Orr v. Riederer

Filing 135

MEMORANDUM AND ORDER denying as moot 111 Defendant's Motion for Reconsideration; denying 112 Plaintiff's Motion for Summary Judgment; granting 114 Defendant's Motion for Summary Judgment. The case is closed. See Memorandum and Order for further details. Signed by District Judge Carlos Murguia on 7/3/2012. (jw)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
ROBERT D. ORR,
Plaintiff,
v.
ALBERT A. RIEDERER,
Defendant.

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Case No. 10-1303-CM

MEMORANDUM AND ORDER
Plaintiff Robert D. Orr brought this action pro se against defendant Albert A. Riederer.1
Plaintiff was, at one time, a shareholder and officer of Brooke Capital Corporation (“Brooke”).
Brooke was a public corporation that franchised insurance agencies. In 2008, Brooke encountered
financial difficulties, and creditors began suing Brooke and its affiliated companies. In conjunction
with the resulting litigation, Brooke, its affiliates, and plaintiff agreed to appointment of defendant as
Special Master. As Special Master, defendant was charged with managing, controlling, operating,
and maintaining Brooke’s operations and finances.
After Brooke subsequently collapsed, plaintiff filed the instant lawsuit. Plaintiff claims that
defendant exceeded the scope of his duties as Special Master, leading to the downfall of Brooke and
a significant loss of money to plaintiff. The only remaining counts are claims for tortious
interference with contract and tortious interference with prospective business advantage. The case is
now before the court on three motions: Defendant’s Motion for Reconsideration of the Court’s Order
Regarding Transfer of Venue (Doc. 111); Plaintiff’s Motion for Summary Judgment (Doc. 112); and

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After the parties completed briefing on the instant motions, counsel entered an appearance
on behalf of plaintiff. Counsel has not, however, asked to modify or supplement the briefs.

Defendant Albert Riederer’s Motion for Summary Judgment (Doc. 114). For the following reasons,
the court grants defendant’s motion for summary judgment and denies the other two motions as
moot.
I.

FACTUAL BACKGROUND
The parties proposed many uncontroverted facts. In the end, however, this case boils down to

one issue: malice. If plaintiff has sufficient evidence of malice to survive summary judgment, then
many more of the proposed facts are relevant. But if plaintiff does not, then only a few facts are
relevant to the court’s analysis. The court therefore addresses the few relevant facts below, within
the discussion of plaintiff’s claims.
II.

STANDARD OF REVIEW
Summary judgment is appropriate if the moving party demonstrates that there is “no genuine

issue as to any material fact” and that it is “entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). In applying this standard, the court views the evidence and all reasonable inferences
therefrom in the light most favorable to the nonmoving party. Adler v. Wal-Mart Stores, Inc., 144
F.3d 664, 670 (10th Cir. 1998) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986)).
III.

DISCUSSION
Although the parties make a number of arguments why each of them is entitled to summary

judgment, there is one question that the court considers before reaching the others: Does plaintiff
have sufficient evidence that defendant acted with malice? Both of plaintiff’s remaining
claims—tortious interference with contract and tortious interference with a prospective business
advantage—require a showing of malicious conduct.
To establish either tortious interference with contract or prospective business advantage,
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plaintiff must present evidence that shows:
(1) the existence of a business relationship or expectancy with the probability of
future economic benefit to the plaintiff; (2) knowledge of the relationship or
expectancy by the defendant; (3) that, except for the conduct of the defendant,
plaintiff was reasonably certain to have continued the relationship or realized the
expectancy; (4) intentional misconduct by defendant; and (5) damages suffered by
plaintiff as a direct or proximate cause of defendant’s misconduct. Both [torts] are
predicated on malicious conduct by the defendant.
Turner v. Halliburton Co., 722 P.2d 1106, 1115 (Kan. 1986); Pepsi–Cola Bottling Co. of Pittsburg,
Inc. v. PepsiCo., Inc., 431 F.3d 1241, 1262–63 (10th Cir. 2005) (applying Kansas law); see also
Dickens v. Snodgrass, Dunlap & Co., 872 P.2d 252, 257 (Kan. 1994); L&M Enter., Inc. v. BEI
Sensors & Sys. Co., 231 F.3d 1284, 1288 (10th Cir. 2000) (analyzing Kansas law); Kan. Pattern Jury
Instructions 4th § 124.91, 124.92. While “malice” is not listed as a fundamental element of either
tort, the Kansas Supreme Court has repeatedly emphasized that malicious conduct is required to
prevail on a claim for tortious interference. A showing of malicious conduct is one that a party
“acted in a state of mind characterized by an intent to do a harmful act without reasonable
justification or excuse.” Linden Place, LLC v. Stanley Bank, 167 P.3d 371, 380 (Kan. Ct. App.
2007).
Plaintiff’s primary argument why summary judgment should not be granted on this issue is
that he is not required to prove maliciousness. In support, he cites an unpublished opinion by Judge
Lungstrum, Mediware Info. Sys., Inc. v. McKesson Info. Solutions, LLC, No. 06-2391-JWL, 2007
WL 926142 (D. Kan. Mar. 26, 2007). Mediware was before the court on a motion to dismiss. The
defendant argued that the plaintiff had not adequately alleged malice. Judge Lungstrum held:
The concept of legal malice and justification is evident from the “absence of
justification” requirement of a tortious interference with contract claim and the
“intentional misconduct” requirement of a tortious interference with business
expectancy claim. Accordingly, because Mediware has alleged each of these
requirements, the court deems that sufficient to survive McKesson’s motion to
dismiss.
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Mediware, 2007 WL 926142, at *4.
The court rejects plaintiff’s application of Mediware for a few reasons. First, Mediware was
in a different procedural posture than the instant case. Second, Judge Lungstrum did not overtly
reject the requirement that a party show malice—he merely explained the interplay between malice
and the explicitly-enumerated elements of absence of justification and intentional misconduct. In
fact, the Kansas Court of Appeals has since cited Mediware for the proposition that a plaintiff must
have “some evidence that [the defendant] acted with malice—sometimes phrased as acting without
privilege or justification—when [committing the complained-of act].” M West, Inc. v. Oak Park
Mall, L.L.C., 234 P.3d 833, 852 (Kan. Ct. App. 2010).
Although plaintiff maintains that a showing of malice is unnecessary, he does point to
evidence that he claims shows malice. Specifically, plaintiff claims that he heard that defendant said
that plaintiff was spending other people’s money. Plaintiff did not, however, know who made the
comment. He also complains that defendant never responded as Special Master to anything that
plaintiff wrote to him. And plaintiff believes that defendant had a bias against Brooke and in favor
of the Bank of New York and the securitization investors. Finally, plaintiff relies on an email
purportedly written by Carl Baranowski to plaintiff that said, “This account info needs to be provided
ASAP. I’m sitting here with [defendant], and he said that he would do his best to put you both in jail
on Monday if he doesn’t have the account info this weekend.” Plaintiff represents in his response
brief that he will produce additional evidence to demonstrate defendant’s maliciousness, but he has
not done so in conjunction with summary judgment briefing.
Plaintiff’s evidence is insufficient to create a genuine issue of material fact as to whether
defendant acted with malice. Both comments that plaintiff cites are inadmissible hearsay and, in any
event, they do not suggest malice on defendant’s part. Plaintiff’s speculation about defendant’s bias
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is also unsupported and insufficient to establish a genuine issue for trial. And defendant’s failure to
respond to plaintiff’s writings is likewise not enough to show malicious conduct.
Additionally, the court notes that at least one time, defendant did respond to plaintiff’s
writings. In fact, elsewhere in his briefing, plaintiff claims that defendant’s response shows that
defendant’s alleged misconduct was intentional. Defendant wrote plaintiff an email on October 5,
2008 that stated:
Emails like yours are a clear attempt to interfere with the Consent Order issued by
Judge Lungstrum. If you continue to issue emails like this, and if you continue to
interfere with the Consent Order, I will ask the Judge to hold you in contempt of
court. If you do not understand the consequences of that, please ask your lawyer.
(Doc. 1-1 at 61.) This email, however, does not support plaintiff’s position. Instead, it evidences
defendant’s belief that he was acting within the Consent Order and his willingness to go to the court
to show that plaintiff himself—and not defendant—was violating the order. In other words, the
email tends to suggest that defendant was not intentionally engaging in misconduct or acting with
malice.
Finally, plaintiff contends that defendant failed to report plaintiff’s “Board Protests”
(plaintiff’s writings mentioned above) to the court on October 8, 2008. This “concealment,”
according to plaintiff, shows intentional misconduct. The court disagrees. Under the Consent Order,
defendant was required to report to the court at least monthly concerning the operation and
management of the entities. Defendant testified in deposition that he orally reported on the
operations and finances of Brooke on October 8. While defendant did not recall informing the court
of plaintiff’s recent complaints, he was not required to do so on October 8 under the Consent Order.
Instead, the Consent Order merely required defendant to “investigate the claims and other matters
raised by the parties to this action” and report his findings and conclusions (without a timetable for
doing so). Assuming that defendant did not inform the court of plaintiff’s complaints on October 8,
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his silence, standing alone, is insufficient to create a genuine issue of material fact as to whether
defendant intentionally interfered with plaintiff’s contract(s) or prospective business advantage. Nor
is it sufficient to suggest that defendant acted with malice.
The court understands that issues of motive and malice are typically for the jury. See
Burcham v. Unison Bancorp, Inc., 77 P.3d 130, 152 (Kan. 2003) (citation omitted). But here, based
on the evidence presented, a reasonable jury could not find that defendant acted maliciously. And
the court cannot send this case to trial on plaintiff’s promise to produce additional evidence at a later
time. Once defendant shows that there is no genuine issue of material fact, plaintiff must in turn
produce evidence from which a reasonable jury could find in his favor. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 256–57 (1986).
Because plaintiff does not have evidence that defendant acted with malicious intent, his
claims must fail. The court need not address any of the other arguments raised by the parties.
IT IS THEREFORE ORDERED that Defendant Albert Riederer’s Motion for Summary
Judgment (Doc. 114) is granted.
IT IS FURTHER ORDERED that Defendant’s Motion for Reconsideration of the Court’s
Order Regarding Transfer of Venue (Doc. 111) is denied as moot.
IT IS FURTHER ORDERED that Plaintiff’s Motion for Summary Judgment (Doc. 112) is
denied as moot.
The case is closed.
Dated this 3rd day of July 2012, at Kansas City, Kansas.
s/ Carlos Murguia
CARLOS MURGUIA
United States District Judge

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