SYLLABUS BY THE COURT 1. Whether a district court erred by granting a motion to dismiss for failure to state a claim is a question of law subject to unlimited review. 2. When a district court has granted a motion to dismiss for failure to state a claim, an appellate court must accept the facts alleged by the plaintiff as true, along with any inferences that can reasonably be drawn therefrom. The appellate court then decides whether those facts and inferences state a claim based on plaintiff's theory or any other possible theory. If so, the dismissal by the district court must be reversed. 3. Factual disputes cannot be resolved in ruling on dispositive motions. Review of the judgment of the Court of Appeals in 41 Kan. App. 2d 386, 202 P.3d 87 (2009). Appeal from Johnson District Court; JANICE D. RUSSELL, judge. Opinion filed February 8, 2013. Judgment of the Court of Appeals affirming the district court is reversed. Judgment of the district court is reversed, and the case is remanded to the district court.
The opinion of the court was delivered by: Nuss, C.J.:
The opinion of the court was delivered by NUSS, C.J.:
The trial court dismissed the claims of two trustees alleging Marion Battaglia tortiously interfered with their existing contracts and prospective business relationships. A Court of Appeals panel affirmed the dismissal but on a different ground. We granted review and now reverse because the panel inappropriately resolved factual issues on a dispositive motion. We therefore remand to the trial court for additional proceedings.
According to the trustees' amended petition, the salient facts are as follows:
Defendant Marion Battaglia owned a 20 percent interest in Baron Development Company, LLC (BDC), a Kansas limited liability company. He also owned 2,222 shares of common stock in The Baron Automotive Group, Inc. (BAG). The balance of the BDC membership interest and the BAG common stock shares were owned by A. Baron Cass and the Barton J. Cohen Revocable Trust.
On August 30, 2005, Battaglia sold his BDC stock to Cass and the Cohen Trust. Battaglia also contemporaneously sold his BDC membership interest to BDC via a "Redemption Transaction." Per its terms, BDC paid Battaglia $419,809 in cash and issued a promissory note for $1,259,434. Under a related "Pledge Agreement," the note was secured for Battaglia by a first-priority security interest in his 20 percent membership interest in BDC.
Per the "Pledge Agreement," the BDC promissory note to Battaglia became due and payable in full if either BDC or BAG were ever sold to an unrelated party. Per that agreement, BDC further promised not to sell any portion of Battaglia's security interest in membership with BDC without his consent. But his consent was no longer required once all of the obligations under the note were performed and the "[t]ermination date" of the agreement was reached.
After these transactions with Battaglia were completed, Cass transferred all of his interests in BDC and BAG to the A. Baron Cass Family Trust.
In October 2006, the Cohen and Cass trustees and BAG made an agreement with Group 1 Automotive, Inc. (Group 1). Per the agreement, (1) trustees would sell to Group 1 100 percent of the membership interests in BDC (including Battaglia's 20 percent security interest) and (2) BAG would sell to Group 1 all of its assets. The trustees believed Battaglia's consent was not required because the sale of the BDC interests would occur simultaneously with full payment of the promissory note to him.
Once Battaglia learned of the sale agreements, however, he insisted on knowing the purchase price and other details. The trustees refused the request because Battaglia was not a "seller" under the sale agreements, the transactions with Group 1 were confidential, and disclosure of such information might jeopardize the agreements. Battaglia responded by arguing that he was entitled to copies of the sale agreements because of his presidency of BAG and his security interest in BDC. Counsel for trustees and BAG countered that Battaglia was not entitled to see the documents because Battaglia was not a shareholder of BAG, a member of BDC, or a director of either. He therefore had no interest except as the holder of a promissory note.
Battaglia knew that the sales transaction was supposed to close on January 16, 2007. So 4 days earlier his attorney, Louis C. Accurso, filed a civil action in the circuit court of Jackson County, Missouri, naming Cohen, the Cohen Trust, Cass, BAG, and BDC as defendants (the Missouri action). Among other things, the suit alleged that the trustees breached their fiduciary duties to Battaglia by engaging in self-dealing and financially manipulating BAG and BDC in order to dilute Battaglia's ownership interest. That same day, Accurso faxed to Group 1's general counsel a copy of the Missouri action along with the following letter: "Please find enclosed a file-stamped copy of a lawsuit filed today on behalf of Marion Battaglia. If you have any questions or comments, please do not hesitate to contact me."
After receiving the letter and a copy of the Missouri action from Battaglia's attorney, Group 1 refused to close the transaction without altering the agreements to include a supplemental indemnification agreement from BDC, the Cohen Trust, and the Cass Trust. Group 1 also now required that $2,500,000 be placed in escrow for its benefit. Their demands were met, with the trustees allegedly incurring substantial attorney fees as a result.
After closing, the Cohen and Cass trustees filed the instant lawsuit against Battaglia. They alleged claims for tortious interference with a contract, tortious interference with a business expectancy, and also requested specific performance of the "pledge agreement." Included in their claims was an allegation that Accurso's conduct in "[s]ending the letter and a copy of the ...