Fankhanel v. M & H Const. Co., Inc.

• Decision Date: 12 February 1997
• Docket Number: No. 960223,960223
• Citation: 559 N.W.2d 229
• Court: North Dakota Supreme Court
• Parties: Delyle FANKHANEL and, Gay Fankhanel, Plaintiffs and Appellants, v. M & H CONSTRUCTION COMPANY, INC., Defendant and Appellee. Civil

Page 229

559 N.W.2d 229

1997 ND 20

Delyle FANKHANEL and, Gay Fankhanel, Plaintiffs and Appellants, v. M & H CONSTRUCTION COMPANY, INC., Defendant and Appellee.

Civil No. 960223.

Supreme Court of North Dakota.

Feb. 12, 1997.

Robert J. Schaefer (argued), and Richard D. Varriano, Moorhead, MN, for plaintiffs and appellants.

Daniel L. Hull (argued) of Anderson & Bailly, Fargo, for defendant and appellee.

NEUMANN, Justice.

¶1 Delyle Fankhanel appeals the district court's judgment, challenging the court's order granting summary judgment dismissing Fankhanel's claim for tortious interference with a contract. We affirm.

¶2 In 1992, Fankhanel contracted with M & H Construction Company, Inc. (M & H), to construct the basement for a home. M & H excavated the basement and poured the floor and footings for the basement walls. Fankhanel was dissatisfied with the work and refused to pay M & H, asserting the construction was defective.

¶3 Fankhanel is an independent trucker who had been making deliveries for Kost, Inc., for approximately twenty years, with a written contract since 1991, renewable monthly. Kost is a local company that supplied materials for area construction projects.

¶4 In March 1993, the president of M & H, Mike Montplaisir, met with a corporate officer of Kost, Don Ishaug. During the meeting, Montplaisir told Ishaug that Fankhanel refused to pay for the construction of the basement. Montplaisir further told Ishaug that if Fankhanel delivered any of Kost's products to M & H Construction's job sites, M & H might take their business elsewhere. Following their discussion, Ishaug told Fankhanel to resolve the dispute. Fankhanel, however, still refused to pay M & H for construction of the basement. Thereafter, Kost stopped using Fankhanel to deliver its construction materials.

¶5 In November 1993, Fankhanel brought two actions against M & H, claiming M & H had defectively constructed the basement, and claiming it had tortiously interfered with Fankhanel's written contract with Kost for delivering construction materials. In January 1995, the district court dismissed the tortious interference claim on a motion for summary judgment. The court held M & H's actions did not constitute tortious interference with Fankhanel and Kost's contract, and that M & H was justified in imposing the subject condition on its future delivery contracts with Kost. The defective construction claim was tried and the jury returned a judgment in favor of M & H Construction minus the defects. Fankhanel appeals the district court's judgment, and on appeal challenges the district court's dismissal of the tortious interference claim. ¹

¶6 "Summary judgment is a convenient procedure to expedite a lawsuit without a trial on the merits when there is no real dispute about the facts." Delzer v. United Bank of Bismarck, 484 N.W.2d 502, 508 (N.D.1992). A motion for summary judgment must be granted if there is no genuine issue of material fact and either party is entitled to judgment as a matter of law. Thedin v. U.S. Fidelity & Guar. Ins. Co., 518 N.W.2d 703, 705 (N.D.1994); Rule 56 N.D.R.Civ.P. "When no pertinent evidence on an essential element is presented to the trial court in resistance to the motion for summary judgment, it is presumed that no such evidence exists." Kummer v. City of Fargo, 516 N.W.2d 294, 297 (N.D.1994).

¶7 Both parties below applied North Dakota's "significant contacts approach to deciding choice-of-law questions," and argued Minnesota has the most significant contacts in this case. Plante v. Columbia Paints, 494 N.W.2d 140, 141 (N.D.1992). Accordingly, the district court applied Minnesota law. The district court's application of Minnesota law was not questioned on appeal. Therefore, we apply Minnesota law to the tortious interference claim.

¶8 In Minnesota, a cause of action for wrongful interference with a contractual relationship requires proof of five elements: (1) the existence of a contract; (2) the alleged wrongdoer's knowledge of the contract; (3) intentional procurement of its breach or interference with the contract; (4) without justification; and (5) damages. Kjesbo v. Ricks, 517 N.W.2d 585, 588 (Minn.1994); Sip-Top, Inc. v. Ekco Group, Inc., 86 F.3d 827, 832 (8th Cir.1996). The fourth element is at issue in this appeal. We must decide whether there is a genuine issue of material fact regarding the element of justification, which would preclude disposing of the matter by summary judgment.

¶9 According to the Minnesota Supreme Court:

" 'Justification is the most common affirmative defense to an action for interference. It is employed to denote the presence of exceptional circumstances which show that no tort was in fact committed and [a] lawful excuse [existed] which excludes actual or legal malice.' "

Aslakson v. Home Sav. Ass'n, 416 N.W.2d 786, 790 (Minn.App.1987) (quoting Johnson v. Radde, 293 Minn. 409, 196 N.W.2d 478, 480 (1972)).

¶10 Ordinarily, justification is an issue of fact. Kjesbo, 517 N.W.2d at 588 (citing Bennett v. Storz Broadcasting Co., 270 Minn. 525, 134 N.W.2d 892, 900 (1965)). The test for proving justification is what is reasonable conduct under all the circumstances of the case. Id. However, a justification issue can be decided as a matter of law, by showing the "defendant was justified by a lawful object which he had a right to assert." Bennett, 134 N.W.2d at 897.

¶11 In Glass Service Co. v. State Farm Ins. Co., 530 N.W.2d 867, 872 (Minn.App.1995), the Minnesota Court of Appeals dismissed a tortious interference with prospective business relations claim because State Farm was justified, as a matter of law, in advising its insured about a policy limitation, and there was no evidence of coercion or inducement. In Furlev Sales v. North American Automotive, 325 N.W.2d 20, 25-26 (Minn.1982), the Minnesota...