Opinion ID: 2277130
Heading Depth: 1
Heading Rank: 3

Heading: Count IIIntentional Interference with Credit Expectancy

Text: Count II of Bell's petition claims Famous Barr intentionally interfered with Bell's credit expectancy by reporting false and negative information to credit agencies. This tort is one sort of intentional interference with a business expectancy and is comprised of the following elements: (1) a valid credit expectancy; (2) defendant's knowledge of the expectancy; (3) a denial of credit induced or caused by defendant's intentional interference; (4) absence of justification; and (5) damages. [18] We find Bell presented genuinely disputed facts to meet each of these five elements so that a jury could find that Famous Barr intentionally interfered with his valid credit expectancy.
An expectancy is that which is expected or hoped for. [19] To have valid credit expectancy one need not have a formal contract. [20] There must be, however, a reasonable expectation of obtaining credit. [21] This expectancy cannot be too indefinite or remote. [22] The dispute in this case centers on whether Bell could have had valid credit expectancy at the time derogatory information was reported without having had a credit application pending with any creditor. Famous Barr argues the analysis of the court in Haas [23] and the facts of Franklin [24] suggest a pending credit application is necessary for credit expectancy as a matter of law. We disagree and hold no pending credit application is necessary for credit expectancy. Bell presented undisputed evidence that he had a perfect credit history until Famous Barr reported derogatory information. He made $15,000.00 in credit card purchases per year on average, had financing for his home, and no creditor had ever reported him delinquent. He also had a credit account with Famous Barr for twenty-two years, which he paid in full every month. In addition, Bell never was denied credit until denied by EAB. Finally, Bell showed he repeatedly asked Famous Barr to remove derogatory information from his credit report. Although Bell had no credit application pending at the time Famous Barr reported derogatory information, a reasonable jury could find he had valid credit expectancy based on his longstanding clean credit history, and his efforts to keep it clean. This holding is consistent with the rule that no formal contract is required for valid credit expectancy. [25] We stress that only a valid or reasonable expectancy of credit satisfies the test. Not only must plaintiff expect to apply for credit, but also plaintiff must have a reasonable chance of obtaining credit. What constitutes a reasonable chance of obtaining credit is usually a question of fact for the jury to decide where fair-minded persons could disagree. In this case, a reasonable jury could find Bell's chance of obtaining credit was reasonable by his credit report being devoid of any delinquency. We hold a reasonable jury could find Bell had valid credit expectancy. Famous Barr argues we should follow Haas v. Town and Country Mortgage Company [26] to conclude Bell had no valid expectancy of credit because he had no credit application pending with EAB when Famous Barr reported derogatory information. In Haas , plaintiffs sought to buy a piece of property that was being foreclosed and assumed the mortgage from the owner. Plaintiffs were negligent by not inquiring about the eligibility requirements of the mortgage loan they assumed, and one week after closing defendant mortgagee informed them they were ineligible because the loan was reserved for first time buyers. Defendant gave plaintiffs certain options, none of which plaintiffs exercised. Despite being advised by their own title company to make loan payments until the problem was resolved, plaintiffs missed payments. Consequently, defendant reported that plaintiffs were delinquent. Plaintiffs thereafter were denied credit and charged higher-than-normal interest rates on a car loan. The court of appeals reversed the judgment the trial court entered in favor of plaintiffs' claim for tortious interference with a business expectancy. It found no evidence in the record that at the time [defendant] issued the credit reports that plaintiffs had established a business relationship either with any of the credit card companies which denied them credit or with the lender of the car loan. [27] Despite similarities between Haas and the instant case, Haas does not control because of important factual differences. Unlike the instant case, in Haas there was no evidence defendant wrongfully reported derogatory information to credit card companies. Plaintiffs neglected to learn the eligibility requirements of their loan and they were advised to continue repaying the loan. It is reasonable to conclude the court rejected plaintiffs' claim of intentional interference with a business expectancy claim because defendant was justified in reporting the derogatory informationthe fourth element of this tort claim. Also unlike the instant case, in Haas there was no evidence of the strength of plaintiffs' credit history. It found plaintiff's mere hope of establishing a credit relationship tenuous and not evinc[ing] the existence of a valid business relationship or expectancy. The court may have found that while plaintiffs had credit expectancy, they lacked a valid or reasonable expectancy. This language also suggests the court rejected plaintiff's claim because insufficient evidence showed defendant's actions caused plaintiffs' creditors to deny them creditthe third element of this tort claim. Notwithstanding these factual differences, the court in Haas may have under-appreciated the claim of tortious interference with credit expectancy. It ruled against plaintiffs because they had no established business relationship with a creditor. It considered the mere hope of establishing a credit relationship tenuous and not evinc[ing] the existence of a valid business relationship or expectancy. The court incorrectly focused exclusively on an established business relationship. As explained above, a formal credit contract is not necessary for valid credit expectancy. [28] Expectancy is just that: hope. If that hope is reasonable, then plaintiff has valid credit expectancy. In neither its factual background nor its analysis did the court in Haas cite any evidence of plaintiffs' credit history. Nor did it consider the reasonableness or validity of plaintiff's hope of obtaining credit. To the extent Haas and Franklin require a pending credit application in order to find valid credit expectancy, they are overruled.
The tort of intentional interference with credit expectancy presupposes [defendant's] knowledge of the plaintiff's [expectancy], or at least facts which would lead a reasonable person to believe that such [expectancy] exists. Without such knowledge, there can be no intent and no liability. [29] The evidence Bell presented shows a genuine dispute whether Famous Barr knew or should have known of his credit expectancy. In July 1993, Famous Barr wrote Bell one of a series of dunning letters threatening, [Y]our credit bureau report will show a derogatory rating of R9 for the next seven years. This may result in denial when trying to obtain car loans, charge cards, apartment rental, home mortgage, and even employment. These letters permit an inference that Famous Barr believed Bell cared about the affect a derogatory rating would have on his ability to obtain credit and likely were attempts to encourage Bell to pay to avoid a derogatory report. In addition, Bell repeatedly notified Famous Barr of his receipt of these letters and asked it not to make derogatory reports. Finally, although plaintiff need not show defendant knew or should have known plaintiff's credit expectancy was valid or reasonable, it may be fairly inferred that Famous Barr knew or reasonably should have known of Bell's valid credit expectancy because his credit history with Famous Barr was perfect. It is also irrelevant that Famous Barr could not have known Bell would apply specifically to EAB for credit. As noted above, there is evidence Famous Barr knew or reasonably should have known of Bell's more general credit expectancy.
The person claiming tortious interference has the burden of proving that the other party actively and affirmatively took steps to induce the breach and that the expectancy would have come to fruition but for the actor's improper conduct. [30] Bell must show both intent and causation. [31] Famous Barr had the requisite intent if it knew interference was certain or substantially certain to occur as a result of its actions, even if its express purpose was not to interfere. [32] The evidence Bell presented shows a genuine dispute whether Famous Barr had this intent or knowledge. Bell showed he disputed the bill for the fan, and that Famous Barr recognized and conceded this dispute. He repeatedly notified Famous Barr that, in light of the billing error, derogatory reports were wrongful. Famous Barr threatened to file and actually filed the reports anyway. Bell also presented evidence that derogatory information filed by Famous Barr remained on his credit report even after Bell paid for the fan. Finally, its dunning letters show Famous Barr knew these derogatory reports were detrimental to Bell's credit rating. Famous Barr claims its intent was negated by its attempts to correct the derogatory reports, by its automated reporting system, by its claim not to know how credit providers use credit reports, or by the cooperation of its employees. This evidence, however, merely shows a dispute of fact. A reasonable jury could find Famous Barr intended to interfere with Bell's credit expectancy, even if only by knowing the report was substantially certain to interfere. The evidence Bell presented also shows a genuine dispute whether Famous Barr's derogatory report caused EAB to deny credit to Bell. Bell presented evidence EAB denied credit to Bell because of derogatory information on Bell's TRW-credit report. The only such derogatory information on that report was supplied by Famous Barr. Bell also presented evidence Famous Barr continued, for a time, to report derogatory information even after promising to desist. Famous Barr does present evidence showing how it unsuccessfully tried to remove all derogatory information from Bell's credit reports. It is also undisputed Famous Barr never contacted EAB directly. This evidence, however, merely shows causation is disputed. In a light most favorable to Bell, a reasonable jury could find that but for Famous Barr's improper conduct, EAB would not have denied credit to Bell.
One may act in a manner that interferes with another's business expectancy if by so doing one is acting to protect one's own economic interests. [33] The evidence Bell presented shows a genuine dispute whether Famous Barr was justified in reporting derogatory information to protect its economic interests. Bell presented evidence he properly rejected the fan, Famous Barr promised to replace it but never did, and Famous Barr reported derogatory information while assuring Bell it did not expect payment. As explained in Part II above, a reasonable jury could find Famous Barr reported derogatory information while a billing error existed in violation of the Federal Truth in Lending Act. [34] As such, the actions of Famous Barr may not have been justified. [35]
Famous Barr does not dispute that Bell was damaged when EAB denied him credit and the chance to earn TWA frequent flyer miles. We do not decide whether summary judgment is proper on Bell's claim for punitive damages in Count II because it was never reached by the trial court.