Hankins v. Welch State Bank

• Decision Date: 28 October 2014
• Docket Number: Case No. 14-CV-0398-CVE-PJC
• Citation: Hankins v. Welch State Bank, Case No. 14-CV-0398-CVE-PJC (N.D. Okla. Oct 28, 2014)
• Court: U.S. District Court — Northern District of Oklahoma
• Parties: PATRICK HANKINS, and TRUDY HANKINS, Plaintiffs, v. WELCH STATE BANK, Defendant.

PATRICK HANKINS, and TRUDY HANKINS, Plaintiffs, v. WELCH STATE BANK, Defendant.

Case No. 14-CV-0398-CVE-PJC

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA

October 28, 2014

OPINION AND ORDER

Now before the Court is defendant's motion to dismiss and brief in support. Dkt. # 13. Defendant moves to dismiss plaintiffs' one-count complaint pursuant to Fed. R. Civ. P. 12(b)(6) on the ground that plaintiffs have failed to state a claim under Oklahoma law for tortious interference with contract. Id. at 1. Plaintiffs respond that the factual allegations in the complaint are sufficient to state a tortious interference claim. Dkt. # 16, at 2. Plaintiffs request that, should the Court grant defendant's motion, they be allowed to amend the complaint and provide additional factual allegations for their claim. Id. at 4. Defendant has filed a reply. Dkt. # 17.

I.

Plaintiffs are married, reside in Texas, and own a home in Welch, Oklahoma. Dkt. # 2, at 1, 2. On January 31, 2014, plaintiffs entered into a real estate agreement (the agreement) for sale of the home with a prospective buyer, Rachel Walker. Id. at 2. The agreement gave Walker the power to terminate the agreement if a home inspection reported conditions not acceptable to her. Dkt. # 13-1,at 2.¹ Walker approached defendant, a for-profit bank with its principal place of business in Welch, Oklahoma, to finance her purchase. Dkt. # 2, at 1, 2. Defendant requested an appraisal of the property, and the appraisal was conducted on February 18, 2014. Id. at 2. The appraisal noted "some settling as [to] a few low areas in [the] floor near [the] wall" and that the "kitchen laminate flooring had separation." Dkt. # 13-2, at 10.

On March 13, 2014, defendant notified plaintiffs of the potential structural issues and stated that it would hire a general contractor to inspect the home. Dkt. # 2, at 2. The contractor inspected the home on March 26, 2014, and provided defendant with a written report of his findings on April 2, 2014. Id. The report stated, inter alia, that the foundation was "[u]nstable, therefore causes movement to wood structure, resulting in an uneven floor." Dkt. # 13-3, at 1. It also concluded that the "[k]itchen floor shows separation in vinyl" and that the floor sills were "tilting outward." Id.

On April 2, 2014, defendant notified Walker of the result of the inspection, and it declined to finance the purchase of the home. Dkt. # 2, at 2. Walker and plaintiffs began discussing an owner financing arrangement that same day. Id. On April 3, 2014, one of defendant's employees, anassistant vice president, sent Walker an e-mail containing a copy of the structural inspection report and the listing of a home being offered for sale by another of defendant's employees. Id. at 3. On April 10, 2014, Walker notified plaintiffs that she was terminating the agreement. Id.

Also on April 10, 2014, plaintiffs spoke to the general contractor who carried out the structural inspection. Id. He told plaintiffs that defendant "misconstrued the report" and that the house was in good condition. Id. However, he refused to so state in writing. Id. On April 21, 2014, plaintiffs hired a licensed engineer to perform a structural inspection of the property. Id. The second inspection found that the property "was in overall sound/stable condition." Id. Plaintiffs filed suit on July 17, 2014. Id. at 1.

II.

In considering a motion to dismiss under Rule 12(b)(6), a court must determine whether the claimant has stated a claim upon which relief may be granted. A motion to dismiss is properly granted when a complaint provides no "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint must contain enough "facts to state a claim to relief that is plausible on its face"and the factual allegations "must be enough to raise a right to relief above the speculative level." Id. (citations omitted). "Once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Id. at 562. Although decided within an antitrust context, Twombly "expounded the pleading standard for all civil actions." Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009). For the purpose of making the dismissal determination, a court must accept all the well-pleaded allegations of the complaint as true, even if doubtful in fact, and must construe the allegations in the light most favorable to the claimant. Twombly, 550 U.S. at 555;Alvarado v. KOB-TV, LLC, 493 F.3d 1210, 1215 (10th Cir. 2007); Moffett v. Halliburton Energy Servs., Inc., 291 F.3d 1227, 1231 (10th Cir. 2002). However, a court need not accept as true those allegations that are conclusory in nature. Erikson v. Pawnee Cnty. Bd. of County Comm'rs, 263 F.3d 1151, 1154-55 (10th Cir. 2001). "[C]onclusory allegations without supporting factual averments are insufficient to state a claim upon which relief can be based." Hall v. Bellmon, 935 F.2d 1106, 1109-10 (10th Cir. 1991).

III.

Defendant argues that plaintiffs' claim for tortious interference should be dismissed because the complaint fails to allege essential elements of the tort. Dkt. # 13, at 2. Since 1912, the Oklahoma Supreme Court has recognized the tort of tortious interference with contract as a means of protecting the parties to a contract from outside action. Schonwald v. Ragains, 1912 OK 210, ¶ 6, 122 P. 203, 206 ("[I]t is a violation of a legal right to interfere with contractual relations recognized by law, if there be no sufficient justification for the interference."). Oklahoma has adopted the Restatement (Second) of Torts as to tortious interference claims. Wilspec Techs., Inc. v. DunAn Holding Grp. Co., 2009 OK 12, ¶¶ 1,7, 204 P.3d 69, 70, 71. The Restatement recognizes three species of tortious interference: "(1) section 766 interference with a third party's performance with [sic] an existing contract; (2) section 766A interference with plaintiff's own performance; or (3) section 766B interference with prospective contractual relations not yet reduced to contract." Id. ¶ 6, 204 P.3d at 71. Plaintiffs have alleged a § 766 claim for tortious interference. Dkt. # 2, at 3-4, see also Dkt. # 16, at 2. Under Oklahoma law, a § 766 tortious interference claim has four elements: "(1) the interference was with an existing contractual or business right; (2) such interference was malicious and wrongful; (3) the interference was neither justified, privileged nor excusable; and (4) theinterference proximately caused damage." Wilspec Techs., Inc., ¶ 15, 204 P.3d at 74 (citing Mac Adjustment, Inc. v. Prop. Loss Res. Bureau, 1979 OK 41, ¶ 5, 595 P.2d 427, 428). Defendant asserts that plaintiffs' complaint fails as to the first three elements, Dkt. # 13; defendant makes no argument as to the fourth element, proximate cause. For purposes of this opinion, the Court will assume that plaintiffs have adequately pled the fourth element.

A. Interference with an Existing Contractual or Business Right

Defendant argues that plaintiffs cannot state the first element of a tortious interference claim, interference with an existing contract or business right, because it requires a breach of contract. Plaintiffs asserted no breach of the agreement, alleging instead that defendant's actions caused Walker's nonperformance. Dkt. # 2, at 3-4. Defendant relies heavily on this Court's prior opinion in McGregor v. Kormondy, No. 11-CV-570-CVE-TLW, 2012 WL 3023202 (N.D. Okla. July 24, 2012), which stated that the "recent declaration of the Oklahoma Supreme Court [in Wilspec Technologies, Inc.] that a tortious interference claim under § 766 requires a breach of the contract is . . . controlling . . . ." Id. at *4. Because the Court wrote that § 766 could be satisfied by showing a breach of contract, without mentioning nonperformance, defendant asserts that only a breach can satisfy § 766. Dkt. # 13, at 5. Defendant reads McGregor too narrowly. In that case, the plaintiff brought a claim for tortious interference against his former business partner, alleging the former partner interfered with a contract between the plaintiff and the corporation that the two had founded together. Id. at *1-*2. In a prior separate opinion, the Court determined that there was no breach of a contract between the plaintiff and the corporation. Id. at *4. The Court reviewed the law of tortious interference in Oklahoma, with particular attention to the recent ruling of the Oklahoma Supreme Court in Wilspec Technologies, Inc. Id. at *3-*4. The Court found that "the Oklahoma SupremeCourt unequivocally stated that, where a plaintiff alleges that defendant has intentionally interfered with a contract pursuant to § 766, a breach or nonperformance of the third party is required for liability to attach." Id. at *4. The plaintiff in McGregor had alleged a breach of contract, making the previous finding of no breach dispositive of his tortious interference claim. Id.

The present case is readily distinguishable from McGregor. Plaintiffs do not allege and have never alleged a breach of the agreement. Rather, they argue that defendant's actions caused Walker's nonperformance of the agreement. Dkt. # 2, at 3-4. The Restatement (Second) of Torts, which the Oklahoma Supreme Court adopted in Wilspec Technologies, states that "[o]ne who intentionally and improperly interferes with the performance of a contract . . . between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability . . . ." RESTATEMENT (SECOND) OF TORTS § 766 (1979); see also Wilspec Techs., Inc., ¶ 7, 204 P.3d at 71-72. The Oklahoma Supreme Court made clear that nonperformance suffices to show tortious interference: "[W]e believe that where the law provides a remedy against a tortfeasor who induces or causes a third party not to perform the contract, the protection against...