Opinion
No. A04-329.
Filed September 7, 2004.
Appeal from the District Court, Hennepin County, File No. 03-14062.
Benjamin S. Houge, (for appellants).
Jeffrey A. Eyres, David M. Jaffe, Leonard, (for respondents).
Considered and decided by Kalitowski, Presiding Judge, Klaphake, Judge, and Hudson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
Appellants are 43 individuals who purchased time-share memberships at Palace Resorts, a chain of hotels in Mexico. Respondent MLT, Inc., is a vacation travel wholesaler that contracts with Palace Resorts for blocks of rooms for use in its vacation packages. Appellants sued MLT, alleging tortious interference with contract and statutory theft; their suit seeks temporary and permanent injunctions and civil damages under Minn. Stat. § 609.53 (2002). The district court granted MLT's motion to dismiss for failure to state a claim on which relief can be granted. Because appellants have failed to set forth a legally sufficient claim for relief, we affirm.
DECISION
This court reviews de novo the district court's dismissal for failure to state a claim. Bodah v. Lakeville Motor Express, Inc., 663 N.W.2d 550, 553 (Minn. 2003). A party may move for judgment on the pleadings after the pleadings are closed. Minn. R. Civ. P. 12.03. When ruling on such a motion, the court must consider only the allegations set forth in the pleadings; if other matters are considered, the motion is treated as a motion for summary judgment. Id. The court may, however, consider a contract referred to in the complaint, if the contract is central to the allegations of the complaint. In re Hennepin County 1986 Recycling Bond Litig., 540 N.W.2d 494, 497 (Minn. 1995). All facts alleged in the complaint must be taken as true and all reasonable inferences drawn in favor of the plaintiff. Bodah, 663 N.W.2d at 553.
For a dismissal on the pleadings based on a failure to state a claim on which relief can be granted, this court considers only "whether the complaint sets forth a legally sufficient claim for relief." Doyle v. Kuch, 611 N.W.2d 28, 31 (Minn.App. 2000) (quotation omitted). We do not weigh evidence, but will dismiss "if it appears to a certainty that no facts, which could be introduced consistent with the pleading, exist which would support granting the relief demanded." Id. (quotation omitted).
1. Tortious Interference with Contract
Tortious interference with a contract requires proof of five elements: "(1) the existence of a contract; (2) the alleged wrongdoer's knowledge of the contract; (3) intentional procurement of its breach; (4) without justification; and (5) damages." Kallok v. Medtronic, Inc., 573 N.W.2d 356, 362 (Minn. 1998) (quotation omitted). Viewing the allegations of the complaint here as true, three of these elements are satisfied: contracts existed between appellants and the Palace Resorts; MLT knew of the existence of at least one of the contracts; and appellants suffered damages.
But appellants have failed to demonstrate an intentional breach of the contracts. Each appellant continued to exercise his or her right to a guaranteed one-week stay each year, which is the only right guaranteed under the contract. Use of additional weeks during each year is not guaranteed, but contingent on availability. We therefore conclude that appellants have failed to plead a breach of contract.
Further, appellants have failed to show that MLT's conduct was not justified. A legitimate economic interest can justify interference in a contract. Harman v. Heartland Food Co., 614 N.W.2d 236, 242 (Minn.App. 2000). If the alleged interferer has a legitimate interest, an action for tortious interference will not lie unless improper means are used, which generally means the interferer committed an independent tort or other illegality. Id. Lack of justification can be inferred where a party has a bad motive, such as malice. See Metge v. Cent. Neighborhood Improvement Ass'n, 649 N.W.2d 488, 500 (Minn.App. 2002), review dismissed (Minn. Oct. 15, 2002). Here, MLT is in the business of vacation travel and has a legitimate economic interest in booking rooms at the Palace Resorts. The complaint contains no allegations that MLT deliberately sought a breach for some purpose other than a purely economic one.
Thus, even accepting all of the allegations of the complaint as true, appellants have failed to plead a prima facie case of tortious interference with contract, because they have not alleged facts showing an intentional or unjustified breach of contract.
2. Theft
Appellants allege that MLT committed theft under Minn. Stat. § 609.52, subd. 2 (2002) (defining theft as intentionally and permanently depriving another of moveable property), and under statutes of all states in which appellants are residents. Because of this, appellants allege that MLT knowingly received and resold stolen property. By virtue of these allegations, appellants seek double and treble damages for knowingly receiving stolen property under Minn. Stat. § 609.53, subd. 4 (2002).
Generally, theft is the intentional taking of property, without claim of right and with intent to permanently deprive another of possession of that property. Minn. Stat. § 609.52, subd. 2. According to the contract between appellants and Palace Resorts, appellants do not acquire a property interest in the physical realty of Palace Resorts, but merely receive vacation certificates that entitle them to accommodation and certain services. Again according to the contract, the guaranteed right to accommodation is limited to one week per year; although appellants have the option to use additional vacation certificates during any one year, this is limited to times when space is available. Thus, appellants' entire enforceable property interest, if it can be called that, is limited to one week's worth of accommodation each year.
This is generally true of the other state statutes included in the complaint.
Putting aside the question of whether this is real property or moveable property, the complaint does not allege that appellants have been deprived of that particular property interest. They have been deprived of some sort of contingent interest in additional weeks each year, but not of the guaranteed week.
Further, according to the contract between MLT and Palace Resorts, Palace Resorts can black-out days when MLT cannot reserve rooms and can force MLT to accept alternate rooms if Palace Resorts rooms are filled. Thus, although Palace Resorts may have the ability to permanently deprive appellants of their contingent property interests by consistently overbooking rooms, MLT does not.
We therefore conclude that, even taking all of the allegations of the complaint as true, appellants have failed to plead a prima facie case that MLT has permanently deprived them of property.
3. Injunctive Relief
"If a plaintiff can show no likelihood of prevailing on the merits, the district court errs as a matter of law in granting a temporary injunction." Metro. Sports Facilities Comm'n v. Minn. Twins P'ship, 638 N.W.2d 214, 226 (Minn.App. 2002), review denied (Minn. Feb. 4, 2002). Appellants have failed to set forth a legally sufficient claim for relief. Under these circumstances, the district court did not err in concluding that appellants failed to state a claim for injunctive relief.