Brief Fact Summary. Appellant Winternitz was a tenant of Appellee Summit Hills Joint Venture. Appellant entered into an agreement to sell his business under the belief that he could transfer his lease to the buyer. Appellee revoked permission to transfer the lease.
Synopsis of Rule of Law. Part performance applies when specific performance is sought, but not when the party is seeking damages.
A third party who, without legal justification, intentionally interferes with the rights of a party to a contract, or induces a breach thereof, is liable in tort to the injured contracting party.
View Full Point of LawIssue. Did the lower court err by nullifying the jury verdicts?
Did the lower court err by nullifying the jury verdict on the breach of contract claim?
Did the lower court err by nullifying the jury verdict on the malicious interference with contractual relationship claim?
Held. The court erred in nullifying the jury verdict on the malicious interference with contractual relationship claim, but did not err in nullifying the jury verdict on the breach of contract claim.
A lease for a term of one year or more falls under the statute of frauds and must be in writing and signed by the party against whom enforcement is sought. Appellant argues that part performance should excuse compliance with the statute of frauds. The Court rejects this argument because part performance applies when specific performance is sought, and in this case Appellant is seeking damages. Because the statute of frauds does apply and the renewal is not enforceable due to lack of a writing signed by Appellee, the lower court did not err in nullifying the jury’s verdict.
Malicious interference with contractual relationship requires improper interference with a contract between another and a third party by preventing or burdening performance of the contract. The Court finds that there is sufficient evidence of Appellee’s agreement to allow renewal and assignment of the lease, Appellee’s breach of that agreement, and that the breach of that agreement was malicious and intended to injure Appellant. In addition the Court notes that a malicious interference with contractual relationship claim may be based on a contract unenforceable under the statute of frauds. Therefore, the Court holds that the lower court erred by nullifying the jury verdict on the malicious interference with contractual relationship claim.
Discussion. In the present case, the Court did not allow Appellant to use part performance to bring his breach of contract claim because he was seeking damages and not specific performance. However, the Court held that the lower court erred in nullifying the jury verdict on the malicious interference with contractual relationship claim because the claim could be brought even though the contract was unenforceable under the statute of frauds and Appellant had presented sufficient evidence to support the jury’s finding.