Kjesbo v. Ricks

Why This Case Matters

When someone intentionally interferes with your contract and causes it to fall through, you may have a claim for tortious interference. Kjesbo v. Ricks is an important Minnesota Supreme Court case because it defined the elements of tortious interference with contract and addressed a key question: can a defendant justify the interference by claiming they were exercising a legal right? The court said not always – if the legal right is exercised in bad faith to defeat the very purpose it was designed to serve, that is not justification.

The Facts

Noel Kjesbo was leasing 320 acres of farmland in Grant County that Metropolitan Life Insurance Company had acquired through foreclosure. In 1990, Kjesbo offered to purchase the land for $165,000. Under Minnesota’s family farm statute, the original owner, Valerie Ricks, had a right of first refusal – the right to match the purchase offer before it could be sold to someone else. Valerie could not afford to buy the land herself, so her son Randy enlisted his employer, Douglas Daniels, to finance the purchase. Valerie exercised the right of first refusal, purchased the land with Daniels’ money, and immediately transferred half the land to Randy, who conveyed it to Daniels. Within two years, Daniels controlled the entire property. The statutory right of first refusal existed to preserve family farms – but the land ended up in the hands of an outside investor.

What the Court Decided

The Supreme Court held that Ricks and Daniels tortiously interfered with Kjesbo’s purchase contract as a matter of law. The court set out the five elements of tortious interference with contract in Minnesota: (1) the existence of a contract, (2) the defendant’s knowledge of the contract, (3) intentional procurement of its breach, (4) without justification, and (5) damages. On the critical question of justification, the court held that technical compliance with a statute is not enough. Valerie Ricks technically exercised her right of first refusal, but she did so as a vehicle to transfer the land to an outside investor – the opposite of what the family farm statute was designed to accomplish. The court awarded Kjesbo specific performance of his purchase contract and attorney fees.

What This Means for You

• Your contracts are legally protected: If someone intentionally causes another party to breach a contract with you, that person may be liable for tortious interference. You do not need to prove the interferer acted with malice – only that the interference was intentional and unjustified.
• Exercising a legal right is not always a defense: Even if someone has a technical legal right to take an action that interferes with your contract, using that right in bad faith – to accomplish something the law was not designed to protect – may not constitute justification.
• Remedies may include specific performance: In addition to money damages, courts can order specific performance – meaning the court can require the original contract to be carried out as agreed. This remedy is especially significant in real estate transactions where the property is unique.