An Ohio Court of Appeals recently addressed a construction contractor’s claim that Park National Bank, which held the mortgage on a fire-damaged hotel, caused the breach of that contractor’s repair agreement with the owner. While the Bank’s vice president was absolved of liability due to acting solely within the scope of his employment with the Bank, the Court ruled that a trial must be held to assess the Banks’ motives. Bridge v. Park National Bank, 179 Ohio App. 3d 761.

After fire damaged a hotel, the owners hired a construction contractor to perform emergency repairs. A few days later, those parties entered into a contract for further repairs and restoration. That agreement included a provision that compelled the construction contractor to “comply with all Mortgage Bank requirements” in making the repairs. Separately, the mortgage required that repairs were to be completed in a manner satisfactory to the Bank. However, when the Bank’s officer demanded more than the construction contractor was willing to provide, work was discontinued.

The owner and the contractor agreed that their repair agreement was terminated because of the Bank’s demands, and the contractor proceeded to sue the Bank for intentionally interfering with the performance of the repair contract. The parties did not dispute that the Bank officer acted at all times within the scope of his employment. Therefore, he faced no individual liability for his actions.

The Bank, however, must proceed to trial for a determination of the motives for its various demands. The Bank argued that it was merely asserting its own legally protected interests by requiring the contractor to fulfill certain requirements. And while the Court recognized that as a viable defense under Ohio law, the Court also stated that there was conflicting evidence on the Bank’s justifications for its demands, the interests it sought to protect, and the reasonableness of those requirements. The Court’s primary concern was that the Bank did not make the same demands on the owners when they eventually made the repairs themselves. Therefore, a trial was necessary to decide whether the Bank truly was justified in requesting that the contractor meet requirements that were not imposed upon repairs made by the owner.