least 1250 miles of cable television construction per year, as evidenced by [the Materials

Requisition Budget].”19

Count III further alleged that Telesat breached the 1987 Contact by terminating the

agreement on April 14, 1989, by failing to offer JEJ contracts for at least 1250 miles of cable

construction work in both 1988 and 1989, and by failing to pay JEJ for construction work

performed for Telesat on various jobs commenced after November 13, 1987. For such breaches,

JEJ sought judgment against Telesat in the sum of $24,330,882.20 JEJ sought the same judgment

against Group and Capital on the ground that Group and Capital were “estopped from denying

liability and financial responsibility for the actions of . . . Telesat.”

In Count IV of the complaint, entitled “Breach of Contractual Obligation of Good Faith,”

JEJ alleged that Telesat’s failure to honor its mileage guarantee and its failure to pay for work

performed constituted a breach of the obligation of good faith performance mandated by Florida

Statutes chapter 671.203. JEJ sought the same judgment in Count IV as it did in Count III;

again, Group and Capital were allegedly liable for Telesat’s breaches on the ground that they

were “estopped from denying liability and financial responsibility for the actions of . . . Telesat.”

Count V, entitled “Alternative Claim for Breach of Modified Contract,” alleged that after

executing the 1987 Contract, the parties orally modified the contract to include the mileage

19
In this opinion, we refer to this “essential element” as the “mileage guarantee” or the
“mileage promise.” JEJ, in its brief on cross appeal, suggests that there is a legally significant
difference between a “guarantee” and a “promise.” In the context of this case, we perceive no
legally significant difference between the two and therefore refer to the mileage guarantee and
the mileage promise interchangeably.
20
As noted previously, see supra note 16, $24,330,882, represents the profits JEJ
contended that it would have made had Telesat honored the mileage guarantee plus the $977,000
due JEJ for work performed.

16
guarantee. (This is in contrast to Count III, which alleged that the mileage guarantee was part of

the original 1987 Contract.) Count V alleged that Telesat breached the 1987 Contract, as

modified, by failing to honor the mileage guarantee, and by failing to pay JEJ for work

performed, as alleged in Count III. Count V therefore sought the same relief as did Count III:

judgment against Telesat, Group, and Capital in the sum of $24,330,882. As in Count III, Group

and Capital were allegedly liable for Telesat’s breaches because they were “estopped from

denying liability and financial responsibility for the actions of . . . Telesat.”

As an alternative to the “breach of contract” and “breach of modified contract” counts,

the complaint asserted that the facts underpinning those counts supported a claim for promissory

estoppel. Count VI, “Alternative Claim of Promissory Estoppel,” alleged that Telesat promised

to award JEJ contracts for at least 1250 miles of cable system construction per year for 1988 and

1989, that JEJ relied on such representation to its detriment, and that Telesat was thus “estopped

from repudiating the promise to build a minimum of 1250 miles of cable television construction

per year for two years.” JEJ sought the same compensatory damages against Telesat, Group, and

Capital in Count VI as it did in Counts III and V; Group and Capital were allegedly liable for

such damages because they were “estopped from denying liability and financial responsibility

for the actions of . . . Telesat.”

In Count VII, “Breach of Fiduciary Relationship,” JEJ alleged that in entering into the

1987 Contract with Telesat, JEJ “reposed a confidence in” Telesat, Group, and Capital, and

“trusted” them to “protect [its] interests. . . .” The contract therefore created a fiduciary

relationship between JEJ, as beneficiary, and Telesat, Group, and Capital, as fiduciaries. Count

VII alleged that these defendants “breached their fiduciary duty to . . . JEJ by failing to build a

17
minimum of 1250 miles [of cable TV system] per year as promised and improperly terminating .

. . JEJ’s contracts,” and by failing to pay JEJ for work JEJ had performed for Telesat. JEJ sought

the same compensatory damages as those prayed for in Counts III through VI ($24,330,882) plus

punitive damages in a sum three times the amount of the compensatory damages ($72,992,646),

for a total of $97,323,528.21

In Count VIII, “Alternative Claim for Fraud in the Inducement,” JEJ alleged that, in

conjunction with the execution of the 1987 Contract, “Telesat [aided and abetted by Group and

Capital] made false statements of material fact in asserting that a minimum of 1250 miles of

cable television construction would be constructed per year for two years during the life of the

contract.” JEJ alleged that Telesat made these statements with the intent to induce JEJ to enter

into the 1987 Contract and materially change its position to its detriment. JEJ sought

compensatory and punitive damages.

In Count IX, “Alternative Claim of Negligent Misrepresentation in the Inducement,” JEJ

alleged that Telesat, Group, and Capital “were negligent in failing to determine the truth or

falsity of these false statements [regarding the mileage guarantee] at the time the statements were

made,” and, at the same time, “acted willfully and wantonly and with a reckless disregard for

[JEJ’s] rights.” JEJ sought compensatory and punitive damages.

In Count X, “Alternative Claim for Conversion,” JEJ alleged, in substance, that Telesat,

Group, and Capital had tortiously converted the profits that JEJ would have made had Telesat

21
All subsequent claims for compensatory and punitive damages were also for this
amount unless otherwise stated.

18
honored the mileage guarantee and paid JEJ the $977,000 due for work performed. JEJ sought

compensatory and punitive damages.

Count XI, “Alternative Claim for Civil Conspiracy,” alleged that the fraud Telesat

perpetrated against JEJ (as previously alleged in Count VIII – the misrepresentation and

omission of “material facts in order to induce . . . JEJ to provide . . . construction services”) was

the product of a conspiracy among Telesat, Group, and Capital. JEJ sought compensatory and

punitive damages.

Count XII, “Alternative Claim for Civil Theft,” alleged that Telesat, at the direction of

Group and Capital or aided and abetted by them, “improperly retained funds due and owning to”

JEJ for work previously performed, and “fraudulently induced . . . JEJ to provide construction

services with the criminal intent to deprive . . . JEJ of its property.” Such conduct constituted

theft under Florida Statutes chapters 812.014 and 772.11, thereby rendering the defendants liable

for treble damages. Count XII therefore sought judgment for $72,992,646 – three times the

amount sought in the breach of contract counts.

In Count XIII, “ Alternative Claim for Tortious Interference with Contractual Relations,”

JEJ sought compensatory and punitive damages against Group and Capital on the theory that

these defendants “willfully, intentionally and by improper means caused . . . Telesat to breach

the [1987 Contract] with . . . JEJ.”

In Count XIV, “Tortious Interference with Contractual Relations with Subcontractors,”

JEJ claimed that the three defendants, acting “maliciously, willfully and wantonly, and in

reckless disregard for [JEJ’s] rights,” improperly terminated the 1987 Contract for the purpose of

hiring JEJ’s subcontractors to perform the work that JEJ had previously hired them to perform.

19
Such conduct allegedly constituted tortious interference with JEJ’s relations with its

subcontractors. JEJ sought compensatory and punitive damages.

Finally, in Count XV, “Defamation,” JEJ sought $1,000,000 in compensatory damages

and $3,000,000 in punitive damages against Telesat on the ground that Telesat, “in order to

justify [its] own wrongful decision to terminate” the 1987 Contract, made false and defamatory

statements to “JEJ’s subcontractors, other members of the industry, and franchising authorities”

regarding JEJ’s substandard operations and its “sue happy” nature.

B. Pre-Trial Proceedings

The defendants moved to dismiss the complaint, and each count thereof, for failure to

state a claim for relief.22 The district court granted their motions to dismiss Count X ,

“Alternative Claim for Conversion,” and Count XII, “Alternative Claim for Civil Theft,” but

denied their motions to dismiss the remaining counts.23 Thereafter, each defendant answered the

complaint. Their answers were identical in substance.24 They denied engaging in the wrongful

conduct giving rise to JEJ’s and the Johnsons’ claims for relief, and asserted several affirmative

defenses. These defenses alleged, inter alia, that the district court lacked subject matter

jurisdiction, that the plaintiffs failed to state a claim for relief, and that JEJ’s claims were barred

22
Alternatively, the defendants moved to strike all of the plaintiff’s punitive damages
pleadings. The court granted the defendants’ motion without prejudice. The plaintiffs
subsequently repled their punitive damages claims.
23
After these counts were dismissed, the plaintiffs filed an amended complaint. The
amended complaint removed the two dismissed counts; in all other respects, it was exactly the
same as the original.
24
They were also identical in length – each defendant’s answer was 201 paragraphs and
17 pages long.

20
by the statute of frauds and the parol evidence rule. Responding to JEJ’s claims that Telesat

wrongfully breached the 1987 Contract as initially drawn (Count III) and as modified (Count V),

the defendants alleged that JEJ had breached the contract in several material respects, thus

warranting Telesat’s termination of the contract on April 13, 1989.25 Finally, Telesat alleged

that, because of JEJ’s breaches, it was entitled to a setoff against any recovery JEJ might obtain.

The defendants then jointly moved the court for summary judgment on all claims.26 The

district court denied the defendants’ motions for summary judgment, with the exception of the

civil conspiracy count, which it dismissed following the “final” pretrial conference.27 After the

court postponed the trial (to accommodate the schedule of a visiting district judge to whom it had

assigned the case for trial), the defendants moved the court to reconsider its ruling denying their

motions for summary judgment. The court denied their motion.

C. The trial

25
The defendants later amended their answer to include “lack of consideration” as a
defense.
26
By that time, the parties had taken approximately 63 depositions, consisting of 103
volumes of transcript, and had propounded numerous interrogatories and requests for production.
On the eve of trial, the total number of depositions was up to 69, and the parties had listed a
combined total of 214 trial witnesses and 2784 exhibits.
27
This case changed hands twice in the district court. The case was initially assigned to
then-Chief Judge John H. Moore II, who set a trial date of January 13, 1992. Judge Moore held
the “final” pretrial conference at which the civil conspiracy count was dismissed. Due to some
pressing matters that precluded his trial of the case, Judge Moore postponed the trial and
subsequently reset the case for trial on March 30, 1992, before Judge W. Brevard Hand of the
Southern District of Alabama. When Judge Hand’s schedule could not accommodate the trial,
Judge Moore assigned the case to Judge Anthony A. Alaimo of the Southern District of Georgia.
Judge Alaimo, after holding another “final” pretrial conference (which turned out to be the real
final pretrial conference), tried the case the following June.

21
The case thus went to trial on all but three of the counts alleged in JEJ’s complaint.28 In

its case in chief, JEJ called a variety of witnesses who described the following: Telesat’s entry

into the cable television market following the enactment of the Cable Act; Group’s and Capital’s

financial interest in Telesat; Telesat’s statements to local governmental authorities in its

applications for cable franchises, including statements regarding its corporate and financial

relationship with Group and Capital and its contractual relationship with JEJ; the incumbent

cable operators’ resistance to Telesat’s applications and, after the applications were granted,

their harassment of JEJ’s construction operations (on behalf of Telesat) in the field;29 Telesat’s

long range plans; areas in which Telesat, after obtaining a cable franchise, aborted its

construction plan; Group’s involvement in Telesat’s negotiations with incumbent cable

operators, some of whom entered into a joint venture with Telesat; Group’s reaction to Telesat’s

complaints about JEJ’s performance on the job; and Group’s involvement (through one or more

officers or directors of Group who were officers or directors of Telesat) in Telesat’s decision to

terminate the 1987 Contract.

JEJ also called expert witnesses to establish its case for damages. They included a

certified public accountant, Harold C. Farnsworth, and an economist, Dr. Frederick Raffa, both

of whom testified regarding the lost profits and loss of business value JEJ sustained because

28
The three claims dismissed prior to trial were civil conspiracy, conversion, and civil
theft.
29
According to JEJ personnel, incumbent operators would send employees to JEJ work
sites to look for (and document) any evidence of harm caused by JEJ to the incumbent operator’s
cables (over which JEJ was laying Telesat’s cables). Additionally, the incumbent operators were
required to provide maps of the public rights-of-way in which their cables had been laid; JEJ
alleges that incumbent operators intentionally provided maps that were poor and misleading in
order to make JEJ’s job more difficult.

22
Telesat failed to award it contracts for the construction of 1250 miles of cable system during

each year of the 1987 Contract.

At the close of the plaintiff’s case, the defendants moved the court pursuant to Fed. R.

Civ. P. 50(a) to enter judgment as a matter of law on each of JEJ’s claims.30 The court reserved

ruling on their motions.31 The defendants then presented their cases, during which JEJ withdrew

its claim for defamation.32 At the close of all of the evidence, the defendants once again moved

for judgment as a matter of law on all counts lodged against them.

The district court granted Capital’s motion in full. Group’s motion was granted on all

counts except breach of contract, tortious interference with contractual relations, and tortious

interference with contractual relations with subcontractors. Telesat’s motion was granted on all

30
Federal Rule of Civil Procedure 50(a) provides:

(1) If during a trial by jury a party has been fully heard on an issue and there is no
legally sufficient evidentiary basis for a reasonable jury to find for that party on
that issue, the court may determine the issue against that party and may grant a
motion for judgment as a matter of law against that party with respect to a claim
or defense that cannot under the controlling law be maintained or defeated
without a favorable finding on that issue.
(2) Motions for judgment as a matter of law may be made at any time before
submission of the case to the jury. Such a motion shall specify the judgment
sought and the law and the facts on which the moving party is entitled to the
judgment.
31
The court stated that it would reserve ruling until it heard the defendants’ evidence.
What the court probably meant was that it would entertain defense motions for judgment as a
matter of law after the defendants put on their case, not that the court would revisit their motions
and determine whether the plaintiff’s case, standing alone, established one or more claims for the
jury. Rule 50(a) does not authorize a trial judge, after the defense has presented its case (in
whole or in part), to revisit, and grant, a defense motion for judgment as a matter of law made at
the close of the plaintiff’s case without considering, in addition to the evidence presented in the
plaintiff’s case, the evidence presented by the defense.
32
The court dismissed this claim with prejudice.

23
counts except breach of contract and tortious interference with contractual relations with

subcontractors.33

In granting the Rule 50(a) motions, the district court struck the purported “mileage

guarantee” from the case, and thus (in effect) dismissed JEJ’s claim for the profits it allegedly

lost because Telesat had failed to award it contracts for the construction of 1250 miles of cable

system both in 1988 and in 1989. JEJ’s only remaining claim for breach of contract damages

was for $977,000 in unpaid invoices. The district court, however, permitted JEJ to argue to the

jury a claim not included in any count of the complaint – a claim for the profits JEJ would have

made on construction contracts Telesat gave to other contractors between April 13, 1989, when

Telesat terminated the 1987 Contract, and November 12, 1989, when the contract’s two-year

term expired, allegedly in derogation of JEJ’s right of first refusal.34

The district court submitted the case to the jury under a special verdict,35 which included

four sets of interrogatories. The first set was entitled “Piercing the Corporate Veil.” Answering

the interrogatories in this set, the jury found that Group “operated Telesat as a mere

instrumentality for . . . Group’s own improper purpose,” that “JEJ was deceived by . . . Group’s

improper use of Telesat,” and that “JEJ suffered damages proximately caused by . . . Group’s

improper use of Telesat.”

33
In granting judgment as a matter of law on the Florida RICO claims, the district court
dismissed both the criminal RICO claim for equitable relief and the civil RICO claim for
damages.
34
In essence, the district court permitted JEJ to amend its complaint to conform to the
evidence. See Fed. R. Civ. P. 15(b). The district court did so despite a pretrial order in which it
stated that amendments to conform to the evidence would not be permitted.
35
See Fed. R. Civ. P. 49(a).

24
Answering the interrogatories in the second set, entitled “Breach of Contract Claim,” the

jury found that “Telesat breached the November 13, 1987, contract by wrongfully terminating

JEJ’s services,” and that JEJ sustained damages in the sum of $1,500,000. Of that sum,

$300,000 represented amounts due JEJ for work performed on unspecified Telesat projects, and

$1,200,000 represented the profits JEJ would have made from jobs Telesat gave other

contractors (in derogation of JEJ’s “Right of First Refusal”) from April 13, 1989, to November

12, 1989. Relying on their answers to the first set of interrogatories, the jury found Group liable

for Telesat’s breaches and thus for the $1,500,000 in damages JEJ had sustained.36

Answering the interrogatories in the third set, entitled “Claim of Tortious Interference

with the November 13, 1987 Contract,” the jury found that “Group wrongfully caused or

directed Telesat to breach the . . . contract,” that JEJ sustained $1,500,000 in damages as a result

of the breach, and that the evidence “warrant[ed] the award of punitive damages” against Group

in the amount of $4,000,000.

Answering the interrogatories in the fourth set, entitled “Claim of Tortious Interference

with Contractual Relations with Subcontractors,” the jury found that “Telesat improperly

interfered with JEJ’s relationship with its subcontractors,” but that Group did not. The jury also

found that the evidence warranted an award of punitive damages in the amount of $100,000

against Telesat.37

36
The answers to the second set of interrogatories provided the basis for the entry of
judgment against Telesat. These answers, coupled with the jury’s answers to the first set of
interrogatories on veil piercing, provided the basis for the entry of judgment against Group.
37
The jury found in favor of Group on the issues covered by the fourth set of
interrogatories, notwithstanding its response to the first set of interrogatories, in which it found
that Group had “operated Telesat as a mere instrumentality for . . . Group’s own improper

25
D. Post-Trial proceedings

After the jury returned its special verdict, Telesat and Group, pursuant to Federal Rule of

Civil Procedure 50(b),38 renewed their motions for judgment as a matter of law, made at the

close of the evidence, on the claims the court submitted to the jury.39 At the same time, JEJ

moved the court to reconsider its rulings granting the defendants judgment as a matter of law and

to grant JEJ a new trial on the claims that the court had dismissed.

The court denied JEJ’s motion. The court granted Telesat’s motion as to the “tortious

interference with contractual relations with subcontractors” claim, striking the jury’s $100,000

punitive damages award on the ground that JEJ conceded that it had sustained no compensable

injury – a prerequisite to the recovery of punitive damages under Florida law – as a result of

purposes.”
38
Rule 50(b) provides:

If, for any reason, the court does not grant a motion for judgment as a matter of
law made at the close of all the evidence, the court is considered to have
submitted the action to the jury subject to the court’s later deciding the legal
questions raised by the motion. The movant may renew its request for judgment
as a matter of law by filing a motion no later than 10 days after entry of judgment
– and may alternatively request a new trial or join a motion for a new trial under
Rule 59.

Fed. R. Civ. P. 50(b).
39
Although Telesat and Group did not move alternatively for a new trial, their motion for
judgment as a matter of law raised issues that did not go to the legal sufficiency of JEJ’s
evidence; rather, the issues concerned alleged trial court errors in the admission and exclusion of
evidence. For example, Telesat and Group contended that “the evidence of ‘greenmail’ was
irrelevant to [JEJ’s] tortious interference claim.”

26
Telesat’s tortious interference.40 In all other respects, Telesat’s and Group’s motions were

denied.

After ruling on the parties’ motions for post-judgment relief, the court addressed the

parties’ motions for attorneys’ fees and costs. Section 35 of the 1987 Contract, entitled

“Attorney Fees,” provided:

Should it become necessary for either party to bring legal action or engage legal
counsel by virtue of any disagreement between the parties of this Agreement, the
prevailing party shall be entitled to receive, in addition to any other amounts, a
reasonable sum as and for attorney fees, together with the cost thereby incurred,
should it succeed in its actions.

Telesat claimed that it was entitled to recover attorneys’ fees under Section 35 of the

contract, because it prevailed on JEJ’s contract claim (insofar as it was based on the mileage

guarantee) and on JEJ’s tort claims rooted in the 1987 Contract. All defendants claimed

entitlement to attorneys’ fees under the “attorney’s fee” provision of the Florida civil RICO

statute, because they had prevailed on JEJ’s Florida civil RICO claim.41 Finally, the defendants

asked for an award of costs under Rule 54 of the Federal Rules of Civil Procedure. Meanwhile,

JEJ claimed that it was entitled to attorneys’ fees under Section 35, because it prevailed on its

breach of contract claim (as that claim stood after the court struck the mileage guarantee). JEJ

also moved the court for an award of costs under Rule 54.

40
Under Florida law, in a civil action based on misconduct in commercial transactions,
including those involving willful, wanton, or gross misconduct, a judgment for punitive damages
may not exceed three times the amount of compensatory damages awarded. See Fla. Stat. ch.
768.73(1)(a) (1997).
41
Florida Statutes chapter 772.104 provides that a defendant “shall be entitled to recover
reasonable attorney’s fees and court costs in the trial and appellate courts upon a finding that the
claimant raised a claim which was without substantial fact or legal support.”

27
The district court denied the parties’ motions for attorneys’ fees and costs, with the

exception of Capital’s Rule 54 motion for costs, which the court granted. The court then entered

final judgment – pursuant to the jury’s findings and its order disposing of the parties’ post-trial

motions – as follows: against Telesat and Group, jointly and severally, in the sum of $1,500,000

in compensatory damages, and against Group in the sum of $4,000,000 in punitive damages.

Following the entry of final judgment, Telesat, Group, and Capital appealed. Telesat and

Group appealed the district court’s ruling denying their post-trial Rule 50(b) motions for

judgment as a matter of law as to JEJ’s breach of contract claim, and Group appealed the court’s

denial of its Rule 50(b) motion as to JEJ’s tortious interference with contractual relations claim.

In addition, Telesat appealed the district court’s denial of its motion for attorneys’ fees under

Section 35 of the 1987 Contract; Telesat and Group appealed the district court’s denial of their

motion to tax costs under Rule 54; and Telesat, Group, and Capital appealed the district court’s

denial of their motion for attorneys’ fees for successfully defending JEJ’s Florida civil RICO

claim.

JEJ cross-appealed, challenging the district court’s entry of judgment as a matter of law

for Capital on all counts.42 JEJ also cross-appealed the judgment as a matter of law for Telesat

and Group on federal RICO, Florida civil RICO, breach of contractual obligation of good faith,

and fraudulent inducement, and the district court’s decision to strike the mileage guarantee from

42
JEJ’s brief does not indicate which counts against Capital should have been submitted
to the jury; we therefore assume that JEJ contends that the jury should have received all counts
(as suggested by its notice of appeal).

28
the breach of contract and breach of modified contract claims.43 In addition, JEJ cross-appealed

the district court’s denial of its motion for attorneys’ fees under Section 35 of the 1987 Contract.

III.

In this part, we address – and reject – all of JEJ’s appeals. Parts III.A and III.B examine

the district court’s decision to strike the mileage guarantee from JEJ’s breach of contract and

breach of modified contract claims. Part III.C addresses JEJ’s claim that the defendants violated

a statutorily-imposed contractual obligation of good faith, and part III.D examines JEJ’s claim

for fraudulent inducement. Part III.E considers JEJ’s federal and state RICO claims. Finally,

part III.F discusses the dismissal of Capital from the case.

Our review of a district court’s grant of a Rule 50 motion for judgment as a matter of law

is de novo; we apply the same standard that the district court applied in addressing the motion.

See Isenbergh v. Knight-Ridder Newspaper Sales, Inc., 97 F.3d 436, 439 (11th Cir. 1996).44 In

doing so, we consider all the evidence in the light most favorable to the nonmoving party, and

“independently determine whether the facts and inferences point so overwhelmingly in favor of

43
JEJ challenged other rulings of the district court in its notice of appeal; however, it
briefed only those issues listed above. Claims not presented to the court of appeals are
considered waived. See Cervi v. Kemp, 855 F.2d 702, 705 n.8 (11th Cir. 1988).
44
As an initial matter, we note that, with the exception of the Count I federal RICO
claim, all of JEJ’s claims were based on Florida law. Therefore, with respect to those claims, we
look to Florida substantive law for the rule of decision. Federal law, however, provides the rule
of procedure. The sufficiency of the evidence to create a case for the jury is a procedural issue to
which we apply federal law. See Excel Handbag Co. v. Edison Bros. Stores, Inc., 630 F.2d 379,
383-84 (5th Cir. 1980) ( “This Court uniformly has held . . . that the federal rather than the state
test should be applied to determine if there is sufficient evidence to create a jury question
because the issue is one of procedural rather than substantive law.”); see also ABC-Paramount
Records, Inc. v. Topps Record Distrib. Co., 374 F.2d 455, 460 (5th Cir. 1967).

29
the movant . . . that reasonable people could not arrive at a contrary verdict.” Pulte Home Corp.

v. Osmose Wood Preserving, Inc., 60 F.3d 734, 739 (11th Cir. 1995) (internal quotation marks

and citations omitted). “The nonmoving party must provide more than a mere scintilla of

evidence to survive a motion for judgment as a matter of law.” Isenbergh, 97 F.3d at 439. If

“the nonmoving party failed to make a showing on an essential element of his case with respect

to which he had the burden of proof,” then the entry of judgment as a matter of law is

appropriate. Pulte Home Corp., 60 F.3d at 738 (internal quotation marks and citations omitted).

A. Breach of Contract

In Count III of the complaint, “Breach of Contract,” JEJ claimed damages resulting from

Telesat’s breach of a guarantee in the 1987 Contract of 1250 miles of construction work per

year. We reject this claim on two grounds. First, the alleged mileage guarantee was not part of

the written 1987 Contract, and the parol evidence rule prevents the written contract from being

modified by an oral agreement. Second, and more fundamentally, JEJ gave no consideration in

exchange for the mileage guarantee, and thus no contract was formed.

1.

JEJ alleged that the 1987 Contract consisted of three documents that, considered together,

establish the mileage guarantee. The first document is the 1987 Contract itself, the second is

Telesat’s “1988 Materials Requisition Budget,” and the third is a letter from Glenn Johnson to

30
Brian McNamara, in which Johnson states that he is writing to “comfort” Telesat regarding the

Section 38 right-of-first-refusal provision.45

We reject the assertion that these documents establish a mileage guarantee. The 1987

Contract itself says nothing about a mileage guarantee, and the other two documents are not

attached as exhibits or in any other way incorporated into the written contract. As for the “1988

Materials Requisition Budget,” that document reflects Telesat’s estimate of the miles of cable

system that, assuming local government approval of Telesat’s pending franchise applications and

Group’s willingness to support Telesat’s construction plans, Telesat anticipated building in

several Florida counties in that calendar year. It contains no language other than the names of

the affected Florida counties, and, opposite the names, the word “Franchise” or “Private,”

abbreviations for the months of calendar year 1988, and “Totals” for the “Central,” “Western,”

and “Southern” districts’ mileages. The allegation that the Materials Requisition Budget

evidences “an essential element of [the 1987 Contract] . . . that JEJ would have first refusal on

construction for . . . Telesat, of at least 1250 miles of cable television construction per year” is

disingenuous. The Materials Requisition Budget contains nothing that could be considered a

contract provision, and therefore nothing that could be read as a mileage guarantee. As for the

“comfort” letter, it also evidences nothing about a mileage guarantee.

45
This letter is described in more depth in note 8, supra.

31
Because the mileage guarantee was not part of the written 1987 Contract, JEJ’s claim is

reduced to a claim that the mileage guarantee was an oral agreement that should be used in

interpreting the written agreement.46 As such, the claim is barred by the parol evidence rule.

In Florida, “evidence of a prior or contemporaneous oral agreement is inadmissible to

vary or contradict the unambiguous language of a valid contract.”47 Chase Manhattan Bank v.

Rood, 698 F.2d 435, 436 (11th Cir. 1983). This rule applies when the parties intend that a written

contract incorporate their final and complete agreement. One way to demonstrate such intent is

through the use of a merger clause. See E. Allan Farnsworth, Contracts § 7.3, at 476 (2d ed.

1990). In this case, a merger clause is found in Section 22 of the 1987 Contract, entitled “Entire

Agreement,” which states:

This Agreement contains the entire Agreement between [Telesat] and [JEJ].
There are no other agreements or understandings stated or implied except as are
contained herein. It is hereby further understood that any changes, modifications
or alterations of this Agreement shall be in writing and executed by all parties
hereto.

When a contract contains such a merger clause, the agreement is deemed to be “integrated,” such

that evidence of prior or contemporaneous agreements shall not be admitted to contradict the

terms of the contract.

46
The alleged guarantee, as described in part I.C, supra, was based on the following
sequence of events: Immediately prior to the signing of the 1987 Contract, McNamara – in
response to Glenn Johnson’s inquiry as to how many miles of cable system Telesat anticipated
building over the next two years – showed Johnson the “1988 Materials Requisition Budget”
and, according to Johnson, said “How’s that for a guarantee?” As for 1989, McNamara
supposedly said that 1989 would be “even better.”
47
The parol evidence rule is not a rule of evidence, but rather is a substantive rule of law.
See Knabb v. Reconstruction Fin. Corp., 197 So. 707, 715 (Fla. 1940). We therefore apply
Florida law on this issue. See supra note 44.

32
There are, however, several exceptions to the parol evidence rule that permit the

introduction of evidence of prior oral agreements even though the final written contract was

intended to be integrated. We address two of these exceptions – parol evidence may be admitted

(1) to show that the oral agreement induced the signing of the written contract, or (2) to explain a

latent ambiguity in the written contact.

As for the first exception, Florida courts recognize an “inducement” exception to the

parol evidence rule whereby “parol evidence is admissible to establish a contemporaneous oral

agreement which induced the execution of a written contract, though it may vary, change, or

reform the instrument.” Mallard v. Ewing, 164 So. 674, 678 (Fla. 1936). The party submitting

parol evidence under this exception, however, carries a heavy burden of proof. See Healy v.

Atwater, 269 So.2d 753, 755 (Fla. 3d DCA 1972). The inducement exception “requires the

[oral] agreement to be shown by evidence that is clear, precise, and indubitable; that it shall be

found that the witnesses are credible, that they distinctly remember the facts to which they

testify, and that they narrate the details exactly and that their statements are true.” Mallard, 164

So. at 678 (emphasis added); see also Rood, 698 F.2d at 438. As the trial judge noted, in

applying the inducement exception, “we do not believe that, when the existence of the

contemporaneous oral agreement rests solely on a credibility choice between two witnesses, the

proof of that accord is ‘clear, precise, and indubitable.’” Rood, 698 F.2d at 438 n.4 (quoting

Mallard, 164 So. at 678).

Having reviewed the record, including McNamara’s testimony denying the existence of

an oral mileage guarantee and Johnson’s inconsistent testimony regarding the substance of the

alleged guarantee, we agree with the district court that JEJ’s evidence concerning the oral

33
mileage guarantee was not “clear, precise, and indubitable.” The district court, therefore,

correctly held that the evidence was inadmissible under the inducement exception to the parol

evidence rule.

As for the second exception, JEJ argues that the district court erred in excluding

Johnson’s testimony regarding the mileage guarantee because such testimony was admissible to

explain a “patent ambiguity” in the 1987 Contract. JEJ asserts that the term “cable TV system”

is patently ambiguous.48 Under Florida law, however, parol evidence is not admissible to explain

a patent ambiguity; it is admissible to explain only a latent ambiguity.

[A] patent ambiguity is that which appears on the face of the instrument and
arises from the use of defective, obscure, or insensible language. Extrinsic
evidence is inadmissible if the ambiguity is patent, because such evidence would,
in effect, allow the court to rewrite the contract for the parties by supplying
information the parties themselves did not choose to include. A latent ambiguity,
on the other hand, is said to exist where a contract fails to specify the rights or
duties of the parties in certain situations and extrinsic evidence is necessary for
interpretation or a choice between two possible meanings. In such instance, this
evidence is required because the instrument itself does not provide sufficient
insight into the intent of the parties.

Crown Management Corp. v. Goodman, 452 So.2d 49, 52 (Fla. 2d DCA1984) (citations

omitted); see also Carson v. Palmer, 190 So. 720, 722 (Fla. 1939); Blazina v. Crane, 670 So.2d

981, 983 (Fla. 2d DCA. 1996); Landis v. Mears, 329 So. 2d 323, 325-26 (Fla. 2d DCA 1976); 3

Corbin on Contracts § 536, at 26 (1960) (discussing admissibility of evidence to aid in

interpreting terms in contracts and stating that “evidence of surrounding circumstances will be

48
The preamble to the 1987 Contract states, “Whereas [Telesat] desires to construct an
aerial and underground cable TV system (‘Systems’) in the State of Florida . . . .” (emphasis
added). The same phrase appears in the 1986 Contract. Thus, JEJ is making the dubious claim
that the meaning of the term “cable TV system” changed from one contract to the next – it
connoted a mileage guarantee in the 1987 Contract but not in the 1986 Contract.

34
admissible only in cases of latent ambiguity”). Because JEJ contends that the term “cable TV

system” was a patent, not a latent, ambiguity, and because a patent ambiguity may not be

explained by parol evidence, JEJ’s argument fails.

Accordingly, the district court ruled correctly when it invoked the parol evidence rule to

exclude Johnson’s testimony and to strike the mileage guarantee from the 1987 Contract.49

2.

We also affirm the decision to strike the mileage guarantee from the 1987 Contract on the

ground (not relied upon by the district court) that the mileage guarantee was unenforceable for

lack of consideration.50

49
The mileage guarantee could perhaps be seen as a separate agreement from the 1987
Contract (rather than as evidence modifying that contract), and thus the parol evidence rule
would not apply. In such a situation, however, the contract would be invalid under the statute of
frauds. Florida’s statute of frauds, entitled “Unenforceable Contracts,” provides that “[n]o action
shall be brought . . . upon any agreement that is not to be performed within the space of 1 year
from the making thereof . . . unless the agreement or promise upon which such action shall be
brought . . . shall be in writing and signed by the party to be charged therewith.” Fla. Stat. ch.
725.01 (1997). By its terms, the two-year oral mileage guarantee could not be performed within
one year, and the enforcement of that guarantee is thus barred by Florida’s statute of frauds. Cf.
Khawly v. Reboul, 488 So.2d 856 (Fla. 3d DCA 1986) (finding that statute of frauds barred both
breach of contract and fraud in the inducement claims because alleged oral agreement could not
be performed within one year); Ashland Oil, Inc. v. Pickard, 269 So.2d 714, 721 (Fla. 3d DCA
1972) (“The Florida rule is that the statute of frauds may not be avoided by a suit for fraud based
on oral representations . . . .”).
50
Telesat raised this ground in its answer, in its memorandum in support of its motion for
summary judgment, and (by reference) in its Rule 50(a) and 50(b) motions for judgment as a
matter of law. The district court, however, in denying these motions, did not explicitly address
this ground. Nevertheless, we may rely on this argument in our decision. See Bonanni Ship
Supply, Inc. v. United States, 959 F.2d 1558, 1561 (11th Cir. 1992) (noting that “this court may
affirm the district court where the judgment entered is correct on any legal ground regardless of
the grounds addressed, adopted or rejected by the district court” and affirming grant of summary
judgment on alternative ground); see also United States v. Blue Cross & Blue Shield of Ala., –

35
It is a fundamental principle of contract law that a promise is not enforceable unless it is

supported by consideration. See Restatement (Second) of Contracts § 17 (1981) (“[T]he

formation of a contract requires a bargain in which there is a manifestation of mutual assent to

the exchange and a consideration.”). In a bilateral contract, the exchange of promises by both

parties constitutes consideration:

[T]he courts in general require that before mutual promises will be enforced, each
as the consideration of the other, each party must promise to do something which
will yield a benefit or advantage to the other, or which will result in a detriment or
disadvantage to himself in exchange for the other promise. Whatever may be the
character of the thing promised, as a general rule it cannot serve as consideration
unless it is binding. . . . [M]utual promises in each of which the promisor
undertakes some act or forbearance that will be, or apparently may be, detrimental
to the promisor or beneficial to the promisee, and neither of which is void, will
qualify as consideration sufficient to support one another.

Williston on Contracts § 7:6, at 77-79, 87 (footnotes omitted).

If, however, “one of the promises appears on its face to be so insubstantial as to impose

no obligation at all on the promisor – who says, in effect, ‘I will if I want to’” – then that

promise may be characterized as an “illusory” promise, i.e., “a promise in form but not in

substance.” Farnsworth, Contracts § 2.13, at 75-76 (1990). An illusory promise does not

constitute consideration for the other promise, and thus the contract is unenforceable against

either party. See id.; Williston on Contracts § 7:7, at 88-89 (“Where an illusory promise is

made, that is, a promise merely in form, but in actuality not promising anything, it cannot serve

as consideration. . . . In such cases, where the promisor may perform or not, solely on the

condition of his whim, his promise will not serve as consideration.” (footnote omitted)).

F.3d – , – (11th Cir. 1998) (affirming district court’s dismissal of case on alternative ground); Lee
v. Hughes, 145 F.3d. 1272, 1277 n.6 (11th Cir. 1998) (same).

36
Florida law adheres to these basic contract principles.51 See Rosenberg v. Lawrence, 541

So.2d 1204, 1206 (Fla. 3d DCA 1988); Pick Kwik Food Stores, Inc. v. Tenser, 407 So.2d 216,

218 (Fla. 2d DCA 1981).

The 1987 Contract between Telesat and JEJ recites the giving and receipt of

consideration.52 Upon closer inspection, however, it becomes clear that JEJ gave nothing in

exchange for any of Telesat’s promises – including any mileage promise.53

The 1987 Contract placed no obligations on JEJ in terms of either quantity of work

performed or price charged for such work. The “right of first refusal” provision makes clear that

51
The Florida cases sometimes refer to this concept of lack of consideration due to an
illusory promise as “lack of mutuality.” See Pick Kwik Food Stores, Inc. v. Tenser, 407 So.2d
216, 218 (Fla. 3d DCA 1981) (holding executory features of a contract “void from the beginning
for lack of consideration or, as the rule is sometimes expressed, for lack of mutuality”). The
interchangeable use of “lack of consideration” and “lack of mutuality” is common; however, it
has been argued that for the sake of avoiding confusion, the concept is preferably expressed in
terms of consideration. See Williston on Contracts §§ 7:6, 7:14; Restatement (Second) of
Contracts § 79, at 200. In applying this proposition of law to the 1987 Contract, we discuss this
issue in terms of consideration rather than mutuality.
52
The preamble to the 1987 Contract states, “NOW, THEREFORE, in consideration of
the premises and for other good and valuable considerations, the receipt and sufficiency of which
is hereby severally acknowledged, the parties warrant, covenant and agree as follows . . . .”
53
Glenn Johnson testified at trial that JEJ was, in fact, obligated to perform 1,255.8 miles
of construction for Telesat (i.e., the mileage guarantee was mutual), although Johnson admitted
that this obligation was not written into the 1987 Contract. If JEJ were required to complete any
construction, then the contract would have been supported by consideration. It is unfathomable
that such an obligation would exist, however, given JEJ’s right of first refusal (which, unlike any
minimum construction requirement, appears in the written contract). Under Glenn Johnson’s
“mutual mileage guarantee” scenario, Telesat was required only to offer 1250 miles of
construction to JEJ, and JEJ was required to complete the same amount; thus, if JEJ refused any
work offered by Telesat, and Telesat offered only 1250 miles of construction, then JEJ
automatically would have breached the contract. Thus, JEJ’s purported minimum construction
requirement would essentially render the right of first refusal meaningless; we therefore interpret
JEJ’s claim of a mileage guarantee as merely a promise by Telesat to offer 1250 miles of
construction work per year.

37
JEJ could turn down every offer from Telesat, and thus do no work whatsoever. In addition,

JEJ’s right of first refusal gave it the option – albeit tacitly – to renegotiate, at any time, the

prices that it would charge Telesat for performing cable system construction work. The 1987

Contract contained price lists: Exhibits A, B, and C. The parties treated Telesat’s contract offers

as if they incorporated those price lists by reference; thus, when JEJ accepted a Telesat offer, it

billed Telesat for work performed using the prices quoted in the price lists. If JEJ believed that

the listed prices were too low, it could simply reject Telesat’s offer. JEJ presumably would do

so if the prices a competitor would charge Telesat for the work would be significantly higher. In

that event, JEJ would likely make a counteroffer.54

The net effect of the parties’ arrangement was that the prices listed in Exhibits A, B, and

C were merely a starting point for JEJ. If the prevailing “market” prices – those quoted by JEJ’s

competitors – were significantly higher than those contained in Exhibits A, B, and C, then JEJ

would likely make a counteroffer with prices somewhere between those quoted in the exhibits

and those prevailing in the market. Telesat, however, was constrained by the contract price lists.

If the prices quoted in Exhibits A, B, and C were higher than those prevailing in the market,

Telesat could not renegotiate – it would have to offer the work to JEJ at the prices quoted in the

exhibits. JEJ, in turn, would almost certainly accept the offer.

54
Nothing in the 1987 Contract precluded JEJ from making a counteroffer on any terms
that it chose. JEJ could counteroffer a cost-plus contract, or a fixed-price contract, or a contract
of the type used in this case. The contract price JEJ proposed could be higher than the price
dictated by the price lists attached as exhibits to the 1987 Contract; in addition, JEJ could modify
the provisions of that agreement that were to control how future construction contracts were to
be performed and how the risks were to be allocated between the parties.

38
According to the evidence JEJ presented in its case in chief, the incumbent cable

operators, in their campaign to forestall Telesat’s looming competition, made it known that any

contractor who did business with Telesat would be “blackballed.” The incumbent operators

targeted JEJ, and put it on the blackball list, because JEJ was Telesat’s principal contractor.55

We must assume that in agreeing to the prices quoted in Exhibits A, B, and C, JEJ took the risk

of being blackballed into account. We must also assume that JEJ’s competitors would take the

risk into account in deciding whether to accept a Telesat contract offer that JEJ rejected. In

either event, the analysis we set out above holds true: JEJ would be expected to reject any

Telesat offer that was too low – that is, an offer that JEJ’s competitors would reject – and to

make a counteroffer at a higher price.

Having concluded that the price lists did not entail any consideration from JEJ, we turn to

two other items in the contract that are possible sources of consideration. The first is contained

within the right-of-first-refusal provision; it states that JEJ “may perform such work for other

purchasers [besides Telesat], as long as not working in the same franchised area.” The

implication is that JEJ could not work for any system operator other than Telesat in an area in

which Telesat has a franchise. Such an agreement is an illegal contract in restraint of trade;56 as

such, JEJ’s concessions thereunder could not constitute valid consideration. See Castro v.

Sangles, 637 So.2d 989, 990 (Fla. 3d DCA 1994) (holding that a contract in violation of a

55
The alleged harassment by incumbent operators is described in note 29, supra.
56
Florida law prohibits all contracts in restraint of trade, with certain exceptions that are
not relevant here. See Fla. Stat. ch. 542.33 (1997); see also Fla. Stat. ch. 542.331 (1997)
(repealing chapter 542.33 but stating that it continues to govern contracts entered into before
July 1, 1996).

39
Florida statue is void); Thomas v. Ratiner, 462 So.2d 1157, 1159 (Fla. 3d DCA 1984) (same).

The second possible source of consideration is the attorneys’ fees provision (discussed at length

in part VI, infra). That provision, however, would impose a cost on JEJ only if JEJ breached

another provision of the contract. Because JEJ had no obligations under the contract, it would be

impossible for JEJ to be in breach. Thus, JEJ’s commitment to pay attorneys’ fees is illusory,

and could not serve as consideration.

In sum, while Telesat bound itself to offer JEJ all of its construction work, JEJ promised

nothing of substance in return; JEJ would accept the work if doing so would be in its self-

interest, however it might perceive that interest to be. Such a “promise” was illusory and could

not serve as adequate consideration for Telesat’s promise. Telesat’s obligation, under the right-

of-first-refusal clause, to offer JEJ any work – let alone 1250 miles of construction work in each

year of the 1987 Contract – is therefore unenforceable. This means that the 1987 Contract had

no more legal effect than an unsigned piece of paper indicating that the parties intended to enter

into a series of construction contracts that would incorporate by reference some of the provisions

appearing on the paper – provisions dealing with how the construction contracts would be

performed, how JEJ would be paid, and who would bear the responsibility of, among other

things, providing insurance and restoring the job site to its former condition.

For the foregoing reasons, we conclude that the 1987 Contract lacked consideration and

thus affirm the district court’s decision to strike the alleged oral mileage guarantee from Count

III of JEJ’s complaint.57

57
After taking this case under submission following oral argument, we asked counsel for
the parties for record citations that described the consideration, if any, that JEJ may have given
Telesat for its right of first refusal. Telesat’s attorneys cited no consideration. Counsel for JEJ

40
B. Breach of Modified Contract

In the alternative, Count V of JEJ’s complaint (“Alternative Claim for Breach of

Modified Contract”) alleges that “[s]ubsequent to the execution of the [1987 Contract] . . . the

parties agreed to modify the contract to include the construction of at least 1250 miles of cable

television construction per year.” Glenn Johnson testified at trial that this oral mileage guarantee

was made on November 13 by Brian McNamara immediately before he and McNamara signed

the contract. Nothing introduced into evidence at trial indicated that the McNamara guarantee

was made after that event. Given this absence of proof, we affirm the district court’s grant of

judgment as a matter of law as to Count V.58

C. Breach of Contractual Obligation of Good Faith

In Count IV, JEJ alleged that Telesat breached the contractual obligation of good faith

imposed by Florida Statutes chapter 671.203, a provision of the Uniform Commercial Code

(U.C.C.), by failing to offer JEJ contracts for the construction of 1250 miles of cable system

cited the fact that the price lists attached to the 1987 Contract were lower than the rates
contractors were charging cable operators for construction work; according to counsel, JEJ
agreed to discount its prices in order to induce Telesat to enter into the contract. This alleged
discount did not constitute consideration, however, because it left JEJ in the same position we
describe above: If the prices quoted in the contract price lists were significantly lower than those
prevailing in the market place, JEJ could reject Telesat’s offer of work and make a counteroffer,
knowing that Telesat would have to pay another contractor a higher price to do the work.
58
This claim also fails for the reason discussed in part III.A.2, supra (lack of
consideration), and for the reason discussed in note 49, supra (the statute of frauds).

41
during each of the two years covered by the 1987 Contract. The district court granted the

defendants judgment as a matter of law on Count IV on the ground that chapter 671.203 applies

only to contracts for the sale of goods, whereas the 1987 Contract was a contract for services.

We find no error in the district court’s ruling. It is clear that chapter 671.203 applies only

to contracts for the sale of goods.59 See Fla. Stat. ch. 671.203 (1997) (imposing obligation of

good faith on “[e]very contract or duty within this code” (emphasis added)); see also Florida

Mining & Materials Corp. v. Standard Gypsym Corp., 550 So.2d 47, 48 (Fla. 2d DCA 1989)

(“The Uniform Commercial Code (U.C.C.) governs the sale of goods in Florida.”). The 1987

Contract is a contract for the provision of services;60 the provisions of the U.C.C. are therefore

inapplicable. See Dionne v. Columbus Mills, Inc., 311 So.2d 681, 683 (Fla. 2d DCA 1975). We

thus affirm the district court’s grant of judgment as a matter of law on Count IV.

In addition, as discussed in part III.A, supra, there was no valid mileage guarantee to

which the good faith requirement could apply. The good faith requirement does not exist “in the

air.” Rather, it attaches only to the performance of a specific contractual obligation. See

59
JEJ alleges in its brief on cross appeal that Count IV was not based on chapter 671.203,
but on chapter 672.103. We find no mention of chapter 672.103 in the complaint; even so, it too
is part of Article II of the U.C.C. and thus is applicable only to the sale of goods. See Fla. Stat.
ch. 672.102 (1997) (noting scope of Article II and stating that it “applies to transactions in
goods”). JEJ also argues that Count IV was also based on the Florida common law, which it
argues, implies a covenant of good faith into every Florida contract. Not only did JEJ not plead
Count IV under a common law theory, but even if it had, judgment as a matter of law would
have been appropriate because, as discussed in part III.A, supra (and in the next paragraph), the
parties did not enter into an enforceable contract into which a covenant of good faith could be
implied.
60
Although the 1987 Contract contemplated the sale of some goods to JEJ (e.g.,
materials), such sales were incidental to the primary purpose of the contract – the provision of
cable installation services.

42
Hospital Corp. of Am. v. Florida Med. Ctr., Inc., 710 So.2d 573, 5775 (Fla. 4th DCA 1998).

Because Telesat had no contractual obligation to offer JEJ 1250 miles of construction work per

year, it had no duty to perform such an obligation in good faith.

D. Fraudulent Inducement

The district court granted judgment as a matter of law on Count VIII, “Alternate Claim

for Fraud in the Inducement,” on two grounds. First, the court applied the standard for admitting

evidence under the “inducement” exception to the parol evidence rule, imposing the requirement

that JEJ’s evidence of fraudulent inducement be “clear, precise, and indubitable,” and concluded

that JEJ’s evidence did not satisfy this requirement. Second, stating that a plaintiff in a

fraudulent inducement action must prove that he suffered injury by acting in justifiable reliance

on the defendant’s misrepresentation, the district court held as a matter of law that, under the

circumstances of this case, it was unreasonable for JEJ to have relied on a mileage guarantee that

the 1987 Contract failed to mention.

We find no Florida precedent supporting the court’s first ground – that to establish a tort

claim for fraudulent inducement, as opposed to a contract claim for breach, the evidence must be

43
“clear, precise, and indubitable.”61 We do find Florida precedent, however, for the district

court’s second ground.

Florida law defines fraudulent inducement as “[a] false representation of a material fact,

made with knowledge of its falsity, to a person ignorant thereof, with intention that it shall be

acted upon, followed by reliance upon and by action thereon amounting to substantial change of

position.” Biscayne Blvd. Properties, Inc. v. Graham, 65 So.2d 858, 859 (Fla. 1953) (quoting

Wheeler v. Baars, 15 So. 584 (Fla. 1894)). In order to prevail on a fraudulent inducement claim,

therefore, the plaintiff must prove the following elements:

(1) a false statement concerning a material fact;
(2) the representor’s knowledge that the representation is false;
(3) an intention that the representation induce another to act on it; and,
(4) consequent injury by the party acting in reliance on the representation.

Johnson v. Davis, 480 So.2d 625, 627 (Fla. 1985). The plaintiff’s reliance must be “justifiable.”

Saunders Leasing Sys., Inc. v. Gulf Cent. Distrib. Ctr., Inc., 513 So.2d 1303, 1306 (Fla. 2d DCA

1987).

As the district court noted in its formal order granting the defendants’ Rule 50(a)

motions, JEJ’s president “participated in the drafting of the [1987 Contract] and had every

61
The only cases expressing this “clear, precise, and indubitable” standard that we have
found are contract cases. Although the cases refer to “fraud,” they do so merely in the course of
discussing the fraudulent inducement exception to the parol evidence rule. See F.M.W.
Properties, Inc. v. Peoples First Fin. Sav. & Loan Ass’n, 606 So.2d 372, 374-75 (Fla. 1st
DCA1992); Venusa Dev. Corp. v. Southeast Mortgage Co., 297 So.2d 86, 88 & n.1 (Fla. 3d
DCA 1974). There is an important analytical distinction between a tort action seeking damages
for fraudulent inducement to enter into a contract and a breach of contract action where one of
the parties seeks to vary or explain the provisions of the contract by introducing parol evidence
under the “inducement” exception to the parol evidence rule. See Ashland Oil, Inc. v. Pickard,
269 So.2d 714, 722 (Fla.3d DCA 1972) (noting distinction and stating that parol evidence rule
applies “where the controversy is of a contractual nature, but it has no application where the
action is in tort for fraudulently inducing a party to enter into the writing”).

44
opportunity to include terms that he considered essential. The parties even made handwritten

changes to the agreement on the occasion of its signing. Neither the typed contract nor the

written changes said anything about a mileage guarantee.” In light of these uncontroverted facts

– and in light of the Section 22 merger clause, quoted in part III.A.1, supra – we agree that as a

matter of law it was unreasonable for JEJ to rely on an alleged oral mileage guarantee that it

chose not to reduce to writing. See Ungerleider v. Gordon, 936 F.Supp. 915 (M.D. Fla. 1996)

(applying Florida law and finding reliance on alleged oral promise “perforce unjustifiable” in

fraudulent inducement to contract case in which contract had integration clause and alleged oral

promise contradicted terms of written contract); Saunders Leasing Sys., Inc., 513 So.2d at 1306

(finding no fraudulent inducement in similar case). We accordingly affirm the district court’s

grant of judgment as a matter of law as to Count VIII on the court’s second ground – lack of

justifiable reliance.

We also affirm the district court’s decision on a more elementary ground – that JEJ was

not fraudulently induced to take “action . . . amounting to substantial change of position.” See

Biscayne Blvd. Properties, Inc. v. Graham, 65 So.2d 858, 859 (Fla. 1953) (quoting Wheeler v.

Baars, 15 So. 584 (Fla. 1894)). In other words, JEJ did not “act[] to [its] injury.” Huffstetler v.

Our Home Life Ins. Co., 65 So. 1, 2 (Fla. 1914); see also 27 Fla. Jur. 2d § 49, at 336-37 (1981)

(noting that the “person to whom the representation is made must have relied on it and, as a

consequence, been induced to act to his detriment” (footnotes omitted)).62

62
The district court did not base its decision on this ground. We nonetheless consider it
under our authority to affirm a district court’s judgment on a ground not relied on by the court.
See supra note 50.

45
JEJ argues that it suffered injury when Telesat fraudulently induced it to change its

position and sign the 1987 Contract. The 1987 Contract, however, did not require Telesat to

build any cable systems. And it did not require JEJ to do anything. Instead, it expressly granted

JEJ the right to decline Telesat’s offers of work at its whim. JEJ’s claim is thus reduced to the

allegation that it was fraudulently induced to sign a contract that did not bind it to perform any

work for Telesat.63 The law’s requirement that the plaintiff take “action . . . amounting to

substantial change of position” is accordingly absent.64

E. RICO

In this section, we address JEJ’s contention that the district court erred in granting the

defendants’ motions for judgment as a matter of law on Counts I and II, the federal and Florida

RICO claims.65

63
We note again that this contract was drafted almost exclusively by JEJ’s attorney. See
supra Part I.C.
64
We also affirm the district court’s decision on the basis of the Florida statute of frauds.
See supra note 49; see also Ashland Oil, Inc. v. Pickard, 269 So.2d 714 (Fla. 3d DCA 1972).
65
JEJ alleged that the defendants, in violation of 18 U.S.C. § 1962(a)-(d), carried out a
pattern of racketeering activity by engaging in a mail and wire fraud scheme. The scheme had
two parts. The first involved the defendants’ misrepresentations to franchising authorities for the
purpose of obtaining cable franchises for Telesat. The second involved misrepresentations to
JEJ for the purpose of inducing it to do business with Telesat. As for the first part, the district
court ruled in limine that the misrepresentations to franchising authorities were barred by the
Noerr-Pennington doctrine. Under that doctrine, “[j]oint efforts to influence public officials do
not violate the antitrust laws even though intended to eliminate competition.” United Mine
Workers of Am. v. Pennington, 381 U.S. 657, 670, 85 S.Ct. 1585, 1593, 14 L.Ed.2d 626 (1965);
see also McGuire Oil Co. v. Mapco, Inc., 958 F.2d 1552, 1558 (11th Cir. 1992). Finding this
case sufficiently analogous to the antitrust context in which the doctrine arose, the district court
applied the doctrine and prohibited JEJ from using the defendants’ petitioning of franchising
authorities as predicate mail and wire fraud acts, thus striking from Count I the first part of the
alleged scheme to defraud. Because, as we discuss infra, JEJ’s Count I claim fails on other

46
1.

Section 1962 of Title 18 of the United States Code criminalizes the following activities:

(a) It shall be unlawful for any person who has received any income derived,
directly or indirectly, from a pattern of racketeering activity . . . to use or invest,
directly or indirectly, any part of such income, or the proceeds of such income, in
acquisition of any interest in, or the establishment or operation of, any enterprise
which is engaged in, or the activities of which affect, interstate or foreign
commerce.
(b) It shall be unlawful for any person through a pattern of racketeering activity . .
. to acquire or maintain, directly or indirectly, any interest in or control of any
enterprise which is engaged in, or the activities of which affect, interstate or
foreign commerce.
(c) It shall be unlawful for any person employed by or associated with any
enterprise engaged in, or the activities of which affect, interstate or foreign
commerce, to conduct or participate, directly or indirectly, in the conduct of such
enterprise’s affairs through a pattern of racketeering activity.
(d) It shall be unlawful for any person to conspire to violate any of the provisions
of subsection (a), (b), or (c) of this section.

18 U.S.C. § 1962(a)-(d) (1994) (emphasis added). All four subsections of section 1962 thus

require proof of a “pattern of racketeering activity,” which is defined in 18 U.S.C. § 1961(5) as

“at least two acts of racketeering activity.” The definition of racketeering activity includes “any

act which is indictable” under a number of federal criminal statutes. Among these statutes are 18

U.S.C. § 1341, the federal mail fraud statute, and 18 U.S.C. § 1343, the federal wire fraud

statute. See 18 U.S.C. § 1961(1) (Supp. II 1996). Mail fraud or wire fraud “occurs when a

person (1) intentionally participates in a scheme to defraud another of money or property and (2)

grounds, we need not consider JEJ’s argument that the district court improperly applied the
Noerr-Pennington doctrine. As for the second part of the alleged scheme, the district court held
that JEJ’s failure to make out a case of fraudulent inducement under Count VII foreclosed the
use of that part as support for the Count I claim. Accordingly, because Count I alleged no other
acts of racketeering, the defendants were entitled to judgment as a matter of law.
Because the Count II Florida RICO claim mirrored the federal RICO claim, the court
granted a Rule 50(a) judgment on Count II as well.

47
uses the mails or wires in furtherance of that scheme.” Pelletier v. Zweifel, 921 F.2d 1465, 1498

(11th Cir. 1991).

Section 1964(c) provides a civil remedy to persons injured by reason of a violation of

section 1962:

Any person injured in his business or property by reason of a violation of section
1962 of this chapter may sue therefor in any appropriate United States district
court and shall recover threefold the damages he sustains and the cost of the suit,
including a reasonable attorney’s fee . . . .

18 U.S.C.A. § 1964(c) (Supp. II 1998). To prevail under section 1964(c), the plaintiff must

prove both a violation of section 1962(a), (b), (c) or (d), and that the plaintiff was injured “by

reason of” that violation.

JEJ alleges that in executing their greenmail scheme, the defendants violated all four

subsections of section 1962. The notion that one or more of the defendants violated subsections

(a) or (b) is frivolous. As for (a), assuming that one or more of the defendants engaged in a

pattern of racketeering activity as alleged, JEJ has presented no evidence from which a

reasonable jury could find that such defendant(s) “received income from [such] activity and used

that income in the operation of the enterprise,” i.e., Telesat.66 As for (b), indulging the same

assumption, we find no evidence that any of the defendants “acquired or maintained, directly or

indirectly, an interest in or control of [Telesat] through a pattern of racketeering activity.”

66
JEJ has alleged that Telesat is an “enterprise” within the meaning of 18 U.S.C. §
1961(4), and thus participation therein creates potential RICO liability under 18 U.S.C. § 1962.
We have held that, for RICO purposes, a single entity can be both the defendant and the
“enterprise” in which the defendant participated. See Cox v. Administrator United States Steel
& Carnegie, 17 F.3d 1386, 1398 (11th Cir. 1994).

48
With respect to subsection (c), however, a reasonable jury could find that Group or

Capital, as “person[s] . . . associated with [Telesat,] conduct[ed] and participate[d], directly or

indirectly, in the conduct of” the affairs of Telesat. With respect to subsection (d), a reasonable

jury could find that the defendants conspired to violate subsection (c). As to those two

subsections, therefore, the sufficiency of JEJ’s case under Count I turns on whether the

defendants committed two or more predicate acts of mail or wire fraud that injured JEJ in its

“business or property.”

Count I alleges that the defendants committed the following fraudulent acts (each

facilitated by the use of the mails or wires), and thus engaged in a pattern of racketeering

activity:

(a) Fraudulently misrepresenting [Telesat’s, Group’s, and Capital’s] present
intentions concerning cable construction schedules when, in truth and in fact,
[they] had no intention to complete the construction schedules as represented;

(b) On more than two occasions, fraudulently inducing [JEJ] to agree to continue
construction services in franchise areas when, in fact, [they] had already decided
to sell their operations in those respective areas;

(c) Misrepresenting their intentions concerning construction and business plans to
various franchising authorities and refusing to reveal their true intentions;

(d) Instructing [Telesat’s] employees to fail to process invoices in a timely
fashion in order to obtain leverage against [JEJ]; and

(e) Failing to pay [JEJ] monies due and owing, in an attempt to extort a release
from [JEJ].

49
The misrepresentations set out in (c) were made to the franchising authorities, and the

misrepresentations alleged in (a) may have been made to them as well. The conduct alleged in

(a), (b), (d), and (e) was directed toward JEJ.67

We consider first the misrepresentations made to franchising authorities. We are unable

to understand how these misrepresentations injured JEJ in any way. If anything, the

misrepresentations inured to JEJ’s benefit. By encouraging the approval of Telesat’s franchise

applications, they allowed Telesat to build more cable systems and, thus, to offer JEJ more

construction work. But for the defendants’ scheme, Telesat would have had no work to offer. If

Telesat’s intent was to overbuild the existing cable system until the incumbent cable operator

agreed to participate in a joint venture or to purchase Telesat’s franchise (in which case the

overbuild, and JEJ’s construction work, would cease), Telesat would have to pay JEJ for the

work already performed and the profits JEJ would have made had it been allowed to complete

the job.

Putting this point aside, even if we were to assume that JEJ suffered injury as a result of

the misrepresentations made to the franchising authorities, JEJ did not suffer a direct injury,

proximately caused by those acts, as required under section 1964(c). See 18 U.S.C. § 1964(c)

(requiring that plaintiff be “injured . . . by reason of” a violation of section 1962). As we have

explained:

[A] plaintiff has standing to sue under section 1964(c) only if his injury flowed
directly from the commission of the predicate acts. . . . This means that, when the
alleged predicate act is mail or wire fraud, the plaintiff must have been a target of

67
Because act (a) may be read as directed either toward the franchising authorities or
toward JEJ, we read act (a) as directed toward both.

50
the scheme to defraud and must have relied to his detriment on misrepresentations
made in furtherance of that scheme.

Pelletier v. Zweifel, 921 F.2d 1465, 1499-1500 (11th Cir. 1991), see also Holmes v. Securities

Investor Protection Corp., 503 U.S. 258, 266-68, 112 S.Ct. 1311, 1317-18, 117 L.Ed.2d 532

(1992) (imposing proximate rather than factual cause requirement in holding that to bring civil

RICO claim under section 1964(c) plaintiff must have suffered direct injury as a result of

defendant’s violation of section 1962). Because the misrepresentations the defendants are said to

have made were directed to the franchising authorities, not JEJ, JEJ lacks standing under section

1964(c) to prosecute a claim based on such misrepresentations.

JEJ does have standing, however, to prosecute a claim based on defendants’ conduct that

was directed toward it, as alleged in paragraphs (a), (b), (d), and (e). In (a), JEJ alleged that the

defendants fraudulently misrepresented their present intentions about Telesat’s construction

schedules. More specifically, the defendants did not intend that Telesat would abide by the

schedules it established for the construction work JEJ was to perform; in truth, they fully

anticipated that these schedules would not be completed (because Telesat would reach a deal

with the incumbent cable operator and dispense with its overbuild). In (b), JEJ alleged that the

defendants induced it to continue working in a particular franchise area even though Telesat had

already decided to shut the job down and enter into a joint venture with the incumbent operator.

We fail to see, however, how JEJ could have suffered any injury as a result of the

conduct described in paragraphs (a) or (b). Under the protocol the parties adopted and followed,

after Telesat acquired a franchise and prepared the construction plans and specifications, it

would issue an offer in the form of a “Notice to Proceed.” If JEJ accepted the offer, thus

creating a contract, it would commence construction. If Telesat cut the job short, JEJ would be

51
entitled to payment for work it had done, as well as for the profits it would have made had it

completed the job.

Paragraphs (d) and (e), describing Telesat’s undue delay in paying JEJ’s invoices, alleged

nothing more than breach of contract. This is so notwithstanding the allegation that Telesat

delayed paying the invoices in order to extort a release from JEJ of its claims (other than those

evidenced by the invoices) against Telesat. Even if we were to assume that Telesat delayed

paying JEJ’s invoices for an extortionate purpose, Telesat’s conduct would not constitute a

“scheme to defraud” proscribed by the mail and wire fraud statutes; thus, the acts of nonpayment

could not serve as acts of racketeering. See United States v. Kreimer, 609 F.2d 126, 128 (5th Cir.

1980) (explaining that the mail fraud statute “does not reject all business practices that do not

fulfill expectations, nor does it taint every breach of a business contract”);68 McEvoy Travel

Bureau, Inc. v. Heritage Travel, Inc., 904 F.2d 786, 791 (1st Cir. 1990) (stating, with reference to

mail and wire fraud statutes, “[n]or does a breach of contract in itself constitute a scheme to

defraud”).

For the foregoing reasons, we affirm the district court’s judgment for the defendants as a

matter of law on JEJ’s federal RICO claim.

2.

As indicated in part II.A, supra, JEJ’s Florida RICO claim essentially replicated the

allegations of its Count I federal RICO claim; the acts cited in Count II as constituting a “pattern

68
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this
court adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to
October 1, 1981.

52
of racketeering activity” were the same fraudulent acts cited in Count I. Count II, however,

sought both legal and equitable relief. Nevertheless, in briefing its cross-appeal, JEJ has not

challenged the district court’s rejection of its claim that the criminal RICO statute entitled it to

equitable relief. It challenges, instead, the district court’s decision granting the defendants’ Rule

50(a) motion for judgement as a matter of law on its treble damages claim under the civil RICO

statute.

The civil RICO statute is modeled on federal RICO’s private civil remedy provision, 18

U.S.C. § 1964(c). It provides that:

Any person who proves by clear and convincing evidence that he or she has been
injured by reason of any violation of the provisions of s. 772.103 shall have a
cause of action for threefold the actual damages sustained and, in any such action,
is entitled to minimum damages in the amount of $200, and reasonable attorney’s
fees and court costs in the trial and appellate courts.

Fla. Stat. ch. 772.104 (1997). Chapter 772.103 makes it unlawful for any person:

(1) Who has with criminal intent received any proceeds derived, directly or
indirectly, from a pattern of criminal activity . . . to use or invest, whether directly
or indirectly, any part of such proceeds, or the proceeds derived from the
investment or use thereof, in the acquisition of any . . . interest . . . in the
establishment or operation of any enterprise.
(2) Through a pattern of criminal activity . . . to acquire or maintain, directly or
indirectly, any interest in or control of any enterprise . . . .
(3) Employed by, or associated with, any enterprise to conduct or participate,
directly or indirectly, in such enterprise through a pattern of criminal activity . . . .
(4) To conspire . . . to violate any of the provisions of subsection (1), subsection
(2), or subsection (3).

Fla. Stat. ch. 772.103 (1997) (emphasis added). A “pattern of criminal activity” is defined in

chapter 772.102(4) as:

at least two incidents of criminal activity that have the same or similar intents,
results, accomplices, victims, or methods of commission or that otherwise are
interrelated by distinguishing characteristics and are not isolated incidents . . . .

53
Fla. Stat. ch. 772.102(4) (1997). Included in the definition of criminal activity is any conduct

that is “subject to indictment or information as a criminal offense and listed in [the federal RICO

statute,] 18 U.S.C. § 1961(1)(A),(B),(C), or (D).” Such conduct includes, of course, mail and

wire fraud.

Reduced to its essentials, Count II seeks relief on the basis of the same mail and wire

fraud allegations as Count I presented. Perceiving no reason for applying a different rationale to

Count II than the one we applied in rejecting Count I, we affirm the district court’s decision

granting judgment as a matter of law for the reasons we have affirmed its judgment on Count I.

F. Claims against Capital

The district court granted Capital judgment as a matter of law on all counts because it

concluded that JEJ failed to produce any evidence of independent wrongdoing on the part of

Capital. In its brief on cross appeal, JEJ takes issue with the district court’s conclusion, arguing

that a reasonable jury could have found wrongdoing on the part of Capital from the evidence

before it. In support of its argument, JEJ cites evidence demonstrating that: Capital was

Telesat’s parent; Capital financed the construction of Telesat’s cable systems;69 Capital’s

financial commitment to Telesat gave credibility to Telesat’s franchise applications; and Capital

was controlled by persons who were officers of Telesat, Group, or both.

The evidence JEJ cites merely demonstrated that Capital provided its wholly-owned

subsidiary with funding and, as prudence would require, thereafter monitored its subsidiary’s use

69
The form of the investment – whether it was by equity investment, loan, or independent
guarantee of Telesat obligations – is not known.

54
of the funds. Capital’s conduct could hardly be labeled “wrongful.”70 The district court’s

decision granting Capital judgment as a matter of law is accordingly affirmed.

IV.

Group appeals the judgment against it for breach of contract and tortious interference

with contractual relations. We find that the evidence was insufficient to support either verdict,

and thus reverse the judgment against Group in its entirety.

A. Breach of Contract

The jury found that Group was operating Telesat as “a mere instrumentality” for its own

illegal purposes, and thus held Group jointly liable with Telesat for breach of contract under the

“piercing the corporate veil” doctrine. The Florida Supreme Court has spoken to the issue of

when the corporate veil should be pierced as follows:

Corporations are legal entities by fiction of law. Their purpose is generally to
limit liability and serve a business convenience. Courts are reluctant to pierce the
corporate veil and only in exceptional cases will they do so. Such instances are
for fraud as where creditors are misled and defrauded or where the corporation is
created for some illegal purpose or to commit an illegal act.

State ex rel. Continental Distilling Sales Co. v. Vocelle, 27 So.2d 728, 729 (Fla. 1946). A party

seeking to pierce the corporate veil and hold a parent corporation liable for the actions of its

subsidiary must prove: (1) that the subsidiary was a “mere instrumentality” of the parent, and (2)

that the parent engaged in “improper conduct” through its organization or use of the subsidiary.

70
As the district court stated in an order ruling on the parties’ post-trial motions: “The
defect in JEJ’s case against [Capital] was that JEJ attempted to rely almost entirely on evidence
against [Group] to implicate [Capital] in wrongdoing. . . . In order to build a proper case against
[Capital] [JEJ] would have needed to place greater focus on actions taken by [Capital].”

55
See Dania Jai-Alai Palace, Inc. v. Sykes, 450 So.2d 1114, 1117-21 (Fla. 1984). Improper

conduct is present only in “‘cases in which the corporation was a mere device or sham to

accomplish some ulterior purpose . . . or where the purpose is to evade some statute or to

accomplish some fraud or illegal purpose.’” Id. at 1117 (quoting Mayer v. Eastwood-Smith &

Co., 164 So. 684, 687 (Fla. 1935)).

Applying these principles, we conclude that JEJ failed to make out a case for the jury on

its claim that Group should be held liable for Telesat’s actions. Even if we were to assume that

Telesat was a “mere instrumentality” of Group, there is simply no evidence that Group used

Telesat for the purpose of engaging in improper conduct. The relationship between Group and

Telesat was essentially that of a normal parent and subsidiary with no misuse of the corporate

form.71 JEJ introduced no testimony indicating that it was deceived or misled as to the

independent identities of the two corporations or that it believed that it had entered into a

contractual relationship with Group.

JEJ contends that Group engaged in “generalized improper conduct,” and that such

conduct provided ample grounds for piercing the corporate veil. As it did in its closing argument

to the jury, JEJ argues that Group used Telesat to carry out an elaborate greenmail scheme:

Group “used Telesat to trick franchise authorities and competitors” knowing that “it would reap

millions in profits.” As the trial judge correctly ruled in limine, there was nothing unlawful

about Telesat’s franchising activity. Moreover, Congress, in deregulating rates under the Cable

Act, intended that cable companies such as Telesat would apply for franchises in areas with

71
Although Capital was Telesat’s parent, for purposes of this discussion we assume that
Group was Telesat’s parent, because Group owned Telesat’s sole shareholder, Capital. Because
we hold that, even under this assumption, JEJ cannot “pierce” to Group, we do not need to
address whether JEJ would otherwise have needed to pierce to Capital before piercing to Group.

56
incumbent cable operators; indeed, one of the very purposes of the Cable Act was to induce

competition in the cable industry. Congress certainly understood the business reality that

incumbent cable operators, in an effort to protect their monopolies and the profits that rate

deregulation could provide, might attempt to buy out newcomers such as Telesat rather than

compete. Group did nothing more than accept Congress’ invitation to enter into competition

with the incumbents. We are at a loss to understand how that could constitute “greenmail” or

anything that the law would consider improper.

We find nothing in the record that could be said to constitute the sort of conduct that

would warrant piercing the corporate veil. We therefore conclude that the district court erred in

refusing to grant Group judgment as a matter of law on JEJ’s breach of contract claims.

B. Tortious Interference with Contract

Group also contends that the evidence was insufficient to make out a case for the jury on

JEJ’s “Alternative Claim for Tortious Interference with Contractual Relations.”72 Under Florida

law, the elements of a cause of action for tortious interference with a contractual relationship are:

(1) The existence of a contract,
(2) The defendant’s knowledge of the contract,
(3) The defendant’s intentional procurement of the contract’s breach,
(4) Absence of any justification or privilege, [and]
(5) Damages resulting from the breach.

72
In renewing its Rule 50(b) motion for judgment as a matter of law following trial,
Group argued that it was entitled to judgment as a matter of law on this tortious interference
claim because the jury could not pierce the corporate veil to find Group liable for Telesat’s
breach of the 1987 Contract and then also find Group liable for tortiously interfering with the
same contract. The district court rejected Group’s argument, and Group has reiterated the
argument on appeal. Because in part IV.A, supra, we conclude that the evidence was insufficient
to support piercing the corporate veil and holding Group liable for breach of the 1987 Contract,
the issue of simultaneous liability is no longer before us.

57
Florida Tel. Corp. v. Essig, 468 So.2d 543, 544 (Fla. 5th DCA 1985). Group concedes that JEJ

established the first two elements, and, given the circumstantial evidence in the record,73 we

conclude that JEJ established the third element. As for the fourth element, however, the absence

of any justification or privilege, JEJ’s case fails as a matter of law.

Florida law recognizes the principle that actions taken to safeguard or protect one’s

financial interest, so long as improper means are not employed, are privileged. See Ethyl Corp.

v. Balter, 386 So.2d 1220, 1225 (Fla. 3d DCA 1980); Babson Bros. Co. v. Allison, 337 So.2d

848, 850 (Fla. 1st DCA 1976). Group, as the owner of Telesat’s sole shareholder, Capital, had

the requisite financial interest in Telesat’s business to invoke the privilege. See Babson Bros.

Co., 337 So.2d at 850 (“It is clear that a controlling stockholder of a corporation falls within the

privilege when he interferes with a contract between the corporation and a third person.”).74

Furthermore, JEJ presented no evidence that Group employed improper means in protecting this

interest.

JEJ contends that Group’s actions were not privileged because they were motivated by a

malicious intent “to retaliate against Johnson for complaining about the lack of mileage and

73
That evidence indicated that Group, through its ownership of Capital, Telesat’s sole
shareholder, closely monitored Telesat’s cable system construction, including the work JEJ was
doing for the company. In addition, Telesat informed Group (1) that JEJ’s construction work
was substandard, (2) that JEJ was constantly complaining about not having enough work, (3) that
JEJ was threatening to bring suit because Telesat had not lived up to the alleged mileage
guarantee (which Telesat denied having made), and (4) that Telesat was considering canceling
the 1987 Contract.
74
Group’s ownership interest in Telesat distinguishes this case from Yoder v. Shell Oil
Co., 405 So.2d 743, 744 (Fla. 2d DCA 1981), in which the court stated that “a privilege to
interfere with a third party’s conduct does not include the purposeful causing of a breach of
contract.”

58
becoming wise to the greenmail scheme.” Whether Group acted with malice is of no moment;

under Florida law, its actions were privileged. As one Florida appellate court has observed, “it is

irrelevant whether the person who takes authorized steps to protect his own interests does so

while also harboring some personal malice or ill-will towards the plaintiff . . . .” See Ethyl

Corp., 386 So.2d at 1225; see also Menendez v. Beech Acceptance Corp., 521 So.2d 178, 180

(Fla. 3d DCA 1988) (discussing financial interest privilege and stating that “conduct engaged in

for legitimate purposes, even if tinged with animosity and malice, does not give rise to a cause of

action for interference with a contractual relationship”).

In sum, we conclude that the evidence was insufficient to establish a case of tortious

interference.75 Accordingly, Group was entitled to the entry of judgment as a matter of law on

this claim.76

V.

Telesat appeals the judgment against it on Count III, “Breach of Contract.” Count III, as

pled in the complaint, contained two independent causes of action. The first was based on the

mileage guarantee; the second was based on the invoices JEJ had submitted to Telesat for work

done prior to Telesat’s termination of the 1987 Contract. As noted in part II.B, supra, after

75
The jury found Group liable for $1.5 million in compensatory damages (based on the
alleged damages to JEJ from Telesat’

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/73360. Public record. Not legal advice.