G-Force Hauling v. David Erickson

Citation: 918 N.W.2d 503Docket: 17-0654

Court: Court of Appeals of Iowa; April 18, 2018; Iowa; State Appellate Court

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David Erickson appeals a judgment against him for tortious interference with a contract between G-Force Hauling, L.L.C. (G-Force) and Menards, Inc. The Iowa District Court ruled that Erickson intentionally interfered with G-Force’s contract, which included provisions for compensation based on mileage and handling charges, as well as two types of bonuses—the delivery bonus and the retention bonus. G-Force had contracted with Menards annually since 2011 but did not sign a contract for 2014. Erickson worked for G-Force starting August 24, 2013, and engaged in discussions regarding the contract and the retention bonus during his employment. 

In December 2013, G-Force's Moffett (a truck-mounted forklift) became inoperative, prompting G-Force to rent a replacement from Heartland Transport. On December 15, 2013, Erickson purchased the same Moffett and accessories from Heartland Transport. The following day, he went to the Menards location where G-Force's truck was stored and removed the rented Moffett and chains attached to G-Force’s trailer. Erickson challenges the district court's evidentiary rulings, the finding of intentional interference, and contends that G-Force failed to mitigate its damages while also seeking appellate attorney fees. The appellate court reversed the initial judgment and remanded the case.

Gowens attempted to contact Erickson multiple times after discovering that Erickson removed chains essential for securing his Moffett, but Erickson did not respond. Unable to find replacement chains locally and facing a two-week wait for ordered chains, Gowens testified that G-Force could not make deliveries without them, leading to a complete halt in deliveries for Menards from December 16 to December 31, 2013. Menards subsequently refused to pay G-Force its retention bonus for the year, which totaled $25,518.61, due to the lack of deliveries. G-Force filed a breach-of-contract lawsuit against Menards and a tortious interference claim against Erickson. After arbitration, Menards settled for $12,000 and was released from the lawsuit. G-Force sought the remaining unpaid retention bonus from Erickson as damages. Following a bench trial, the court ruled in favor of G-Force, awarding $13,518 against Erickson, who is now appealing.

In reviewing the case, the district court's actions are evaluated for errors at law, with factual findings supported by substantial evidence being binding. Erickson argues that the court erred by admitting hearsay statements from a third party, specifically regarding Gowens' receipt of a phone call about the removal of the Moffett and chains. The court determined that the statements were admissible not for their truth but to explain Gowens' subsequent actions, which is an acceptable non-hearsay purpose. Thus, the district court's admission of the evidence was not deemed erroneous.

Erickson argues that the district court made an error by admitting a police report related to a theft allegation, which contained hearsay statements. Notably, the report included a testimony from Jacob McCloud, a Menards employee, asserting that he informed Erickson the chains belonged to G-Force, not Heartland Transport, at the time of their removal. The court allowed G-Force’s counsel to read this statement for impeachment purposes, despite Erickson's objections. However, the statements in question were not prior statements from Erickson, which is a prerequisite for impeachment according to established Iowa case law. The law requires that a witness be alerted to the specifics of the prior inconsistent statement and given a chance to acknowledge or deny it.

The court implicitly treated McCloud's statement as true, suggesting Erickson was aware that the chains did not belong to him. G-Force later attempted to introduce the police report as an exhibit, claiming it was relevant for impeachment, but the court did not clearly address the hearsay objection when admitting the report. The report was deemed hearsay and did not qualify under the public-records exception to the hearsay rule. Prejudice is presumed when hearsay evidence is improperly admitted unless proven otherwise.

G-Force contends that the report's admission was not prejudicial because the court primarily used it to establish that Erickson was on notice regarding the ownership of the chains. However, this conclusion was pivotal in the court's finding that Erickson intentionally interfered with G-Force’s hauling contract. The court noted that Erickson acted without notifying G-Force, even after being informed by McCloud about the ownership of the chains, which was essential for establishing the tortious interference claim.

Erickson claimed ownership of chains based on a sales receipt, but the chains were not owned by Heartland Transport and were identified as belonging to G-Force. Despite being informed of this ownership, Erickson did not reach out to G-Force for clarification. The case centers on hearsay evidence, which was deemed prejudicial and essential to the matter, leading to the decision to reverse the previous ruling and remand for a new trial. The court did not address Erickson's claims regarding G-Force's damage mitigation or tortious interference, as the remand negated the need for these determinations. Additionally, Erickson's request for attorney fees was denied, as he did not present a contract or statute supporting such an award. The court concluded with a reversal and remand for a new trial.