Dolton v. Capitol Federal Sav. and Loan Ass'n, 80CA1043
| Decision Date | 03 September 1981 |
| Docket Number | No. 80CA1043,80CA1043 |
| Citation | 642 P.2d 21 |
| Parties | L. L. DOLTON, Plaintiff-Appellant, v. CAPITOL FEDERAL SAVINGS AND LOAN ASSOCIATION, a Federally Chartered Savings and Loan Association, First Capitol Corporation, a Colorado corporation, and Richard D. Heiserman, Defendants-Appellees and Third Party Plaintiffs, and Fuller and Company, a Partnership, Third Party Defendants. . II |
| Court | Colorado Court of Appeals |
Sanford B. Hertz, P. C., Robert M. Bearman, P. C., Denver, for plaintiff-appellant.
Harry Williams, Law, Scheid & Farabee, P. C., John M. Law, Jeffrey Beattie, Denver, for defendants-appellees and third party plaintiffs.
Plaintiff appeals a summary judgment entered for defendants, asserting that the trial court erred in concluding there was no legal basis for its claims for tortious interference with contractual relations and prospective business advantage and breach of fiduciary duty. We affirm in part and reverse in part.
Plaintiff L. L. Dolton is a real estate developer. Defendants are Capitol Federal Savings & Loan Association, a lender; First Capitol Corporation, a subsidiary of Capitol Federal engaged in the business of real estate development; and Richard D. Heiserman, senior vice-president of Capitol Federal and president of First Capitol.
Dolton and First Capitol sought to buy the same parcel of real estate through independent negotiations with the real estate broker of Parker Farms, the owner. In September of 1976, First Capitol informed Parker Farms' broker of its intent to make a cash offer for the property. In early October, Dolton submitted an offer to purchase for the asking price, but specifying installment payments. Dolton claims he was told by the real estate broker that this offer had been accepted by the owners. Although the offer itself was signed by the broker it was never accepted in writing by the sellers. Dolton asserts, however, that, because the broker was a partner in Parker Farms, his signature constituted acceptance on behalf of the seller.
Dolton then contacted Heiserman in his capacity as an officer of Capitol Federal, an association with whom Dolton had dealt for some 20 years. Dolton claims that he informed Heiserman that he had offered to purchase the land and that it had been accepted. He then inquired about financing the purchase through Capitol Federal, telling Heiserman the purchase price and the terms of purchase. According to Dolton, Heiserman told him that First Capitol had once been interested in the property, but no longer intended to purchase it. Dolton did not submit a loan application.
On October 11, First Capitol offered to purchase the property for an amount less than the listing price, but for cash. This offer was accepted. The record reflects that, had Parker Farms not accepted First Capitol's offer, it would have accepted Dolton's.
Upon discovering that First Capitol had purchased the property, Dolton brought this action, claiming tortious interference with the contract he asserts existed between himself and the seller, tortious interference with a prospective business advantage, and breach of a fiduciary duty on the part of the lender. The trial court granted the defendants' motion for summary judgment and Dolton appeals.
An element of the tort of intentional interference with a contractual relationship is the existence of an underlying contract between the plaintiff and the owner of the property. Comtrol, Inc. v. Mountain States Telephone & Telegraph Co., 32 Colo.App. 384, 513 P.2d 1082 (1973). Although intentional interference with a voidable contract is actionable, Carman v. Heber, Colo.App. 601 P.2d 646 (1979), where a contract is void pursuant to statute, rather than voidable, there can be no liability for inducing its breach. Colorado Accounting Machines, Inc. v. Mergenthaler, Colo.App., 609 P.2d 1125 (1980).
Contrary to Dolton's contention, there is no document which can be construed as a written agreement between him and Parker Farms. Even if we assume an oral contract for the purchase of the property did exist, by the specific language of the statute of frauds, it was "void". Section 38-10-108, C.R.S. 1973. Hence, there was no error in granting summary judgment on defendants' claim of tortious interference with a contractual relationship.
Interference with a prospective business advantage has been recognized as being actionable. W. Prosser, Torts § 130 (4th ed. 1971). We hold that such a tort exists in Colorado. To prove tortious interference with a prospective contractual relation, it is not necessary to prove an underlying contract. It is sufficient to show intentional and improper interference preventing formation of a contract. Restatement (Second) of Torts § 766B. Comment c to § 766B indicates that interference with the prospect of buying land is actionable under this theory.
However, the trial court here concluded that relief could not be granted on this claim because "plaintiff and defendants were competing in the open market (and therefore) defendants were privileged as a matter of law ...." Although correct as to First Capitol, this ruling was erroneous as to the other defendants.
Restatement (Second) of Torts § 768(1)(a), states the competitor's privilege relied upon by the trial court. We adopt this section as a clear statement of the law. It provides:
"One who intentionally causes a third person not to enter into a prospective contractual relation with another who is his competitor ... does not interfere improperly with the others relation if the relation concerns a matter involved in the competition between the actor and the other ...."
The trial court correctly reasoned that First Capitol, Dolton's competitor in the field of real estate development, was privileged as a matter of law. But it was error to extend the privilege to Capitol Federal, the lender, and Heiserman, acting individually and in his capacity as an officer of Capitol Federal. Accordingly, summary judgment entered in favor of Capitol Federal and Heiserman on this issue cannot stand.
We also agree with Dolton's contention that the issue of a breach of fiduciary duty is one of fact....
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