K & K Management Inc. v. Lee

Appellants, owners of a motel, contracted with the appellees to operate the motel's restaurant under a profit sharing lease. About two years later it appeared to the appellants that terminating the arrangement would be more efficient than continuing it. Appellants effected termination by locking out the appellees without notice. This strategy for maximizing value failed to consider all of the costs. When the dust settled after the resulting litigation, the appellees held judgments based on jury verdicts totaling $979,400 in compensatory and punitive damages for breach of contract, conversion, and malicious interference with business relationships. Acting through counsel who were not trial counsel, appellants have assigned numerous errors. The principal claim of error with which we agree, and which carries a price tag of $800,000, was permitting the jury to treat the breach of the contract between the parties as a tort.