Thimjon Farms Partnership v. First International Bank & Trust
2013 ND 160
| N.D. | 2013Background
- Northern Grain’s line of credit with First International matured January 5, 2010, and the bank was a secured creditor on Northern Grain’s assets, including its deposit account.
- Thimjon and Hagemeister contracted with Northern Grain to construct grain-handling systems on their properties; First International was not a party to these contracts and neither Thimjon nor Hagemeister were First International customers.
- Both plaintiffs prepaid down payments to Northern Grain, which Northern Grain deposited in its First International account; Northern Grain never completed the systems and ceased operations.
- First International informed Northern Grain it would not extend future financing and directed Northern Grain to pay down its line of credit; it later encouraged new contracts with customers and to accept down payments.
- Down payments from Thimjon and Hagemeister were applied to Northern Grain’s line of credit; First International ultimately refused to extend new credit to Northern Grain.
- Thimjon and Hagemeister filed separate actions later consolidated, alleging in part that First International’s conduct induced Northern Grain’s breach of contracts and harmed the plaintiffs; the district court granted summary judgment for First International and denied amendments to add deceit claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Intentional interference with contract | Thimjon and Hagemeister: First International induced breaches by pressuring down payments and limiting financing. | First International asserts its actions were justified as a secured lender defending its interests and did not unlawfully interfere. | Summary judgment proper; actions justified, no tortious interference. |
| Unlawful interference with business | Thimjon and Hagemeister claim independent tortious or deceitful acts by First International breached the business relationship. | First International contends no independent tortious act occurred and its conduct was justified as debt collection. | Dismissal affirmed; no independently tortious interference proven. |
| Promissory/Equitable estoppel | Thimjon and Hagemeister rely on promises of future financing to alter their position. | No duty or reliance by Thimjon/Hagemeister; Northern Grain’s financing communications did not involve them. | Estoppel claims properly dismissed; no justifiable reliance by plaintiffs. |
| Unjust enrichment | First International was enriched at plaintiffs’ expense; unjust for bank to retain funds. | Enrichment arose from Northern Grain’s valid contractual arrangement with the bank; no unjust enrichment of a third party. | Dismissed; no unjust enrichment for First International. |
| Deceit (amendment to addition of deceit claim) | First International misrepresented financing to Northern Grain affecting plaintiffs. | No duty to disclose; misrepresentations not made to plaintiffs; Ostlund requires direct or communicated misrepresentation. | Amendment futile; deceit claim not viable. |
Key Cases Cited
- Hilton v. N.D. Educ. Ass’n, 2002 ND 209 (N.D. 2002) (justification may defeat interference claims if legitimate business concerns exist)
- Fankhanel v. M & H Constr. Co., Inc., 1997 ND 20 (N.D. 1997) (test for justification of interference with contract)
- Ostlund Chemical Co. v. Norwest Bank, 417 N.W.2d 833 (N.D. 1988) (bank’s duty to impart full, accurate information upon inquiry)
- Van Sickle v. Hallmark & Assocs., Inc., 2008 ND 12 (N.D. 2008) (elements of intentional interference with contract and justification)
- Arndt v. Maki, 2012 ND 55 (N.D. 2012) (summary judgment standard and de novo review)
- Hayden v. Medcenter One, Inc., 2013 ND 46 (N.D. 2013) (unjust enrichment analysis; close link to contractual arrangements)