Opinion
No. 53577-3-I
Filed: March 14, 2005 UNPUBLISHED OPINION
Appeal from Superior Court of Snohomish County. Docket No. 02-2-04971-9. Judgment or order under review. Date filed: 11/25/2003. Judge signing: Hon. Ronald X Castleberry.
Counsel for Appellant(s), Martin T. Crowder, Karr Tuttle Campbell, 1201 3rd Ave Ste 2900, Seattle, WA 98101-3028.
Counsel for Respondent(s), Michael Patrick Hooks, Attorney at Law, 900 4th Ave Ste 1700, Seattle, WA 98164-1050.
Gary James Taylor, Attorney at Law, 2033 6th Ave Ste 800, Seattle, WA 98121-2567.
A claim for tortious interference with a business relationship requires evidence of a valid contractual relationship or business expectancy; knowledge of the relationship by the defendant; intentional interference by the defendant inducing or causing a breach or termination of the relationship or expectancy; interference by the defendant based on an improper purpose or improper means, and damages. Here, evidence fails to support the existence of any intentional interference causing a breach, or any interference by the defendants for improper purposes or means. As such, the summary judgment is affirmed.
FACTS
For a number of years Thurman Industries, Inc. (Thurman) operated a chain of retail hardware, kitchen, bath and garden stores in Washington, Oregon, Montana and Idaho. Omega Cabinets, Ltd. and its affiliate HomeCrest Corporation, hereafter referred to as HomeCrest, is a manufacturer of kitchen cabinets and related accessories. HomeCrest, as supplier, sold its products to Thurman, who in turn sold these products in its stores. The arrangement between Thurman and HomeCrest was not exclusive. Thurman carried other manufacturer's cabinet products, and HomeCrest could supply other area businesses. Mic Keating has been HomeCrest's account representative in the Northwest for a number of years.
Thurman alleges that HomeCrest, through Keating, induced Chris Yochum, a Thurman employee, to leave his position as a salesman in its Billings, Montana store to set up a competing cabinet store. Yochum was employed at the Billings store from December 1992 until February 23, 2001 and was the store's leading cabinet salesperson. Yochum was an 'at will' employee of Thurman, having no written employment contract. There was no covenant not to compete.
For a number of reasons Yochum determined to start his own store selling cabinets, not the least of which was his belief that Thurman's store was in decline, losing quality products and having financial difficulty. He began to consider leaving Thurman's stores a few years before actually leaving. Even so, he continued to sell cabinets made by HomeCrest and other manufacturers at the store up to the very day he left Thurman's employ. In fact, he sold cabinets for four kitchens during his last week of employment.
According to Yochum and Keating, Yochum approached Keating a couple of months before he resigned from Thurman. He inquired whether HomeCrest would allow him to carry its products if he went out on his own. Keating was not authorized to make that decision but gave Yochum a credit application to be sent to HomeCrest.
On February 23, 2001, Yochum told the Billings store manager, Tom Mutchler, he was leaving Thurman's employ to open his own cabinet sales shop. Yochum declined to answer Mutchler's question as to what line of cabinets he was going to sell, and Mutchler and Yochum agreed he would leave the employ of the store on that day. Three days later, on February 26, 2001, during a conversation between them, Mutchler again inquired whether Yochum was planning to sell HomeCrest products. Yochum indicated that he would as HomeCrest had approved the sale of cabinets to him. However, Yochum did not rent store space in Billings until April. Thurman argues that the timing of Yochum's approval to sell HomeCrest cabinets meant that the arrangements were improperly made behind Thurman's back while Yochum was still employed by Thurman. This is the basis for Thurman's claim.
Rich Barnett was a Vice President in charge of sales at Thurman in 2001. He opined that it would be impossible for Yochum to become an approved customer of HomeCrest in the three days between his resignation and the day he admitted he was going to sell HomeCrest cabinets. Also, on February 26, 2001, Keating called Mutchler to tell him that he would be Yochum's HomeCrest factory sales representative. Shortly thereafter, Mutchler called some of Thurman's cabinet customers and offered to sell cabinets at 10 percent below Yochum's prices. These customers allegedly advised Mutchler they were going to switch to Yochum for their HomeCrest cabinets. However, it is not in dispute that Thurman continued to make purchases and sales of HomeCrest cabinets as well as those of other manufacturers after Yochum resigned. For a year after Yochum left Thurman's employ, Thurman continued to buy cabinets from HomeCrest. HomeCrest later stopped selling cabinets to Thurman because the company fell far behind in it payments to HomeCrest.
Thurman concedes that HomeCrest and Keating could sell products to competitors. It is also true that shortly after Yochum left Thurman, its owner banned Keating from any of the Thurman stores. But Thurman alleges that without the sales and profits from HomeCrest cabinet sales the Billings store was no longer viable. It closed its doors in February 2002.
In 1996, Eagle Hardware, now Lowe's, opened a store in Billings, and in 1999, Home Depot also opened a store there.
On February 2, 2002, Thurman filed a complaint for damages and injunctive relief alleging, among other claims, that HomeCrest and Keating tortiously interfered with Thurman's contractual rights and business expectancies causing damages.
In a summary judgment motion, HomeCrest, joined by Keating, sought dismissal of the tortious interference claims. On November 25, 2003, the trial court granted summary judgment and dismissed Thurman's tortious interference claim. Thurman filed a timely notice of appeal. Thereafter, HomeCrest and Keating filed a second motion for summary judgment seeking dismissal of the remaining claims as well as judgment for HomeCrest's counterclaim for amounts past due on the sale of HomeCrest cabinets. The motion and counterclaim was granted. Thurman filed an amended notice of appeal on March 1, 2004, but limits this appeal to the summary judgment dismissal of the tortious interference claim.
ANALYSIS
The usual standard of review applies. A trial court's grant of summary judgment is reviewed de novo by this court. Summary judgment is appropriate if there is no genuine issue of material fact and the party bringing the motion is entitled to judgment as a matter of law. This court must consider the facts in the light most favorable to the nonmoving party, and the motion should be granted only if reasonable persons could reach but one conclusion. But if the nonmoving party ''fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which the party will bear the burden of proof at trial,' then the trial court should grant the motion.'
City of Seattle v. Mighty Movers, Inc., 152 Wn.2d 343, 348, 96 P.3d 979 (2004).
CR 56(c); Mulcahy v. Farmers Ins. Co., 152 Wn.2d 92, 98, 95 P.3d 313 (2004).
Marincovich v. Tarabochia, 114 Wn.2d 271, 274, 787 P.2d 562 (1990).
Citoli v. City of Seattle, 115 Wn. App. 459, 474, 61 P.3d 1165 (2002) (quoting Young v. Key Pharmaceuticals, Inc., 112 Wn.2d 216, 225, 770 P.2d 182 (1989)).
Initially we note there is no actual disagreement as to what choice of State law should be used in this case. The elements for the claim are substantively similar under both Washington and Montana law, and there is no conflict. This court need not engage in a choice of law analysis.
Thurman argues that HomeCrest and Keating tortiously interfered with its business expectancy by invading the relationship with, and duty of loyalty, which Yochum owed to Thurman while he was an employee.
In Washington, to maintain a claim for tortious interference with a contractual relationship or business expectancy the following elements are required: (1) a valid contractual relationship or business expectancy; (2) knowledge of that relationship by the defendant; (3) intentional interference by the defendant inducing or causing a breach or termination of the relationship or expectancy; (4) interference by the defendant based on an improper purpose or improper means, and (5) damages.
Sintra, Inc. v. City of Seattle, 119 Wn.2d 1, 28, 829 P.2d 765 (1992); see also Pleas v. City of Seattle, 112 Wn.2d 794, 803-04, 774 P.2d 1158 (1989).
Specific to the claim is a requirement that there was intentional interference. Intentional interference in this context requires an improper objective of harming the person or business, or the use of wrongful means that in fact cause injury to the person's or business's contractual or business relationships.
Schmerer v. Darcy, 80 Wn. App. 499, 505, 910 P.2d 498 (1996) (citing Pleas, 112 Wn.2d at 804).
Thurman fails to show that HomeCrest or Keating intentionally interfered with its business relationships based on an improper purpose of harm. Thurman contends HomeCrest and Keating induced Yochum to leave Thurman's employ thus interfering with Thurman's expectation that its Billings store would continue to profitably sell cabinets. But this argument fails for two reasons.
First, Thurman's allegation that Keating induced Yochum to leave Thurman's employ is not supported. The undisputed facts show that Yochum was dissatisfied with his employment at Thurman and in seeking a greater business opportunity decided to leave its employ. Not only did Yochum decide to leave Thurman due to his own economic interests, but he also believed that the Thurman stores were failing. The record shows that Yochum initiated the contact with Keating, and HomeCrest, not vice versa. Thurman's suggestion to the contrary is mere speculation and is not supported by any evidence. Speculation and argumentative assertions, without more, will not establish genuine issues of material fact.
Further, Thurman's reliance on Kieburtz Assocs., Inc. v. Rehn, 68 Wn. App. 260, 842 P.2d 985 (1992) is misplaced and easily distinguished. In Kieburtz, unlike here, during the period of employment an employee solicited customers for a rival business and acted in direct competition with the employer's business. There is no evidence of a violation of a duty not to compete in this case.
Leonard v. Pierce County, 116 Wn. App. 60, 65-66, 65 P.3d 28 (2003) (citing Seven Gables Corp. v. MGM/UA Entertainment Co., 106 Wn.2d 1, 13, 721 P.2d 1 (1986)); see also CR 56(e).
There is no evidence that Keating did anything other than provide Yochum with a credit application that Yochum necessarily had to send to HomeCrest for a decision whether HomeCrest would sell and supply cabinets to Yochum. Second, there is no dispute that Thurman continued to purchase cabinets from HomeCrest for sales in Billings and other Thurman stores for approximately eleven months after Yochum resigned. The Thurman/HomeCrest business split came after Thurman became seriously delinquent in its accounts with HomeCrest. There is no evidence that HomeCrest or Keating intentionally or otherwise interfered with Thurman's contractual relationship or business expectancy.
Moreover, Thurman also fails to present any evidence to establish that HomeCrest or Keating interfered for an improper purpose or through use of improper means. Thurman concedes it did not have an exclusive agreement with either Keating or HomeCrest barring the company from selling products to a Thurman competitor. It is undisputed there was no employment contract between Thurman and Yochum. It is also undisputed there was no covenant not to compete between Yochum and Thurman. Finally, as noted above, there is also no dispute that Yochum continued to sell cabinets to Thurman customers through the week he left Thurman's employ. The record is devoid of any evidence to support the establishment of any interference for an improper purpose or through the use of improper means.
Absent evidence that HomeCrest or Keating intentionally interfered and/or acted with an improper purpose, Thurman fails to establish necessary elements of its claim of tortious interference and summary judgment is appropriate. The decision of the trial court is affirmed.
KENNEDY, BECKER, JJ., Concur.