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The established cemetery has sued the former employee for tortious interference with contract. The former employee has moved for summary judgment, based on the foregoing facts.
Shortly after the promotion began, several purchasers of funeral plans with the established cemetery canceled their plans and purchased plans from the new cemetery. When the established cemetery withheld penalties from the refund amounts, the purchasers objected and threatened to notify the state consumer protection bureau.
A former high-level employee of the cemetery, who knew of the limitations specified in the state statute, recently built a new cemetery near the established cemetery. To promote the new cemetery, the former employee sent postcards to local residents asserting that anyone who had already purchased a pre-need funeral plan had «an unlimited right to cancel that plan at any time, for any reason, without penalty.» The postcard also offered a $100 rebate on a pre-need funeral plan with the new cemetery to anyone who canceled an existing plan elsewhere.
An established cemetery sells «pre-need» funeral plans, which include funeral services, a casket, and a burial plot, in exchange for advance payment. By state statute, any purchaser of a funeral plan of this sort can cancel the purchase at any time, subject to a penalty imposed by the seller of up to 15% of the purchase price.
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A is incorrect. This answer correctly states that the former employee's motion for summary judgment should be dismissed, but it misstates the legal reasoning for this conclusion. Merely providing a monetary incentive to induce a person to breach a contract is not by itself sufficient to establish tortious interference with contract.
C is incorrect. The customers' ability, by state statute, to terminate their contracts does not allow the former employee to intentionally interfere with those contracts.
D is incorrect. The former employee's actions in sending the established cemetery's customers misinformation about their contracts was not permissible competition but rather improper interference with their contractual relationships with the established cemetery.