## Facts

- Engineering & Professional Services, Inc. (EPS) served as general contractor on a construction project; RJS Utility Construction, Inc. (RJS) was a subcontractor.
- Receivables Purchasing Company, Inc. (Receivables) bought assignments of RJS invoices issued to EPS.
- Before purchasing each invoice, Receivables called EPS project manager Richard D. Getts, Jr.; Receivables presented evidence that Getts stated the invoice had been approved for payment.
- EPS later refused to pay four invoices, citing problems with RJS’s work under the EPS–RJS subcontract.
- EPS and RJS also entered a separate arrangement under which EPS would receive a 5% discount on future invoices paid directly to RJS within a specified time.
- Receivables alleged (1) the discount arrangement interfered with its contractual relations with RJS, and (2) Getts’s “approved for payment” statements fraudulently induced Receivables to purchase invoices that EPS did not pay.

## Issues

1. Whether EPS’s discount arrangement with RJS constituted intentional and improper interference with Receivables’ contract or business expectancy under Arkansas law.
2. Whether Receivables produced sufficient evidence of fraudulent misrepresentation (including falsity, knowledge or recklessness, reliance, and damages) to survive summary judgment under Arkansas law.

## Decision

- The court affirmed summary judgment for EPS on tortious interference.
- The court reversed summary judgment for EPS on fraud and remanded for further proceedings.
- The disposition was affirmed in part and reversed and remanded in part.

## Legal Principles

- Under Arkansas law, tortious interference requires proof that the defendant intentionally and improperly interfered with a valid contractual relationship or a protectable business expectancy.
- A history of prior transactions, without evidence of an obligation to continue assigning invoices or a concrete expectancy, is insufficient to establish the “contract/expectancy” element.
- Fraud under Arkansas law requires a false representation of material fact, knowledge of falsity or reckless disregard, intent to induce reliance, justifiable reliance, and damages.
- On summary judgment, a court must view evidence and reasonable inferences in the nonmovant’s favor and may not resolve credibility disputes or weigh competing inferences where a reasonable jury could find for the nonmovant.

## Conclusion

The Eighth Circuit held that Receivables failed to identify an enforceable contract or protectable expectancy with which EPS could have interfered, but Receivables presented enough evidence from the “approved for payment” communications and later nonpayment for a jury to decide whether EPS, through its project manager, committed actionable fraud.


Receivables Purchasing Co. v. Eng'g & Pro. Servs., Inc., 510 F.3d 840 (8th Cir. 2008)