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Court of Appeals Rules Plaintiff Entitled to Proceed with Claim for Intentional Interference with Business Relations

On May 24, 2012, the District of Columbia Court of Appeals decided Onyeoziri v. Spivok, No. 10-CV-104, slip op. (D.C. May 24, 2012) in which it considered claims arising from a foreclosure sale. The plaintiff in that case owned a house in the District which he rented. He obtained a business/commercial loan secured by the property and subsequently defaulted. The lender then served notice of a foreclosure sale. Prior to the sale, the plaintiff allegedly entered into a contract to sell the property to a third party who made a small deposit toward the purchase price and obtained pre-qualification for a home loan. Notwithstanding being aware of these facts, the lender proceeded with the foreclosure sale, ultimately selling the property to itself for a relatively small amount of money and leaving the plaintiff with a large amount of indebtedness. As a consequence of the foreclosure sale, the plaintiff could not perform on the contract to sell the property to the third party. The plaintiff asserted various claims against the lender and related persons. The Superior Court granted summary judgment for the defendants and the plaintiff appealed. On appeal, the plaintiff argued that the Superior Court improperly rejected his claims under the federal Truth in Lending Act and the District of Columbia Home Loan Protection Act and his common law claim for intentional interference with business relations. The Court of Appeals affirmed dismissal of both statutory claims on the grounds that the subject loan was a business/commercial loan and therefore not within the scope of either statute. With respect to the claim for intentional interference with business relations, however, the Court of Appeals reversed the judgment on the grounds that the plaintiff had presented a prima facie case of intentional interference with business relations; specifically, his evidence showed the existence of a valid contract, the defendants’ knowledge of the contract and their interference with its performance, and resulting damages. The Court of Appeals recognized that the defendants might nonetheless be able to defend their conduct on the grounds that they had a legal justification to proceed with the foreclosure sale but concluded that the applicability of the defense could not be resolved on summary judgment as it depended on genuine issue of material fact concerning, inter alia, whether proceeding with the foreclosure sale was necessary to protect the defendants’ economic interests. To view the Court of Appeals’ opinion, click here.