M West v. Oak Park Mall

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No. 102,115

IN THE COURT OF APPEALS OF THE STATE OF KANSAS

M WEST, INC.,
Appellant,

v.

OAK PARK MALL, L.L.C., and
CINGULAR WIRELESS, L.L.C.,
Appellees.


SYLLABUS BY THE COURT

1.
When the pleadings, depositions, answers to interrogatories, and admissions on
file, together with the affidavits, show that there is no genuine issue as to any material
fact and that the moving party is entitled to judgment as a matter of law, summary
judgment is appropriate. The trial court is required to resolve all facts and inferences
which may reasonably be drawn from the evidence in favor of the party against whom the
ruling is sought. When opposing a motion for summary judgment, an adverse party must
come forward with evidence to establish a dispute as to a material fact. In order to
preclude summary judgment, the facts subject to the dispute must be material to the
conclusive issues in the case. On appeal, the same rules apply; summary judgment must
be denied if reasonable minds could differ as to the conclusions drawn from the evidence.

2.
The statute of frauds applies to all contracts for the assignment of an interest in
property for a term of more than 1 year.
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3.
A memorandum, in order to be enforceable under the statute of frauds, may be any
document or writing, formal or informal, signed by the party to be charged or by his or
her lawfully authorized agent, which states with reasonable certainty (a) each party to the
contract either by his or her own name, or by such a description as will serve to identify
him or her, or by the name or description of his or her agent, (b) the land or other subject
matter to which the contract relates, and (c) the terms and conditions of all the promises
constituting the contract and by whom and to whom the promises are made.

4.
The statute of frauds requires that only the material terms of a contract are to be
stated with reasonable certainty.

5.
For the purpose of satisfying the statute of frauds, separate writings may be
construed together in order to determine whether there is sufficient written agreement
upon which to base an enforceable contract.

6.
When the evidence pertaining to the existence of a contract or the content of the
contract's terms is conflicting or permits more than one inference, a question of fact is
presented. Nevertheless, whether undisputed facts establish the existence and terms of a
contract raise a question of law for the court's determination.

7.
When all terms of a contract have been agreed upon and a condition precedent to
requiring performance is accepted, the condition precedent becomes part of the main
contract and the agreement is consummated.

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8.
Conditions precedent to performance under an existing contract arise from the
terms of a valid contract and define events that must occur before a right or obligation
matures under the contract. In contrast, conditions precedent to the formation of a
contract involve issues of offer and acceptance which precede and determine the
formation of a contract.

9.
Whether conditions are considered prerequisites to formation of a contract or
prerequisites to an obligation to perform under an existing agreement is controlled by the
intent of the parties.

10.
When parties have considered and settled the details of a proposed agreement, a
difficult question of fact is presented as to whether the parties have the understanding that
neither party is to be bound until they execute a formal written document.

11.
Kansas recognizes the duty of good faith and fair dealing in every contract, with
the exception of employment-at-will contracts.

12.
Generally, good faith and reasonableness in contract matters are factual questions.
Summary judgment is appropriate on those matters, however, when the facts are
uncontroverted and establish that a defined standard has been met.

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13.
When a contract contains a condition precedent to a party's performance obligation
and the occurrence of the condition is within the control of that party, the party must
make a good-faith effort to bring about the condition.

14.
While a condition precedent must have happened before a contract can be
enforced or relief sought in the way of specific performance, the party that has demanded
the condition precedent cannot hinder, delay, or prevent its happening for the purpose of
avoiding performance of the contract.

15.
Tortious interference with a prospective business advantage or relationship seeks
to protect future or potential contractual relations and is predicated on malicious conduct
by a defendant.

16.
The elements of tortious interference with a prospective business relationship are:
(1) The existence of a business relationship or expectancy with the probability of future
economic benefit to the plaintiff; (2) knowledge of the relationship or expectancy by the
defendant; (3) that, except for the conduct of the defendant, plaintiff was reasonably
certain to have continued the relationship or realized the expectancy; (4) intentional
misconduct by defendant; and (5) damages suffered by plaintiff as a direct or proximate
cause of defendant's misconduct.

17.
Under the facts of this case, there existed genuine issues of material fact as to
whether a binding contract was formed between the parties; whether one of the
defendants exercised good faith and fair dealing in regard to the alleged contract; and
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whether one of the defendants tortiously interfered in a prospective business advantage or
relationship by engaging in intentional misconduct which was unjustified and malicious.
These genuine issues of material fact preclude the entry of summary judgment against the
plaintiff on its claims of breach of contract and tortious interference with a business
advantage or relationship.

Appeal from Johnson District Court; JANICE D. RUSSELL and DAVID W. HAUBER, judges.
Opinion filed June 18, 2010. Reversed and remanded.

Mark D. Murphy and Jeffrey M. Cook, of The Murphy Law Firm, LLC, of Overland Park, for
appellant M West, Inc.

Lynn S. McCreary, of Bryan Cave LLP, of Kansas City, Missouri, and Sarah N. Swatosh, of the
same firm, of St. Louis, Missouri, for appellee Cingular Wireless, L.L.C.

Kathryn G. Lee, Amber Van Hauen, and Kara S. Bemboom, of Husch Blackwell Sanders LLP, of
Kansas City, Missouri, for appellee Oak Park Mall, L.L.C.

Before LEBEN, P.J., GREEN and CAPLINGER, JJ.

GREEN, J.: M West, Inc. (M West), appeals from the trial court's judgments
granting summary judgment to Cingular Wireless, L.L.C. (Cingular), and to Oak Park
Mall, L.L.C. (Oak Park). M West and Cingular were both tenants of Oak Park. Cingular
and M West entered into a proposed assignment agreement for M West to take over
Cingular's lease contingent upon Oak Park's consent of the assignment and the execution
of a formal binding written assignment agreement. As required by its lease, Cingular
requested Oak Park's approval of the assignment and outlined the consideration that
would be paid to M West for the assignment. Despite Oak Park's indications to M West
that it liked the idea of Cingular assigning its lease and that it was considering the
proposed assignment agreement, Oak Park entered into negotiations with Cingular for
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termination of its lease in exchange for a cash payment. Oak Park ultimately rejected
Cingular's proposed assignment of its lease to M West and allowed Cingular to terminate
its lease in exchange for a $400,000 payment.

M West sued both Cingular and Oak Park and raised breach of contract claims. In
addition, M West made a claim against Oak Park for tortious interference with a
prospective business advantage or relationship. In granting summary judgment to
Cingular and Oak Park, the trial court determined that no binding contract existed
between Cingular and M West, that the statute of frauds was not satisfied, and that the
evidence failed to support M West's tortious interference claim.

We determine that the trial court erred in its decisions. First, in regard to M West's
claims against Cingular, the appellate record establishes that the communications
between the parties met the statute of frauds. Moreover, in looking at the record in the
light most favorable to M West, we determine that there existed a genuine issue of
material fact as to whether the communications between M West and Cingular evidenced
the existence of a binding contract with conditions precedent to performance under the
contract or only preliminary negotiations with conditions that had to be met before
formation of the contract. Importantly, if a binding contract existed between Cingular and
M West, Cingular could be held liable to M West if it is found that Cingular did not act in
good faith with regard to the contract or hindered, delayed, or prevented the happening of
the condition precedents for the purpose of avoiding performance of the contract.
Because these are issues of fact, we determine that the trial court erred in granting
summary judgment to Cingular.

Moreover, based upon the nature of the relationship between Cingular and M
West, the viability of M West's tortious interference claim against Oak Park is dependent
upon whether there is a binding contract between Cingular and M West. If it is found that
a binding contract existed between Cingular and M West, then there is evidence in the
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present appellate record to create a genuine issue of material fact as to whether Oak Park
engaged in intentional misconduct which was unjustified and malicious. As a result, we
determine that the trial court improperly granted summary judgment to Oak Park on M
West's tortious interference claim. Accordingly, we reverse and remand for further
proceedings.

Cingular was a tenant in Oak Park under a 10-year lease agreement signed in April
2004. In early 2006, with approximately 8 years remaining on its lease agreement with
Oak Park, Cingular began communicating with M West regarding an assignment of its
lease agreement. M West owned Charlotte & Tipit, a fine jewelry store located at Oak
Park, and was looking for a larger store space.

Under Cingular's lease agreement with Oak Park, before Cingular could assign its
lease to another entity, Cingular had to obtain Oak Parks' consent to the assignment
agreement:

"Section 16.01. Consent Required.

"(A) Tenant shall not voluntarily, involuntarily or by operation of law assign or
encumber this Lease, in whole or in part, nor sublet all or any part of the Leased Premises
without the prior consent of Owner in each instance. . . . As a condition to any
assignment of this Lease by Tenant which is permitted under this Lease, the assignee
thereof shall be required to execute and deliver to Owner an agreement, in recordable
form, whereby such assignee assumes and agrees with Owner to discharge all obligations
of Tenant under this Lease. . . .

"(B) If Tenant shall request Owner's consent to any assignment of this Lease or
to any subletting of all or any part of the Leased Premises, Tenant shall submit to owner
with such request the name of the proposed assignee or subtenant, such information
concerning its business, financial responsibility and standing as Owner may reasonably
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require, and the consideration (and the terms and conditions thereof) to be paid for and
the effective date of the proposed assignment or subletting."

M West alleged that in January 2006, David Farmer, a representative of Cingular,
contacted Homiri Moshiri, the president of M West, and asked if he was still interested in
the Cingular space. According to M West, Farmer and Moshiri discussed the terms of an
assignment of the lease to M West, which would include a substantial payment by
Cingular to M West and Cingular remaining on the lease as a guarantor. M West further
alleged that Farmer told Moshiri that in the Cingular lease there was a provision that if
Oak Park did not approve of a proposed assignment, then Cingular would be released
from the lease. As a result, Farmer told Moshiri that there would be no problem getting
Oak Park to approve of the assignment.

M West further alleged that Moshiri contacted an Oak Park representative and
requested Oak Park's approval of M West's assumption of the lease. According to M
West, Moshiri was assured that M West was approved to proceed and enter into such an
assumption. M West asserted that the negotiations with Farmer continued by telephone
through April 2006 when Farmer announced that Cingular and M West had a deal.
According to M West, Moshiri then contacted Karla Rocker with Oak Park and told her
about the agreement that M West and Cingular had reached. M West alleged that Rocker
told Moshiri that was fine and M West could proceed with the agreement with Cingular.

On April 5, 2006, Moshiri emailed Jody House, an Oak Park representative, that
M West and Cingular had reached a meeting of the minds, subject to Cingular's real
estate department's approval, to assign Cingular's lease to M. West. Moshiri stated that he
needed to know whether Oak Park's real estate department liked "this idea or not."
Houser responded, "I like the idea."

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Communications Between Cingular and M West in April and May 2006

On April 7, 2006, Farmer, on behalf of Cingular, sent M West a proposed
assignment of Cingular's lease at Oak Park. The document read as follows:

"I have been authorized to offer you an assignment of the above referenced
property, in exchange for consideration in the amount of $330,000.00 effective June 30,
2006, whose lease has approximately 89 months remaining on the lease. This represents
an assignment fee of $180,000.00 plus $150,000.00 (approximately 14 month's rent and
charges).

"This is not a binding proposal and is contingent upon Cingular's Real Estate
Committee's final approval, consent of the Landlord's mortgagee, if required, and the full
execution of a formal binding written assignment agreement mutually acceptable to the
parties. However, if this proposal meets with your satisfaction, please sign below and fax
it back to me at 831.464.3961 so that I may get final approval from Cingular. Upon
approval I will notify you immediately so we may commence producing the necessary
documentation.

"I look forward to your fast and favorable reply, since time is of the essence. This
proposal shall expire at the close of business on April 14, 2006. Cingular asks that you
please respond in writing."

Moshiri "AGREED TO AND ACCEPTED" the proposed assignment by placing
his electronic signature on the signature line below those words at the bottom of the
document. Thereafter, Moshiri began lining up contractors, cabinet makers, and sign
makers that would be ready to remodel Cingular's store space once the proposed
assignment was accepted by Oak Park. On May 2, 2006, Moshiri sent an email to
Cingular stating that his plan was to have the space remodeled and open by August 1,
2006. Otherwise, because Moshiri would be out of the country during August and
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September, he stated that the opening of the new store would "end up in October" which
"cuts it close" to the holiday shopping season and the store's fall jewelry events.

In an email dated May 8, 2006, Moshiri expressed frustration at Cingular's delay
in preparing the proper documents for Oak Park. Moshiri stated: "If this takes much
longer, I will have to move on." Cingular responded on May 10, 2006, by attaching a
letter that it intended to forward to Oak Park. That same day, a series of emails was sent
between Moshiri and Cingular about the terms of the assignment to be included in the
letter to Oak Park. The parties' emails reference the payment of $180,000 by Cingular to
M West for assignment of the lease and also a $150,000 payment by Cingular to Oak
Park to be credited towards M West's rent and other charges in Cingular's store space.

By letter dated May 11, 2006, Cingular requested Oak Park's consent to the
assignment of its lease to M West. Cingular's letter outlined the consideration for the
proposed assignment as follows:

"[T]he proposed consideration for the assignment is $150,000.00, which (i) shall be paid
directly from Tenant to Owner, for the benefit of Assignee, and (ii) is to be held by
Owner in a segregated interest-bearing account for the benefit of Assignee, and from
which all future rent and other charges owed by Assignee shall be paid until such
amounts are exhausted in full. Tenant shall also make a payment directly to Assignee in
the amount of $180,000.00 in connection with this matter."

On May 12, 2006, a Cingular representative sent an email to Moshiri telling him that
"[t]he single greatest thing for you in this deal is that Cingular Wireless is the tenant
under the lease and will remain primary (financially) under the lease as a de facto
guarantor."

On May 17, 2006, Oak Park offered to terminate Cingular's lease in exchange for a
$465,000 payment. That same day, Moshiri emailed Oak Park and asked how long it
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would take to get approval for the proposed assignment of Cingular's lease. Karla Rocker,
with Oak Park, responded: "I should have more information for you by the end of the
week. We are in the middle of our discussion." On May 23, 2006, Rocker sent a letter to
Cingular stating that Oak Park would not consent to the proposed lease assignment.

On June 2, 2006, Cingular sent a letter to Rocker confirming an agreement
between Oak Park and Cingular for Oak Park to terminate Cingular's lease on June 15,
2006, in exchange for a $400,000 payment.

In November 2006, M West sued Oak Park and Cingular. M West claimed that
Cingular breached its assignment agreement with M West. In addition, M West made
claims of breach of contract and tortious interference with a prospective business
advantage or relationship against Oak Park.

In December 2007, Cingular moved for summary judgment against M West.
Cingular argued that M West could not satisfy the statute of frauds for its breach of
contract claim. The trial court determined that the communications between Cingular and
M West showed only continuing negotiations and that a meeting of the minds as to the
terms of a mutually acceptable lease assignment between Cingular and M West could not
be established. The trial court found that because the writings between the parties did not
evidence an existing and binding contract, the statute of frauds had not been satisfied.
Accordingly, the trial court granted summary judgment to Cingular on M West's breach
of contract claim.

In July 2008, Oak Park moved for summary judgment against M West. Oak Park
argued that there existed no genuine issues of material fact as to whether an enforceable
contract existed between the parties, thereby precluding M West's breach of contract and
tortious interference claims against it. On M West's breach of contract claim, the trial
court determined that the undisputed facts did not support an inference that Oak Park and
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M West had entered into an agreement. On M West's tortious interference claim, the trial
court determined that Oak Park "had a contractual right to engage in the conduct
complained of, and the available evidence, even when resolved in favor of the
nonmoving party, is not strong enough to raise a non-speculative inference" that Oak
Park "was not justified in acting to terminate its lease for consideration that Cingular
agreed to pay." Accordingly, the trial court granted summary judgment to Oak Park on M
West's breach of contract and tortious interference claims.

SUMMARY JUDGMENT

Standard of Review

When the pleadings, depositions, answers to interrogatories, and admissions on
file, together with the affidavits, show that there is no genuine issue as to any material
fact and that the moving party is entitled to judgment as a matter of law, summary
judgment is appropriate. The trial court is required to resolve all facts and inferences
which may reasonably be drawn from the evidence in favor of the party against whom the
ruling is sought. When opposing a motion for summary judgment, an adverse party must
come forward with evidence to establish a dispute as to a material fact. In order to
preclude summary judgment, the facts subject to the dispute must be material to the
conclusive issues in the case. On appeal, the same rules apply; summary judgment must
be denied if reasonable minds could differ as to the conclusions drawn from the evidence.
Miller v. Westport Ins. Corp., 288 Kan. 27, 32, 200 P.3d 419 (2009).

M WEST'S BREACH OF CONTRACT CLAIM AGAINST CINGULAR

Statute of Frauds

The trial court's primary basis for granting summary judgment to Cingular was
that the statute of frauds had not been satisfied in this case. M West argues, however, that
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the emails and letter exchanged by M West and Cingular constitute memoranda of an
agreement that satisfy the statute of frauds.

Neither party disputes that the agreement between Cingular and M West must
satisfy the statute of frauds in order to be a valid contract. Indeed, the statute of frauds
applies to all contracts for the assignment of an interest in property for a term of more
than 1 year. See K.S.A. 33-105 (providing that "[n]o leases, estates or interests of, in or
out of lands, exceeding one year in duration, shall at any time hereafter be assigned or
granted, unless it be by deed or note, in writing, signed by the party so assigning or
granting the same").

Quoting Walton v. Piqua State Bank, 204 Kan. 741, 747, 466 P.2d 316 (1970), this
court in Kenby Oil Co. v. Lange, 30 Kan. App. 2d 439, 442, 42 P.3d 201 (2002), outlined
the requirements to satisfy the statute of frauds as follows:

"'"A Memorandum, in order to be enforceable under the statute of frauds, may be
any document or writing, formal or informal, signed by the party to be charged or by his
lawfully authorized agent, which states with reasonable certainty (a) each party to the
contract either by his own name, or by such a description as will serve to identify him, or
by the name or description of his agent, (b) the land or other subject matter to which the
contract relates, and (c) the terms and conditions of all the promises constituting the
contract and by whom and to whom the promises are made."' [Citation omitted.]"

See Restatement (Second) of Contracts § 131 (1979).

Our Supreme Court has recently held that the statute of frauds requires that only
the material terms of a contract are to be stated with reasonable certainty; see Botkin v.
Security State Bank, 281 Kan. 243, 250, 130 P.3d 92 (2006). See also Federal Deposit
Ins. Corp. v. Neitzel, 769 F. Supp. 346, 349 (D. Kan. 1991) (citing Barnhart v. McKinney,
235 Kan. 511, 524, 682 P.2d 112 [1984]) (material terms need only be stated with
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reasonable certainty). Furthermore, for the purpose of satisfying the statute of frauds,
separate writings may be construed together in order to determine whether there is
sufficient written agreement upon which to base an enforceable contract. Young v.
Hefton, 38 Kan. App. 2d 846, 856, 173 P.3d 671 (2007).

Here, the April 2006 proposed assignment agreement and the communications
between the parties in April and May 2006 met all the requirements to satisfy the statute
of frauds. The proposed assignment agreement, the emails from Cingular, and the May
2006 letter to Oak Park requesting assignment of Cingular's lease were all signed by a
representative for Cingular, the party to be charged. Moreover, the April and May 2006
communications identify the parties to the proposed assignment and the subject matter to
which the contract relates. Specifically, the proposed assignment was for M West to
assume Cingular's lease for its store space.

Finally, the material terms of the proposed assignment were stated with reasonable
certainty within the April and May 2006 communications. Based on the proposed
assignment agreement and the later communications between the parties, M West was to
take over Cingular's lease agreement with Oak Park. The proposed assignment agreement
between M West and Cingular went so far as to set forth the effective date of June 30,
2006. In consideration for the assignment, Cingular would pay M West an assignment fee
of $180,000 plus $150,000 to be used towards rent and charges for Cingular's store space.
Indeed, the May 11, 2006, letter from Cingular to Oak Park requesting Oak Park's
consent to the assignment set forth the proposed assignment of Cingular's lease to M
West and the agreed amount of the consideration to be paid by Cingular to M West.
Further, Cingular made clear in its communications to M West that Cingular would
remain a guarantor on the assigned lease.

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Because the communications between the parties in April and May 2006 were
sufficiently specific to satisfy the applicable requirements of the statute of frauds, the trial
court erred in determining that the statute of frauds had not been met.

Existence of Binding Contract

In determining that Cingular and M West did not have an existing binding
contract, the trial court also found that the letters and emails between M West and
Cingular indicated that the parties were involved only in negotiations for an assignment
of Cingular's lease agreement. The trial court determined that the conditions of (1) a
formal binding written assignment agreement and (2) approval of the assignment by Oak
Park were conditions that had to be met before a contract could be formed between the
parties.

M West contends, however, that it and Cingular had formed a binding contract and
that Oak Park's approval and execution of a formal assignment agreement was a
condition precedent to performance of the contract.

Not surprisingly, Cingular agrees with the trial court's determination and argues
that the unsatisfied conditions precedent preclude M West's breach of contract action
against it. Cingular asserts that the conditions of Oak Park's consent to the assignment
and the execution of a mutually acceptable written agreement were conditions precedent
to the formation of a contract between it and M West.

When the evidence pertaining to the existence of a contract or the content of the
contract's terms is conflicting or permits more than one inference, a question of fact is
presented. Nevertheless, whether undisputed facts establish the existence and terms of a
contract raise a question of law for the court's determination. Nungesser v. Bryant, 283
Kan. 550, 566, 153 P.3d 1277 (2007).
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Our Supreme Court in Wallerius v. Hare, 194 Kan. 408, 412, 399 P.2d 543 (1965),
defined a "condition precedent" as follows:

"A condition precedent is something that it is agreed must happen or be
performed before a right can accrue to enforce the main contract. It is one without the
performance of which the contract, although in form executed and delivered by the
parties, cannot be enforced. A condition precedent requires the performance of some act
or the happening of some event after the terms of the contract, including the condition
precedent, have been agreed on before the contract shall take effect. [Citation omitted.]"

Thus, a condition precedent is simply "something that is agreed must happen or be
performed before a right can occur to enforce the main contract." Weinzirl v. The Wells
Group, Inc., 234 Kan. 1016, Syl. ¶ 3, 677 P.2d 1004 (1984). Under our Supreme Court's
definition, the presence of a condition precedent does not stymie the formation of a
contract, but rather becomes part of the contract itself. "When all terms of a contract have
been agreed upon and a condition precedent to requiring performance is accepted, the
condition precedent becomes part of the main contract and the agreement is
consummated." Wallerius v. Hare, 200 Kan. 578, Syl. ¶ 1, 438 P.2d 65 (1968).

Courts have recognized two types of conditions precedent: conditions precedent to
performance under an existing contract and conditions precedent to the formation of a
contract. "In the law of contracts, conditions may relate to the existence of contracts or to
the duty of immediate performance under them. Thus, there may be conditions to the
formation of a contract, or conditions to performance of a contract." Richard A. Lord, A
13 Lord, Williston on Contracts, § 38:4, p. 375 (4th ed. 2000). Conditions precedent to
performance under an existing contract arise from the terms of a valid contract and define
an event that must occur before a right or obligation matures under the contract. In
contrast, conditions precedent to the formation of a contract involve issues of offer and
acceptance which precede and determine the formation of a contract. City of Haverhill v.
George Brox, Inc.; Gordon Construction Corporation, 47 Mass. App. Ct. 717, 719-20,
17

716 N.E.2d 138 (1999) (citing Corbin on Contracts § 628 [1960 & Supp. 1999]; 5
Williston on Contracts § 666A [3d ed. 1961 & Supp. 1999]; Restatement [Second] of
Contracts § 224 [1979]).

Substantial authority exists, however, that most conditions precedent are
conditions precedent to performance under an existing contract rather than conditions
precedent to formation of a contract. See Oppenheimer & Co. v. Oppenheim, 86 N.Y.2d
685, 690, 636 N.Y.S.2d 734, 660 N.E.2d 415 (1995) (citing Calamari & Perillo,
Contracts § 11-5, p. 440 [3d ed. 1987]) ("Most conditions precedent describe acts or
events which must occur before a party is obliged to perform a promise made pursuant to
an existing contract, a situation to be distinguished conceptually from a condition
precedent to the formation or existence of the contract itself."); 13 Williston on Contracts,
§ 38:4, p. 381 (4th ed. 2000) ("The fact that no duty of performance on either side can
arise until the happening of the condition does not . . . make the validity of the contract
depend upon its happening."); see also Wood v. Cunningham, 140 N.M. 699, 702, 147
P.3d 1132 (2006) ("Generally, a condition precedent is an event occurring after the
formation of a valid contract, an event that must occur before there is a right to an
immediate performance."); 13 Williston on Contracts § 38:7, p. 394 ("A condition
precedent in a contract is the typical kind. It must be performed or happen before a duty
of immediate performance arises on the promise which the condition qualifies.").

Whether conditions are considered prerequisites to formation of a contract or
prerequisites to an obligation to perform under an existing agreement is controlled by the
intent of the parties. Western Commerce Bank v. Gillespie, 108 N.M. 535, 537, 775 P.2d
737 (1989); Hohenberg Bros. Co. v. George E. Gibbons & Co., 537 S.W.2d 1, 3 (Tex.
1976).

The issue here is whether the parties intended to form a binding contract with
conditions precedent to the performance under the contract or whether they intended their
18

communications to result in the formation of a contract only after the conditions
precedent were met. In analyzing this issue, we bear in mind that "'[a] court should be
cautious in granting a motion for summary judgment when resolution of the dispositive
issue necessitates a determination of the state of mind of one or both of the parties.'
[Citation omitted.]" Brennan v. Kunzle, 37 Kan. App. 2d 365, 378, 154 P.3d 1094, rev.
denied 284 Kan. 945 (2007). If a genuine material issue of fact exists as to whether the
April 2006 proposed assignment agreement, along with the parties' communications in
April and May 2006, evidenced the intent of the parties to create an existing binding
contract, the performance of which would be required when the conditions precedent
were satisfied, then summary judgment was improper on this issue.

In looking at the April 2006 assignment agreement and the April and May 2006
communications between the parties, we note that all the components of a valid contract
are present: offer, acceptance, consideration, and the terms setting forth the rights and
obligations of the parties. The terms were mutually agreed upon by M West and
Cingular. The conditions of Oak Park's approval of the proposed assignment and
execution of a formal assignment agreement were the same conditions contained in the
lease agreement between Cingular and Oak Park. Cingular and Oak Park's lease
agreement required that these two conditions must be satisfied before Oak Park would
approve Cingular's assignment of the lease to another party.

Consequently, if we were to accept Cingular's argument that the two previously
mentioned conditions had to be satisfied before a contract came into existence between M
West and Cingular, there would be absolutely nothing left for either party to perform
once those conditions precedent were satisfied. In other words, when those conditions
precedent were satisfied, the contract between M West and Cingular would form.
Nevertheless, no performance would be required of either party because the assignment
of Cingular's lease to M West would already have been completed.

19

Although Cingular successfully argued to the trial court that the communications
between the parties showed that they were involved in preliminary negotiations and that
the parties were not yet to the contract stage, there is contract language throughout the
April 2006 proposed assignment agreement indicating that the parties intended to form a
binding contract.

Specifically, the Cingular representative opened the April proposed assignment
agreement with an offer, recitation of consideration, and the effective date of the
agreement: "I have been authorized to offer you an assignment of the above referenced
property, in exchange for consideration in the amount of $330,000 effective June 30,
2006, whose lease has approximately 89 months remaining on the lease." (Emphasis
added.) The Cingular representative then broke down the $330,000 consideration as
follows: "This represents an assignment fee of $180,000.00 plus $150,000.00
(approximately 14 month's rent and charges)."

Then, at the close of the proposed assignment, Cingular's representative stated that
"time is of the essence," which is a term peculiar to a contractual requirement, and set an
expiration date for the "proposal": "I look forward to your fast and favorable reply, since
time is of the essence. This proposal shall expire at the close of business on April 14,
2006. Cingular asks that you please respond in writing." (Emphasis added.) Finally, the
Cingular representative included a signature line for Moshiri at the bottom of the
document immediately preceded by the words "AGREED TO AND ACCEPTED BY."

The material terms of the proposed assignment were later referenced in emails
between the parties and further details were hammered out about how the proposed
consideration was to be kept in an interest-bearing account. The terms of the proposed
assignment, along with the additional details, were included in the letter that Cingular
ultimately sent to Oak Park requesting assignment of its lease to M West.

20

By setting forth the particular terms of the agreement, including consideration and
the effective date of the assignment, and requiring M West to accept its offer, it seems
that Cingular may have intended to create a binding agreement. Further, the
communications between the parties in April and May 2006 and the letter that Cingular
ultimately sent to Oak Park requesting approval of assignment of its lease to M West
appears to indicate that the parties had reached an agreement on the material terms of the
assignment and intended to be bound by those terms.

Moreover, although Cingular maintains that there was never the "full execution of
a formal binding written assignment agreement" in this case as referenced in the proposed
assignment agreement, a jury could infer that the proposed assignment was actually a
contract to make a contract if Oak Park consented to the terms of the assignment. 1
Perrilo, Corbin on Contracts § 2.8, pp. 133-34 (1993) offers the following insight on
agreements binding parties to make another agreement:

"It is quite possible for parties to make an enforceable contract binding them to prepare
and execute a subsequent final agreement. In order that such may be the effect, it is
necessary that agreement shall have been expressed on all essential terms that are to be
incorporated in the document. That document is understood to be a mere memorial of the
agreement already reached. If the document or contract that the parties agree to make is
to contain any material term that is not already agreed on, no contract has yet been made;
the so-called 'contract to make a contract' is not a contract at all."

Here, the material terms of the assignment had been agreed upon when Cingular
presented the proposed assignment to Oak Park. If Oak Park gave its consent to the
assignment, Cingular and M West would have only had to memorialize the essential
terms of the agreement that had already been reached. As a result, the jury could infer
that the parties had intended to be bound by the proposed assignment.

21

On the other hand, Cingular included the following language in the proposed
assignment indicating that it did not intend to create a binding contract at that time with
M West: "This is not a binding proposal and is contingent upon Cingular's Real Estate
Committee's final approval, consent of the Landlord's mortgagee, if required, and the full
execution of a formal binding written assignment agreement mutually acceptable to the
parties." This was the language relied upon heavily by the trial court in granting
Cingular's motion for summary judgment.

Although the above-referenced language seems to indicate that Cingular did not
intend to create a binding agreement, there are also facts that would compel a contrary
conclusion. These are questions of fact for a jury, not for summary judgment. As
discussed previously, the contract language within the proposed assignment, the fact that
Cingular required M West's acceptance to the terms in writing, the parties' later
communications, and the letter sent by Cingular to Oak Park requesting approval of the
proposed assignment all appear to indicate that the parties did intend to create a binding
agreement.

As explained in Corbin on Contracts § 2.9, p. 144, when parties have considered
and settled the details of a proposed agreement, there is often a difficult question of fact
whether the parties have the understanding that neither party is to be bound until they
execute a formal written document:

"One of the most common illustrations of preliminary negotiation that is totally
inoperative is one where the parties consider the details of a proposed agreement, perhaps
settling them one by one, with the understanding during this process that the agreement is
to be embodied in a formal written document and that neither party is to be bound until
they execute this document. At times they execute a letter of intent, with the
understanding that they are not bound until a later definitive writing is drafted, approved
and executed. Often it is a difficult question of fact whether the parties have this
understanding. There are very many decisions holding both ways. These decisions should
22

not necessarily be regarded as conflicting, even though it may be hard to reconcile some
of them on the facts that are reported to us in the appellate reports. It is a question of fact
that the courts are deciding, not a question of law; and the facts of each case are
numerous and not identical with those of any other case. In very many cases the question
may properly be left to a jury." (Emphasis added.)

As our Supreme Court stated in Sidwell Oil & Gas Co. v. Loyd, 230 Kan. 77, 83,
630 P.2d 1107 (1981), "[w]hen the evidence pertaining to the existence of a contract is
conflicting a question is presented for the trier of facts. The controlling question as to
whether a binding contract was entered into depends on the intention of the parties and is
a question of fact."

We cannot say as a matter of law whether the parties intended Oak Park's consent
to the lease assignment and the parties' signature to a formal assignment agreement to be
conditions precedent to the formation of a contract, as urged by Cingular, or merely
conditions precedent to future events that the parties agreed should be fulfilled by the
cooperative conduct of each party within a reasonable time. As a result, we determine
that material fact issues exist as to the parties' intent to be bound by the correspondence
between them.

Implied Duty of Good Faith and Fair Dealing

M West also contends that a factual issue was presented as to whether Cingular
acted in good faith with respect to the conditions precedent of gaining Oak Park's
approval of the proposed assignment and executing a formal written assignment
agreement. Importantly, the success of M West's good faith argument is dependent upon
a jury's finding on the previous issue, that is, whether the parties intended to form a
binding contract.

23

Kansas recognizes the duty of good faith and fair dealing in every contract, with
the exception of employment-at-will contracts. Estate of Draper v. Bank of America, 288
Kan. 510, 525, 205 P.3d 698 (2009); see Restatement (Second) of Contracts § 205
(1979). Generally, good faith and reasonableness in contract matters are factual
questions. Summary judgment is appropriate on those matters, however, when the facts
are uncontroverted and establish that a defined standard has been met. Estate of Draper,
288 Kan. at 528.

The duty of good faith and fair dealing that is usually imposed on every contract
requires at least that a party do nothing to prevent the occurrence of a condition of that
party's duty. A party, however, may be required to do more than refrain from action that
will prevent the occurrence of the condition. Often, a party is expected to take affirmative
steps to see that the condition occurs. Farnsworth, Contracts § 8.6 (3d ed. 1999), pp. 544-
45.

Courts in other jurisdictions have held that when a contract contains a condition
precedent to a party's performance obligation and the occurrence of the condition is
within the control of that party, the party must make a good-faith effort to bring about the
condition. Johnson v. Lambros, 143 Idaho 468, 474, 147 P.3d 100 (2006); see
Aquasource v. Wind Dance Farm, Inc., 833 N.E.2d 535, 539 (Ind. App. 2005) ("[A] party
may not rely on the failure of a condition precedent to excuse performance where that
party's own action or inaction caused the failure. When a party retains control over when
the condition will be fulfilled, it has an implied obligation to make a reasonable and good
faith effort to satisfy the condition."); Brown v. Alron, Inc., 223 Neb. 1, 4, 388 N.W.2d 67
(1986); Tacoma Northpark, L.L.C. v. NW, L.L.C., 123 Wash. App. 73, 82, 96 P.3d 454
(2004).

It is a principle in the law of contracts that a bilateral contract contains an implied
condition on both parties to cooperate with each other in obtaining the goals of the
24

contract. See Vanadium Corporation v. Fidelity & Deposit Co., 159 F.2d 105, 108 (2d
Cir. 1947) ("'[W]herever the cooperation of the promisee is necessary for the
performance of the promise, there is a condition implied in fact that the cooperation will
be given.'"). Moreover, not only is there an implied condition for the parties to cooperate
in such performance if cooperation is necessary in achieving the goals of the bilateral
contract, but also there is an implied condition to not prevent performance or make it
impossible for the other party to perform, which we will discuss next.

Nevertheless, the question of whether Cingular lived up to the basic requirement
of cooperation to secure the assignment of the lease and whether Cingular negotiated in
good faith when seeking Oak Park's approval of the assignment must wait until a jury
determines if a contract was formed between M West and Cingular.

Doctrine of Prevention

The prevention doctrine is substantially related to the implied covenant of good
faith and fair dealing that is implicit in every contract. See Cauff, Lippman & Co. v.
Apogee Finance Group, Inc., 807 F. Supp. 1007, 1022 (S.D.N.Y. 1992). 13 Williston on
Contracts § 39:6,pp. 530-31, explains that the prevention doctrine is based on the duty of
good faith as follows:

"[T]he principle of prevention is based on the implied agreement of the parties to a
contract to proceed in good faith and cooperate in performing the contract in accordance
with its expressed intent and, therefore, to refrain from committing any willful act or
omission that would interfere with the other party or prevent or make it impossible for the
other party to perform."

Our Supreme Court in Wallerius, 194 Kan. at 412, has explained the prevention
doctrine as follows:

25

"While the condition precedent must have happened before the contract can be
enforced or relief sought in the way of specific performance, the party who has demanded
the condition precedent cannot hinder, delay or prevent its happening for the purpose of
avoiding performance of the contract. We believe the rule announced in Talbott v. Nibert,
167 Kan. 138, 206 P.2d 131, is applicable here. On page 146 of the opinion it is stated:
"'The rule is clear and well settled, and founded in absolute justice, that a party to
a contract cannot prevent performance by another and derive any benefit, or escape any
liability, from his own failure to perform a necessary condition. [Citations omitted.] And
this is the universal rule. 12 Am. Jur., Contracts, §§ 381, 386; 2 C.J., Agency, § 439, p.
772; 13 C.J., Contracts, §§ 721, 722, 723; Restatement, Contracts, § 315.'"

13 Williston on Contracts § 39:4, pp. 523-25, further explains the doctrine of
prevention as follows:

"If a promisor prevents or hinders the occurrence or fulfillment of a condition to
his or her duty of performance, the condition is excused; in other words, 'the
nonoccurrence or nonperformance of a condition is excused where the failure of the
condition is caused by the party against whom the condition operates to impose a duty.'
Accordingly, the liability of the promisor is fixed regardless of the failure to fulfill the
condition. The pertinent rule set forth in the Restatement (Second) of Contracts [§ 245
(19790], is that where a party's breach by nonperformance contributes materially to the
nonoccurrence of a condition of one of his duties, the nonoccurrence is excused, so that
performance of the duty that was originally subject to its occurrence can become due in
spite of its nonoccurrence.
"The prevention doctrine thus operates as an exception to the general rule that
one has no duty to perform under a contract containing a condition precedent until the
condition occurs. In effect, where one improperly prevents the performance or the
happening of a condition of his or her own promissory duty, the offending party thereby
eliminates it as a condition, or, viewed another way, the condition is considered as
waived or fulfilled. The promisor who prevents the fulfillment of a condition precedent or
its performance by the other party to contract cannot rely on the nonoccurrence of such
condition to defeat his or her liability."

26

In this case, the evidence showed that despite its pending proposed assignment
with M West, Cingular engaged in negotiations with Oak Park to terminate its lease
agreement for a lump sum payment. This undoubtedly resulted in a better deal for
Cingular. Based on the limited evidence currently before this court, a factual issue is
presented as to whether Cingular hindered or prevented the occurrence of the condition
precedent of Oak Park's approval of the proposed assignment.

Because these issues of fact require resolution by a jury, we determine that the
trial court improperly granted Cingular's motion for summary judgment based upon
Cingular's contention that the parties had not formed a binding contract.

M West's Tortious Interference Claim Against Oak Park

Importantly, as to its claims against Oak Park, M West argues only that the trial
court should not have granted summary judgment on its tortious interference with a
prospective business advantage or relationship claim. Because M West makes no
argument on its breach of contract claim against Oak Park, M West has waived any issue
concerning the trial court's grant of summary judgment in favor of Oak Park on the
breach of contract claim. See Kingsley v. Kansas Dept. of Revenue, 288 Kan. 390, 395,
204 P.3d 562 (2009) (An issue not briefed by a party is deemed waived or abandoned.).

M West maintains that based upon the summary judgment standard of review, the
trial court erroneously determined that M West's tortious interference claim was not
viable because there was no malice or lack of justification by Oak Park.

Tortious interference with a prospective business advantage or relationship seeks
to protect future or potential contractual relations and is predicated on malicious conduct
by a defendant. Turner v. Halliburton Co., 240 Kan. 1, 12, 722 P.2d 1106 (1986). The
elements of tortious interference with a prospective business relationship are:
27


"(1) the existence of a business relationship or expectancy with the probability of future
economic benefit to the plaintiff; (2) knowledge of the relationship or expectancy by the
defendant; (3) that, except for the conduct of the defendant, plaintiff was reasonably
certain to have continued the relationship or realized the expectancy; (4) intentional
misconduct by defendant; and (5) damages suffered by plaintiff as a direct or proximate
cause of defendant's misconduct." Turner, 240 Kan. at 12.

Our Supreme Court has held that a party may be privileged or justified to interfere
with contractual relations in certain situations. Burcham v. Unison Bancorp, Inc., 276
Kan. 393, 425, 77 P.3d 130 (2003). "The issues of defendants' motive and the presence or
absence of malice are typically questions for the jury. [Citation omitted.]" 276 Kan. at
425.

"'"The term 'justification' has been said not to be susceptible of any precise
definition. It is employed to denote the presence of exceptional circumstances which
show that no tort has been in fact committed and to connote lawful excuse which
excludes actual or legal malice."' [Citations omitted.]" 276 Kan. at 425. Our Supreme
Court in Turner also stated that "'[g]enerally, a circumstance is effective as a justification
if the defendant acts in the exercise of a right equal or superior to that of the plaintiff, or
in the pursuit of some lawful interest or purpose, but only if the right is as broad as the act
and covers not only the motive and purpose but also the means used.'" 240 Kan. at 13
(quoting 45 Am. Jur. 2d, Interference § 27, p. 305); see PIK Civ. 4th 124.93
("Justification exists when the defendant interfered in the exercise of a right equal to or
superior to that of the plaintiff and used fair means and good faith for some lawful
interest or purpose.").

Our Supreme Court in Turner, 240 Kan. at 14, noted that the Restatement
(Second) of Torts § 767 (1977) does not speak in terms of privilege or justification;
rather, the Restatement refers to tortious conduct as "improper." Our Supreme Court
28

noted that § 767 sets forth the following seven factors to be considered in determining
whether a defendant's conduct is improper:

"(a) the nature of the actor's conduct,
"(b) the actor's motive,
"(c) the interests of the other with which the actor's conduct interferes,
"(d) the interests sought to be advanced by the actor,
"(e) the social interests in protecting the freedom of action of the actor and the contractual
interests of the other,
"(f) the proximity or remoteness of the actor's conduct to the interference, and
"(g) the relations between the parties." 240 Kan. at 14.

See also PIK Civ. 4th 124.93 (In determining whether justification exists for a tortious
interference, the above seven factors should be considered.).

Despite the previously mentioned rule that the issues of a defendant's motive and
the presence of absence or malice are typically a question for the jury, the trial court in
this case determined the issues as a matter of law. In rejecting M West's argument that
there was a genuine issue of material fact as to whether Oak Park acted maliciously and
without justification, the trial court focused on Oak Park's contractual right under
Cingular's lease to not approve a proposed assignment. Specifically, the trial court stated:

"M West claims it was misled to believe a proposed assignment agreement would be
approved when, in fact, Oak Park Mall never intended to consent to an assignment. M
West offers no direct evidence that Oak Park never intended to consent other than the
result that Oak Park and Cingular terminated the lease. Under the terms of the lease
agreement, however, Oak Park Mall had a contractual right to terminate the lease
agreement with Cingular. See Lease Agreement § 16.01(B). M West's suggestion that
Oak Park Mall was waiting for a proposed assignment agreement so that it could offer a
better deal to Cingular carries very little weight. Under the terms of the lease agreement,
Oak Park Mall always would have an opportunity to do this because Cingular was
29

required to submit information about a potential assignment to Oak Park Mall for
approval. The mall also always would have the opportunity to either terminate the lease
or modify the tenant's lease agreement. As such, emails and telephone conversations
where Oak Park Mall representatives stated that an assignment would be 'fine' are not
enough to show that the mall lacked good faith or used unfair means under these
circumstances.
"M West offers no evidence as to the negotiations or discussions between Oak
Park Mall and M West to suggest any improper motive other than two contractual parties
reaching an agreement to end a lease. Oak Park Mall had a contractual right to engage
in the conduct complained of, and the available evidence, even when resolved in favor of
the nonmoving party, is not strong enough to raise a non-speculative inference that Oak
Park Mall was not justified in acting to terminate its lease for consideration that
Cingular agreed to pay." (Emphasis added.)

Thus, the trial court essentially determined that the undisputed evidence showed that Oak
Park was justified in its actions and that it did not act improperly in negotiating for
termination of Cingular's lease.

The trial court's rationale, however, glosses over the fact that there was evidence
presented by M West indicating that Oak Park had induced M West, over several months,
to proceed with an assignment agreement with Cingular and then had used that agreement
as a bargaining chip to terminate Cingular's lease for a substantial cash payment.
Moreover, the evidence establishes that despite Oak Park's actions in engaging Cingular
in negotiations to terminate its lease, Oak Park failed to disclose this fact to M West and
even went so far as to indicate to M West that it was still considering the proposed
assignment.

If we were to assume that M West and Cingular had a binding contract, the
evidence brought forth at the summary judgment stage showed the following: (1) Oak
Park knew of the existence of that business relationship; moreover, it was aware of the
probability of the future economic benefit to M West; (2) Oak Park had knowledge of the
30

relationship or expectancy by M West (Oak Park was aware of what monies M West
would receive if Oak Park approved the assignment of the lease); (3) M West was
reasonably certain to have continued the relationship, except for the conduct of Oak Park
(M West and Cingular would have mutually cooperated with each other in satisfying the
conditions precedent, which would have allowed Cingular to assign its lease to M West)
or realized the expectancy (M West would be allowed to complete the remaining term of
Cingular's lease); (4) Oak Park engaged in intentional misconduct (Oak Park induced
Cingular not to perform its contract with M West by entering into negotiations with
Cingular to terminate Cingular's lease—preventing M West from realizing its expectancy
that it would be allowed to assume Cingular's lease); and (5) damages were suffered by
M West as a direct consequence or proximate result of Oak Park's conduct (M West
would have received $180,000 directly; $150,000 indirectly [future lease payments];
plus, a prime location to sell its jewelry).

Based on the nature of the relationship between M West and Cingular, the viability
of M West's tortious interference claim is dependent on whether a binding contract is
found to exist between M West and Cingular. Although the tort of tortious interference
with a prospective business advantage or relationship does not require the existence of a
binding contract and can be based upon future contractual relations, it is apparent that M
West's tortious interference claim against Oak Park would require a binding contract
between M West and Cingular. If there was no binding contract between M West and
Cingular, then M West could not have been reasonably certain to have continued the
existing business relationship or to have realized the expectancy of assuming Cingular's
lease. On the other hand, if an existing binding contract did exist between M West and
Cingular, the limited evidence in the appellate record is sufficient to establish a genuine
issue of material fact as to whether Oak Park engaged in intentional misconduct which
was unjustified and malicious.

31

Nevertheless, Oak Park asserts that no genuine issue of material fact could exist as
to M West's tortious interference claim against it because under Cingular's lease, Oak
Park did not have to accept an assignment of Cingular's lease and could simply terminate
the lease. Specifically, the applicable portion of Section 16.01(B) of Cingular's lease
agreement provides as follows:

"(B) If [Cingular] shall request [Oak Park]'s consent to any assignment of this
Lease or to any subletting of all or any part of the Leased Premises, [Cingular] shall
submit to [Oak Park] with such request the name of the proposed assignee or subtenant,
such information concerning its business, financial responsibility and standing as [Oak
Park] may reasonably require, and the consideration (and terms and conditions thereof) to
be paid for and the effective date of the proposed assignment or subletting. Upon receipt
of such request and all such information, [Oak Park] shall have the right (without limiting
[Oak Park]'s right of consent in respect of such assignment or subletting), by giving
notice to [Cingular] within 15 days thereafter, (i) to terminate this Lease if the request is
for an assignment or a subletting of all the Leased Premises, or (ii) if such request is to
sublet a portion of the Leased Premises only, to terminate this Lease with respect to such
portion. If [Oak Park] exercises its right to terminate this Lease, the effective date of
termination shall be set forth in [Oak Park]'s notice to [Cingular] . . . ."

Thus, Oak Park points out that under Cingular's lease it could make a business decision to
terminate Cingular's lease instead of accepting the proposed assignment to M West.

Oak Park's argument, however, misses the point. While Oak Park did have the
option under its lease agreement with Cingular to not accept the assignment of Cingular's
lease to M West and to terminate Cingular's lease, Oak Park could still be found to have
tortiously interfered with M West's business advantage or relationship if Oak Park failed
to use fair means and good faith in the exercise of that right. See PIK Civ. 4th 124.93
("Justification exists when the defendant interfered in the exercise of a right equal to or
superior to that of the plaintiff and used fair means and good faith for some lawful
interest or purpose.") In other words, Oak Park's right to terminate Cingular's lease would
32

not justify any and all means used by Oak Park in exercising that termination right. See
Turner, 240 Kan. at 13 ("'Generally, a circumstance is effective as a justification if the
defendant acts in the exercise of a right equal or superior to that of the plaintiff, or in the
pursuit of some lawful interest or purpose, but only if the right is as broad as the act and
covers not only the motive and purpose but also the means used.'" [Emphasis added.]).

Here, before exercising its option not to accept the assignment of Cingular's lease
to M West, Oak Park induced M West to continue its performance under the contract
with Cingular in the expectation of consummating its contractual obligation with
Cingular to assume Cingular's lease. Nevertheless, unbeknownst to M West, Oak Park
began negotiations with Cingular to terminate Cingular's lease. Moreover, Oak Park
induced Cingular to renege on its promise to M West to cooperate with each other
(Cingular and M West) in satisfying the conditions precedent to the assignment of
Cingular's lease to M West. Thus, Oak Park invaded the contractual promises between M
West and Cingular to the detriment of M West's business advantage or relationship
between M West and Cingular.

Although the dissent cites cases where summary judgment was properly granted in
favor of the lessor or mortgage holder on an interference-with-contractual relations claim,
the facts in those cases are far different from the facts in the present case. For example,
unlike the cases cited by the dissent, C (Oak Park) induced A (M West) to form its
contract with B (Cingular) while inducing B (Cingular) not to perform its contract with A
(M West). Moreover, the record indicates that C (Oak Park) was inducing B (Cingular)
not to perform its contract with A (M West) before C (Oak Park) exercised its option to
reject the assignment of B's (Cingular's) lease to A (M West). As a result, the cases cited
by the dissent are simply not analogous to the present case.
Indeed, under the circumstances present in this case, a jury could conclude that
Oak Park's conduct in inducing M West to proceed with an assignment agreement with
Cingular and in leading M West to rely on its representations that it liked the idea of M
33

West occupying Cingular's store space and that it was seriously considering the
assignment agreement, when in actuality Oak Park was negotiating with Cingular to
terminate Cingular's lease entirely, knowing that this would prevent M West from ever
achieving its expectancy that it would be allowed to assume Cingular's lease, did not use
fair means and good faith in exercising its right to terminate Cingular's lease.

Based on the previous reasoning, we reverse the trial court's judgment granting
summary judgment to Cingular and Oak Park and remand for further proceedings
consistent with this opinion.

Reversed and remanded.

***

LEBEN, J., concurring in part and dissenting in part: I agree with the majority that
summary judgment cannot be granted to Cingular Wireless, but I cannot agree that M
West has provided sufficient evidence to avoid summary judgment in favor of Oak Park
Mall.

Cingular's written offer on April 7, 2006, purported to have three conditions
precedent to the formation of a contract, and two of the three were under Cingular's
control: approval by Cingular's "Real Estate Committee" and the execution of a formal
document agreeable to both parties. On the evidence presented by M West, the third
condition—the consent of Oak Park Mall, Cingular's landlord—also may have been
effectively controlled or influenced by Cingular. The majority correctly notes that
Cingular's offer, which M West accepted, contained lots of language that appeared to
make it a binding contract offer and that it contained all of the material terms for the lease
assignment. Thus, Cingular had a duty of good faith and fair dealing to M West not to
rely upon conditions under Cingular's control to prevent formation of the contract. M
34

West has presented sufficient evidence that this duty may have been violated through
Cingular's later interactions with Oak Park Mall.

But that does not make Oak Park Mall liable for tortious interference with the
potential business advantage M West might have gained from taking over Cingular's
lease. To avoid summary judgment, M West must have some evidence to support a
reasonable inference that Oak Park Mall acted with malice—sometimes phrased as acting
without privilege or justification—when denying approval of the assignment. See Turner
v. Halliburton Co., 240 Kan. 1, 12-13, 722 P.2d 1106 (1986); Linden Place v. Stanley
Bank, 38 Kan. App. 2d 504, Syl. ¶ 7, 167 P.3d 374 (2007); Mediware Information
Systems, Inc. v. McKesson Information Solutions, 2007 WL 926142, at *4 (D. Kan. 2007)
(unpublished opinion).

M West recognized in its motion to reconsider in the district court that its cause of
action for tortious interference was "predicated on malicious conduct by the defendant."
See Burcham v. Unison Bancorp, Inc., 276 Kan. 393, 425, 77 P.3d 130 (2003). M West
also recognized that Oak Park Mall eventually negotiated a deal for itself with Cingular
that was to Oak Park Mall's financial advantage. M West then argued that this supported
an inference of malicious conduct in that "Oak Park was interested in M West and
Cingular submitting a proposal so that Oak Park could then negotiate a better deal for
itself." But merely acting in one's own financial interest does not establish malicious
conduct, which is conduct done with an intent to harm another party without reasonable
justification. See Linden Place, 38 Kan. App. 2d at 513.

Thus, other courts have properly granted summary judgment when—as is the case
here—there was no specific evidence of malicious intent and a mortgage holder or a
lessor has exercised its contractual right to deny approval to a lease or lease assignment.
E.g., RAN Corp. v. Hudesman, 823 P.2d 646 (Alaska 1991) (summary judgment properly
granted against interference-with-contractual-relations claim when lessor exercised his
35

contractual right to deny approval of lease assignment and plaintiff had no evidence that
lessor did so for spiteful motives); Schulman v. J.P. Morgan Inv. Management, Inc., 35
F.3d 799 (3d Cir. 1994) (summary judgment granted against interference-with-
contractual-relations claim when lender/mortgage holder exercised its contractual right to
disapprove prospective building tenant). In more general circumstances, courts have
granted summary judgment against interference-with-contractual-relations claims when
the defendant presented evidence that it acted out of legitimate business interests and
there was a lack of evidence of malice or general bad motive. E.g., Linden Place, 38 Kan.
App. 2d at 513-14; Scudder v. International Air Service Co., Ltd., 1998 WL 560070 (9th
Cir. 1998) (unpublished opinion) (summary judgment granted against interference-with-
contractual-relations claim in absence of evidence that defendant acted out of malice
rather than to protect its own financial interest).

Like the district court, I would conclude that, absent speculation, there is no
evidence that Oak Park Mall intended to injure M West by denying approval of the lease
assignment. Oak Park Mall's comments of liking the idea of a potential lease assignment
to M West and that the agreement sounded "fine" do not demonstrate malice. Oak Park
Mall was within its rights when it encouraged the potential agreement between Cingular
and M West, waited to see whether that offer comported with its own business needs, and
then negotiated with Cingular for an outcome that would better meet Oak Park Mall's
business interests. I would therefore affirm the district court's grant of summary judgment
to Oak Park Mall.