Knight Enterprises, Inc. v. RPF Oil Co.

829 N.W.2d 345, 299 Mich. App. 275
CourtMichigan Court of Appeals
DecidedJanuary 17, 2013
DocketDocket No. 306451
StatusPublished
Cited by52 cases

This text of 829 N.W.2d 345 (Knight Enterprises, Inc. v. RPF Oil Co.) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Knight Enterprises, Inc. v. RPF Oil Co., 829 N.W.2d 345, 299 Mich. App. 275 (Mich. Ct. App. 2013).

Opinion

SAAD, EJ.

Defendant, RPF Oil Company, appeals the trial court’s judgment in favor of plaintiff, Knight Enterprises, Inc. For the reasons set forth below, we reverse.

I. FACTS AND PROCEEDINGS

Knight filed a complaint against RPF and other defendants after Amer Saleh decided to rebrand his gas [277]*277stations from Citgo, for which Knight is the gasoline supplier, to Shell, for which RPF is the gasoline supplier. Knight specifically alleged that RPF intentionally interfered with the fuel supply agreements between Knight and Saleh, which caused Saleh and his companies “to breach their obligations to Knight Enterprises.”

At trial RPF’s executive chairman, John Fleckenstein, testified that in 2005 or 2006, Saleh bought two gas stations from RPF. At the time, Saleh told Fleckenstein that he had two other gas stations, one in Port Huron and one in Roseville, and that each had approximately two years left on their respective gasoline-supply contracts. In 2008, Saleh approached RPF and several other gasoline suppliers to enter into agreements to supply gasoline to his Port Huron and Roseville gas stations. According to Fleckenstein, Saleh told RPF that he was no longer under any contract with Knight. RPF employee Michelle Wright testified that when RPF entered into the supply agreements with Saleh, she asked Saleh directly whether he was under contract with any other gasoline supplier and he told her that he was not. Saleh confirmed this information at trial. Saleh testified that he was dissatisfied with Knight because Knight had continuously underpriced Saleh at a nearby gas station and had overcharged Saleh for fuel delivery. Saleh was also concerned that anti-American statements made by Venezuela’s president, Hugo Chavez, had hurt his Citgo business because Venezuela supplied Citgo fuel. Saleh claims he had tried to negotiate a solution with Knight’s president, Carroll Knight, but that Knight had not worked with Saleh to resolve his concerns.

In April 2008, Saleh sued Knight claiming breach of contract and seeking termination of their fuel-supply [278]*278contract. On May 20, 2008, Saleh signed a ten-year fuel-supply agreement with RPF, to begin on July 1, 2008. Saleh continued to buy gas from Knight during the transition and Wright testified that Saleh had explained that he would operate as Citgo until RPF converted the stations to the Shell brand. It was Wright’s understanding that Saleh was simply winding up his contract with his former Citgo supplier. Knight agreed at trial that, despite Saleh’s lawsuit against him, Saleh continued to pay for gas deliveries until, one day, Saleh called and said he had decided to switch to Shell and he did not intend to pay for his gas delivery. At the time Knight estimated that, among other amounts, Saleh owed him $200,000 for gasoline he had already delivered to Saleh’s stations. Knight later sued Saleh for breaching his agreements and Saleh settled the claim by paying Knight $275,000.

Carroll Knight testified that in light of what had happened with Saleh’s switch to RPF, he was very surprised when, sometime in July 2008, Fleckenstein asked to meet with Knight to talk about buying ethanol fuel from Knight. Knight surreptitiously taped the discussion until Fleckenstein noticed the tape recorder and ended the meeting. The trial court admitted a transcript of the recording at trial. At the meeting Fleckenstein had said he wanted to meet with Knight to talk about buying ethanol, and Knight took the opportunity to confront Fleckenstein with copies of Knight’s contracts with Saleh, which were not set to expire until at least 2010. Fleckenstein repeatedly told Knight at the meeting that he had no idea that Saleh had any continuing contracts with Knight. Fleckenstein recalled that Saleh had showed him some contracts a couple years earlier and that they had “a couple of years left of them.” Fleckenstein told Knight that he had only taken a cursory look at the contracts and had told Saleh he [279]*279could not rebrand any stations that were under other contracts. Fleckenstein further explained to Knight that when Saleh approached RPF to buy fuel, Saleh specifically said that his Citgo contracts were no longer in effect. As noted, and despite Fleckenstein’s assertions during the meeting, Knight sued RPF for tortious interference with a contract. After hearing proofs, the trial court ruled in favor of Knight and awarded Knight $96,136.83 in damages.

II. DISCUSSION

RPF appeals the trial court’s judgment in favor of Knight. “This Court reviews a trial court’s findings of fact following a bench trial for clear error and reviews de novo the trial court’s conclusions of law.” Redmond v Van Buren Co, 293 Mich App 344, 352; 819 NW2d 912 (2011).

As a preliminary matter, we hold that the trial court incorrectly framed Knight’s claim as one for tortious interference with a business relationship or expectancy, rather than tortious interference with a contract. Knight specifically alleged tortious interference with a contract in the complaint and Knight’s counsel argued those elements at the close of proofs at trial. Nonetheless, the trial court cited and decided the case on the basis of the elements for tortious interference with a business relationship. As this Court explained in Health Call of Detroit v Atrium Home & Health Care Servs, Inc, 268 Mich App 83, 89-90; 706 NW2d 843 (2005):

In Michigan, tortious interference with a contract or contractual relations is a cause of action distinct from tortious interference with a business relationship or expectancy. Badiee v Brighton Area Schools, 265 Mich App 343, 365-367; 695 NW2d 521 (2005); Feaheny v Caldwell, 175 Mich App 291, 301-303; 437 NW2d 358 (1989); M Civ JI [280]*280125.01 and 126.01. The elements of tortious interference with a contract are (1) the existence of a contract, (2) a breach of the contract, and (3) an unjustified instigation of the breach by the defendant. Badiee, supra at 366-367; Mahrle v Danke, 216 Mich App 343, 350; 549 NW2d 56 (1996); Jim-Bob, Inc v Mehling, 178 Mich App 71, 95-96; 443 NW2d 451 (1989); see also M Civ JI 125.01 (adding the necessary damage element to the cause of action).

By definition, tortious interference with a contract is an intentional tort. Indeed, it is well-settled that “ ‘[o]ne who alleges tortious interference with a contractual . . . relationship must allege the intentional doing of a per se wrongful act or the doing of a lawful act with malice and unjustified in law for the purpose of invading the contractual rights or business relationship of another.’ ” Derderian v Genesys Health Care Sys, 263 Mich App 364, 382; 689 NW2d 145 (2004), quoting CMI Int’l, Inc v Intermet Int’l Corp, 251 Mich App 125, 131; 649 NW2d 808 (2002). As this Court explained in Badiee, 265 Mich App at 367:

“A wrongful act per se is an act that is inherently wrongful or an act that can never be justified under any circumstances.” Prysak v R L Polk Co, 193 Mich App 1, 12-13; 483 NW2d 629 (1992). “If the defendant’s conduct was not wrongful per se, the plaintiff must demonstrate specific, affirmative acts that corroborate the unlawful purpose of the interference.” CMI Int’l, [251 Mich App] at 131.

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