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Home Builder All Wet About Wet Basement Report
Description Professional engineer’s negative report about a home a couple was considering buying caused them to drop negotiations. The builder then sold the house for $15,000 less. Another engineer stated that the problem was not serious. Builder’s suit for tortious interference with a prospective business relationship must fail because there was nothing improper about the engineer’s methods. (Updated 10-3-97)
Topic Torts
Key Words Interference with a Business Expectancy, Home Inspection, Professional Engineer
C A S E   S U M M A R Y
Facts The Kesslers had been negotiating to buy a new home built by Baldwin. The hired Sharp, a licensed Professional Engineer, to inspect the home. He reported what he believed were significant leakage problems in the basement that he estimated would cost $11,500 to repair. The Kesslers quit dealing with Baldwin who later sold the house for $15,000 less. Another engineer, hired by Baldwin, also found a water problem, but said it would be quite cheap to repair. Baldwin sued Sharp for tortious interference with a business relationship.
Lower Court Decision Summary judgement for Sharp. Baldwin failed to show a major element of this cause of action— "that Sharp lacked justification in issuing the inspection report." Baldwin appealed.
Court of Appeals Decision Affirmed. This tort requires
  1. "the existence of a contract or a valid business relationship;
  2. defendant’s knowledge of the contract or relationship;
  3. intentional interference by the defendant inducing or causing a breach of the contract or relationship;
  4. absence of justification; and
  5. damages."
It is possible that the other engineer was correct and that Baldwin was mistaken about the extent of the water problem, but he was justified to use his professional expertise to produce what he believed was a good report, which is a statement of his opinion. There was no evidence that he did this in order to harm Baldwin.
Citation Baldwin Properties v. Sharp, ---SW2d--- (1997 WL 469395, Mo.App., Mo.)

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