Opinion ID: 1788581
Heading Depth: 1
Heading Rank: 5

Heading: INTERFERENCE WITH THE McLAUGHLIN AGREEMENT

Text: The court of appeals held that ACS tortiously interfered with the McLaughlin Agreement by purchasing the AMS Division from First Texas. ACS argues that First Texas did not sell the AMS Division, but only transferred the asset into a subsidiary through the P & C Agreement. Whether a sale or a transfer, the P & C Agreement had the effect of severing the purchase option from the asset. This severance is the essence of McLaughlin's tortious interference claim. ACS contends that the court of appeals erred by affirming the trial court's judgment that it tortiously interfered with the McLaughlin Agreement. The court of appeals held that because ACS knew about the McLaughlin Agreement and considered it a potential conflict for its acquisition, there was evidence of tortious interference. ACS argues that no evidence exists to support the jury's findings because, at most, ACS merely persuaded First Texas to do what it had a right to do under the McLaughlin Agreement. Neither party contends that the McLaughlin Agreement is ambiguous.

In deciding a no evidence claim, we consider the evidence and inferences tending to support the jury's findings. Havner v. EZ Mart Stores, Inc., 825 S.W.2d 456, 458 (Tex.1992). We disregard all contrary evidence and inferences. Transport Ins. Co. v. Faircloth, 898 S.W.2d 269, 275-76 (Tex.1995); Havner, 825 S.W.2d at 458. Any evidence of probative force supporting a finding requires us to uphold the jury's verdict. Southern States Transp., Inc. v. State, 774 S.W.2d 639, 640 (Tex.1989).
A party alleging tortious interference must prove four elements to sustain its claim: (1) that a contract subject to interference exists; (2) that the alleged act of interference was willful and intentional; (3) that the willful and intentional act proximately caused damage; and (4) that actual damage or loss occurred. See Juliette Fowler Homes v. Welch Assocs., 793 S.W.2d 660, 665 (Tex. 1990); Davis v. HydPro, Inc., 839 S.W.2d 137, 139 (Tex.App.Eastland 1992, writ denied). When a dispute arises from the terms of a contract, and the contract is not ambiguous, we can determine the parties' rights and obligations under the agreement as a matter of law. See Friendswood Dev. Co. v. McDade + Co., 926 S.W.2d 280, 282 (Tex.1996); Westwind Exploration, Inc. v. Homestate Sav. Ass'n, 696 S.W.2d 378, 381 (Tex.1985). Ordinarily, merely inducing a contract obligor to do what it has a right to do is not actionable interference. See C.E. Servs., Inc. v. Control Data Corp., 759 F.2d 1241, 1248 (5th Cir.), cert. denied, 474 U.S. 1037, 106 S.Ct. 604, 88 L.Ed.2d 583 (1985); West Texas Gas, Inc. v. 297 Gas Co., 864 S.W.2d 681, 686 (Tex.App.Amarillo 1993, no writ)(citing Kingsbery v. Phillips Petroleum Co., 315 S.W.2d 561, 576 (Tex.Civ.App. Austin 1958, writ ref'd n.r.e.)); but cf. Sterner v. Marathon Oil Co., 767 S.W.2d 686 (Tex.1989). Moreover, a contracting party's preemptive rights are not triggered by the other contracting party's negotiations with a third party purchaser. See Tenneco Inc. v. Enterprise Prod. Co., 925 S.W.2d 640, 645 (Tex.1996).
The court of appeals construed the McLaughlin Agreement's purchase option provision as an obligation for First Texas to actually transfer 49 percent of the AMS Division to McLaughlin upon exercise of the purchase option in 1991. The court of appeals reasoned that, when First Texas sold the AMS Division to ACS, the sale severed First Texas' obligation to transfer a 49 percent interest in the AMS division from the propertythe AMS division. This, according to the court of appeals, abrogated McLaughlin's future purchase option rights. The court of appeals concluded that because the sale eliminated the possibility that First Texas could honor the 1991 purchase option in 1991, First Texas breached the McLaughlin Agreement. Thus, ACS, as a purchaser with notice of the McLaughlin Agreement, tortiously interfered with McLaughlin's contract rights by inducing First Texas' breach. Based on the record and the legal conclusions it made about the nature of the McLaughlin Agreement and the disputed sale to ACS, the court of appeals affirmed the trial court's judgment. We conclude that the court of appeals erred because it did not properly analyze the parties' rights under the McLaughlin Agreement. The evidence shows that ACS merely negotiated for First Texas to do what it had a right to do under the McLaughlin Agreement. Paragraph 10(b) of the McLaughlin Agreement provides for the sale of the AMS Division to an outside buyer, like ACS, despite McLaughlin's 1991 purchase option. Moreover, Paragraph 10(b) does not require a purchaser to assume the unmatured purchase option obligation. Under the McLaughlin Agreement, McLaughlin contracted for the possibility that the unmatured purchase option could be severed from the asset. Consequently, the severance here cannot be a breach of contract, and ACS cannot be held liable for inducing First Texas to do what it had a right to do under the McLaughlin Agreement. See Control Data Corp., 759 F.2d at 1248. McLaughlin argues that ACS's argument is a belated attempt to invoke the privilege of legal justification or excuse as an affirmative defense to liability. However, this is not a legal justification or excuse case. That situation exists when the party asserting the privilege does not deny the alleged interference, but instead seeks to avoid liability upon a claimed interest that is being impaired or destroyed by the plaintiff's contract. See Sterner, 767 S.W.2d at 689-90. A party must plead and prove the affirmative defense of legal justification or excuse. Sterner, 767 S.W.2d at 690. However, in this case, legal justification or excuse is not an issue. The focus in evaluating a tortious interference claim begins, and in this case remains, on whether the contract is subject to the alleged interference. See Juliette Fowler Homes, 793 S.W.2d at 664. Here, the evidence and the McLaughlin Agreement's express terms reveal that the McLaughlin Agreement is not subject to McLaughlin's tortious interference allegations. See Westwind Exploration, Inc., 696 S.W.2d at 381. Instead, Paragraph 10(b) allows for an outside buyer like ACS to contract to purchase the AMS Division despite McLaughlin's limited purchase rights. Under a proper construction of the McLaughlin Agreement, ACS did not interfere as a matter of law. See Westwind Exploration, Inc., 696 S.W.2d at 381. Therefore, it need not prove legal justification or excuse to avoid liability. The court of appeals also held that First Texas could have avoided a breach by refusing to sell the AMS Division to a third party without first buying out the unmatured purchase option under Paragraph 5 of the McLaughlin Agreement. However, the McLaughlin Agreement did not require First Texas to make an early buy out of the purchase option. Under Paragraph 5, First Texas could make an early buy out if it desire[d] to purchase the Option. In fact, under Paragraph 5, First Texas' early buyout right expired on June 1, 1989. At the same time, under Paragraph 10(b), First Texas retained the right to sell the AMS Division to a third party until May 30, 1991. Accordingly, First Texas could have made an early buy out, as it tried to do in December 1988 before the FSLIC's repudiation, but nothing in the McLaughlin Agreement obligated it to do so. McLaughlin's rights did not include an early buy out if First Texas decided to sell the AMS Division. Instead, the McLaughlin Agreement's terms unambiguously contemplate a transaction where the unmatured purchase option could be abrogated through severance of the asset and the purchase option obligation, leaving McLaughlin with nothing other than the initial $400,000 proceeds for the AMS II partnership and a right to bid on the AMS Division. The evidence reveals that McLaughlin might have a legitimate complaint about First Texas' failure to provide notice of the proposed sale to ACS as Paragraph 10(b) required. However, there is no evidence that by negotiating the P & C Agreement, ACS prevented First Texas from performing its obligation to provide McLaughlin notice and an opportunity to bid. See Tenneco Inc., 925 S.W.2d at 645. Therefore, the court of appeals erred in holding that there was legally sufficient evidence to support the jury's tortious interference findings.