Opinion ID: 3051928
Heading Depth: 3
Heading Rank: 1

Heading: Intentional Interference with Contract

Text: [1] Under California law, a claim for intentional interference with contract requires: (1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of the contract; (3) defendant’s intentional acts designed to induce breach or disruption of the contract; (4) actual breach or disruption; and (5) resulting damage. Pac. Gas & Elec. Co. v. Bear Stearns & Co., 791 P.2d 587, 589-90 (Cal. 1990). We agree with the district court that Park Place’s claim fails because there was no admissible evidence that Freddie Mac influenced or caused National City to terminate its mortgage broker contract with Park Place, intentionally or otherwise. [2] Park Place contends that the testimony of its president, Mark Gallagher, proved that Freddie Mac influenced National City to terminate the contract. Gallagher testified only that a National City employee had told him that Freddie Mac and National City would shut Park Place down. That testimony, which may have been admissible hearsay to show National City’s state of mind, does not connect Freddie Mac in any way to National City’s decision. The district court correctly inferred that, at best, the testimony suggests that National City may have colluded with Freddie Mac to stop handling Park Place business. But the statement does not shed any light on the intentions of Freddie Mac. [3] Park Place also contends that circumstantial evidence precludes summary judgment. The circumstantial evidence tended to prove that Park Place had been a profitable mortgage broker for National City, which no one denied, and that National City may have been reluctant to terminate its contract with Park Place. The evidence also showed that Freddie Mac may have known about Park Place’s rapid refinancing strategy before National City terminated the contract. Even if, as Park Place seems to allege, Freddie Mac was negligent in 5036 FAMILY HOME v. FEDERAL HOME LOAN its tardy discovery that it was dealing in problematic loans, evidence of negligence is not proof of intentional interference by Freddie Mac with Park Place’s contract. A necessary element of Park Place’s claim is proof that Freddie Mac’s action was designed to accomplish interference. This evidence proved only that Freddie Mac would no longer buy a product it could not sell to its customers. It proved nothing about interference with the originators of those products.