Court Opinion

ID: 9521360
Source: CourtListenerOpinion
Date Created: 2023-08-07 02:03:18.945757+00
Date Added: 2024-06-11T12:49:41.452410
License: Public Domain

VANDE WALLE, Chief Justice,
concurring in part and dissenting in part.
[¶ 38] I concur in parts I, II, III C, D, E, F, and IV. I respectfully dissent as to Parts III A and B, and V.
[¶ 39] Viewing the evidence in the manner outlined in ¶ 8 of the majority opinion, i.e., in favor of Thimjon and Hagemeister, First International Bank & Trust told Northern Grain Equipment that further financing would be available to Northern if it paid down its line of credit; absent those promises of future financing, Northern Grain would not have entered into the contracts with Thimjon and Hagemeister; First International urged Northern Grain to enter into new contracts to sell grain bins and dryers; First International requested the down payments from those contracts be applied to the line of credit; First International refused to extend Northern Grain’s line of credit. Although there may be no evidence showing a direct intent on the part of First International to cause Northern Grain to breach its contracts, it is sufficient to sustain an action for intentional breach of contract if First International acted with knowledge that the interference would result. Peterson v. Zerr, 477 N.W.2d 230, 234 (N.D.1991). I believe that giving Thimjon and Hagemeis-ter the benefit of all favorable inferences which can reasonably be drawn from these facts there is a genuine issue of fact whether or not First International acted with knowledge that interference with Northern Grain’s contracts with Thimjon and Hagemeister would result from requiring Northern Grain to apply the down payment from these contracts to its line of credit and refusing to provide further financing to Northern Grain to complete those contracts.
[¶ 40] The majority opinion does not necessarily reject that belief; rather, it concludes First International’s actions were justified and relies on our decision in Hilton v. N.D. Educ. Ass’n., 2002 ND 209, ¶ 27, 655 N.W.2d 60, which noted that “Hilton has not suggested any argument that would preclude application of the rationale from Fankhanel to our law for intentional interference with contract, and we apply that rationale to this case.” The decision in Fankhanel was based on a choice-of-law question and the Court applied the Minnesota law on justification under the “significant contacts approach.” Fankhanel v. M & H Constr. Co., Inc., 1997 ND 20, ¶ 7, 559 N.W.2d 229. It thus appears that although we have cited justification principles from Minnesota cases in these decisions, we have not necessarily embraced them as a precedent for other cases applying North Dakota law.
[¶ 41] Moreover, the factual scenarios in the North Dakota cases as well as the Minnesota cases are significantly different from this case in that in none of those cases was the down payment the plaintiffs made on a contract with a borrower diverted directly by the borrower to the lender at the direction of the lender. Under these circumstances I believe whether or not First International Bank was justified in its actions is a question of fact and therefore summary judgment was improperly granted on the issue of intentional interference with contract as well as those other issues which were disposed of on the grounds First International’s actions were justified.
[¶ 42] Finally, I note that if there is justification for First International’s actions in diverting the plaintiffs’ down payments to pay the existing debt of Northern Grain to First International knowing that it would deny further loans to Northern *342Grain and that Northern Grain would default on its contracts with the plaintiffs, contracting parties should be forewarned there are precautions they should take before entering into these contracts. If the contract calls for a down payment for a future performance by the other party, the person making that down payment should inquire whether or not the other party is financed by a lender and, if that is the case, the down paying party should inquire of the lender whether or not the other party has a sufficient line of credit to perform the contract. See Ostlund Chemical Co. v. Norwest Bank, 417 N.W.2d 833 (N.D.1988) (holding the bank had a duty to give truthful information and could be subject to an action for deceit if it fails to do so) discussed by the majority opinion at ¶ 31. Only then will the down paying party be protected from a lender encouraging a borrowing party to enter into additional contracts, taking the down payment on those contracts and applying it to prior loans, refusing to advance a further line of credit knowing that by doing so the borrowing party will be unable to perform the contract, and leaving the innocent, down paying party without recourse because the borrowing party is bankrupt.
[¶ 43] Because I believe there are questions of fact as to the actions of First International in the first instance and, if those facts as alleged are true, whether or not First International’s actions were justified, I respectfully dissent.
[¶ 44] DONOVAN J. FOUGHTY, D.J., concurs.