Unpublished Disposition, 895 F.2d 1418 (9th Cir. 1984)

MEMORANDUM^** 

In this diversity action, David A. Thompson, Sr. and Reta A. Thompson ("the Thompsons") appeal the district court's grant of summary judgment in favor of John Hancock Mutual Life Insurance Company ("Hancock") on the Thompsons' claims of fraud and tortious interference with a business relationship. We have jurisdiction under 28 U.S.C. § 1291. We review the summary judgment de novo, Hope v. International Bhd. of Elec. Workers, 785 F.2d 826, 828-29 (9th Cir.), cert. dismissed, 478 U.S. 1039 (1986), and we affirm.

BACKGROUND

This action arises out of the Thompsons' attempt to purchase certain timber property in Columbia County, Oregon from the Estate of Serafin ("the Estate"). On June 6, 1983, the Thompsons and the Estate signed a purchase agreement which provided that the closing payment of the purchase price was due on or before September 6, 1983. Between November 1982 and September 1983, the Thompsons sought financing for this purchase from several lenders, including Hancock. The Thompsons, however, were not able to obtain a loan commitment by the closing date. Until August of 1983, the Thompsons mistakenly assumed that the Estate would extend the closing date if they were unable to obtain financing by September 6, 1983.

After September 6, 1983, the Estate reopened bidding for the property. The Thompsons renewed their bid of $900,000. On September 20, 1983, however, the Estate accepted a bid of $1,011,500 from The Campbell Group ("Campbell"). On October 23, 1984, following the settlement of a state court action filed by the Thompsons against the Estate, Campbell purchased the property for $1,012,000. On the same day, Campbell sold the property to Hancock for $1,072,000.

In May, 1988, the Thompsons filed this suit claiming that Hancock's fraud and interference with their contract with the Estate prevented them from purchasing the property. After the district court granted summary judgment in favor of Hancock, the Thompsons timely appealed.

ANALYSIS

The Thompsons contend that Hancock defrauded them by falsely representing that it was interested in financing their purchase of the property and failing to disclose its own interest in purchasing the property. This contention lacks merit.

Under Oregon law, the elements of fraud are: (1) a false representation; (2) made with knowledge or belief that the representation is false; (3) intent to induce the other party to act or to refrain from acting in reliance on the misrepresentation; (4) justifiable reliance on the misrepresentation in acting or refraining from acting; (5) damage resulting from such reliance. Riley Hill Gen. Contractor v. Tandy Corp., 303 Or. 390, 405, 737 P.2d 595, 604 (1987); Webb v. Clark, 274 Or. 387, 391, 546 P.2d 1078, 1080 (1976). Summary judgment is appropriate if the evidence shows that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

Here, the uncontroverted evidence establishes as a matter of law the absence of two elements of fraud, i.e., justifiable reliance by the Thompsons on a misrepresentation by Hancock and damage resulting from such reliance. Kelly Niemi, the Thompsons' financing agent, testified in his deposition that Hancock did not commit to lend the Thompsons any money. At a meeting in June of 1983, Hancock's agent told Mr. Niemi that the Thompsons' purchase appeared on the surface to be something it "would be interested in" and asked him to submit a loan application. Mr. Niemi also testified that by August of 1983, Hancock had told him that any loan it might make would not be available until after September 6, 1983. Thus, the record contains no evidence that Hancock ever represented to the Thompsons that it would provide financing before the closing deadline.

Mr. Thompson also admitted that Hancock never made a commitment to finance his purchase and that by July of 1983 he was concentrating his efforts on obtaining a loan from Fibre Federal Credit Union. The Thompsons further admitted that they assumed the closing date was flexible and did not learn of their mistake until the latter part of August, 1983. In sum, there is no evidence that the Thompsons justifiably relied on a misrepresentation by Hancock.

Moreover, even if the Thompsons could prove that Hancock misrepresented its interest in financing their purchase of the property and failed to disclose its own interest in purchasing the property, they could not prevail on their claim for fraud. There is no evidence that such misrepresentations caused the Thompsons to miss the closing deadline or to refrain from seeking a loan elsewhere. Mr. Thompson testified in his deposition that as of July and August of 1983, he was actively pursuing a loan from Fibre Federal Credit Union. Thus, the Thompsons' inability to purchase the property was caused by their mistaken assumption that the Estate would extend the closing deadline.

Therefore, the district court correctly granted Hancock's motion for summary judgment on the fraud claim because there is no genuine issue as to any material fact and Hancock is entitled to a judgment as a matter of law. See Celotex, 477 U.S. at 323.

The Thompsons contend that Hancock wrongfully interfered with their contract to purchase the property from the Estate by: (1) causing Campbell to contact the Estate before September 6, 1983, to express an interest in purchasing the property; and (2) causing Campbell to purchase the property after September 6, 1983. These contentions lack merit.

Under Oregon law, wrongful interference occurs when the defendant intentionally interferes with a business or contractual relationship, with the improper motive to harm the plaintiff or by use of improper means which harm the plaintiff. Top Service Body Shop v. Allstate Ins. Co., 283 Or. 201, 209-210, 582 P.2d 1365, 1371 (1978). The interference resulting in injury must be wrongful by some measure beyond the fact of the interference itself. Id. See also Conklin v. Karban Rock, Inc., 94 Or.App. 593, 611, 767 P.2d 444, 448 (" [i]mproper means are those which are independently wrongful, ... and include violence, threats, intimidation, deceit, misrepresentation, bribery, unfounded litigation, defamation and disparaging falsehood), review denied, 307 Or. 719, 773 P.2d 774 (1989).

Here, the Thompsons allege that Hancock interfered with their purchase of the property before September 6, 1983, by causing Campbell to contact the Estate to express an interest in purchasing the property. Even if this allegation is true, however, there is no evidence that this contact caused harm to the Thompsons. Several other parties also contacted the Estate and expressed interest in the property before September 6, 1983. Nevertheless, the Estate did not accept any new bids until after the Thompsons failed to meet their closing deadline. Furthermore, the record contains no evidence that the contact by Campbell caused the Estate to refuse to extend the closing deadline. Thus, the Thompsons have failed to produce evidence to establish, or to raise a triable issue over, their claim that Hancock wrongfully interfered with their contract with the Estate before September 6, 1983. See Top Service, 283 Or. at 209-210, 582 P.2d at 1371.

The Thompsons' claim that Hancock wrongfully interfered with their purchase of the property after September 6, 1983 also fails. The Estate satisfied its contractual obligation to the Thompsons by not accepting bids for the property until after September 6, 1983. After that date, the Thompsons had neither a right to purchase the property nor a special relationship with the Estate; anyone could bid for the property, including Hancock.

The fact that Hancock ultimately purchased the property is not sufficient to support a claim of interference with a prospective relationship between the Thompsons and the Estate. The record contains no evidence that Hancock had an improper motive or used improper means in its purchase of the property. See id.

The Thompsons allege that Hancock used improper means by breaching a confidential relationship or a fiduciary duty and using confidential information the Thompsons supplied to purchase the property. Even if the Thompsons could prove that such a relationship existed, there is no evidence that the alleged use of confidential information improperly allowed Hancock to purchase the property. The Estate received five bids for the property, three of which were higher than the Thompsons' bid.

Therefore, the district court correctly granted Hancock's motion for summary judgment on the wrongful interference claim because there is no genuine issue as to any material fact and Hancock is entitled to a judgment as a matter of law. See Celotex, 477 U.S. at 323; Top Service, 283 Or. at 209-210, 582 P.2d at 1371.

AFFIRMED.