## Facts

- Knight Enterprises, Inc. sold gasoline wholesale to gas stations, including stations displaying CITGO signage.
- Mark Beard was president of M & L Petroleum, Inc., a competing gasoline wholesaler and transporter that obtained fuel from multiple suppliers and delivered it to stations.
- Some stations that bought from Knight contacted M & L on their own to ask about price and supply, including because M & L offered lower prices or because the stations needed product when they could not get delivery from another source.
- M & L delivered gasoline to certain stations after the stations requested delivery.
- Beard denied contacting, soliciting, inducing, or coercing Knight’s customers to switch suppliers; he testified that station owners contacted M & L.
- Beard acknowledged he knew Knight had contracts with at least two stations (Pars Petro and Jefferson Petro), but he denied knowledge of other alleged Knight contracts.
- At trial, Knight admitted it had no evidence that Beard or M & L initiated contact with Knight’s customers or told them to stop buying fuel from Knight.
- A jury returned a verdict for Knight on its tortious-interference claim, but the trial court granted a directed verdict for Beard and M & L and later awarded them mediation sanctions.
- Knight appealed, challenging (among other rulings) an evidentiary order excluding certain proof, the directed verdict, the denial of CITGO Petroleum Corp.’s attempt to join or intervene, and the mediation-sanctions award.

## Issues

1. Whether defendants can be liable for tortious interference with Knight’s station contracts when defendants supplied fuel only after the stations requested it and there was no evidence of solicitation, inducement, coercion, or other wrongful conduct aimed at causing a breach.
2. Whether the trial court committed reversible error in granting defendants’ motion in limine excluding certain evidence offered by Knight.
3. Whether the trial court properly granted a directed verdict for defendants after the jury returned a verdict for Knight.
4. Whether the trial court properly denied CITGO Petroleum Corp.’s effort to join or intervene in the action.
5. Whether the trial court properly awarded defendants mediation sanctions.

## Decision

- The Michigan Court of Appeals affirmed.
- The directed verdict for Beard and M & L was proper because Knight’s proof did not allow a reasonable jury to find intentional, wrongful interference with Knight’s contractual relationships when the record showed defendants merely responded to customer-initiated requests.
- The court found no basis to reverse the trial court’s evidentiary ruling challenged by Knight.
- The court affirmed the denial of CITGO’s joinder or intervention.
- The court affirmed the award of mediation sanctions to defendants.

## Legal Principles

- Tortious interference with contract requires proof of: (1) a contract or valid business expectancy, (2) the defendant’s knowledge of it, (3) intentional interference that causes a breach or termination, and (4) resulting damages.
- Interference must be improper; liability generally requires proof that the defendant did more than compete or accept business and instead used conduct that is wrongful in itself or wrongful because of how it was carried out.
- Knowledge that a contract exists, without proof that the defendant took improper steps to cause a breach, does not by itself establish tortious interference.
- On a directed-verdict motion, the court views the evidence in the light most favorable to the nonmoving party, but must take the case from the jury when the evidence fails on an element such that reasonable jurors could not find for the plaintiff.
- Under Michigan’s case-evaluation (mediation) rules, a prevailing party may recover sanctions when the opposing party rejects the evaluation and does not achieve a better result at trial, subject to the rule’s requirements.

## Conclusion

Because Knight admitted it had no evidence that Beard or M & L solicited or pressured Knight’s stations, and the record showed only that M & L supplied gasoline after the stations independently requested it, the Court of Appeals held Knight failed as a matter of law to prove the type of intentional, wrongful conduct required for tortious interference; it therefore affirmed the directed verdict and also affirmed the challenged evidentiary ruling, the denial of CITGO’s participation, and the mediation-sanctions award.


Knight Enterprises v. Beard, 2004 WL 60323 (2004)