Petition — Balter v. Ethyl Corp.

Supreme Court brief1981

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Office-Supreme Court, U.S.

& 0 ie 1 ~ 5 ce) FiLéeéD

‘PR 21 1981

ALEXANDER L. STEVAS,

CLERK

CASE NO.

in the

Supreme Court

of the

United States

October Term, 1980

DAVID BALTER,

Petitioner,

VS.

ETHYL CORPORATION,

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE SUPREME COURT OF FLORIDA

Guy B. Bailey, Jr., and

Jesse C. Jones,

Counsel of Record for Petitioner,

Suite 1820, One Biscayne Tower

Miami, Florida 33131

(305) 374-5505

. Of Counsel: Sara Soto

April 21, 1981

QUESTIONS PRESENTED

DOES FLORIDA’S SYSTEM OF TERRI-

TORIALLY DISTINCT FINAL APPELLATE

COURTS, EACH WITH ITS OWN SUBSTAN-

TIVE LAW, DENY EQUAL PROTECTION?

IS JURY TRIAL IN CIVIL CASES A RIGHT

FUNDAMENTAL TO THE AMERICAN

SCHEME OF JUSTICE, WHICH THE STATE

CANNOT, CONSISTENT WITH DUE

PROCESS, DENY TO PETITIONER?

TABLE OF CONTENTS

TABLE OF AUTHORITIES ................... iii

CONSTITUTIONAL PROVISIONS INVOLVED . x

eth dupe, oA Rana oe 1

RRR RSE it a a ae 2

STATEMENT OF THECASE................. 3

STATEMENT OF THEFACTS ................ 4

REASONS FOR ALLOWANCE OF THE WRIT... 10

FLORIDA’S CREATION OF FIVE APPELLATE

DISTRICTS, EACH FREE TO DEVELOP ITS OWN

SUBSTANTIVE LAW, DENIED BALTER’S RIGHT

TO EQUAL PROTECTION. ................... 10

WE Arey Pe cas oo oS as oho vnc oc 21

THE FLORIDA THIRD DISTRICT COURT OF

APPEAL DEPRIVED BALTER OF HIS CONSTI-

TUTIONAL RIGHT TO A JURY TRIAL ........ 21

RePNPNE es vs ss cane cae ies. 27

TABLE OF AUTHORITIES

Cases

Allstate Ins. Co. v. Hague,

US. , 101 S. Ct. 633 (1981)

Ansin v. Thurston,

101 So.2d 808 (Fla. 1958) ...........

Baldwin v. New York,

Me RI oe ieee sv iwee ok

Beacon Theatres v. Westover,

859 U.S. 500 (1959) ................

Benton v. Maryland,

395 U.S. 784 (1969) ................

Boddie v. Connecticut,

ow SG. a ee

Burch v. Louisiana,

WON BIE BAPUAWTODs vce soc cccecens

Cantwell v. Connecticut,

910 U.S. 206 (1940)................

Capital Traction Co. v. Hof,

Pee MAM ei. sc vi vem ene,

Chambers v. Baltimore & Ohio R.R. Co.,

Bur Bae PO UOOT) . oo sc ivvddeieens

TABLE OF AUTHORITIES -

(Continued)

Cases

City of New Orleans v. Dukes,

GUE TAMMEMET VOROOD 5 vin ek eh es vnce een

Dairy Queen, Inc. v. Wood,

Dimick v. Schiedt,

os 2 ae ae res

Douglas v. Alabama,

NP RCRD 6 cece eee ces

Douglas v. California,

PIM COP UROOO) oc cece ees

Duncan v. Louisiana,

a Se nr

Dunn v. Blumstein,

ORS Se 5)

Erie R.R. Co. v. Tompkins,

OE IU MO IOOOD ccc cece cee rec cec’

Fay v. New York,

EE yj er

Foley v. Weaver Drugs, Inc.

177 So.2d 221 (Fla. 1965) ..............

TABLE OF AUTHORITIES

(Continued)

Cases Page

Gideon v. Wainwright,

372 U.S. 335 (1963)... 2.000002, 21

Griffin v. County School Bd. of Prince

Edward County,

377 U.S. 218 (1964)... 00. 17

Griffin v. Illinois,

351 U.S. 12 (1956)... 2... 14

Hudson Water Co. v. McCarter,

209 U.S. 349 (1906) ........................ Q

In re Oliver,

333 U.S. 257 (1948) ........................ 21

In re Winship,

397 U.S. 358 (1970)... ee. 21

In re U.S. Financial Securities Litigation,

609 F.2d 411 (1979), cert. denied,

446 U.S. 929 (1980) ........................ 24

Insurance Field Serv., Inc. v. White & White

Inspection and Audit Serv., Inc.,

384 So.2d 303 (Fla. 5th DCA 1980)........... 10

Johnson v. Robison,

CO / 16

TABLE OF AUTHORITIES

(Continued)

Cases Page |

Ker v. California,

a 6c G's Cain y 0d wb 0 4.0 oreo 'e 21

Klopfer v. North Carolina,

ST ee ee 21

Lane v. Brown,

eo 6s Wide wb 0g oad acu sess 14

Lindsey v. Normet,

I a as sy 4 do sso 0-0 13, 14

Louisiana ex rel. Gremillion v. NAACP,

EE ie a 21

Malloy v. Hogan,

ago. ys 5b 0:4 40 0 oe 21

Marbury v. Madison,

1 Cranch 137, 2 L.Ed. 60 (1803) .............. 12

McGowan v. Maryland,

ER 17, 18

McKeiver v. Pennsylvania,

ee a ek keep ad vse caces 25

Melancon v. McKeithen,

345 F.Supp. 1025 (E.D. La. 1972), aff'd,

409 U.S. 943 (1972), 409 U.S. 1098 (1973) ...... 21

TABLE OF AUTHORITIES

(Continued)

Cases Page

Memorial Hosp. v. Maricopa County,

aE EE Ce eas bn ska ees 17

Missouri v. Lewis,

Bi ISR a oa Pane Pag 18

North v. Russell,

METI, cic wc wvcvavecesddevcea 17

Parklane Hosiery Co. v. Shore,

cas sv viele aele-eaee «Re 25

Parsons v. Bedford,

I os iv os be aw: v ke oe a mae eee 22

Pointer v. Texas,

I i ae ee 21

Rinaldi v. Yeager,

UME os 2s cs 6 b's CR RAS wee ae aN 14

Ross v. Bernhard,

I 12S gk ee as bg a oldie 24

Ross v. Moffitt,

Ee SREP ok css ii vv oun ccnweewe 14

Salsburg v. Maryland,

Se STAD so sce eect ceva casnweae 17

vii

TABLE OF AUTHORITIES

(Continued)

Cases

San Antonio Indep. School Dist. v. Rodriguez,

eR ss wa Sabin vee ba xean

Serafino v. Palm Terrace Apartments, Inc.,

343 So.2d 851 (Fla. 2d DCA 1976).........

Shapiro v. Thompson,

Smith v. Bennett,

es ag vw y aids a visescocees

Sosna v. Iowa,

MINEO 6.5 as i cek cesses ctsessuns

U.S. v. Kras,

oo 8 Er

U.S. v. MacCollum,

MENUS os ais ow dp kiniens codecs

U.S. v. Nixon,

Re TINUED sus av be ont ths ae ces

U.S. v. Wonson,

28 Fed. Cas. 745 (C.C.D. Mass. 1812) .......

viii

* >

TABLE OF AUTHORITIES

(Continued)

Cases Page

Vlandis uv. Klein,

EE 18

Washington v. Texas,

cE 21

Wilson v. Aiken Indus., Inc.,

US. , 99 S.Ct. 366 (1978) ...... 20

CONSTITUTIONAL PROVISIONS INVOLVED

Fla. Const. art. V, §3(b) (1968 Revision as amended

1980): |

Jurisdiction — The supreme court:

(1) Shall hear appeals from final judgments

of trial courts imposing the death penalty and

from decisions of district courts of appeal

declaring invalid a state statute or a provision

of the state constitution.

(2) When provided by general law, shall

hear appeals from final judgments entered in

proceedings for the validation of bonds or

certificates of indebtedness and shall review

action of statewide agencies relating to rates

or service of utilities providing electric, gas,

or telephone service.

(3) May review any decision of a district

court of appeal that expressly declares valid a

state statute, or that expressly construes a

provision of the state or federal constitution,

or that expressly affects a class of constitutional

or state officers, or that expressly and directly

conflicts with a decision of another district

court of appeal or of the supreme court on the

same question of law.

(4) May review any decision of a district

court of appeal that passes upon a question

certified by it to be of great public importance,

or that is certified by it to be in direct conflict

with a decision of another district court of

appeal.

(5) May review any order or judgment of a

trial court certified by the district court of

appeal in which an appeal is pending to be of

great public importance, or to have a great

effect on the proper administration of justice

throughout the state, and certified to require

immediate resolution by the supreme court.

(6) May review a question of law certified

by the Supreme Court of the United States or

a United States Court of Appeals which is

determinative of the cause and for which there

is no controlling precedent of the supreme

court of Florida.

(7) May issue writs of prohibition to courts

and all writs necessary to the complete exercise

of its jurisdiction.

(8) May issue writs of mandamus and quo

warranto to state officers and state agencies.

(9) May, or any justice may, issue writs of

habeas corpus returnable before the supreme

court or any justice, a district court of appeal

or any judge thereof, or any circuit judge.

Fla. Const. art. V, §4(b) (1968 Revision, as amended

1972):

Jurisdiction.

(1) District courts of appeal shall have

jurisdiction to hear appeals, that may be taken

as a matter of right, from final judgments or

orders of trial courts, including those entered

on review of administrative action, not directly

appealable to the supreme court or a circuit

court. They may review interlocutory orders

in such cases to the extent provided by rules

adopted by the supreme court.

(2) District courts of appeal shall have the

power of direct review of administrative action,

as prescribed by general law.

(3) A district court of appeal or any judge

thereof may issue writs of habeas corpus

returnable before the court or any judge thereof

or hefore any circuit judge within the territorial

jurisdiction of the court. A district court of

appeal may issue writs of mandamus, certiorari,

prohibition, quo warranto, and other writs

necessary to the complete exercise of its

jurisdiction. To the extent necessary to dispose

of all issues in a cause properly before it, a

district court of appeal may exercise any of

the appellate jurisdiction of the circuit courts.

xii

U.S. Const. amend. VII:

Trial by jury in civil cases.

In Suits at common law, where the value in

controversy shall exceed twenty dollars, the

right of trial by jury shall be preserved, and

‘ no fact tried by a jury shall be otherwise

re-examined in any Court of the United States,

than according to the rules of the common law.

U.S. Const: amend. XIV, §1:

Citizens of the United States.

All persons born or naturalized in the United

States, and subject to the jurisdiction thereof,

are citizens of the United States and of the

State wherein they reside. No State shall make

or enforce any law which shall abridge the

privileges or immunities of citizens of the United

States; nor shall any State deprive any person

of life, liberty, or property, without due process

of law; nor deny to any person within its

‘jurisdiction the equal protection of the laws.

xiii

OPINION BELOW

The opinion below is reported: Ethyl Corp. u Balter,

386 So.2d 1220 (Fla. 3d DCA 1980), petition for review

denied, 392 So.2d 1371 (Fla. 1981).

JURISDICTION

The Florida Third District Court of Appeal entered

its decision July 8, 1980, and denied rehearing without

opinion September 4, 1980. The Florida Supreme Court

denied the petition for discretionary review on January

21, 1981.

This petition for writ of certiorari is filed pursuant

to 28 U.S.C. §1257(3). 28 U.S.C. §2403(b) may be

applicable.

STATEMENT OF THE CASE

David Balter sued Ethyl Corporation for tortious

interference with contract. The jury, on a special

intcrrogatory verdict, found that Ethyl had interfered

with actual malice, and awarded Balter $1,020,450.

Ethyl appealed to the Florida Third District Court

of Appeal. That court reversed and directed a judgment

in Ethyl’s favor. In so ruling, the court (1) rewrote the

facts, in complete derogation of the jury’s province,

and (2) adopted a substantive rule of law (that interference

to protect one’s own interest, even with actual malice,

is absolutely privileged) contrary to that of other Florida

district courts.

Balter moved for rehearing, urging that the decision

(1) violated his right to a jury trial under the Federal

and Florida Constitutions and (2) was contrary to the

precedents of Florida’s other district courts. The court

denied that motion without opinion.

Balter then petitioned the Florida Supreme Court

for discretionary review, urging the only available ground:

conflicting precedents among the district courts. The

supreme court denied that petition without opinion,

and (by rule) permitted no rehearing.

STATEMENT OF THE FACTS

The Florida Third District Court of Appeal

re-examined the facts and rendered a verdict against

Balter. The court rejected some facts and accepted

others, resolved factual disputes and drew factual

inferences in Ethyl’s favor, and came to a different

factual conclusion from that of the jury. Based on its

own version of the facts, the court then made legal

conclusions against Balter, which it could not have

done had it accepted the jury’s findings.

Balter claimed, and the jury believed, that Ethyl,

a large polyethylene film producer, manipulated Pac-

Craft, a film converter half-owned and managed by

Balter, in an eventually successful effort to control

Pac-Craft and oust Balter. Ethyl, Balter claimed, knowingly

sent Balter defective film, deceiving him with empty

promises to make up the losses with credits to purchase

good film. (T. 3771-73, 3811-18, 3827, 4024-25; P. Ex. 64,

56, 59) Through skillful maneuvering, Ethyl controlled

Pac-Craft’s cash flow and its film supply, caused it to

default on a bank loan Ethy] had arranged, coerced the

bank to call the loan, and took over Pac-Craft’s stock.

(P. Ex. 64, 55, 56, 59, 69, 58; T. 1018, 4024-25, 3770-75,

3802) Ethyl then persuaded Balter to put Pac-Craft

into a Chapter XI bankruptcy proceeding by promising

to transfer all of Pac-Craft’s stock to him if his plan

succeeded. (T. 3868-69, 3897, 3899-3900, 3915, 3918-19,

4041-47; P. Ex. 20) Finally, Ethyl eliminated Balter

altogether by causing his plan of arrangement to collapse

and ending his employment with Pac-Craft. (T. 917-18,

3933, 1044-45, 1893-1905)

Balter claimed, and the jury believed, that Ethyl

acted deliberately and used improper and dishonest

means, in a well-conceived plan to take over Pac-Craft,

oust Balter, and avoid liability. Yet the Third District’s

opinion states:

During the late 1960’s, Pac-Craft encountered

severe financial difficulties which primarily

included its inability to pay its outstanding

account with Ethyl, by far its largest creditor.

As a result, Pac-Craft negotiated a $450,000

loan from the City National Bank of Miami,

(CNB), which was personally guaranteed both

by Balter and Stanley Fromm, the owner of

the other half of Pac-Craft, and which was

secured by their stock in the company. The

only reason the bank agreed to the loan was

that Ethyl guaranteed it. Ethyl had decided,

rather than forcing Pac-Craft into bankruptcy,

instead to attempt to preserve the existence

of an important customer in the hopes of

receiving a greater return on its outstanding

balance and of securing future business as

well. In March of 1969, however, Pac-Craft

defaulted on the loan. In accordance with the

guarantee agreement, the CNB debt was

satisfied by Ethyl which was assigned both

the pledged Pac-Craft stock and the personal

guarantees of Balter and Fromm.

The evidence believed by the jury, however, shows

that Pac-Craft’s financial difficulties resulted directly

from Ethyl’s supplying and charging Pac-Craft for

defective polyethylene film. (T. 3771-73, 3811-18, 3827,

4024-25; P. Ex. 64) At the time of the bank loan, Pac-

Craft was not near bankruptcy; it was in fact

contemplating expansion. (T. 3802-09) Ethyl proposed

the loan, to finance Pac-Craft’s expansion. (T. 3770-75,

3802) Months before the loan, Ethyl was contemplating

the forced acquisition of Pac-Craft. (P. Ex. 69) The

conditions Ethyl attached to the loan intentionally put

Ethyl] in a position to destroy Balter’s control of Pac-

Craft. (P. Ex. 56, 59, 64) Then, after driving Pac-Craft to

the financial brink, (T. 3822-23, 3826-29) Ethyl coerced

the bank to call the loan. (P. Ex. 55)

The Third District states:

At all times, Ethyl’s actions were reasonably

directed to the recovery of the very substantial

sums it was owed by Pac-Craft, to the protection

of its status as the co-obligor with the corporation

on a $450,000 loan it was later required to pay,

and, finally, as the lawful holder of 100% of its

stock.

The evidence believed by the jury, however, shows

that Ethyl acted not to protect its interests, but to

acquire or control Pac-Craft. Ethyl’s memoranda show

a continued intent to increase Ethyl’s interest (either

through a direct take-over, a substitution of a manager

loyal to Ethyl, or a liquidation), not to preserve an

existing interest. (P. Ex. 69, 64, 56, 59, 58)

The Third District states that:

Balter, however, was unable to produce an

additional $34,000 which was necessary to fund

the plan which had been finally approved by

the Chapter XI bankruptcy court and by Ethyl

and the Pac-Craft creditors’ committee which

Ethyl dominated as the control creditor.

* * *

Initial plans of reorganization submitted by

Balter, ... would have required no or

substantially less monies to fund, but . . . would

also have brought Ethyl far less return on its

outstanding claim.

But the evidence the jury believed shows that

Ethyl’s maneuvers forced up the amount of cash required

not by $34,000, but by almost $100,000. (T. 3940; 4009-19)

Balter therefore could not fund the plan.

Moreover, Ethyl induced Balter to begin the Chapter

XI proceeding by promising it would accept his first

plan of arrangement. (T. 3868-69, 3897, 3899-3900, 3915,

3918-19) Xthyl defeated that plan, and then kept “moving

back the goal posts,” forcing Balter to submit ever-

higher plans, (T. 1033-34) and finally bringing a competitor

into Pac-Craft’s files (in violation of a bankruptcy court

order) to obtain data to submit a liquidation proposal.

(T. 3933, 1044-45, 1893-1905) Balter was finally unable

to keep up with Ethyl’s machinations.

The Third District states that Ethyl used no

“improper means” in destroying Balter’s relationships.

The evidence the jury believed, however, shows that

Ethyl induced Balter to put Pac-Craft in bankruptcy by

falsely promising Pac-Craft’s stock and its support of

his plan of arrangement. (T. 3868-69, 3897, 3899-3900,

3915, 3918-19, 4041-47; P. Ex. 20) Ethyl instead solicited

a competitor to prepare and submit a liquidation offer

(although a Chapter XI proceeding is not intended to

be a liquidation) by misrepresenting Ethyl’s relationship

with Balter, Pac-Craft’s financial condition, and the

meaning of the Chapter XI proceeding. And in order to

aid the competing offer, Ethyl violated an express

bankruptcy court directive protecting Pac-Craft’s files.

(T. 1884-85, 1911, 1044-45, 1893-1905)

The Third District states:

[Ethyl’s] activities were not directed against

Balter or his relationship with Pac-Craft at all,

but merely to the corporation itself.

But the evidence the jury believed shows that

Ethyl always acted for the purpose of ousting Balter

from Pac-Craft so that it could substitute itself or someone

it controlled in his place. Ethyl’s memoranda never

once speak of injuring Pac-Craft, but do show a complete

disregard for Balter’s individual rights. (P. Ex. 55, 56,

58, 59, 69)

The Third District also states that Balter released

his claims against Ethyl] in return for a release of his

guarantee on the CNB note. But, as the jury correctly

found, no releases were in evidence at trial and no

releases were to be exchanged at all until Balter completed

his plan (which never happened). (P. Ex. 14)

In sum, every finding of fact favorable to Balter

which the jury could and did make is supported by

evidence in the record. Every legal conclusion in the

Third District’s opinion is bottomed on a Third District

finding of fact different from the jury’s.

REASONS FOR ALLOWANCE OF THE WRIT

FLORIDA’S CREATION OF FIVE APPEL-

LATE DISTRICTS, EACH FREE TO

DEVELOP JTS OWN SUBSTANTIVE LAW,

DENIED BALTER’S RIGHT TO EQUAL

PROTECTION

The Florida appellate system denied David Balter

a $1 million jury verdict, because he lives in Miami,

rather than elsewhere in Florida — in violation of his

fourteenth amendment right to equal protection.

The district court reversed Balter’s jury verdict

by adopting a substantive rule of law different from

that of Florida’s other districts.' The supreme court

then refused review.

The jury found that Ethyl interfered with Balter's contracts

and business expectancies, with actual malice. The Third District

ruled that a person with a financial interest in the subject of his

interference has an absolute privilege — that interference is

actionable only if done “solely” for malice. The Third District's

rule is contrary to that of Florida's Second and Fifth Districts, the

Restatement, and the weight of judicial authority. See Serafino v.

Palm Terrace Apartments, Inc., 343 So.2d 851, 852 (Fla. 2d DCA

1976) (interference privileged only if “without malice”); Insurance

Field Serv., Inc. v. White & White Inspection and Audit Serv., Inc.,

384 So.2d 303 (Fla. 5th DCA 1980) (whether interference is actionable

depends on a balancing of the respective interests, purposes,

motives, and means); Restatement (Second) Torts §§766-774 (1979); 1

F. Harper and F. James, The Law of Torts, §6.12 (1956); W. Prosser,

Handbook of the Law of Torts, §129 (4th ed. 1971).

Each of Florida's five district courts has final appellate

jurisdiction within its own domain. There is no appeal

as of right to the supreme court, even where, as here,

the districts develop conflicting substantive law. The

resulting difference in common law rules is not based

on any rational consideration of varying local concerns.

It is based instead on arbitrary territorial lines.

Balter does not claim a constitutional right to an

appeal. Nor does he claim a right to an appeal to the

same judges as persons elsewhere in the state. But he

does have a right to have Florida law applied free of

unreasoned territorial distinctions. Florida's failure to

provide an appeal as of right to its supreme court

where its districts adopt conflicting substantive rules

of law has denied Balter that right.

Florida’s district courts were created by

constitutional amendment’ in 1956, with appellate

jurisdiction from most trial court decisions. The supreme

court's jurisdiction was at the same time circumscribed,’

*Fla. Const. art. V, §4 (1968 Revision, originally numbered

§5).

*Fla. Const. art. V, §3 (1968 Revision, originally numbered

§4),

making district court decisions final, with limited

discretionary review in the supreme court.‘

The supreme court ascribed to these amendments

an intent to relieve its workload.’ The court initially

construed the amendments broadly, to maintain uniformity

of precedent,° but subsequently adopted a more restrictive

interpretation. The supreme court now hears appeals

‘This appellate structure resembles the federal system — a

totally inappropriate model for the states. State appellate courts

make laws. Within the course of adjudicating the rights of individual

litigants, each appellate court develops that state's common law

— a law-making power similar to that of the legislatures.

There is no corresponding, all-encompassing federal common

law. Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938). The federal

courts are by definition courts of limited jurisdiction. Their role

as the ultimate interpreter of federal law cannot be questioned.

See, e.g., Marbury v. Madison, 1 Cranch 137, 2 L.Ed. 60 (1803); U.S.

v. Nixon, 418 U.S. 683, 703-05 (1974). But the federal courts do not

make laws as do the state courts.

Moreover, even within the federal system, this Court has

recognized the importance of avoiding conflicting precedents. See

Sup.Ct.R. 17.1(a); 18 Moore's Federal Practice $817.21 (1981) and

cases cited therein.

*Ansin v. Thurston, 101 So.2d 808, 810 (Fla. 1958) (“The

revisions and modernization [were] prompted by the great volume

of cases reaching the Supreme Court. . . .”).

*See Foley v. Weaver Drugs, Inc., 177 So.2d 221, 230 (Fla.

1965) (Drew, J., concurring specially) (“{I}t would result in utter

chaos . . . if it were impossible for this Court to maintain consistency

and uniformity of the law in such cases.”).

as “a matter of grace, carrying with it no guarantee

that the desired review will be granted.”

This Court has stated that the Federal Constitution

does not wayler pe any litigant an appeal, so long as “a

full and fair trial on the merits is provided.” Lindsey uv

Normet, 405 U.S. 56, 77 (1972). Nevertheless, while

"1 A. England & T. Simon, Florida Appellate Practice Manual

§2.12 (1980). Ultimately, the constitution was further amended to

restrict litigants’ access to Florida’s supreme court. For a discussion

of the history of these provisions co-authored by Florida Supreme

Court Justice Arthur England, see England, Hunter, and Williams,

Constitutional Jurisdiction of the Supreme Court of Florida: 1980

Reform, 32 Fla.L.Rev. 147 (1980).

*Without courts of appeal, however, common law jurisprudence

would be frozen in the 18th century. Any notion that the statey

judicial systems dispensed justice would have long ago disintegrated

in the resulting chaos, as trial courts sought to deal with 19th and

20th century problems using horse-and-buggy precedents. See

Boddie v. Connecticut, 401 U.S. 371, 374-75 (1971):

Perhaps no characteristic of an organized and cohesive

society is more fundamental than its erection and

enforcement of a system of rules defining the various

rights and duties of its members, enabling them to

govern their affairs and definitely settle their differences

in an orderly, predictable manner.

American society, of course, bottoms its systematic

definition of individual rights and duties, as well as its

machinery for dispute settlement, not on custom or the

will of strategically placed individuals, but on the common

law model. It is to courts, or other quasi judicial official

bodies, that we ultimately look for the implementation

**%

appellate review might not be a constitutional guarantee,

“it is now fundamental that once established, those

avenues must be kept free of unreasoned distinctions

that can only impede open and equal access to the

courts.” Rinaldi v. Yeager, 384 U.S. 305, 310 (1966).°

Judicial resolution of private disputes is largely a

matter of state, and not federal, concern. But, as noted

(Footnote 8 Continued)

of a regularized, orderly process of dispute settlement.

‘ Within this framework, those who wrote our original

constitution, in the fifth amendment, and later those

who drafted the fourteenth amendment recognized the

centrality of the concept of due process in the operation

of this system. Without this guarantee that one may

not be deprived of his rights, neither liberty nor property,

without due process of law, the state’s monopoly over

techniques for binding conflict resolution could hardly

be said to be acceptable under our scheme of things.

*Accord, Douglas v. California, 372 U.S. 353 (1963); Lane v.

Brown, 372 U.S. 477 (1963); Smith v. Bennett, 365 U.S. 708 (1961);

Griffin v. Illinois, 351 U.S. 12 (1956). Compare U.S. v. MacCollum,

426 U.S. 317 (1976); Ross v. Moffitt, 417 U.S. 600 (1974).

This rule applies to civil as well as criminal proceedings.

Lindsey v. Normet, 405 U.S. 56 (1972) (requirement of Oregon

landlord-tenant statute that appealing tenant provide double

supersedeas bond violated equal protection, despite argument

that added requirement was reasonably related to valid state

objectives to insure landlords against loss and to screen out frivolous

appeals).

in Boddie v. Connecticut, 401 U.S. 371 (1971),” access to

the states’ machinery for resolving private disputes

lies at the heart of an ordered society. The states’

control over conflict resolution “could hardly be said to

be acceptable” “without this guarantee that one may

not be deprived of his rights, neither liberty nor property,

without due process of law.” 401 U.S. at 375." Petitioner

submits that such access should be recognized as a

“fundamental right,” and that any distinctions in providing

such access should require a compelling state interest

— which is manifestly absent.

"In Boddie this Court held that the due process clause

prohibited Connecticut from conditioning access to its courts by

indigents seeking a divorce on the payment of court fees and

costs. Noting that the Court had seldom been required to address

access to civil proceedings as an element of due process, the Court

nevertheless held that the “meaningful opportunity to be heard”

applies to civil plaintiffs “forced to settle their claims of right and

duty through the judicial process.” 401 U.S. at 377.

Justice Harlan's opinion, although not necessarily his rationale,

was itself limited to divorce, as “the exclusive pre-condition to the

adjustment of a fundamental human relationship.” 401 U.S. at 383.

Justice Brennan, concurring in part, wrote that the decision should

apply to access for any civil proceeding. Subsequently, in U.S. v.

Kras, 409 U.S. 434, 447 (1973), the Court declined to extend Boddie

to a voluntary bankruptcy petition, noting that there is no right to

a bankruptcy discharge in the Constitution, which merely authorizes

Congress to establish bankruptcy laws.

"Accord, Chambers v. Baltimore & Ohio R.R. Co., 207 U.S.

142, 148 (1907):

The right to sue and defend in the courts is the alternative

of force. In an organized society it is the right conservative

of all other rights, and lies at the foundation of orderly

°°?

But even if access to courts is not a fundamental

right, Florida’s appellate system still cannot pass

constitutional muster.

Any distinction drawn by a state among its residents

must bear a rational relationship to some legitimate

state objective.” Florida’s appellate system and the

resulting arbitrary application of different substantive

rules of common law cannot meet this standard.

(Footnote 11 Continued)

government. It is one of the highest and most essential

privileges of citizenship. . . .

See also Allstate Ins. Co. v. Hague, __ U.S. __, 101 S.Ct. 633, 647-48

(1981) (Stevens, J., concurring in the judgment):

The forum State’s interest in the efficient operation of

its judicial system is clearly not sufficient, however, to

justify the application of a rule of law that is fundamentally

unfair to one of the litigants . . . . Concern about the

fairness of the forum's choice of its own rule might

arise if that rule favored residents over nonresidents, if

it represented a dramatic departure from the rule that

obtains in most American jurisdictions, or if the rule

itself was unfair on it« face or as applied.

The application of an otherwise acceptable rule of law

may result in unfairness to the litigants if, in engaging

in the activity which is the subject of the litigation,

they could not reasonably have anticipated that their

actions would later be judged by this rule of law.

'2See, e.g., City of New Orleans v. Dukes, 427 U.S. 297, 303

(1976) (“our decisions. . . require. . . that the classification challenged

be rationally related to a legitimate state interest.”); Johnson v.

Robison, 415 U.S. 361, 374-75 (1974)

Territorial classifications are afforded no special

treatment under the equal protection clause. Any

geographic line-drawing by a state must be reasonably

related in fact to local concerns. In McGowan u Maryland,

366 U.S. 420 (1961), this Court upheld a “Sunday closing

statute” prohibiting specified activities but exempting

some localities. The Court concluded that because the

traditional civil purposes behind such laws varied by

locale, the territorial distinctions were not invalid. 366

U.S. at 523, 537 n. 138. Similarly, in North v. Russell,

427 U.S. 328 (1976), this Court upheld a statute providing

for lay judges for police courts in smaller towns, finding

the distinction reasonably based on smaller case loads,

scarcity of lawyers, and limited financial resources.

And in Salsburg v. Maryland, 346 U.S. 545 (1954), this

Court held a statute excepting one county from a

prohibition against admission of illegally procured

evidence in gambling prosecutions reasonably related

to differing crime and enforcement problems among

the localities."

"8See also San Antonio Indep. School Dist. v. Rodriguez, 411

US. 1, 40, 49 (1973) (Texas school-financing system based on local

property taxation upheld, in deference to “the State’s judgment

in conferring on political subdivisions the power to tax local property

to supply revenues for local interests” and the “persistence of

attachment to government at the lowest level where education is

concerned.”); Griffin v. County School Bd. of Prince Edward County,

377 U.S. 218 (1964) (while equal protection does not always require

territorial uniformity, “the object must be a constitutional one.”).

Territorial distinctions have been subjected to strict scrutiny

where they impinge on the fundamental right to interstate travel,

which should apply as well to intrastate travel. See Memorial

Hosp. v. Maricopa County, 415 U.S. 250, 255-56 (1974) (statute

requiring one year county residence as condition to free non-

emergency medical care held unconstitutional; individual plaintiff

} 17

Streamlining appeals might be a legitimate state

objective justifying procedural innovations, and possibly

even a rational reduction of appellate review. A state

cannot, however, obtain even legitimate objectives by

drawing arbitrary territorial distinctions in its substantive

law."

(Footnote 13 Continued)

had moved from outside state, thus invoking interstate travel

cases, requiring a compelling state interest; but, the Court noted

that it did not reach the question of whether “to draw a constitutional

distinction between interstate and intrastate travel. . . .”); See

also Viandis v. Klein, 412 U.S. 441 (1973); Dunn v. Blumstein, 405

U.S. 330 (1971); Shapiro v. Thompson, 394 U.S. 618 (1969). Compare

Sosna v. Iowa, 419 U.S. 393, 406 (1975) (one-year durational residence

requirement for divorce actions “may reasonably be justified on

grounds other than purely budgetary considerations or administrative

convenience,” and thus does not violate equal protection).

“An early equal protection decision, Missouri v. Lewis, 101

U.S. 22 (1880), upheld the creation of separate appellate districts.

Lewis, however, is not controlling. The petitioner in Lewis challenged

the creation of a separate appeals court for the St. Louis vicinity,

with a further appeal to the Missouri Supreme Court only in

specified cases. This Court did not look for or find a rational basis,

holding instead that the equal protection clause could not apply to

territorial distinctions.

The holding in Lewis cannot survive this Court’s subsequent

decisions: any distinction must have some reasonable relationship

to a legitimate state objective. The decision has been cited recently

only for the proposition that such distinctions are not absolutely

prohibited. See, e.g., McGowan, 366 U.S. 420.

Lewis is distinguishable not only by its early vintage, but

also by the failure of the facts in Lewis to present an actual

conflict in controlling law within the state. The petitioner in

Lewis contended only that the denial of supreme court review

deprived him of “the superiority of the wisdom and power” of that

Florida may well have wide discretion to tailor its

judicial system to the unique circumstances of its varied

communities. But, it has not done so here. Instead,

Florida has arbitrarily divided itself into five separate

common law jurisdictions. The common law of the Third

District is no longer the common law of the other

districts. The equal protection clause forbids such an

unreasoned distinction.

The “logical extreme,” Hudson Water Co. u McCarter,

209 U.S. 349, 355 (1906), of Florida’s supposed innovation

crashes into the due process clause. Are “minimum

contacts” now required in one district by a resident of

another? What law does a district apply to a cause of

action arising in another? Cf. Allstate Ins. Co. v. Hague, __

U.S. ___, 101 S.Ct. 633 (1981).

In Florida’s Third District, a person can interfere

with another’s contract, maliciously and with complete

impunity, so long as he expects to gain from his

malfeasance. In the First and Fifth Districts, on the

other hand, the malefactor would be liable in tort.

The difference cost David Balter more than $1

million. He had no-right of further appeal, and was sub

silentio found unworthy of “grace” by the Florida Supreme

Court.

(Footnote 14 Continued)

tribunal. Balter, on the other hand, has been subjected to a substantive

rule of law at variance with that prevailing in Florida’s other

districts.

‘Florida has in effect divided its judiciary into five separate

states. Congress alone can create states. U.S. Const. art. IV, §3.

Balter respectfully submits that the Florida Supreme

Court’s refusal to hear this case on the merits is a

“patent miscarriage of justice,” and a plain violation

of the equal protection clause.

‘Estate of Wilson v. Aiken Indus., Inc.,__ U.S. _, 99 S.Ct. 366,

367 (1978) (Blackmun, J., concurring in denial of certiorari, “with

substantial discomfort;” the Pennsylvania Supreme Court had

affirmed a judgment notwithstanding that a majority concluded it

was erroneous; Justice Blackmun joined because the due process

objection was not properly raised below).

THE FLORIDA THIRD DISTRICT COURT

OF APPEAL DEPRIVED BALTER OF HIS

CONSTITUTIONAL RIGHT TO A JURY

TRIAL.

The Third District’s reversal is based on its

reevaluation of the jury’s findings on disputed facts.

Over 34 years ago, this Court last held that the

Federal Constitution does not guarantee civil litigants

a jury trial in state court. Fay v. New York, 332 U.S.

261 (1947). The Court should reconsider that holding

and bring it in line with subsequent decisions and modern

constitutional law.”

"See Malloy v. Hogan, 378 U.S. 1 (1964) (applying guarantee

against self-incrimination to the states); Pointer v. Texas, 380 U.S.

400 (1965) (right of confrontation); Douglas v. Alabama, 380 U.S.

415 (1965) (right to cross examination); Washington v. Texas, 388

US. 14 (1967) (right to present witnesses in one’s defense); In re

Winship, 397 U.S. 358 (1970) (standard of proof beyond a reasonable

doubt); Cantwell v. Connecticut, 310 U.S. 296 (1940) (right to free

exercise of religion); Louisiana ex rel. Gremillion v. NAACP, 366

U.S. 293 (1961) (right to free association); Ker v. California, 374

U.S. 23 (1963) (protection against unreasonable search and seizure);

Gideon v. Wainwright, 372 U.S. 335 (1963) (right to counsel); Benton

v. Maryland, 395 U.S. 784 (1969) (prohibition against double jeopardy);

Klopfer v. North Carolina, 386 U.S. 213 (1967) (speedy trial clause);

In re Oliver, 333 U.S. 257 (1948) (right to a public trial).

In a split decision, a three-judge district court held in Melancon

v. McKeithen, 345 F.Supp. 1025 (E.D. La. 1972) that there was no

constitutional right to trial by jury, but that even if there were

such a right, Louisiana's civil procedures did not destroy it, but

only modified it in accordance with fair procedures analogous to

those of the Federal Rules of Civil Procedure. This Court affirmed

without opinion. 409 U.S. 943 (1972); 409 U.S. 1098 (1973).

In Duncan v. Louisiana, 391 U.S. 145 (1968), this

Court ruled that the due process clause of the fourteenth

amendment requires a jury trial in criminal cases, holding

that the fourteenth amendment incorporates those

guarantees of the Bill of Rights which are “fundamental

to the American scheme of justice.” 391 U.S. at 149.

In determining whether a right is “fundamental to

the American scheme of justice,” this Court examines

both its historical importance and its present status.

Benton v. Maryland, 395 U.S. 784, 795 (1969).

Each of the thirteen original states guaranteed a

civil jury trial."° When the Federal Constitution was

first submitted to the states, one of the biggest objections

to it was that it did not secure the trial of facts by a

jury in civil cases and the prohibition against appellate

re-examination of facts. See U.S. vu. Wonson, 28 Fed.

Cas. 745, 750 (C.C.D. Mass. 1812). As this Court stated

in Parsons v. Bedford, 3 Pet. 433,.446 (1830):

'’Ga. Const. of 1777 art. LXI, in 2 The Federal and State

Constitutions, Colonial Charters, and Other Organic Laws 785 (F.

Thorpe ed. 1909); Md. Const. of 1776 art. III, in 3 id. at 1686-87;

Mass. Const. of 1780 art. XV, in 3 id. at 1891-92; N.H. Const. of 1784

art. XX, in 4 id, at 2456; N.J. Const. of 1776 art. XXII, in 5 id. at

2598; N.Y. Const. of 1777 art. XLI, in 5 id. at 2637; N.C. Const. of

1776, Declaration of Rights, art. XIV, in 5 id. at 2788; Pa. Const. of

1776, Declaration of Rights, art. XI, in 5 id. at 3083; S.C. Const. of

1778 art. XLI, in 6 id. at 3257; Va. Const. of 1776, Bill of Rights,

§11, in 7 id. at 3814; Capital Traction Co. v. Hof, 174 U.S. 1 (1899).

The Northwest Ordinance of 1787 guaranteed jury trial in civil

cases in territories west of the Appalachians. Northwest Ordinance

of 1787 art. II, in 2 Federal & State Constitutions, at pp. 960-61.

The trial by jury is justly dear to the American

people. It has always been an object of deep

interest and solicitude, and every encroachment

upon it has been watched with great jealousy.

The right to such a trial is, it is believed,

incorporated into and secured in every State

constitution in the Union; and it is found in the

constitution of Louisiana. One of the strongest

objections originally taken against the

Constitution of the United States, was the

want of an express provision securing the right

of trial by jury in civil cases. As soon as the

constitution was adopted, this right was secured

by the Seventh Amendment of the Constitution

proposed by Congress; and which received an

assent of the people so general as to establish

its importance as a fundamental guarantee of

the rights and liberties of the people.”

Historically, the common law guarantee of a jury

trial and the prohibition of an appellate court’s defeating

"Accord, Dimick v. Schiedt, 293 U.S. 474, 485-86 (1935):

The right of trial by jury is of ancient origin, characterized

by Blackstone as ‘the glory of the English law’ and ‘the

most transcendent privilege which any subject can enjoy’.

. .- Maintenance of the jury as a fact-finding body is

of such importance and occupies so firm a place in our

history and jurisprudence that any seeming curtailment

of the right to a jury trial should be scrutinized with

the utmost care.

that right by substituting its own fact-findings” were

“fundamental to the American scheme of justice.”

The present importance of trial by jury is at least

as great as its historical underpinnings. This Court has

not only safeguarded but expanded the right to jury

trial. See Ross v. Bernhard, 396 U.S. 531 (1970); Dairy

Queen, Inc. v. Wood, 369 U.S. 469 (1962); Beacon Theatres

v. Westover, 359 U.S. 500 (1959)." And more recently, in

In re U.S. Financial Securities Litigation, 609 F.2d 411

(9th Cir. 1979), cert. denied, 446 U.S. 929 (1980), the

°Wonson, 28 Fed. Cas. at 750:

[Alecording to the rules of the common law the facts once

tried by a jury are never re-examined, unless a new

trial is granted in the discretion of the court, before

which the suit is being, for good cause shown; or unless

the judgment of such court is reversed by a superior

tribunal, on a writ of error, and a venire facias de novo

is awarded. This is the invariable usage settled by the

decisions of ages. Upon a writ of error, the appellate

court can examine in general errors of law only, and

never can re-try the issues already settled by a jury.

“Maintenance of the jury as a fact-finding body is of such

importance and occupies so firm a place in our history and

jurisprudence that any seeming curtailment of the right to jury

trial should be scrutinized with the utmost care.” 359 U.S. at 501,

quoting Dimick v. Schiedt, 293 U.S. 474.

> |

court firmly rejected an attempt to carve a “complexity

exception” out of the seventh amendment.”

The unwavering and uniform attachment of the

federal and state courts to the jury system underscores

its continued importance to the American scheme of

justice.” In his dissent in Parklane Hosiery Co. Inc. v.

Shore, 439 U.S. 322 (1979), Justice Rehnquist traced

the history of trial by jury in civil cases and summarized

its importance to litigants:

The founders of our Nation considered the

right of trial by jury in civil cases an important

*609 F.2d at 430:

The opponents of the use of juries in complex civil

cases generally assume that jurors are incapable of

understanding complicated matters. This argument

unnecessarily and improperly demeans the intelligence

of the citizens of this Nation. We do not accept such an

‘assertion. Jurors, if properly instructed and treated

with deserved respect, bring collective intelligence,

wisdom, and dedication to their tasks, which is rarely

equalled in other areas of public service.

"See McKeiver v. Pennsylvania, 403 U.S. 528, 548 (1971),

quoting Snyder v. Massachussetts, 291 U.S. 97, 105 (1984):

The fact that a practice is followed by a large number of

states is. . . plainly worth considering in determining

whether the practice ‘offends some principle of justice

so rooted in the traditions and conscience of our people

as to be ranked as fundamental.’

Accord, Burch v. Louisiana, 441 U.S. 130 (1979); Duncan, 391 U.S.

at 158; Benton, 395 U.S. at 795; Baldwin v. New York, 399 U.S. 66,

72-73 (1970).

}

bulwark against tyranny and corruption, a

safeguard too precious to be left to the whim

of the sovereign, or, it might be added, to that

of the judiciary . . . . Trial by a jury of layman

rather than by the sovereign’s judges was

important to the founders because juries

represent the layman’s commonsense, the

‘passional elements in our nature’; and thus

keep the administration of law in accord with

the wishes and feelings of the community.

* * *

It is precisely because the Framers believed

that they might receive a different result at

the hands of a jury of their peers than at the

mercy of the sovereign’s judges, that the Seventh

Amendment was adopted. And I suspect that

anyone who litigates cases before juries in the

1970’s would be equally amazed to hear of the

supposed lack of distinction between trial by

court and trial by jury... .

The right to a jury trial plainly is “fundamental to

the American scheme of justice,” and should therefore

be held applicable to the states.

CONCLUSION

For these reasons, the Court should grant: the

petition for writ of certiorari.

Respectfully submitted,

Guy B. Bailey, Jr., and

Jesse C. Jones, counsel of

record for Petitioner, and

Sara Soto, of counsel.

Aypendix

INDEX

Opinion of Florida Third District Court of Appeal .

NUNN Ne IO. ois ving nea ine soeie ee pipe

Order Denying Rehearing .....................

Notice of Petition for Certiorari Jurisdiction

(Florida Supreme Court) ....................

Florida Supreme Court Order Denying Petition

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App. 1

IN THE DISTRICT COURT OF APPEAL

OF FLORIDA

THIRD DISTRICT

JULY TERM, A.D. 1980

ETHYL CORPORATION, a Foreign Corporation,

Appellant,

vs.

DAVID BALTER,

Appellee.

CASE NO. 78-994

Opinion filed July 8, 1980.

An Appeal from the Circuit Court for Dade County,

Francis X. Knuck, Judge.

Britton, Cohen, Kaufman, Zinkow, Benson & Schantz

and John L. Britton, for appellant.

Bailey & Dawes and Guy B. Bailey, Jr., for appellee.

Before HENDRY, HUBBART and SCHWARTZ, JJ.

SCHWARTZ, Judge.

Ethyl Corporation, one of several defendants below,

appeals from a final judgment for large amounts of

compensatory and punitive damages entered in favor

of the plaintiff, David Balter. The judgment was entered

on a jury verdict which, in answer to a special

App.2 |

interrogatory, found that Ethyl had maliciously interfered

with Balter’s advantageous business relations. Upon

the conclusion that the evidence establishes as a matter

of law that Ethy! committed no such tort, we reverse

the judgment below and order that one be entered for

the appellant instead.

Balter’s claims for damages stem ultimately from

the loss of his interest in, and employment opportunities

with Pac-Craft Corp., a now-defunct Dade County concern,

of which he was once the president, chief operating

officer, and owner of 50% of the capital stock. Pac-

Craft was engaged in the processing and printing of

polyethylene film. It obtained the vast majority of its

primary raw material, the film itself, from Ethyl, one

of the largest manufacturers of that product in the

country. During the late 1960’s, Pac-Craft encountered

severe financial difficulties which primarily included

its inability to pay its outstanding account with Ethy],

by far its largest creditor. As a result, Pac-Craft negotiated

a $450,000 loan from the City National Bank of Miami

(CNB), which was personally guaranteed both by Balter

and Stanley Fromm, the owner of the other half of

Pac-Craft, and which was secured by their stock in the

company. The only reason the bank agreed to the loan

was that Ethyl guaranteed it. Ethyl had decided, rather

than forcing Pac-Craft into bankruptcy, instead to attempt

to preserve the existence of an important customer in

the hopes of receiving a greater return on its outstanding

balance and of securing future business as well. In

March of 1969, however, Pac-Craft defaulted on the

loan. In accordance with the guarantee agreement, the

CNB debt was satisfied by Ethyl which was assigned

both the pledged Pac-Craft stock and the personal

guarantees of Balter and Fromm.

App. 3

Free now to direct the affairs of Pac-Craft as it

wished, Ethyl entered into an agreement with Balter’

under which he would receive back all of the Pac-Craft

stock and be released from his personal guarantee if he

were able to effectuate a reorganization of Pac-Craft

under Chapter XI of the Bankruptcy Code. In order to

comply with this agreement by supplying sufficient .

funds to achieve a satisfactory Chapter XI plan, Balter

entered into a separate contract with a financier named

Paul Wolf, who was represented by John Scussel. This

agreement called for Wolf to provide $170,000 of partial

funding to Pac-Craft in return for making Wolf a director

of the company, and granting him the option to purchase

48% of the stock upon Balter’s receipt of all the shares

from Ethyl. Balter, however, was unable to produce an

additional $34,000? which was necessary to fund the

plan which had been finally approved by the Chapter

XI bankruptcy court and by Ethyl] and the Pac-Craft

creditors’ committee which Ethyl dominated as the

‘Fromm relinquished all interest in his stock in return for the

release of his personal guarantee, and was not made a party to

this action.

*This occurred because, at the last minute, the Pan American

Bank of Hialeah refused to lend Balter the money. See Balter v.

Pan American Bank of Hialeah, 383 So.2d 256 (Fla. 3d DCA 1980).

Balter claimed that this action resulted in part from the failure of

his attorney, Robert Frank, timely to supply the documents demanded

by the bank as preconditions to the loan. See Balter v. Frank,

So.2d (Fla. 3d DCA 1980) (Case no. 78-1019, opinion filed this

date). Balter claimed that all of these acts, as well as those of

Ethyl, Wolf, and Scussel, were wrongful and that all, acting together

in a sort of grand conspiracy, were jointly responsible for the loss

of “his” company, Pac-Craft.

App. 4

control creditor.’ Wolf then withdrew $100,000 of the

$170,000 he had deposited with the court, dooming

Balter’s plan to failure. Subsequently, Wolf, supposedly

in order to protect the remaining $70,000 he could not

withdraw, himself financed the entire amount necessary

to reorganize Pac-Craft. Thereafter, he received all of

the stock from Ethyl, which he held until he sold his

holdings in 1971. Wolf's pian involved a payment to

creditors of some 37% of the outstanding indebtedness.

Ethyl! thus lost more than $300,000 out-of-pocket in its

dealings with Balter and Pac-Craft.

In December, 1969, Balter filed suit against Wolf,

alleging a breach of their agreement because of Wolf's

withdrawal of the $100,000. Two years later, Balter

filed an amended complaint against several more parties-

defendant, including Ethyl. The only counts against

Ethyl which now concern us alleged (1) a breach of

contract, based upon Ethyl’s refusal to approve initial

plans of reorganization submitted by Balter, which would

have required no or substantially less monies to fund,

but which would also have brought Ethy] far less return

on its outstanding claim; and (2) “malicious interference

with contract and with reasonable business expectancies.”

The latter count was, apparently, primarily based on

an alleged interference with the Balter-Wolf agreement,

because of Ethyl’s solicitation from others of subsequent

and more favorable offers to reorganize. Balter claimed

that the submission of such an offer by the Smart-Pac

Corp. made it necessary for him to sweeten “his” plan

*Pac-Craft owed Ethyl over $500,000, more than 75% of its

outstanding indebtedness.

App. 5

by the additional $34,000 he subsequently was unable

to raise. It was thus claimed that Ethyl] had thereby

become responsible for Wolf's withdrawal of his funds

in breach of his contract.

After a three-week trial, the jury found in favor of

Ethyl on the breach of contract claim.‘ As to the

interference count, however, the jury answered “yes”

to a special interrogatory which asked “Do you find that

Ethyl Corp. maliciously interfered with the contract

or with reasonable business expectations of David Balter,

which was a legal cause of loss to David Balter?” Ethyl’s

appeal results from the judgment entered pursuant to

this conclusion.°

While Ethyl’s attempted interference with the Balter-

Wolf contract was apparently the primary tortious act

upon which the plaintiff relied below, the trial involved

‘Balter has cross-appealed from the judgment below, arguing,

inter alia, his entitlement to a directed verdict on this count. We

hold, to the contrary, that the verdict on this issue is completely

supported by the evidence and that the other points raised in the

cross-appeal likewise present no error.

*Wolf was held liable on both breach of contract and interference

counts. The jury also found against Scussel on an interference

claim. See the companion appeal in Scussel v. Balter, So.2d

(Fla. 3d DCA 1980) (Case no. 78-997, opinion filed this date). It

ruled in favor of co-defendant Robert Frank. See note 2, supra,

and Balter v. Frank, So.2d (Fla. 3d DCA 1980) (Case no.

78-1019, opinion filed this date). At the conclusion of the plaintiff's

case, the trial judge directed a verdict in favor of Pan American

Bank of Hialeah. See note 2, supra. We affirmed that action in

Balter v. Pan American Bank of Hialeah, 383 So.2d 256 (Fla. 3d

DCA 1980).

App. 6

a confusing amalgam of the entire decade-old and

immensely complex set of relationships between and

among all the parties involved. Our analysis of the

massive record on appeal has been hampered by this

fact; by the failure of the special verdict to specify

precisely with which “contract . . . reasonable business

expectations” Ethyl was found guilty of interfering;

and even more by Balter’s understandable inability to

articulate a coherent, consistent theory of liability.

Nevertheless, we have carefuliy reviewed the entire

transcript in the light of the applicable law. We find no

evidence whatever to sustain the verdict against Ethy]

on any basis.° :

To establish the tort of interference with a contractual

or business relationship, it is well-settled in Florida

that one must allege and prove (1) the existence of a

business relationship under which the plaintiff has legal

rights, (2) an intentional and unjustified interference

with that relationship by the defendant and (3) damage

to the plaintiff as a result of the breach of the business

relationship. E.g., Nitzberg v. Zalesky, 370 So.2d 389

(Fla. 3d DCA 1979); Symon v. J. Rolfe Davis, Inc., 245

So.2d 278 (Fla. lst DCA 1971). Turning first to Ethyl’s

alleged interference with the Balter-Wolf agreement,

the existence of the agreement itself may satisfy the

first requisite of the tort. There are any number of

reasons, however, why the remaining requirements

have not been met. First and foremost, the evidence

presented at trial conclusively established — and Balter

‘The result reached by the jury is probably attributable to a

clearly erroneous instruction which virtually directed a verdict in

Balter’s favor. If we did not conclude that judgment must be

entered for Ethyl, the charge in question would have required

reversal for a new trial.

App. 7

has admitted — that Ethyl never attempted to interfere:

directly with the Balter-Wolf relationship, and did not

even communicate with Wolf until after he had already

withdrawn his $100,000. Thus, there was a total lack of

proof of a direct interference with that agreement,

which is indispensible to the existence of an actionable

wrong. Balter was able to show, at most, that steps

taken by Ethyl very indirectly led to Wolf's withdrawal

from the arrangement. Even if those acts were not

privileged, as we hold infra they were, such conduct

simply does not meet the requirements of the intentional

tort of interference. There is no such thing as a cause

of action for interference which is only negligently or

consequentially effected. 4 Restatement (Second) of Torts

§766 C (1979). See also Hales v. Ashland Oil, Inc., 342

So.2d 984 (Fla. 3d DCA 1977), and cases cited.

Furthermore, the only expectations which Balter would

even arguably have realized had Wolf not reneged on

his agreement were those which flowed solely and

directly from Ethyl’s own undertaking to return the

stock if a plan of arrangement were consummated.

Hence, Ethyl was essentially accused of interfering

with its own undertaking to Balter.’ No such action lies

under the law of Florida. See United Yacht Brokers,

Inc. v. Gillespie, 377 So.2d 668 (Fla. 1979), and cases

cited.

Balter also apparently contends that Ethyl may be

held liable because of various pre-Chapter XI actions

— including selling Pac-Craft allegedly defective film

and “causing” City National to call its loan — which he

says “forced” the corporation into reorganization. Again,

"Which the jury found was not itself breached.

App. 8

-—

there are numerous reasons why such claims may not

be recognized. Primary among them is the fact that

these activities were not directed against Balter or his

relationship with Pac-Craft at all, but merely to the

corporation itself. While they may or may not have

justified an action by Pac-Craft against Ethyl, or a

stockholder’s derivative action filed by Balter in the

name of Pac-Craft, they did not invade Balter’s individual

rights and therefore cannot form the basis of a tort

action by him individually. See, e.g., Alario v. Miller,

354 So.2d 925 (Fla. 2d DCA 1978), and cases cited;

Remy Beverages, Inc. v. Myer, 56 N.Y.S. 2d 828 (Sup.Ct.

1945), aff'd, 59 N.Y.S. 2d 371 (App. Div. 1945). In addition,

Balter specifically released Ethyl from any such personal

claims in return for its release of his $360,000 guarantee

on the CNB note Ethyl! had satisfied. See Genung v.

Loftin, 152 Fla. 759, 18 So.2d 149 (1943); Berry v. Pyrofax

Gas Corp., 121 So.2d 447 (Fla. 1st DCA 1960). Finally, a

complex and utterly unforeseeable series of events

intervened between these actions and Balter’s eventual

failure to receive the Pac-Craft stock® — which would

have occurred had Balter only been able to comply

with the final reorganization plan which Ethyl had

approved and with which it did not interfere. Hence,

there was no proximate relationship between the activities

in question and Balter’s alleged damages. See Doft &

Company, Inc. v. Home Federal Savings & Loan Ass’n.,

592 F.2d 1361 (5th Cir. 1979); Cone v. Inter County

Telephone & Telegraph Co., 40 So.2d 148 (Fla. 1949);

Seaway Yacht Sales, Inc. v. Brunswick Corp., 242 So.2d

192 (Fla. 3d DCA 1970).

‘See note 2, supra, and accompanying text.

App. 9

Insofar as the plaintiff separately claims the right

to recovery for Ethyl’s “interference” with expectations

arising from the Balter-CNB-Ethy] loan agreement or

the Balter-Ethy] “reorganization” contracts, his contentions

also founder upon the principle, to which we have already

referred, that a cause of action for interference does

not exist against one who is himself a party to the

contract allegedly interfered with. E.g., United Yacht

Brokers, Inc. v. Gillespie, supra; Paradise Shores Apts.,

Inc. v. Practical Maintenance Co., 344 So.2d 299 (Fla. 2d

DCA 1977); Roberts Co., Inc. v. P.B.O. Ltd., 322 So.2d

633 (Fla. 3d DCA 1975); Days v. Florida East Coast R.

Co:, 165 So.2d 434 (Fla. 3d DCA 1964); see Berenson v.

World Jai-Alai, Inc., 374 So.2d 35 (Fla. 3d DCA 1979).

There is, moreover, a completely separate, additional,

and overriding reason which precludes Ethyl’s liability

for “interference” with any of the various contracts

and relationships cited by Balter. Ethyl was, as a matter

of law, privileged to act as it did throughout the entire

course of events involved in this case. At all times, its

actions were reasonably directed to the recovery of

the very substantial sums it was owed by Pac-Craft, to

the protection of its status as the co-obligor with the

corporation on a $450,000 loan it was later required to

pay, and, finally, as the lawful holder of 100% of its

stock. Nitzberg v. Zalesky, supra, and Babson Bros. Co.

v. Allison, 337 So.2d 848 (Fla. 1steDCA 1976), cert.

denied, 348 So.2d 944 (Fla. 1977), among many other

authorities, establish the principle that, so long as

improper means are not employed,’ activities taken to

*The record contains no evidence of any such improper or

unlawful activity by Ethyl. Compare cases cited, W. Prosser, Law

of Torts §129 at 936-937, nn. 30-35 (4th ed. 1971).

App. 10

safeguard or promote one’s own financial, and contractual

interests are entirely non-actionable. See also, e.g.,

Coronet Development Co. v. F.S.W., Inc., 379 Mich. 302,

150 N.W.2d 809 (1967); Petit v. Cuneo, 290 Ill.App. 16, 7

N.E.2d 774 (1937); accord, 4 Restatement (Second) of

Torts, §769, comment c (1979); cf. Matter of Kearney

Chemicals, Inc., 468 F.Supp. 1107 (D. Del. 1979).

It is also clear, contrary to Balter’s position here,

that 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 — that is, in this context, that

Ethyl’s employees, while attempting to protect its

economic situation, also may have happened to dislike

Balter personally.” In Chipley v. Atkinson, 23 Fla. 206,

1 So. 934, 938 (1887) the first Florida decision to recognize

the tort of interference, our supreme court squarely so

stated:

“Where one does an act which is legal in

itself, and violates no right of another person,

it is true that the fact that the act is done from

malice, or other bad motive towards another,

does not give the latter a right of action against

the former.”

“We assume without deciding the correctness of Balter’s

very dubious position that there was some evidence of such motivation

in Ethyl’s conduct. It should be noted, however, that the existence

of any such “malice” is completely belied by Ethyl’s continued

willingness, even eagerness, for Balter to continue as the head

and owner of Pac-Craft, even when it enjoyed repeated opportunities

either to bankrupt the company outright or to take it over itself

and thus to freeze him out entirely.

App. 11

As the court held in the leading case of Beardsley v.

Kilmer, 236 N.Y. 80, 140 N.E. 203, 205-206 (1923):

[W]e have a case where the plaintiff is

complaining of and seeking redress for injuries

caused by an act which is the product of mixed

motives some of which are perfectly legitimate.

The question is whether his cause of action

can successfully rest upon such a foundation.

We feel sure it cannot.

* * *

{Ijn other jurisdictions in this country and

in England the courts in response to a broader

and more equitable vision of the interrelated

rights of individuals have tended toward the

denial of this proposition that it is lawful to

perform an otherwise legal act injuring another

when there is no excuse for its performance

except the malicious purpose of injury. [citing

numerous cases]

But as we have pointed out we are compelled

to disagree with plaintiff's view that the acts

complainéd of were solely the conception and

birth of malicious motives, and when we do

this and decide that there were also legitimate

purposes the rule seems to be perfectly well

established that there is no lability. The question

how far one individual shall be restrained from

doing acts which are inherently proper out of

respect for the rights of others is bound to be

a delicate one. The proposition that a man

may not dig a well upon his own land or enter

App. 12

upon 2 lawful business is one to be advanced

with considerable caution, and the cases seem

firmly to establish the rule that if he digs a

well because he really wants the water or

starts the business for personal advantage or

gain his neighbor is without remedy however

much he suffers, and even though the act may

also have been tinged with animosity and

malice. [e.s.]

There seems to be no authority which holds to the

contrary of this proposition. Accord, e.g., Arnold v.

Moffit, 30 R.I. 310, 75 A. 502 (1910); Raycroft v. Tayntor,

68 Vt. 219, 35 A. 53 (1896); cases collected, W. Prosser,

Law of Torts §129 at 943, nn. 93-94 (4th ed. 1971); 30

Am.Jur. Interference §§33,51 (1958); 45 Am.Jur.2d

Interference §23 (1969); Annot., 26 A.L.R.2d 1227, 1259,

§23 (1952). See generally DeMarco v. Publix Supermarkets,

Inc., __ So.2d ___ (Fla. 1980), affirming and adopting, 360

So.2d 134 (Fla. 3d DCA 1978); Catania v. Eastern Airlines,

Inc.,.381 So.2d 265, 267 (Fla. 3d DCA 1980).

In support of his contrary position on this issue,

Balter relies solely upon an isolated phrase which appears

in Nitzberg v. Zalesky, supra, at 370 So.2d 391, and

Serafino v. Palm Terrace Apartments, Inc., 343 So.2d

851, 852 (Fla. 2d DCA 1976), to the effect “that a

contracting party has a justification or privilege to

interfere where necessary to protect that party’s own

contractual rights provided such interference is without

malice.” [e.s.] Insofar as the emphasized clause, which

is clearly dictum in both cases, may imply that otherwise

privileged activity becomes tortious simply if it is

accompanied by a malicious disposition, we believe, for

App. 13

iii

the reasons stated, that it is not a correct statement df

the law. Hence, to the extent, we recede from that

expression in Nitzberg, and disapprove the one in Seraftno.

In support of this determination, we note that the

out-of-state cases and text authority cited in Serafino

— which was in turn, the sole basis for the statement

in Nitzberg — deal only with quite different issues

from those arising from the economically privileged

actions which are involved in this case, as well as in

Nitzberg and in Serajino itself. The only Florida case

cited on the question in Serafino, Hunter Lyon, Inc. v.

Walker, 152 Fla. 61, 11 So.2d 176, 177 (1942) actually

holds that “[t]he ultimate issue will be whether the

interference charged was done solely through malice

or in the lawful protection of defendant’s loans.” [e.s.].

We similarly find in this case that, since it is beyond

question that Ethyl] acted in the lawful protection of its

legitimate interests in receiving the money it was owed

and not “solely” out of malice, the personal feelings its

employees may have had about Balter make no difference

at all.

The record demonstrates that Balter lost his interest

in Pac-Craft and that Ethyl had taken various actions

over the years which had something to do with that

eventual result — but it shows nothing else. There is

utterly no evidence that Ethyl committed any actionable

wrong, that it engaged in any activity which is or

should be recognized by the law of torts as giving rise

to an action by Balter to recover damages on his behalf.

App. 14

‘%

We therefore reverse the judgment against Ethyl

and remand the cause with directions that judgment

be entered in its favor.

Reversed and remanded.

App. 15

IN THE THIRD DISTRICT COURT OF APPEAL

THIRD DISTRICT OF FLORIDA

CASE NO. 78-994

ETHYL CORPORATION,

Appellant/Cross

Appellee,

vs.

DAVID BALTER,

Appellee/Cross

Appellant.

MOTION FOR REHEARING

Appellee/Cross Appellant, David Balter, respectfully

moves this Honorable Court to rehear and reconsider

its opinion and decision of July 8, 1980.

SUMMARY OF POINTS

MISAPPREHENDED OR OVERLOOKED

1. The Court’s opinion re-evaluates the facts and

the inferences to be derived from those facts, resolves

all factual disputes in favor of Appellant Ethyl, and

omits all facts unfavorable to Appellant Ethyl. It thereby

violates fundamental principles of appellate review.

And it denies Appellee his constitutional right to trial

by jury.

2. The Court’s opinion incorrectly requires that

interference be “direct,” as well as “intentional and

App. 16

unjustified.” It thereby adds an entirely new element

to the tort, contrary to Florida law, and rejects Franklin

v Brown (Fla 1st DCA 1969) which has been repeatedly

followed by this and other courts of appeal.

3. The Court’s opinion confuses Florida law of

causation and damages, and subsitutes the Court’s factual

assessments for the jury’s on these key issues.

4. The Court’s opinion on the issue of an actor’s

incidental personal malice quotes a 1923 New York

decision which not only is contrary to Florida law but

does not apply to tortious interference even in the

state of New York. That decision deals with a cause of

action (“prima facie tort”) not recognized in Florida

and not involved here.

5. The Court’s opinion misapprehends the nature

of the means used by Ethy] to interfere with Balter’s

relationship with Pac Craft, overlooks Ethyl’s use of

actual deceit, its disregard of direct court orders, and

its fraud on other creditors. By overlooking these

egregious activities, the opinion substitutes the Court’s

own subjective opinion of what constitutes proper means

for the jury’s. Florida law, conceded by Ethyl, requires

the issue to be decided by the jury, not by appeals

courts.

App. 17

The Review Procedure Followed in the Court’s Opinion

Violates Fundamental Principles of Appellate Review

and Unconstitutionally Deprives Appellee of his Florida

and Federal Rights to Jury Trial.

An appellate court cannot substitute its judgment

for that of the jury on questions of fact.’ But this

Court’s opinion re-evaluates the facts and the inferences

properly derived from those facts, resolves all factual

disputes in Appellant Ethyl’s favor, and gives Ethyl

the benefit of every doubt on the inferences to be

derived from those facts. A re-evaluation of that sort

contradicts every principle of appellate review. It clearly

denies David Balter’s rights, under Article I, §22 of the

Florida Constitution and the Seventh Amendment to

the Constitution of the United States, to trial by jury.

Both guaranties apply to Florida citizens. Hollywood,

Inc. v City of Hollywood, 321 So2d 65, 71 (Fla 1975).

The Seventh Amendment clearly and unequivocally

states that “no fact tried by a jury shall be otherwise

re-examined in any Court... .”

The Court’s opinion rejects some facts and accepts

others, and overlooks and misapprehends the entire

pattern of conduct displayed by the evidence presented

to the jury, distorting and separating the facts in Ethyl’s

favor. The following are but a few instances, evident

from the face of the opinion, of the Court’s substitution

‘See e.g., Levenstein v Sapiro, 279 So2d 858 (Fla 1973);

Helman v Seaboard Coast Line R. Co., 349 So2d 1187 (Fla 1977);

Midstate Hauling Co. v Fowler, 176 So2d 87 (Fla 1965); Exchange

Bank of St. Augustine v Fla. Nat’l. Bank of Jacksonville, 229 So2d

361 (Fla 1974); Bermil Corp. v Sawyer, 353 So2d 579, 583 (Fla 3d

DCA 1978); Lee v Dade County, 342 So2d 846, 847 (Fla 3d DCA

1977). |

App. 18

of its own factual assessments for those facts properly

decided in Appellee’s favor by the jury:

a. The Court’s opinion states that:

During the late 1960’s, Pac-Craft encountered

severe financial difficulties which primarily

included its inability to pay its outstanding

account with Ethyl, by far its largest creditor.

As a result, Pac-Craft negotiated a $450,000

loan from the City National Bank of Miami

(CNB), which was personally guaranteed both

by Balter and Stanley Fromm, the owner of

the other half of Pac-Craft, and which was

secured by their stock in the company. The

only reason the bank agreed to the loan was

that Ethyl guaranteed it. Ethyl had decided,

rather than forcing Pac-Craft into bankruptcy,

instead to attempt to preserve the existence

of an important customer in the hopes of

receiving a greater return on its outstanding

balance and of securing future business as

well. In March of 1969, however, Pac-Craft

defaulted on the loan. In accordance with the

guarantee agreement, the CNB debt was

satisfied by Ethyl which was assigned both

the pledged Pac-Craft stock and the personal

guarantees of Balter and Fromm.

The evidence believed by the jury shows that:

(1) The severe financial difficulties encountered

by Pac Craft in the late 1960’s directly resulted

from Ethyl’s supplying of defective polyethylene

App. 19

film to Pac Craft and its refusal, despite its promises

to do so, to give Pac Craft the proper credits for

defective film. (T 3771-3, 3811-8, 4024-5)

(2) In May of 1967, when the CNB loan

transaction occurred, Pac Craft was not anywhere

near bankruptcy; in fact it was contemplating future

expansion. (T 3802-9) The Court has confused the

situation which existed in 1967 with the situation

in late 1968 and early 1969.

(3) The CNB loan was Ethyl’s idea. It was

meant to finance the expansion into the bakery

market which Ethyl wanted Pac Craft to undertake.

(T 3770-5, 3802) The money was used to pay off the

existing trade debt to Ethyl so Pac Craft would

have the resources to expand.

(3) About six months before the CNB

transaction, Ethyl was already contemplating the

forced acquisition of Pac Craft. (P Exh 69) The jury

correctly determined that the conditions Ethyl

attached to the CNB financing were meant to put

Ethyl in a position to destroy Balter’s control of

Pac Craft at any time.

(4) Throughout 1968, Ethyl improperly abused

its economic strength by denying Pac Craft the

credits it had promised for defective film. (T 3817-8,

3827, 4025; P Exh 64) The purpose of this denial,

the jury correctly found, was to oust Balter as a

stockholder and manager of Pac Craft. (P Exh 64,

56, 59)

App. 20

(5) Ethyl’s acts caused Pac Craft’s default on

the CNB loan, (T 3822-3, 3826-9) The action taken

on that default was arranged between Ethyl and

CNB. (P Exh 55)

In sum, in the very first paragraph of its opinion,

this Court has overlooked or misapprehended the entire

sequence of events, and the causes and motivations

behind the events, leading up to March, 1969.

b. The Court’s opinion states that:

At all times, Ethyl’s actions were reasonably

directed to the recovery of the very substantial

sums it was owed by Pac-Craft, to the protection

of its status as the co-obligor with the corporation

on a $450,000 loan it was later required to pay,

and, finally, as the lawful holder of 100% of its

stock.

_The jury found that Ethy] did not act to protect its

interest in Pac Craft (which might or might not give

Ethyl] a privilege), but to acquire or control Pac Craft in

derogation of Balter’s rights.

That finding was supported by:

(1) The Ethyl memoranda introduced into

evidence at trial, which show a continued intent to

increase Ethyl’s interest in the company (either

through a direct take-over, a substitution of a manager

loyal to Ethyl, or a liquidation), not to preserve

App. 21

and protect an existing interest (P Exh 69, 64, 56,

59, 58);?

(2) Evidence showing that Ethyl scuttled a

Chapter XI plan of arrangement which would have |

returned 50% of its inflated “debt” (as opposed to

25% or 30%) for reasons not worthy of serious

consideration (a proposal to pay ebout $1200 to

small creditors). (T 917-8)

Ethyl was determined to exercise control of Pac

Craft, either by acquiring it outright or by putting

someone it could control in charge. (P Exh 69, 64, 56,

59, 58) The jury correctly found that this was not

necessary or reasonably directed to the protection of

Ethyl’s interest in Pac Craft. The Court’s opinion

improperly substitutes a finding to the contrary,

overlooking or misapprehending the facts and the law.

c. The Court’s opinion states that:

Balter, however, was unable to produce an

additional $34,000 which was necessary to fund

the plan which had been finally approved by

the Chapter XI bankruptcy court and by Ethyl

and the Pac-Craft creditors’ committee which

Ethyl dominated as the control creditor.

*The distinction is critical: even assuming proper means, the

latter may be privileged; the former is not. See Babson Bros. Co. v

Allison, 337 So2d 848 (Fla 1st DCA 1976).

App. 22

* * *

Initial plans of reorganization submitted by

Balter, . . . would have required no or

substantially less monies to fund, but . . . would

also have brought Ethyl] far less return on its

outstanding claim.

Because Ethyl’s improper maneuverings had forced

up the amount of cash required to fund Balter’s plans,

not by $34,000 as indicated in the Court’s opinion, but

by almost $100,000 (from $150,000 to $247,000) (T 3940;

4009-19), Balter foreseeably could not fund the plan.

The evidence supported the jury finding that Ethyl

told Balter it would accept his first plan of arrangement,

which provided a fifty percent (50%) return to the

creditors on their debt, payable over a four-year period.

(T 3868-9, 3897, 3899- 3900, 3915, 3918-9) It then destroyed

that plan in Bankruptcy Court, and forced Balter to

submit a plan which gave the creditors a higher cash-

up-front return, but which paid them only twenty- five

percent (25%) of their debt. (1033-4) Ethyl then scuttled

that plan by bringing a competitor into Pac Craft’s files

to obtain data to submit a higher proposal (in violation

of Bankruptcy Court order). (T 3933, 1044-5, 1893-1905)

This foreseeably and predictably forced Balter to submit

‘a plan which provided the creditors with a thirty-five

percent (35%) return (still less than Balter’s originally

proposed 50%). Jt is absolutely incorrect to say that

Balter’s initial plan would have brought Ethyl a far

lower return on its outstanding claims against Pac

Craft.

App. 23

d. The Court’s opinion states that:

Ethyl] thus lost more than $300,000 out-of-pocket

in its dealings with Balter and Pac-Craft.

In fact:

(1) Ethyl owed Pac Craft at least $150,000

(according to Balter, $200,000) in credits for defective

film in 1968, and paid only $50,000. (T 1018) Prior

to that in 1967, it had been paid for defective film

with funds from the CNB loan. (T 4024-5)

(2) The $150,000 did not include the large

cost of reprocessing and reshipping the bags made

from Ethyl’s defective film to Pac Craft’s customers,

for which Ethyl undoubtedly would have been liable.

(T 3823, 3226)

(3) Ethyl received $185,000 in the Chapter

XI proceeding (35% of total $500,000 “debt”).

Although it may be unclear how much, if anything,

Ethy] lost, it is very clear it was nowhere near $300,000.

And by forcing Balter not to include the $100,000 to

$200,000 set-off in Pac Craft’s schedule of assets, Ethy]

defrauded other Pac Craft creditors — and the Bankruptcy

Court — by getting a percentage of a much higher and

falsified “debt” claim. This is hardly in the category of

activities privileged as a matter of law.

e. The Court’s opinion states that Ethyl committed

no wrongful acts on its road to the destruction of Balter’s

App. 24

relationship with Pac Craft and Wolf. This completely

overlooks the following facts:

(1) It was not necessary for Balter to put Pac

Craft in Bankruptcy Court. Ethyl induced him to

do so by promising him 100% of Pac Craft’s stock

and the opportunity to present a plan of arrangement

which it promised not to oppose. (T 4041-7; P Exh

20) Ethyl had no intention of keeping any of these

promises.

(2) Ethyl solicited Smart Pac’s offer by

deceiving Smart Pac as to the nature of Ethyl’s

relationship with Balter, the financial condition of

Pac Craft, and the meaning of the Chapter XI

proceeding; in order to aid and assist Smart Pac’s

presentation of its offer, Ethyl violated an express

directive of the Bankruptcy Court. (T 1884-5 1911,

1044-5, 1893-1905) The jury correctly found these

to be improper means to protect one’s interest.

Insurance Field Services v White & White Inspection,

‘384 So2d 303 (Fla 5th DCA June 11, 1980). The

White & White decision was handed down after

the oral argument in this case. It directly conflicts

with this Court’s opinion on this point. Affirming

the rulings of present Supreme Court Justice Parker

Lee McDonald, the Fifth District held:

The question of whether appellants’ admittedly

intentional interference was unjustifiable

depends upon a balancing of the importance,

social and private, of the objective advanced

by the interference against the importance of

the interest interfered with, considering all

App. 25

circumstances among which the methods and

means used and the relation of the parties are

important. Restatement 2d, Torts §767 and

comments.

In framing the issue, we agree with the opinion

of the New Jersey Supreme Court in Grillo v

Board of Realtors of the Plainfield Area, 91

N.J.Super. 202, 219 A.2d 635 (1966), that the

ultimate inquiry is whether the interference

by the defendant is “sanctioned by the rules of

the game.” As the New Jersey Court notes:

There can be no tighter test of liability in

this area than that of the common conception

of what is right and just dealing under

the circumstances. Not only must

dejendants’ motive and purpose be proper

but so also must be the means.

(3) As previously discussed, Ethyl always acted

for the purpose of ousting Balter from Pac Craft so

that it could substitute itself or someone it controlled

in his place. These acts were directed against Balter

and against his relationship with Pac Craft, and

not against the corporation itself. The memoranda

never once speak of injuring Pac Craft, but show a

total and complete disregard of Balter’s rights.

(4) Balter did not release Ethyl from any of

his personal claims in return for Ethyl’s release of

his $360,000 guarantee on the City National Bank

note. To begin with, the evidence would support a

jury finding that releases were never exchanged,

App. 26

based upon the testimony and upon the terms of

the Balter/Ethyl agreement, which provided for

exchange of releases at the completion of Balter’s

plan (and that never occurred). (P Exh 14) In addition,

the jury (properly instructed) properly found that

if any’releases were in fact ever exchanged, they

were not intended to affect Balter’s claims here.

(5) Although Balter has not asserted a separate

claim for Ethyl’s interference with his expectations

arising from the CNB loan agreement, Ethyl’s actions

in connection with the CNB loan agreement were

part and parcel of its ongoing plan to interfere

with Balter’s relationship with Pac Craft.

(6) Balter surrendered a separate claim for

damages based on breach of warranty for defective

film at trial. The defective film appears here only

because Ethyl manipulated the “credits” situation

to oust Balter from his position with Pac Craft.

The Court’s opinion overlooks or misapprehends

the elements of the tort of tortious interference.

The law of Florida requires that interference be

“intentional and unjustified”, not “direct,” as stated in

the Court’s opinion. Ethyl’s interference with Balter’s

contractual relationship with Wolf was undoubtedly

intentional. It intentionally raised the amount of money

needed by Balter to fund a plan, knowing that Balter

had made arrangements with a third party (not Wolf)

to fund the plan. (T 3868-9, 3897, 3899-3900, 3915, 3918-9)

Under no fair reading of these facts could this interference

be described as “negligent”, nor did Balter ever make

a claim for negligent interference. The Court’s

App. 27

‘%

requirement that Ethyl communicate with Wolf in order

fo. Balter to recover overlooks or misapprehends the

Pecision in Franklin v Brown, 159 So2d 893 (Fla 1st

LCA 1964), cited with approval by this Court in John

B. Reid & Assoc., Inc. v Jimenez, 181 So2d 575 (Fla 3d

DCA 1966), Mead Corp v Mason, 191 So2d 592 (Fla 3d

DCA 1966); Retzky v J.A. Cantor Assoc., Inc., 192 So2d

24 (Fla 3d DCA 1966); and Calvary Church, Inc. v Siegel,

358 So2d 1134, 1136 (Fla 3d DCA 1978). See also Doft &

Company, Inc. v Home Federal Savings and Loan, 592

F2d 1361 (5th Cir 1979, Fla). Compare the White &

White decision.

These decisions hold that a party who intentionally

destroys the subject matter of a contract is liable for

tortious interference to the same extent as one who

unlawfully induces a breach. This Court’s opinion totally

overlooks this law, or totally changes it by its decision

here. Ethyl’s acts undoubtedly destroyed the subject

matter of Balter’s contract with Wolf: the financing of

Balter’s plan of arrangement and the corporation itself.

Ethyl’s destruction of the subject matter of the

Balter/Wolf contract is undoubtedly illegal under all

prior Florida law. The current decision creates massive

confusion as to whether there remains any tort of

interference in Florida’s Third District. And as a matter

of policy, the Court’s decision reverts to the unbridled

economic power, might-makes-right, era of a century

ago.

App. 28

‘\

The Court’s opinion overlooks or misapprehends

the facts by stating that Balter had no standing

to sue Ethyl under the CNB loan agreement.

The facts show that Balter was, individually, a

party to that contract and that his guaranty and his

stock were on the line with CNB. Even had Balter’s

position vis-a-vis CNB been unenforceable, the law

presumes CNB would not have called the loan without

Ethyl’s interference. See Azar v Lehigh Corp., 369

So2d 860 (Fla 2d DCA 1978); Franklin v Brown; John B.

Reid v Jimenez; and White & White.

The Court’s assumption that Balter’s only rights

were “derivative” is therefore demonstrably incorrect.

Alario v Miller, 354 So2d 925 (Fla 2 DCA 1978), cited in

the opinion, contrary to its citation, recognizes that

individual stockholders may have sepfrate, non-derivative

rights. See page 926, right column.

Ethyl is not being accused of “interfering with its

own contract” with Balter

Ethyl was indeed not a party to the Balter/Wolf

contract. And it is not being accused of “interfering

with its own undertaking” to Balter. The Court’s opinion

confuses the elements of the tort of interference in

stating that Balter’s claim for interference with his

contract with Wolf is really a claim for Ethyl’s interference

with its own contract with Balter. The first element of

the tort, a contract with a third party, is undoubtedly

satisfied by the contract between Balter and Wolf. The

fact that damage caused by interference with a third

party contract happens to include loss of benefits under

App. 29

another contract with the interferor does not transmute

the claim into a suit for interference with the interferor’s

own contract.

The Court’s opinion overlooks or misapprehends the

many cases stating that the existence of legal causation

is a question to be decided by the jury, and not as

a matter of law by the trial court, and certainly never

by an appellate court.

The Court’s opinion overlooks or misapprehends

the many cases stating that the existence of legal causation

is a question to be decided by the jury, and not as a

matter of law by the trial court, and certainly never by

an appellate court overruling both. This principle was

re-emphasized by the Supreme Court while this case

was under consideration. Gibson v Avis Rent-A-Car

System, 1980 FLW 248 (Fla May 16, 1980). See also

Helman v S.C.L.R.R. Co., 349 So2d 1187 (Fla 1977);

Ranger v Avis Rent-A-Car System, Inc., 336 So2d 467

(Fla 3d DCA 1976); Vertommen V Williams, 287 So2d

116 (Fla 4th DCA 1974); Railway Express Agency, Inc.

v Garland, 269 So2d 708 (Fla 1st DCA 1972); DamBakly

v Mason, 184 So2d 35 (Fla 3d DCA 1967); Savarese v

Holl, 128 So2d 775 (Fla 3d DCA 1961). The Court’s

opinion asserts that “Ethyl could not have foreseen”

that Balter would be unable to raise the amounts of

cash-up-front necessary to fund the new plans Ethyl’s

improper acts forced Balter to submit. The jury has

found to the contrary on this question of fact. Indeed,

the jury properly found that Ethyl not only foresaw

but actually intended this result! The Court’s opinion

overlooks or misapprehends both the jury’s finding

and the case law prohibiting this Court’s “re-examination”

App. 30 ;

’%

of that finding. Only a jury could properly begin even

to consider disbelieving the internal memoranda

discovered in Ethyl’s files (excerpted in the Appendix

on the pages annexed from Appellee’s brief). No review,

however jaundiced or cynical, can properly and

constitutionally dismiss those memoranda as “utterly

no evidence” of improper means or tortious intent.

In additon, the opinion’s citation of a negligence

decision to support the statement that there was “no

proximate relationship between Ethyl’s activities and

Balter’s damages overlooks or misapprehends well

established law to the effect that causation is measured

by far less stringent standards when the tort complained

of is an intentional one as opposed to negligent. See

Briggs v Brown, 46 So 325 (Fla 1908); Johnson v Greer,

447 F2d 101, 106-7 (5th Cir 1973). See also, Concord

Florida, Inc. v Lewin, 341 So2d 242, 245 (Fla 3d DCA

1977) (Hendry J.).

The cases cited in this Court’s opinion

on the issue of “personal animosity”

do not represent Florida law.

The cases cited in this Court’s opinion about personal

animosity do not state Florida law. Even in the states

noted, they don’t — by definition — apply to tortious

interference cases. Beardsley v Kilmer, 140 NE 203,

205-6 (1923), and the other out of state cases cited by

the Court, deal with the concept of “prima facie tort”.

No case in Florida has ever adopted this concept. Prima

facie tort, a New York cause of action, gives a plaintiff

the right to sue a defendant for the defendant’s lawful

actions where such actions are undertaken for a purely

App. 31

malicious purpose. Steward v Worldwide Automobiles

Corp., 189 NYS2d 540 (1959); Sheppard v Cooper’s,

Inc., 156 NYS2d 391 (1956); Ruza v Ruza, 146 NYS2d

808, 811 (1955); and Kajtazi v Kajtazi, 488 FSupp 15, 21

(EDNY 1978). If the acts of which he complains constitute

separate, recognized torts (such as tortious interference)

no one may sue for a “prima facie tort”. Best Window

Co. vs Better Business Bureau, 146 NYS2d 383, 385

(1955); Kaplan v K. Ginsburg, Inc., 178 NYS2d 25, 30

(1958). The Court’s opinion therefore overlooks or

misapprehends the total and complete inapplicability

of this bizarre New York, minority concept to Florida

(or New York) litigants in interference cases.

Balter claimed, the jury found, and the evidence

showed that Ethyl hid embarked on a course of conduct

intentionally calculated to interfere with and destroy

Balter’s relationship with Pac Craft. This plan included

Ethyl’s lying to Balter about its intentions, disobeying

a Bankruptcy Court directive, lying even to Smart Pac

to induce it to submit a competing plan, misleading

other creditors as to the amounts owed to Ethyl by Pac

Craft and manipulating credits known to be due for

defective film. It meets every element of tortious inter-

ference. The jury correctly judged these acts improper

and illegal. Cf. White & White. Balter did not claim, as

apparently this Court mistakenly believes, that Ethyl

had engaged in a perfectly proper course of conduct

made actionable only because the motives for it were

tinged with personal animosity toward him. He did not

sue or recover for “prima facie tort.”

The Florida cases cited in connection with this

issue, DeMarco v Public Supermarket, Inc., So2d

(Fla 1980) and Catalina v Eastern Airlines, Inc.,

App. 32

381 So2d 265, 267 (Fla 3d DCA 1980) are not about

intentional interference. They deal with the subject of

wrongful discharge by an employer of an employee.

This Court’s opinion overlooks or misapprehends the

fact that those cases are completely inapposite here.

The Court’s opinion overlooks or misapprehends

the law and the facts in its decision on Balter’s

cross-appeals for breach of contract and fraud.

The very evidence recited by the Court's opinion

(Ethyl’s inducement of Smart Pac’s “bidding”, which

Ethyl’s representative lied about at trial) constitutes

an undeniable and unmistakable violation of Florida

law of contract: no one may deliberately and in bad

faith prevent another from performing under his contract

and reaping its benefits. Gulf American Land Corp. v

Wain, 166 So2d 763 (Fla 3d DCA 1964). The evidence

compels the conclusion that Ethyl never intended to

honor its contract with Balter. The trial court’s refusal

to instruct the jury on the issue of fraud deprived

Balter of his right to a fair trial. A.C.L.R. Co. v Shouse,

91 So 90, 102 (Fla 1922); Luster v Moore, 78 So2d 87

(Fla 1955); and Menard v O’Malley, 327 So2d 905, 907

(Fla 3d DCA 1976). Yet the Court’s opinion deals with

these, and the remainder of the cross appeal, merely

by four words added as an afterthought in footnote 4.

If the jury findings in favor of Balter are to be disregarded,

there is no basis for regarding those against him as

sacrosanct — especially where they resulted from

defective (or no) jury instructions.

The Court has overlooked that proper means

are for the jury.

App. 33

The Court’s opinion ignores the expressly-agreed-

upon principle that whether actions are “proper means”

is for the jury to decide. See Ethyl’s reply brief, page

11. And see, e.g., Frank Coulson Buick, Inc. v Trumbull,

328 So2d 271 (Fla 4th DCA 1976). See also Churruca v

Miami Jai Alai, Inc., 353 So2d 547 (Fla 1978). And see

title page to Appendix to this motion.

The Court has overlooked or misapprehended

Florida’s law on jury instructions.

The Court’s opinion (in footnote 4) concerning the

jury instruction contravenes the massive Florida case

law requiring jury charges to be read in their totality,

prohibiting continued repetition of elements, and requiring

that the closing arguments be considered in assessing

whether even an improper charge is harmful. On oral

argument, Ethyl’s counsel admitted to this Court that,

even assuming his (incorrect) reading of the charge, it

was never mentioned by anyone on closing argument.

His reading of it ignores the four prior repetitions of

Ethyl’s (unpleaded) “privilege to interfere.” And despite

Ethyl’s assertion’s on appeal that its counsel objected

“strenuously,” the transcript shows but one cryptic

(and incorrect) statement that something “amounts to

a directed verdict.” No one — not the jury, not the trial

judge, not plaintiff's counsel — was aware that a verdict

had been directed. And the issue was rendered harmless,

and moot, by the jury’s proper finding of actual malice.

Until the Court’s July 8, 1980 opinion, no one had ever

been “privileged” to engage in malicious acts.

App. 34

CONCLUSION

For all, or any, of the reasons set forth above, the

judgment on the jury verdict should be reinstated and

affirmed.

Respectfully submitted,

BAILEY & DAWES,

a professional association

Suite 1820, One Biscayne Tower

Two South Biscayne Boulevard

Miami, Florida 33131

(305) 374-4404

By /s/

Guy B. Bailey, Jr.

By /s/

Sara Soto

App. 35

°.

IN THE DISTRICT COURT OF APPEAL

OF FLORIDA

THIRD DISTRICT

JULY TERM, A.D. 1980

THURSDAY, SEPTEMBER 4, 1980

ETHYL CORPORATION,

| Appellant,

vs.

DAVID BALTER,

Appellee.

CASE NO. 78-994

Counsel for appellee having filed in this cause

motion for rehearing, and same having been considered

by the court which determined the cause, it is ordered

that said motion be and it is hereby denied.

App. 36

IN THE DISTRICT COURT OF APPEAL

THIRD DISTRICT OF FLORIDA

DAVID BALTER,

Plaintiff/Petitioner,

vs.

ETHYL CORPORATION,

Defendants/Respondents. —

CASE NO: 78-994

NOTICE OF PETITION FOR

CERTIORARI JURISDICTION

Notice is hereby given that David Balter,

Plaintiff/Petitioner, invokes the certiorari jurisdiction

of the Supreme Court to review the decisions of this

Court rendered July 8, 1980, rehearing denied September

4, 1980.

The decisions expressly and directly conflict with

previous decisions of the Supreme Court and of other

Districts Courts of Appeal.

Respectfully submitted,

BAILEY & DAWES,

a professional association

Attorneys for Plaintiff/Petitioner

1820 One Biscayne Tower

Two South Biscayne Blvd.

Miami, FL 33131

By: /s/

Sara Soto

App. 37

IN THE SUPREME COURT OF FLORIDA

CASES NOS, 59,794

59,795

59,796

DAVID BALTER,

Petitioner,

vs.

ETHYL CORPORATION and

ROBERT FRANK,

Respondents.

PETITIONER’S BRIEF

ON JURISDICTION

INTRODUCTION

The decision below' expressly holds that one may

tortiously interfere with a contract (or reasonable business

expectancy) with actual malice, so long as the interference

serves any economic interest of the malefactor. The

Third District’s decision holds that interference motivated

‘Ethyl Corp. v. Balter, 386 So.2d 1220 (Fla. 3d DCA 1980). This

Court consolidated Balter's petition from this decision (No. 59,794)

with the petitions from Balter v. Ethyl Corp., 386 So.2d 1226 (Fla.

3d DCA 1980) (No. 59,795) and Balter v. Frank, 386 So.2d 1227 (Fla.

3d DCA 1980) (No. 59,796). All three arose from the same case and

trial.

App. 38

‘\

by any self-interest is absolutely privileged — that

interference is tortious only if “done solely through

malice.”

This holding expressly and directly conflicts with

Serafino v. Palm Terrace Apartments, Inc., 343 So.2d

851, 852 (Fla. 2d DCA 1976) (interference to protect

one’s interest is privileged only if it is “without malice”).

The court below, referring to Serafino, itself acknowledged

the conflict:

[W]e believe, for the reasons stated, that it is

not a correct statement of the law. Hence, to

that extent, we recede from that expression

in Nitzberg,’ and disapprove the one in Serafino.

This Court therefore has jurisdiction.’

The conflict is squarely presented: in an action for

tortious interference with a contract or with a reasonable

business expectancy, is a defendant with a financial

interest absolutely privileged to interfere even where

he acts with actual malice? The Second District in

*Although itself not a basis for jurisdiction, the decision below

also conflicts with the Third District’s own decisions in Nitzberg

v. Zalesky, 370 So.2d 389 (Fla. 3d DCA 1979), and Nizzo v. Amoco

Oil Co., 183 So.2d 491 (Fla. 3d DCA 1976).

*Fla. Const. art. V, §3(bX3) (amended April 1, 1980).

App. 39

Serafino said “No.” The Third District, expressly rejecting

Serafino, said “Yes.”

The court below has virtually eliminated the tort

of interference: anyone with any economic interest can

engage in any act, however malicious. If a defendant

profits (or hopes to profit) from his malfeasance, he is

not liable.°

This Court should grant the writ, because of the

confusing conflict in precedents, the public importance

of the issues presented, and the monstrous injustice

perpetrated on Petitioner.

‘Moreover, the pernicious nature of the ruling has now infected

the Fourth District. Wackenhut Corp. v. Maimone, _ So. 2d _ , 1980

F.L.W. 1807 (Fla. 4th DCA, Sept. 24, 1980), expressly follows

Balter. On the other hand, the Fifth District, in Ins. Field Serv.,

Inc. v. White & White Inspection and Audit Serv., Inc., 384 So.2d

303 (Fla. 5th DCA 1980), held that the privilege is not absolute.

See note 18 infra. The White & White decision was cited on

motion for rehearing, but was ignored.

‘In addition to creating confusion and conflict, the decision

below totally misperceives the nature and elements of the tort.

See note 23 infra, discussing the Restatement (Second) Torts.

App. 40

‘\

STATEMENT OF THE CASE

Statement of the Facts‘

David Balter sued Ethyl Corporation (“Ethy!”) for

tortiously interfering with his contracts with and

reasonable business expectancies in Pac-Craft Corporation

(as controlling stockholder and chief executive officer)

and with his contract with financier Paul Wolf.

The jury found: (1) that Ethyl interfered with Balter’s

relationship with Pac-Craft by tortiously divesting him

of ownership and control, and (2) that Ethyl interfered

with Balter’s relationship with Wolf, by destroying the

subject matter of the Wolf-Balter agreement to finance

a Chapter XI reorganization.’ The jury returned a verdict

against Ethyl] for $1,020,450.°

‘Unless otherwise noted, Balter’s statement of the facts is

based on the Third District’s own summary, with verbatim quotes

from the decision set off in italics. The Third District’s decision on

its face plainly vests this Court with jurisdiction. The Third District's

fact summary, however, is not even remotely accurate.

"Balter’s claims for damages stem ultimately from the

loss of his interest in, and employment opportunities

with Pac-Craft Corp., a now defunct Dade County concern

of which he was once the president, chief operating officer,

and owner of 50% of the capital stock.

Concerning Balter’s relationships with Wolf, see note 16 infra.

*The judgment was entered on a jury verdict which, in

answer to a special interrogatory, found that Ethyl had

maliciously interfered with Balter’s advantageous business

relations.

App. 41

Pac-Craft, a Miami processor and printer of

polyethylene film, bought virtually all its raw materials

from Ethyl, a nationally dominant film manufacturer.’

Balter’s troubles began with Pac-Craft’s growing

trade debt to Ethyl.” Balter claimed and the jury believed

that Ethyl wrongfully inflated this debt by charging

Pac-Craft for defective film. Its express, admitted purpose

was to leverage itself into a position to wrest control of

Pac-Craft from Balter.” |

Balter had no choice but to acquiesce in Ethyl’s

control of Pac-Craft. He pledged his Pac-Craft stock to

secure a $450,000 bank loan arranged, guaranteed by,

‘It obtained the vast majority of its primary raw material,

the film itself, from Ethyl, one of the largest manufacturers

of that product in the country.

“During the late 1960's, Pac-Craft encountered severe

financial difficulties primarily including its inability to

pay its outstanding account with Ethyl, by far its largest

creditor.

"The Third District refers to Ethyl's “selling Pac-Craft allegedly

defective film.” The court pointedly did not find there was no

evidence of these claims, ruling instead that these claims were

insufficient to hold Ethyl liable. The court bootstrapped itself into

the conclusion that Ethyl was “free now to direct the affairs of

Pac-Craft as it wished,” even though it was Ethyl’s defective

product that forced Pac-Craft into utter dependence on Ethyl.

App. 42

and paid to Ethyl.” Under Ethyl’s control, Pac-Craft

predictably missed a loan payment. Even then, the

bank called the loan only at Ethyl’s demand. Ethyl] paid

the loan it had caused to be called and took the pledged

Pac-Craft stock.”

Ethyl, with Balter securely under its corporate

thumb, then said it would convey the Pac-Craft stock to

Balter if he would put Pac-Craft through a reorganization

*As a result, Pac-Craft negotiated a $450,000 loan with

the City National Bank of Miami (“CNB”), which was

personally guaranteed both by Balter and Stanley Fromm,

the owner of the other half of Pac-Craft, and which was

secured by their stock in the company. The only reason

the bank agreed to the loan was that Ethyl guaranteed

it.

“In March of 1969, however, Pac-Craft defaulted on the

loan. In accordance with the guarantee agreement the

CNB debt was satisfied by Ethyl which was assigned

both the pledged Pac-Craft stock and the personal

guarantees of Balter and Fromm.

For jurisdictional purposes, Balter may be restricted to these

“facts”; indeed he needs no more to demonstrate jurisdiction. In

truth, however, the jury properly believed Balter’s evidence that

Ethyl deliberately and tortiously forced Pac-Craft to this point

because Ethy] wanted to wrest control of Pac-Craft from Balter, to

thrust its monopoly power into film processing. And Ethy] itself

coerced the bank to call the loan, to increase Ethyl’s leverage.

The Third District acknowledges only that Balter presented

(and the jury properly believed) evidence that Ethyl’s acts were

malicious. The only hint of the actual rancor which comes clearly

through the Third District’s summary cloak is the statement that

Ethyl was “free now to direct the affairs of Pac-Craft as it wished.” It

plainly did so.

App. 43

under Chapter XI of the Bankruptcy Act.“ Balter prepared

and submitted a plan of arrangement to the bankruptcy

court.

Paul Wolf agreed to finance Balter’s plan of

arrangement. However, Ethyl (controlling the creditors

committee by claiming over 75% of the outstanding

debt) kept “moving back the goalpost.”” Ignoring its

agreement with Balter, Ethyl solicited a higher offer

from a third party, Smart-Pac Corp., to liquidate Pac-

Craft. That liquidation offer required Balter to come

up with an additional $34,000 in cash, which he could

not do.” Because of Ethyl’s actions, the reorganization

failed.

“Ethyl entered into an agreement with Balter under

which he would receive back all of the Pac-Craft stock

and be released from his personal guarantee if he were

able to effectuate a reorganization of Pac-Craft under

Chapter XI of the Bankruptcy Code.

“What the Third District calls one failed plan of arrangement

was in fact a series of three, each forced by Ethyl to have a larger

initial cash payment to the creditors and each continually thwarted

by Ethyl’s tortious conduct, culminating in an adjudication when

Balter was unable to raise an additional $34,000.

“The Third District’s opinion does not mention the fact that

Ethyl directly violated a bankruptcy court order in the process of

soliciting Smart Pac’s offer. The Third District described the

bankruptcy proceedings as follows:

In order to comply with this agreement by supplying

sufficient funds to achieve a satisfactory Chapter XI

plan, Baiter entered into a separate plan with a financier

named Paul Wolf, who was represented by John Scussel.

This agreement called for Wolf to provide $170,000 of

App. 44

‘X\

In sum, Ethyl succeeded in wresting control of

Pac-Craft from Balter — first by manipulating trade

credits, and then, by interfering with Balter’s plan of

arrangement. Ethyl] did so with actual malice.

“Continued:

partial funding to Pac-Craft in return for making Wolf a

director of the company, and granting him the option to

purchase 48% of the stock upon Balter’s receipt of all of

the shares from Ethyl. Balter, however, was unable to

produce the additional $34,000 which was necessary to

fund the plan which had been finally approved by the

Chapter XI Bankruptcy Court and by Ethyl and the

Pac-Craft Creditors Committee which Ethyl dominated

as the control creditor. Wolf then withdrew $100,000 of

the $170,000 he had deposited with the court, dooming

Balter’s plan to failure ....

[Balter] alleged interference with the Balter-Wolf

agreement, because of Ethyl's solicitation from others

of subsequent and more favorable offers to reorganize.

Balter claimed that the submission of such an offer by

the Smart-Pac Corp. made it necessary for him to sweeten

“his” plan by the additional $34,000 he subsequently

was unable to raise. It was thus claimed that Ethyl] had

thereby become responsible for Wolf's withdrawal of his

funds in breach of his contract.

The Third District ignored the anomaly that Ethyl had agreed

to convey the stock to Balter if he successfully put through a plan

of arrangement, and yet Ethyl had absolute control over the

success of any plan Balter submitted and used that control to

thwart Balter. The final plan was necessitated by Ethyl’s unlawful

solicitation of a liquidation offer from competitor Smart-Pac.

App. 45

ARGUMENT

THIS COURT HAS JURISDICTION BASED

ON THE EXPRESS AND DIRECT CONFLICT

WITH SERAFINO V. PALM TERRACE

APARTMENTS

A. The Third District’s Decision Conflicts With Serafino

v. Palm Terrace Apartments

Notwithstanding the jury’s finding of actual malice,”

the Third District reversed the $1,020,450 judgment,

holding that “Ethyl was, as a matter of law, privileged

to act as it did.” The Third District held the privilege

absolute, expressly rejecting Serafino v. Palm Terrace

Apartments, Inc., 343 So.2d 851, 852 (Fla. 2d DCA

1976), in which the Second District held:

The law recognizes that a contracting party

has a justification or privilege to interfere

where necessary to protect that party’s own

contractual rights provided such interference

is without malice.

The Third District asserted:

Insofar as the emphasized clause, which is

clearly dictum in both cases, may imply that

otherwise privileged activity becomes tortious

"The finding of actual malice is manifested both in the special

interrogatory verdict and in the punitive damages award.

App. 46

simply because it is accompanied by a malicious

disposition, we believe, for the reasons stated,

that it is not a correct statement of the law.

Hence, to that extent, we recede from that

expression in Nitzberg, and disapprove of the

one in Serafino.

Conflict is plainly established.”

“The Third District itself, in Nitzberg v. Zalesky, 370 So.2d

389 (Fla. 3d DCA 1979), had previously agreed with Serafino, but

rejected its own rule. See also Nizzo v. Amoco Oil Co., 333 So.2d

491 (Fla. 3d DCA 1976).

Wackenhut Corp. v. Maimone, So.2d_-_ , 1980 F.L.W.

1807 (4th Fla. DCA Sept. 24, 1980), by quoting and following Ethyl

v. Balter, compounds the conflict and creates intradistrict conflict

with Frank Coulson, Inc. — Buick v. Trumbull, 328 So.2d 271 (Fla.

4th DCA 1976), cert. dismissed, 336 So.2d 604 (Fla. 1976).

See also Ins. Field Serv., Inc. v. White & White Inspection

and Audit Serv., Inc., 384 So.2d 303, 306-307 (Fla. 5th DCA 1980)

(plaintiff's tortious interference judgment entered by then Circuit

Judge Parker Lee MacDonald affirmed despite defendants’ privilege

to compete):

The question of whether appellants’ admittedly intentional

interference was unjustifiable depends upon a balancing

of the importance, social and private, of the objective

advanced by the interference against the importance of

the interest interfered with, considering all circumstances

among which the methods and means used and the relation

of the parties are important.

* + »

[Tyhe ultimate inquiry is whether the interference by the

defendant is “sanctioned by the rules of the game.”

App. 47

B. Serafino’s Correct Expression of the Law is Not

Dictum.

The opinion below self-servingly characterizes as

dictum Seraftno’s statement that the self-interest privilege

applies only “provided such interference is without

malice.” The Third District’s characterization is both

plainly wrong and irrelevant to this Court’s jurisdictional

determination.

On the facts before it, the Second District in Seraftno

held that there was no liability only because there was

no malice. Serafino accused Palm Terrace Apartments

of interfering with Serafino’s contract with one Elam.

Elam had agreed to assign an apartment lease to Serafino.

Palm Terrace was the lessor. The lease agreement between

Palm Terrace and Elam required Palm Terrace’s written

consent to any assignment, with the provision that

consent “shall not be unreasonably withheld.” 343 So.2d

at 852. Palm Terrace refused to approve the assignment.

Serafino sued for interference with his contract with

Elam.

The Second District stated the issue: Palm Terrace’s

liability for “intentional interference with contractual

Continued:

There can be no tighter test of liability in this

area than that of the common conception of what

is right and just dealing under the circumstances.

Not only must defendants’ motive and purpose

be proper but so also must be the means.

[citations omitted]

App. 48

relations when the defendant is acting under a preexisting ~

contract between it and Elam.” That court then followed

the very rule rejected in the opinion below:

The law recognizes that a contracting party

has the justification or privilege to interfere

where necessary to protect the party’s own

contractual rights provided such interference

is without malice.

Id. at 852 (emphasis added).

The Second District held that because Palm Terrace

indisputably acted under its own contract with Elam,

the issue was whether Palm Terrace’s actions were

malicious:

For the plaintiffs to have succeeded, it was

necessary for them to plead and prove that

the defendant, as a third party, acted maliciously.

There was no such allegation or proof. ... No

malice toward the plaintiff was established.

Id.

The Second District’s expression of the limits on

privilege was plainly necessary to determine the appeal.

App. 49

It is therefore not dictum.” The Second District expressly

held that the issue was whether the otherwise privileged

acts were malicious in fact. Only on finding that there

was no malice did that court reverse.

The Third District’s express and direct rejection

of Serafino creates a conflict of precedents, vesting

jurisdiction in this Court.

C. Even Were The Language In Serafino Dictum, This.

Court Would Have Jurisdiction.

Even were this Court to accept the Third District's

erroneous characterization of the rule in Serafino as

dictum, the conflict would still vest this Court with

jurisdiction.

A long line of cases, beginning no later than Sunad,

Inc. v. City of Sarasota, 122 So.2d 611 (Fla. 1960), has

*A determination of an issue essential to dispose of an appeal

is not dictum. Scott v. Nat'l Airlines, Inc., 150 So.2d 237 (Fla. 1963)

(where court held declaratory relief unavailable because of discharged

employee’s failure to make an election of remedies, court’s statement

that employee may elect to pursue contractual remedies or to sue

for wrongful discharge was not dictum, because it was “essential

to the ultimate conclusion. . .”); Therrell v. Reilly, 151 So. 305, 306

(Fla. 1933) (“What was said in that case was not mere obiter dicta,

because it was necessary for us to say what we did in order to

dispose of the petition for rehearing. . .”). See also Parsons v. Fed.

Realty Corp., 143 So. 912, 920 (Fla. 1932) (“A ruling in a case fully

considered and decided by an appellate court is not dictum merely

because it was not necessary, on account of one conclusion reached

upon one question, to consider another question. . . .”). Accord,

Florida Central R.R. Co. v. Schutte, 103 U.S. 118 (1881).

App. 50

held that a holding in direct conflict with prior dictum

establishes conflict jurisdiction.” As this Court recognized

in Sunad and its progeny, a district court’s announcement

of a rule of law directly contrary to a previous

announcement creates ambivalence in determining the

controlling rule of law — even if the prior announcement

was dictum.

Nothing has changed this rule. Before the 1980

amendment to article V, a cognizable conflict was defined

as “a decision of a district court of appeal which announces

a rule of law that conflicts with a rule previously

announced. ...” 1 A. England & T. Simon, Florida Appellate

Practice Manual, 38 (1979). Plainly, conflict with prior

dictum sufficed.

The 1980 amendment did not change this rule. As

noted in England, Hunter, & Williams, “An Analysis of

the 1980 Jurisdictional Amendment,” 54 Fla. Bar J.

406, 410-411 (1980):

The effect of the change, simply stated, is that

all of the court’s discretionary jurisdiction is

*State v. Jackson, 281 So.2d 353, 354 (Fla. 1973); Twomey v.

Clausohm, 234 So.2d 338, 339, 340 (Fla. 1970); Sheetmetal Workers’

Int’l Ass’n v. Florida Heat and Power, Inc., 230 So.2d 154, 155 (Fla.

1970); Saf-T-Clean, Inc. v. MartinMarietta Corp., 197 So.2d 8, 10

(Fla. 1967); Hagan v. Laragione, 205 So.2d 289, 291 (Fla. 1967);

Hawkins v. Williams, 200 So.2d 800, 801 (Fla. 1967); Southern

Realty and Util. Corp. v. Belmont Mortgage Corp., 186 So.2d 24, 25

(Fla. 1966); Sweet v. Josephson, 173 So.2d 444, 446 (Fla. 1965);

Griffin v. Speidel, 179 So.2d 569, 570 (Fla. 1965); State v. Estate of

Moore, 153 So. 2d 819, 821 (Fla. 1963); Shell v. State Road Dept.,

135 So.2d 857, 858 (Fla. 1962).

App. 51

now predicted on written opinions of the district

courts on points of law brought for review,

rather than on obscure legal issues which were

never discussed at the appellate level.

The amendment eliminated jurisdiction based on

per curiam affirmances without opinion, per curiam

affirmances containing only a citation of authority,”

opinions which merely state that the appeal presents

no merit, conflict based on dissent or concurrence,”

and so-called “inherent conflicts.” Jd. at 411. The

amendment did not otherwise affect the types of

cognizable conflicts:

In light of the limited purposes for the 1980

amendment’s effect on the court’s conflict

jurisdiction — that is, the elimination of

intradistrict conflict and, through the “expressly”

requirement, the necessity of a written opinion

as a predicate for further review — it is also

clear that doctrines which had been developed

by case law under the prior provision and

which were not antithetical to the two changes

would carry forward after April 1, 1980.

Id. at 413 (emphasis added).

Clearly, the confusion created by the Third District's

express disapproval of Serafino would be no less were

Serafino’s language dictum (which it plainly is not).

™See Dodi Pub. Co. v. Editorial America, 8.A., 385 So.2d 1369

(Fla. 1980).

"See Jenkins v. State, 385 So.2d 1356 (Fla. 1980).

App. 52

The conflict here is express and direct, and this Court

has jurisdiction.

D. This Court Should Exercise Its Discretion To Grant

The Writ.

1. This Court Should Grant The Writ To Correct

The Erroneous Precedent.

The Third District’s decision creates an absolute

privilege to interfere with another's contract or reasonable

business expectancies, maliciously and with impunity,

so long as the malefactor will profit from his interference.

In effect, the Third District has turned on its head the

harmless truism, “crime does not pay.” According to

the Third District, if it pays, it cannot be a crime.

App. 53

°°.

The Third District’s decision is contrary to the

overwhelming weight of authority,” and a foreboding

prognosis for non-predatory free enterprise.

To hold that naked self-interest is a carte blanche

for malicious acts is plainly contrary to contemporary

"The clear weight of authority holds that the privilege is

never absolute. As recognized in White & White, “defendants’

motive and purpose [must] be proper [and] so also must be the

means.” The question of whether interference is actionable depends

on a balancing of the parties’ respective interests, purposes, motives,

and means. Restatement (Second) Torts §767 (1979) (listing the

“factors in determining whether interference is improper”). See

§767, Comments b and d, and §768, Comment g. (motive to injure

serves no socially useful purpose and is improper).

Accord, Fury Imports, Inc. v. Shakespeare Co., 554 F.2d 1376,

1383-1385 (5th Cir. 1977) (plaintiff's jury verdict reinstated; despite

defendant's financial interest, jury could have found that purpose

“was to eliminate a competitor. .., and not to preserve ...a source

of supply or ... an investment. If that were the case, Shake speare

would have no valid claim of privilege.”); Frank Coulson, Inc. —

Buick v. Trumbull, 328 So.2d 271 (Fla. 4th DCA 1976), cert. dismissed,

336 So.2d 604 (Fla. 1976) (privilege a jury question); Frank Coulson,

Inc. — Buick v. General Motors Corp., 488 F.2d 202, 206 (5th Cir.

1974) (Fla. law) (jury verdict reinstated; no absolute privilege);

Matter of Kearney Chemicals, Inc., 468 F.Supp. 1107, 1112-1115

(D.Del. 1979) (Fla. law) (“Florida . . . probably . . . would have

resorted to the ad hoc balancing prescribed by §767 ... .”); Adler,

Barish, Daniels, Levin and Creskoff v. Epstein, 482 Pa. 416, 393

A.2d 1175, 1 ALR 4th 1144, 1154-1159 (1978), cert. denied and

appeal dismissed, 442 U.S. 907 (1979) (in action for tortious

interference, privilege to pursue one’s own business interests is

not absolute, citing Harper & James and the Restatement). See

generally 1 F. Harper & F. James, The Law of Torts §6.12, at 516

(1956); W. Prosser, Handbook of the Law of Torts §129, at 943 n. 91

(4th ed. 1971).

App. 54

business standards and traditional notions of fair play.

See Azar vu Lehigh Corp., 364 So.2d 860, 862 (Fla. 2d

DCA 1978):

In the final analysis, the issue seems to turn

upon whether the subject conduct is considered

to be “unfair”, according to contemporary

business standards.”

2. The Third District’s Decision is Also a Denial

of Balter’s Constitutional Right to a Jury Trial.

The seventh amendment of the United States

Constitution clearly and unequivocally states that “no

fact tried by a jury shall be otherwise re-examined in

“See also Upledger v. Vilanor, Inc., 369 So.2d 427, 430 (Fla 2d

DCA 1979), cert. denied, 378 So.2d 350 (Fla. 1979) (in fraud action,

requiring plaintiff to make an “independent investigation” vitiated

by the “desire to upgrade business morality. . . .”), approved in

Besett v. Basnett, So.2d , 1980 F.L.W. 511 (Fla., Oct. 23,

1980). Cf. North Dade Imported Motors v. Brundage Motors, Inc.,

221 So.2d 170, 177-178 (Fla. lst DCA 1969), cert. denied, 226 So.2d

817 (Fla. 1969):

The evidence here reflects that Brundage cracked the

whip of economic power in its dealings with North Dade

(Motors].... Apparently, appellate courts have not been

judicially endowed with a conscience; if we are so blessed,

our conscience has been shocked by the way Brundage

has taken its sledge of franchise agreement and driven

the wedge of economic power through the corporate body

of North Dade [Motors].