Hannigan v. Sears, Roebuck and Co.

Thomas Hannigan was the president and majority stockholder of Tru-Han Corporation (collectively, Hannigan) (plaintiffs). Hannigan distributed metal outdoor storage buildings manufactured by Fabricated Products, Inc. (Fabricated). Hannigan had an idea for a metal lawn locker and entered into an agreement with John Columbini, the president of Fabricated, for Fabricated to manufacture the lockers exclusively for Hannigan and Hannigan to purchase all the lockers Fabricated manufactured. Fabricated also sold outdoor storage buildings to Sears, Roebuck and Co. (Sears) (defendant). Sears unsuccessfully tried to persuade Fabricated to sell lawn lockers directly to Sears and to convince Hannigan to reduce the price of the lockers sold to Sears. John Mitchell, Sears’s new buyer of lawn lockers and outdoor storage buildings, knew about Fabricated’s exclusive contract with Hannigan but wanted a single supplier of the entire line of utility buildings and lawn lockers and again tried to persuade Fabricated to sell lawn lockers directly to Sears. Mitchell told Columbini that if Fabricated could not supply the entire line, Sears would have to look to others, and that Fabricated could make more money by selling directly to Sears. Mitchell suggested Columbini work out something with Hannigan. At the time, 60 percent of Fabricated’s business was with Sears, and Columbini told Mitchell that Fabricated could not exist if the company lost Sears’s business. Columbini persuaded Hannigan to permit Fabricated to sell lockers directly to Sears and give Hannigan a 10 percent commission on the sale of each locker. As a result, Hannigan made less on the sale of each locker. Hannigan sued Sears for intentional interference with contractual relations, alleging that Sears interfered with Hannigan’s contractual rights by inducing Fabricated to modify its contract with Hannigan and coercing Hannigan to agree to the modification. The jury returned a verdict for Hannigan. On appeal, Sears argued that the contract with Hannigan was not breached but modified and that the modification was not coerced.