Jones v. Koons Automotive, Inc. et al, No. 8:2009cv03362 - Document 33 (D. Md. 2011)
Court Description: MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 2/28/11. (sat, Chambers)
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Jones v. Koons Automotive, Inc. et al Doc. 33 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND : GESELE JONES : v. : Civil Action No. DKC 09-3362 : KOONS AUTOMOTIVE, INC. : MEMORANDUM OPINION Presently pending and ready for resolution in this consumer lending case is a motion filed by Defendant Koons Automotive, Inc. to dismiss the intervenor complaint Financial Services, Inc. (ECF No. 29). filed by Prestige The issues have been fully briefed and the court now rules pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons that follow, Koons motion will be denied. I. Background This case began when Plaintiff Gesele Jones filed a complaint against Defendant Koons Automotive, Inc. ( Koons ) in December 2009. (ECF No. 1). Jones alleges that in December 2008 she purchased a new car from Koons. purchase, she traded in her previous As part of that vehicle, a 2006 Ford Taurus, with the understanding that Koons would pay off the existing lien on the car. Intervenor Prestige Financial Dockets.Justia.com Services ( Prestige ) held that lien. According to Jones, Koons failed to pay off the lien.1 In a memorandum opinion dated November 5, 2010, the court determined, among other things, that Prestige would be permitted to intervene. See Jones v. Koons Auto., Inc., --- F.Supp.2d ---, No. DKC 2010). 09-3362, 2010 WL 4449388, at *14-16 (D.Md. Nov. 5, In accordance with that opinion, Prestige s intervenor complaint was filed November 9. (ECF No. complaint asserts two counts against Koons: 27). Prestige s breach of contract and tortious interference with contractual relations. Many of the facts of Prestige s complaint track those in Jones complaint. Prestige alleges that it lent Jones money in December purchase 2006 to a 2006 Ford Taurus; Prestige took a security interest in the Taurus. 27). in exchange, (Id. ¶¶ 26- Two years later, in December 2008, Koons sold Jones a 2007 Pontiac G6. (ECF No. 27 ¶¶ 9, 12-13). As consideration for the purchase, Koons agreed to take Jones Taurus as a trade-in and pay off Prestige. the remaining (Id. ¶ 18). balance on the Taurus lien held by In connection with that sale and trade, Koons prepared a Buyer s Order, Odometer Disclosure Statement, 1 The facts alleged in Jones amended complaint are more fully described in a prior opinion in this case. (See ECF No. 25). 2 Retail Installment Sales Contract ( RISC ), and an Application for Certificate of Title. (Id. ¶¶ 9, 15). Both the Buyers Order and the RISC indicated that a pay-off of $13,148 would be made on the Taurus. (Id. ¶¶ 17, 18). Prestige contends that, contrary to its promise, Koons never paid Prestige. Prestige maintains that Koons, in entering (Id. ¶ 21). the trade-in transaction with Jones, either (a) intentionally induced Jones into discontinuing payments to Prestige by misrepresenting that Koons would vehicle pay that them it knew or (b) she induced could not Jones to afford, buy a second rendering it impossible for Jones to continue her contractual obligations with Prestige. (Id. ¶¶ 32). After Prestige filed its intervenor complaint, Koons moved to dismiss it. (ECF No. 29). December 23, 2010. II. (ECF No. 32). Prestige filed an opposition on No reply was filed. Standard of Review Koons has moved to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the sufficiency of the complaint. Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006). At this stage, the court must consider all well-pleaded allegations in a complaint as true, Albright v. Oliver, 510 U.S. 266, 268 (1994), and must construe all factual 3 allegations in the light most favorable to the plaintiff. See Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993)). In addition to the complaint itself, a court may consider any documents that are attached to it. CACA Int l, Inc. v. St. Paul Fire & Marine Ins. Co., 566 F.3d 150, 154 (4th Cir. 2009). In evaluating unsupported legal the complaint, allegations. the court Revene Comm rs, 882 F.2d 870, 873 (4th Cir. 1989). need v. not accept Charles County Nor must it agree with legal conclusions couched as factual allegations, Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009), or conclusory factual allegations devoid of any reference to actual events, United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979). Francis v. Giacomelli, 588 F.3d 186, 193 (4th See also 2009). to Cir. [W]here the well-pleaded facts do not permit the court infer more than the mere possibility of misconduct, the complaint has alleged, but it has not show[n] . . . that the pleader is entitled to relief. Iqbal, 129 S.Ct. at 1950 (quoting Fed.R.Civ.P. 8(a)(2)). III. Analysis Koons moves to dismiss both of Prestige s claims, which allege that Koons breached a contract with Prestige and that 4 Koons tortiously interfered with the contractual relationship between Jones and Prestige. A. Each will be addressed in turn. Breach of Contract Prestige s breach of contract claim is premised on the allegation that it was an intended third-party beneficiary to the contract between Jones and Koons. As Koons concedes, [d]espite the (See ECF No. 27 ¶ 22). fact that a third-party beneficiary is not a party to the contract, he or she can bring suit to enforce the contract. 419, 452 (2010). not alleged facts Dickerson v. Longoria, 414 Md. Koons maintains, however, that Prestige has establishing that it is a third-party beneficiary. Koons argument is largely identical to the one already considered and rejected on Prestige s motion to intervene. the court said then remains equally true now: Prestige has adequately alleged that it is a third-party beneficiary to the agreements. One form of third-party beneficiary is a creditor beneficiary, which may be found where no purpose to make a gift appears and performance of the promise will satisfy an actual or supposed or asserted duty of the promisee. Lovell Land, Inc. v. State Highway Admin., 408 Md. 242, 261 (2009) (quotations omitted). [I]n order to determine who is a creditor beneficiary, courts should consider the following as controlling factors: the intention of the parties to recognize a person or class as a primary party in interest as expressed in the language of the instrument and 5 What consideration of the surrounding circumstances as reflecting upon the parties intention. Ferguson v. Cramer, 349 Md. 760, 767 (1998). Here, the language and circumstances of the agreement reflect that Prestige was such a creditor beneficiary. The Buyers Order and the Retail Installment Sales Contract between Jones and Koons both provide for a payoff of the lien on the 2006 Ford Taurus. (See ECF No. 21-11, Intervenor Compl. ¶¶ 17-18). Jones amended complaint [and now, Prestige s intervenor complaint] also alleges that the parties intended for Prestige to be paid off. (See, e.g., ECF No. 13-2, Am. Compl. ¶ 53). Prestige has an interest in getting its promised $13,148 payout from Koons. In short, Prestige [has alleged facts that would render it] . . . a third-party beneficiary. See Jones, 2010 WL 4449388, at *14; see also 13 Richard A. Lord, Williston on Contracts § 37:15 (4th ed. 2010 supp.) ( A creditor beneficiary has a very definite interest in any promise to pay his claim. A contract made between A and B, by the terms of which B agrees to pay a debt which A owes to C, is a contract made for omitted)). the benefit of C. (quotation marks and footnotes Prestige s claim for breach of contract will not be dismissed. B. Koons Tortious Interference With Contractual Relations also seeks to dismiss Prestige s claim intentional interference with contractual relations. for As both parties agree, a party asserting such a claim must establish six elements: 6 (1) The existence of a contract or a legally protected interest between the plaintiff and a third party; (2) the defendant s knowledge of the contract; (3) the defendant s intentional inducement of the third party to breach or otherwise render impossible the performance of the contract; (4) without justification on the part of the defendant; (5) the subsequent breach by the third party; and (6) damages to the plaintiff resulting therefrom. Brass Metal Prods, Inc. v. E-J Enters., Inc., 189 Md.App. 310, 348 (2009) Prestige (quotation has not marks alleged omitted). facts Koons suggests demonstrating the that requisite intent and has not presented any sufficiently wrongful acts by Koons. Prestige counters that it has adequately alleged intent and that it need not prove any separate wrongful acts by Koons to succeed on its claim. To establish intent, Prestige must show that Koons conduct was directed Jones. at Interphase Stations, Inc., 566 Prestige s Garment contractual Solutions, F.Supp.2d 460, relationship LLC 465 v. Fox (D.Md. with Television 2008). For instance, [a] plaintiff may prove tortious intent by showing that the defendant intentionally induced the breach or termination of the contract in order to harm the plaintiff or to benefit the defendant at the expense of the plaintiff. v. Robert Logan Assocs., 334 Md. 287, 301 (1994). may arise when the actor does not 7 act for Macklin The tort also the purpose of interfering with the contract or desire it but knows that the interference is certain or substantially certain to occur as a result of his action. cmt. j.2 See Restatement (Second) of Torts § 766, The common thread in each of these instances is that the breach of the contract amounts to more than an incidental consequence of the defendant s acts. Prestige has pled sufficient facts evidencing intent. The intervenor complaint alleges that Koons knowingly misrepresented its willingness to pay off Prestige s lien convince Jones to purchase a car from Koons. of the complaint are true, Koons actions in an effort to Assuming the facts were directed at Prestige in that Jones subsequent failure to make payments to Prestige was an expected consequence of Koons promise to make them in her stead. Alternatively, Prestige has also plead that interference was substantially certain to result, as Prestige was aware of Jones financial status and aware that she would be unable to satisfy two car payments. are sufficient. These factual allegations See Iqbal, 129 S.Ct. at 1949 ( A claim has facial plausibility when the plaintiff pleads factual content 2 Maryland courts have looked to the Restatement (Second) of Torts § 766 when defining the tort of intentional interference with contract. See, e.g., Macklin, 334 Md. at 297. 8 that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. ). Koons also contends that Prestige has inadequately alleged an improper or wrongful act. According to Koons, the types of wrongful acts that have established liability for this tort have been limited to violence or intimidation, defamation, injurious falsehood or other fraud, violation of the criminal law, and institution or threat of groundless prosecutions in bad faith. v. Wash. Cnty. Hosp. civil suits or criminal (ECF No. 29, at 6 (quoting Volcjak Ass n, 124 Md.App. 481, 512 (1999))). Koons is mistaken. Under Maryland law, the tort of intentional interference with contractual relations has two manifestations: the tort . . . is committed when a third party s intentional interference with another in his or her business or occupation induces a breach of an existing contract or, absent an existing contract, maliciously or relationship. wrongfully infringes Macklin, 334 Md. at 297. upon an economic The two types of tort actions differ in terms of the amount of interference that is tolerated. [W]here a contract between two parties exists, the circumstances in which a third party has a right to interfere with the restricted. performance A of broader that right contract to 9 are more narrowly interfere with economic relations exists where no contract or a contract terminable at will is involved. Natural Design v. Rouse Co., 302 Md. 47, 69- 70 (1984). As Prestige observes, the wrongful acts listed by Koons come from cases implicating no contract at all. See, e.g., Volcjak, 124 Md.App. 481, 511-12 (addressing claim by doctor that hospital s acts interfered with doctor s business relations with patients at the hospital ); K&K Mgmt., Inc. v. Lee, 316 Md. 137, 156-68 (1989) (addressing claim by restaurant owner that landlord s breach of lease affected relations with the [restaurant s] Korean customers and some suppliers). situations implicate the broader right to interfere. These But the facts alleged in Prestige s complaint suggest that it had a binding, not-terminable-at-will contract with Jones. Thus, the complaint would indicate that the narrower right to interfere applies to this case. [W]here there is an existing contract, not terminable at will, between a plaintiff and a third party, acts by a defendant to induce the third party to breach that contract are, themselves, improper and wrongful. Macklin, 334 Md. at 304; see also Ronald M. Sharrow, Chtd. v. State Farm Mut. Auto. Ins. Co., 306 Md. 754, 765 (1986) ( But if the party causing the breach acts solely to benefit himself, or to cause injury to another, without a right to so act, such conduct is 10 improper and may subject the party to liability for the injury suffered. ); Evander & (recognizing but see Alexander & Alexander Inc. v. B. Dixon Assocs., Inc., confusion in 336 Md. decisions 635, of 655 Court n.18 of (1994) Appeals of Maryland over whether purposeful interference with a specific contract without a separate wrongful act triggers liability). Koons alleged act in inducing the breach is a sufficient wrongful act to support Prestige s claim. Consequently, Prestige s claim for tortuous interference with contractual relations will also not be dismissed. IV. Conclusion For the foregoing reasons, Koons motion to dismiss will be denied. A separate order will follow. /s/ DEBORAH K. CHASANOW United States District Judge 11
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