Full opinion text
MEMORANDUM GILES, District Judge. Federal National Mortgage Association (“Fannie Mae” or “FNMA”), moves for summary judgment as to all of Peoples Mortgage Company’s (“Peoples”) claims. Peoples moves for summary judgment as to Count IV of Fannie Mae’s Amended Counterclaim. For the reasons stated below, both motions are granted. I. JURISDICTION Peoples brought this action in the Court of Common Pleas of Montgomery County on November 24, 1992. On December 18, 1992, Fannie Mae removed the ease to this court pursuant to 28 U.S.C. § 1441. 28 U.S.C. § 1441(a) provides in relevant part: [A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending. Fannie Mae is a federally chartered corporation, 12 U.S.C. § 1717(a)(2)(B), and the National Housing Act, 12 U.S.C. § 1723a(a), confers subject matter jurisdiction upon this court. II. STANDARD FOR SUMMARY JUDGMENT Summary judgment is appropriate where the record demonstrates that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986). When considering a motion for summary judgment, the court is not permitted to weigh the evidence. Id., 477 U.S. at 255, 106 S.Ct. at 2513. Instead, the court’s sole function is to determine if there are any disputed facts, and, if there are, to determine whether the dispute is both genuine and material. Id., 477 U.S. at 248, 106 S.Ct. at 2510. All reasonable inferences from the facts must be drawn in favor of the non-moving party. Tigg Corp. v. Dow Corning Corp., 822 F.2d 358, 361 (3d Cir.1987). Summary judgment is inappropriate if “reasonable minds could differ as to the import of the evidence.” Anderson, 477 U.S. at 250, 106 S.Ct. at 2511. III. FACTUAL BACKGROUND Fannie Mae is a federal government-sponsored private corporation created by Congress to establish secondary market facilities for home mortgages and, among other things, to provide stability in the secondary market for home mortgages. 12 U.S.C. §§ 1716, 1716b. According to Fannie Mae’s Mission Statement, Fannie Mae’s “unique corporate mission is to be the nation’s housing partner in providing financial products and services that increase the availability and affordability of housing for low-, moderate-, and middle-income Americans.” FNMA Ex. A. Fannie Mae purchases mortgages from approved lenders who may also service the loans for Fannie Mae. Reich Verification, FNMA Ex. B. Under this arrangement, the lender, having granted a loan and taken back a home mortgage as a security, will sell the mortgage to Fannie Mae and either sell the mortgage servicing rights to a third party for a fee or do the servicing itself and receive income therefrom. Complaint ¶ 9. “Servicing” for a mortgage loan owned by Fannie Mae typically includes the receipt by the servicer of monthly mortgage payments, the crediting of those payments to the borrower’s account, the remitting to Fannie Mae of principal and interest sufficient to produce the “pass-through” rate or “required net yield” contracted for by Fannie Mae, the maintenance of escrow accounts for taxes and insurance, and, if necessary, the commencement of any action required to restore a delinquent account. Complaint ¶ 10. In return for performing such servicing functions, mortgage lenders contracting with Fannie Mae retain an annual fee. Complaint ¶11. Lenders doing business with Fannie Mae must meet certain criteria to be approved sellers and servicers of mortgages that Fannie Mae purchases. Reich Verification, FNMA Ex. B. Fannie Mae relies upon the integrity of its approved lenders to originate, underwrite and service mortgages properly. In addition, Fannie Mae conducts periodic reviews of the lender’s selling and servicing to determine if the seller/servicer is complying with criteria established by Fannie Mae. Id. Plaintiff Peoples is a mortgage banking company incorporated under the laws of Pennsylvania, with its principal place of business in Montgomery County Pennsylvania. In July 1987, Peoples entered into a Mortgage Selling and Servicing Contract (the “Contract”) with Fannie Mae, see Peoples Ex. 2, under which Peoples was approved to sell and service mortgages for Fannie Mae. Complaint ¶ 17. Pursuant to the Contract, Peoples was an approved seller of mortgages to Fannie Mae, and an approved servicer of mortgages that Fannie Mae purchased from Peoples from time to time. The Contract and the Guides to Lenders (“Guides”) set forth the terms and conditions of sales of mortgages by Peoples to Fannie Mae and further delineated the requirements of servicing those mortgages. Reich Verification, FNMA Ex. B. The group of Fannie Mae owned mortgages serviced by Peoples is referred to as the “Servicing Portfolio.” The Contract could be terminated by Fannie Mae with or without cause. If Fannie Mae terminated Peoples’ mortgage servicing with cause, Peoples was not entitled to receive any compensation. If Fannie Mae terminated the servicing without cause, Peoples was entitled to a fee to be computed under the Contract and the Guides. Termination of Peoples’ right to sell mortgages to Fannie Mae could occur with or without cause without any payment of compensation to the Peoples. Reich Verification, FNMA Ex. B; Contract, Peoples Ex. 2 at ¶¶ IX.C.1, IX.C.2. On May 17, 1991, Fannie Mae decided to terminate Peoples’ mortgage selling and servicing rights under the Contract. A letter of termination was hand delivered to Peoples that day, notifying Peoples that its mortgage selling and servicing rights under the Contract were being terminated for cause. See Letter of Termination, FNMA Ex. F; Lis Dep., Peoples Ex. 11 at 115. Fannie Mae also asked Peoples to return to Fannie Mae all files and records that Peoples held on the Fannie Mae-owned mortgages being serviced by Peoples. Berger Dep., FNMA Ex. D at 119. Peoples disputed Fannie Mae’s contention that the termination was for cause, and refused to release the mortgage files and records to Fannie Mae. Berger Dep., FNMA Ex. D at 119, 158. During the two weeks following the May 17 termination, Peoples, Fannie Mae, and their respective counsel engaged in extensive negotiations, culminating in the execution by both parties of a letter agreement, dated May 30,1991 (the “Letter Agreement”). See Complaint ¶¶ 36-39; FNMA Ex. E (Letter Agreement); FNMA Ex. H (May 20 draft letter agreement); FNMA Ex. I (May 21 draft letter agreement); FNMA Ex. J (May 24 draft letter agreement). The Letter Agreement, which states that it “represent[s] the full agreement reached by Fannie Mae and Peoples,” provides, inter alia: Peoples was servicing a portfolio of mortgages owned by Fannie Mae (“Servicing Portfolio”). By written notice dated May 17, 1991, Fannie Mae terminated [the Contract with Peoples] for cause. However, in consideration for the resolution of all disputed issues, as set forth in this letter, Fannie Mae agreed to withdraw such termination and issue a suspension subject to compliance with the terms set forth below. FNMA Ex. E. The Letter Agreement continues, providing, inter alia: (a) “Fannie Mae has all rights to the Servicing Portfolio,” except as specifically provided in the Letter Agreement. Id. at ¶ 1; (b) Effective as of May 17, 1991, the Servicing Portfolio “will be subserviced on Fannie Mae’s behalf by Meridian Mortgage.” Id. at ¶ 1; (c) Peoples may retain until May 29, 1991, a portion of the Servicing Portfolio that it was attempting to transfer to two other lenders. Id. at ¶ 2; (d) Peoples will be permitted to sell mortgages to Fannie Mae under the terms of commitments which had not expired as of May 17, 1991. Id. at ¶ 3; (e) Peoples will be permitted until December 1, 1991, to “complete a sale of the servicing of the mortgages in the Servicing Portfolio to an acceptable Fannie Mae Seller/Servicer.” Id. at ¶4; (f) Until the expiration of the period during which Peoples may sell the servicing of the mortgages in the Servicing Portfolio, Peoples will receive servicing income to the extent that the servicing income exceeds Peoples obligations to Fannie Mae. Id. at ¶ 5; and, (g) Peoples will honor its commitments to Fannie Mae, including obligations to repurchase certain mortgages originally sold by Peoples to Fannie Mae. Id. at ¶ 6. In the months following the execution of the Letter Agreement, Peoples was not able to consummate the sale of the servicing rights, despite being given two extensions beyond the December 1, 1991 deadline set in the Letter Agreement for that sale. Peoples’ status as a “suspended” servicer remained in place, and Peoples was never reinstated as a fully approved servicer of Fannie Mae mortgages. In addition, Fannie Mae made what Peoples characterizes as “excessive” demands that Peoples repurchase loans originally sold by Peoples to Fannie Mae. In November, 1992, Peoples brought this lawsuit. Fannie Mae now moves for summary judgment as to all counts of Peoples’ complaint, while Peoples moves for summary judgment as to Count IV of Fannie Mae’s Amended Counterclaim. The dispute is governed by Pennsylvania law. TV. DISCUSSION The resolution the parties’ motions turns substantially upon the question of whether the Letter Agreement is enforceable. Therefore, we will resolve that issue first, and then go on to consider each of Peoples claims against Fannie Mae, and Fannie Mae’s counterclaim against Peoples. A. Enforceability of the Letter Agreement Peoples maintains that the May 30 Letter Agreement is unenforceable because it was executed under duress, it lacks consideration, and it is unconscionable. The court disagrees. 1. Duress Peoples argues that the Letter Agreement is unenforceable because it was executed under duress. However, the court finds that, under the undisputed facts, Peoples’ claim of duress fails as a matter of law because Peoples was free to consult with counsel and could have pursued immediate legal remedies if it thought the Letter Agreement was unfair. In addition, even if the Letter Agreement had been executed under ■ duress, Peoples’ behavior after the Agreement was signed served to ratify it. a. Peoples consulted with counsel The Pennsylvania Supreme Court has held that “in the absence of threats of actual bodily harm there can be no duress where the contracting party is free to consult with counsel.” Carrier v. William Penn Broadcasting Co., 426 Pa. 427, 431, 233 A.2d 519 (1967) (citing Smith v. Lenchner, 204 Pa.Super. 500, 504, 205 A.2d 626 (1964)); accord, Harsco Corp. v. Zlotnicki, 779 F.2d 906, 911 (3d Cir.1985), cert. denied, 476 U.S. 1171, 106 S.Ct. 2895, 90 L.Ed.2d 982 (1986); Three Rivers Motors Co. v. Ford Motor Co., 522 F.2d 885, 891-92 (3d Cir.1975). It is undisputed that Peoples consulted with counsel throughout the negotiations leading to the Letter Agreement. Indeed, the undisputed evidence shows that the Letter Agreement was the end result of numerous discussions and drafts, and that Peoples’ counsel, Samuel Becker (“Becker”), was actively involved at each stage of the process. On May 17, 1991, when Jay Berger, President and sole shareholder of Peoples, was notified of Fannie Mae’s termination of the Contract, he telephoned Becker, who then called Fannie Mae representatives. Becker Dep., FNMA Ex. G at 32-33; Berger Dep., FNMA Ex. D at 123. During the ensuing telephone conversation, in which Berger participated, Reich Dep., FNMA Ex. C at 7, Peoples’ counsel and counsel for Fannie Mae discussed several points that were to be included in a written agreement. On May 20, 1991, Becker sent a draft letter agreement, prepared by his office, to Jay Berger for his review. FNMA Ex. H. With certain changes suggested by Berger, the May 20 draft became a draft that Becker sent to Fannie Mae on May 21. In the cover letter attached to the May 21 draft, sent to Fannie Mae’s counsel, Sherri Reich, Becker wrote: I want to thank you for spending time with us Friday afternoon [May 17] so we could reach an agreement acceptable to both our clients. The suspension letter delivered to Peoples Mortgage Company, Inc. on Monday [May 20] did not contain all of the provisions which we had agreed to on Friday afternoon. I have prepared a letter for you to send to Peoples Mortgage Company, Inc. which I believe covers all our agreements. If the letter is acceptable, please have it executed and delivered to Jay Berger. If you have any questions or comments, please call me so we can quickly resolve any open points. FNMA Ex. I. The above-quoted cover letter is undisputed evidence that the May 17 phone call was aimed at “reaching] an agreement acceptable to both” parties, and that the May 21 draft sent to Fannie Mae by Becker was intended by Becker to cover all of the mutually arrived at agreements. In response to the May 21 draft, Fannie Mae delivered a revised draft to Peoples on May 24. See FNMA Ex. J. Peoples contends that the May 24 draft provided by Fannie Mae “completely ignored Becker’s initial May 21 draft,” Peoples Mem. at 66, and was “a wholly different version of a written agreement,” id. at 40. Comparison of the documents, however, reveals that the May 24 draft, while probably more favorable to Fannie Mae’s interest, incorporated many aspects of the earlier drafts provided by Becker. Becker testified that Fannie Mae’s May 24 draft “changed the deal,” Peoples Ex. 30, Becker Dep. at 85. However, it is hard to imagine a process of negotiation and reduction of an agreement to writing in which each side does not attempt to refashion the writing to better suit its own interest. After the May 24 draft was presented to Peoples, Becker made a few handwritten requested changes to the document. See FNMA Ex. J. There is no evidence that any other changes were requested by Peoples or its counsel. All of Becker’s suggested changes were incorporated into the final, May 30, version of the Letter Agreement. Six days later, Jay Berger signed the Letter Agreement after reading it and discussing it with Peoples’ counsel. Berger Dep. at 215-17. The above-described undisputed facts show that, at all times leading up to the signing of the Letter Agreement, Peoples was “free to consult with counsel,” Carrier, supra, and that in fact Peoples’ counsel was involved in the negotiation and formulation of the letter agreement. Under these circumstances, Carrier commands that there was no duress, as a matter of law. Peoples mistakenly relies upon Litten v. Jonathan Logan, Inc., 220 Pa.Super. 274, 286 A.2d 913 (1971) to support its claim that the Letter Agreement was executed under duress. In Litten, a divided Superior Court held that the plaintiffs could raise duress as defense to enforcement of an agreement in spite of the fact that they were represented by counsel at the time the agreement was made. Peoples’ reliance upon Litten is misplaced for several reasons. First, Litten was decided under New York law. The court “note[d] in passing that Pennsylvania law does not differ and, therefore, if it were to be applied, the result here reached would be the same,” Litten, 220 Pa.Super. at 282 n. 2, 286 A.2d 913, but gave no analysis to support the claim that Pennsylvania and New York law are in accord. Most of the legal authority discussed by the Litten majority is from New York courts or applying New York law, and the majority never discussed or even cited Carrier, the leading Pennsylvania Supreme Court decision on duress. The Litten dissent, which would have held that the duress claim was not available, cited Carrier as authority that when an agreement is signed upon advice of counsel, any contention of duress is nullified. 220 Pa.Super. at 290, 286 A.2d 913 (Montgomery, J., dissenting). Given the Litten majority’s cursory treatment of the relationship between New York and Pennsylvania law, and its failure to distinguish or even discuss Carrier, we do not find Litten to be persuasive authority. b. Peoples could have pursued an immediate legal remedy Also militating against Peoples’ claim that the Letter Agreement was executed undér duress is the fact that Peoples could have pursued immediate legal remedies against Fannie Mae, rather than sign the agreement, if it thought the terms of the agreement were unfair and oppressive. See, e.g., National Auto Brokers Corp. v. Aleeda Dev. Corp., 243 Pa.Super. 101, 364 A.2d 470, 474 (1976); Kennington Ltd. v. Wolgin, Civil Action No. 89-80, 1989 WL 55395 at *4 (E.D.Pa. May 23, 1989); Levin v. Garfinkle, 492 F.Supp. 781, 807 (E.D.Pa.1980), aff'd, 667 F.2d 381 (3d Cir.1981); compare, Litten, 220 Pa.Super. at 280, 286 A.2d 913 (finding duress under New York law where, among other things, there was no possibility of immediate legal relief). Peoples asserts that the May 17 termination for cause was unjustified. In particular, Berger has declared that at that time he “was certain that Fannie Mae had made an error” regarding' a claimed shortage in Peoples’ tax and insurance escrow account. Berger Decl. ¶ 16. Yet, rather than engage counsel to seek injunctive relief against Fannie Mae at that time or otherwise commence legal action to protect its interests, Peoples engaged Becker to negotiate a settlement of the dispute. Peoples apparently “concluded that it was more prudent to settle ... than to litigate.” Levin, 492 F.Supp. at 808. This failure of Peoples to pursue immediate legal remedies reinforces the court’s decision that it will not now find that Peoples executed the Letter Agreement under duress. See id.; Kennington, 1989 WL 55395 at *4 (“Most obvious to the Court is the option of defendant to bring an action for preliminary injunction to protect these asserted rights. The availability of this and other legal remedies negates the claim for economic duress.”). c. Peoples ratified the Letter Agreement An agreement executed under economic duress is not void ab initio. Instead, under Pennsylvania law, a contract executed under economic duress is voidable. Wahsner v. American Motors Sales Corp., 597 F.Supp. 991, 998 (E.D.Pa.1984). Such a contract can be ratified if the party who executed it under duress “accepts the benefits flowing from it, or remains silent, or acquiesces in the contract for any considerable length of time after the party has the opportunity to annul or avoid the contract.” Id.; accord National Auto Brokers, 364 A.2d at 476; Seal v. Riverside Federal Savings Bank, 825 F.Supp. 686, 695-96 (E.D.Pa.1993). Despite Peoples’ assertion that it did not ratify the Letter Agreement, the evidence is undisputed that neither Peoples nor its counsel ever attacked its enforceability until this litigation was filed, some eighteen months after the Letter Agreement was signed. Indeed, Peoples did not raise a duress claim until sometime after the Complaint was filed. Peoples did not mention duress in its response, dated May 24, 1993; to interrogatories from Fannie Mae. Instead, Peoples claimed the Letter Agreement was without consideration. Peoples did not raise duress as a defense until it filed amended affirmative defenses to Fannie Mae’s counterclaim in January 1994. Before bringing this action, Peoples at least twice sought and received modifications of the Letter Agreement without questioning its enforceability. On September 25, 1991, Peoples’ counsel wrote to Fannie Mae and proposed “an alternative repurchase plan for Fannie Mae’s consideration.” FNMA Ex. P. Peoples’ counsel stated that the proposed alternative “repayment schedule [was] not a novation of the [Letter Agreement], but rather [was] a means of accomplishing the repayment terms set forth in the subject Agreement.” Id. On November 25, 1991, Peoples wrote Fannie Mae and asked for an extension of time until December 31, 1991 to complete a sale of the Servicing Portfolio pursuant to the terms of the Letter Agreement. Complaint ¶ 124; FNMA Ex. 3. In that letter, Peoples referred to the Letter Agreement as “our agreement,” and proposed that “additional time for all parties involved to complete their obligations would be beneficial to all concerned.” Fannie Mae agreed to this extension, and to another one. FNMA Exhibits L, N. On February 3, 1992, Jay Berger responded to the later extension by stating his belief that it “serve[d] the best interest of all parties concerned.” Thus, rather than seek to avoid the Letter Agreement that Peoples now claims was entered into under duress, Peoples sought, successfully, to modify it. Under these circumstances, the court finds that even if the original agreement had been entered into under duress, Peoples subsequent conduct would have ratified it. Seal, 825 F.Supp. at 696 (attempt to modify an agreement allegedly entered into under duress is a ratification); compare Litten, 220 Pa.Super. at 279-82, 286 A.2d 913 (no ratification, under New York law, when there were continuous requests made by plaintiffs of defendant that the earlier oral agreement be honored, and repeated unsuccessful attempts by plaintiffs to convince their own counsel to have defendant agree to the original terms or to institute legal action against defendant). 2. Consideration for the Letter Agreement Peoples asserts that the Letter Agreement is unenforceable for lack of consideration. The court disagrees. Under Pennsylvania law, an agreement is enforceable only if it is supported by consideration on both sides. Channel Home Centers, Div. of Grace Retail Corp. v. Grossman, 795 F.2d 291, 299 (3d Cir.1986) (citing Stelmack v. Glen Alden Coal Co., 339 Pa. 410, 14 A.2d 127 (1940); Cardamone v. University of Pittsburgh, 253 Pa.Super. 65, 384 A.2d 1228 (1978)). “Consideration ‘confers a benefit on the promisor or causes a detriment to the promisee and must be an act, forbearance or return promise bargained for and given in exchange for the original promise.’ ” Id. (quoting Curry v. Estate of Thompson, 332 Pa.Super. 364, 371, 481 A.2d 658, 661 (1984)). Failure of consideration goes to the heart of any claim based upon an agreement and is always available as a defense to that claim. M.N.C. Corp. v. Mt. Lebanon Medical Center, Inc., 510 Pa. 490, 509 A.2d 1256, 1259 (1986) (citing In re Levine’s Estate, 383 Pa. 354, 118 A.2d 741 (1955)). Examination of the Letter Agreement reveals that it contains promises by Fannie Mae to: (1) withdraw the termination and issue a suspension; (2) permit Peoples to retain that portion of the portfolio the servicing of which Peoples was attempting to transfer to Landmark Savings Bank or Fidelity Bond and Mortgage Corporation; (3) allow Peoples to fill open commitments to sell mortgages to Fannie Mae; (4) allow Peoples to complete a sale of the servicing of the mortgages in the portfolio by December 1, 1991, to an acceptable Fannie Mae seller/servicer; (5) remit to Peoples any remaining portion of the proceeds from this sale of the servicing after Fannie Mae was reimbursed for those monies due Fannie Mae; and (6) comply in good faith with any legally enforceable subpoena concerning mortgages in the mortgage servicing Portfolio. Peoples asserts that none of the above-described promises by Fannie Mae conferred a benefit on Peoples or caused a detriment to Fannie Mae, and that, therefore, there was no consideration from Fannie Mae for the Letter Agreement. Peoples asserts that none of the promises made by Fannie Mae is consideration for the agreement because they either represent performances that Fannie Mae was already legally bound to render, see, e.g., Cohen v. Sabin, 452 Pa. 447, 307 A.2d 845 (1973) (no consideration where party is already legally bound to render the promised performance); 17A Am.Jur.2d § 163 (where a contract does not contemplate the making of a subsequent agreement, the original consideration will not support the subsequent agreement), or the consideration bargained for as part of the agreed upon exchange did not pass, see, e.g., McGuire v. Schneider, Inc., 368 Pa.Super. 344, 534 A.2d 115, 118 (1987) (citing Necho Coal Co. v. Denise Coal Co., 387 Pa. 567, 569, 128 A.2d 771, 772 (1957)), aff'd, 519 Pa. 439, 548 A.2d 1223 (1988). The court finds, however, that the Letter Agreement was supported by consideration. The benefits conferred on Peoples included withdrawal of its termination and substitution of a suspension in its place, and the right to retain certain files that belonged to Fannie Mae. a. Withdrawal of the termination Fannie Mae promised in the Letter Agreement to withdraw the termination of Peoples and issue a suspension in its place. The possibility of a change of the termination to a suspension was discussed in the May 17 telephone conversation, see Becker Dep., FNMA Ex. 1 at 52, and was part of both Becker’s May 21 and Reich’s May 24 drafts of the Letter Agreement. The May 24 draft stated that Fannie Mae “agreed to convert such termination to a suspension subject to compliance with” the other terms of the letter. FNMA Ex. J. At Becker’s request the terms of the agreement were modified to state that Fannie Mae “agreed to withdraw such termination and issue a suspension subject to compliance with” the other terms of the letter. FNMA Ex. J (showing Becker’s handwritten requested changes); FNMA Ex. E (Letter Agreement, incorporating Becker’s requested changes). This withdrawal of the termination in favor of a suspension provided a benefit to Peoples, and thus serves as consideration for the Letter Agreement. Peoples’ counsel testified that “Mr. Berger felt that a suspension was better for the company than a termination.” Becker Dep., FNMA Ex. G at 56; see also id. at 57. Jay Berger has admitted that Peoples’ status as a suspended, rather than terminated, lender was of benefit to Peoples, particularly with respect to maintaining Peoples’ “warehouse” line of credit with CoreStates Bank, which Berger declared to be “an essential component of any mortgage banking company.” Berger Deck, Peoples Ex. 1 at ¶ 22. Because of the Letter Agreement provision that the “termination” was withdrawn, and that instead, Peoples was merely “suspended,” Peoples never had to, and never did, advise Core-States that it had been terminated. As a result, “everything was business as usual as far as the warehouse line was concerned,” Berger Dep., FNMA Ex. 2 at 153-54, and Peoples was able to maintain its warehouse line for over one year after the suspension, id. at 44. Peoples raises several arguments as to why the withdrawal of the termination and the substitution of a suspension was not consideration for the agreement, in spite of the fact that it apparently conferred a benefit to Peoples. Peoples’ principal argument is that Fannie Mae never had cause to terminate the Contract, and that, therefore, Fannie Mae’s withdrawal of the termination gave Peoples no more than that to which it was already entitled under the Contract. Relying upon the long-established “pre-existing duty” rule that “performance of that which one is already legally obligated to do is not consideration sufficient to support a valid agreement,” Cohen v. Sabin, 452 Pa. at 453, 307 A.2d at 849; accord, In re Commonwealth Trust Co., 357 Pa. 349, 354, 54 A.2d 649 (1947); Warren Tank Car Co. v. Dodson, 330 Pa. 281, 285, 199 A. 139, 141 (1938); Blaisdell Filtration Co. v. M.L. Bayard & Co., 311 Pa. 6, 9, 166 A. 234, 235 (1933); Crown v. Cole, 211 Pa.Super. 388, 392, 236 A.2d 532, 534 (1967); 3 Williston on Contracts § 7:36 (4th ed. 1992); Restatement (Second) of Contracts § 73 (1981); 17 C.J.S. Contracts §§ 110 et seq., Peoples concludes that Fannie Mae’s withdrawal of the termination is not consideration for the Letter Agreement. Peoples’ argument, however, ignores an equally well-established exception to the “pre-existing duty” rule: “[I]f there is an honest dispute over the interpretation of the original agreement,” 3 Williston on Contracts § 7:36 at 584-85 (4th ed. 1992), or if a claim or defense arising out of the original agreement is “doubtful because of uncertainty as to the facts or the law,” Restatement (Second) of Contracts § 74, the settlement of the dispute furnishes sufficient consideration for the new agreement. Accord, Cohen, 452 Pa. at 453, 307 A.2d at 849; Lombardo v. Gasparini Excavating Co., 385 Pa. 388, 391, 123 A.2d 663, 665 (1956); Warren Tank Car Co., 330 Pa. at 285, 199 A. at 141; Kefover v. Potter Title & Trust Co., 320 Pa. 51, 58, 181 A. 771, 774 (1935); Blaisdell, 311 Pa. at 9, 166 A. at 235; Crown, 211 Pa.Super. at 392, 236 A.2d at 534; 17 C.J.S. Contracts § 112 (1963). This exception to the pre-existing duty rule is rooted in “the traditional policy of favoring compromises of disputed claims in order to reduce the volume of litigation.” Restatement (Second) of Contracts § 74, Comment a. Under the undisputed evidence, a reasonable jury would have to find that such an “honest dispute over the interpretation” of the Contract existed in the instant case. Fannie Mae thought that it had cause to terminate Peoples, and Peoples thought that cause did not exist. Even in the sometimes heated words of its brief, Peoples never suggests that Fannie Mae’s termination was a deliberate plan to terminate Peoples without any belief on Fannie Mae’s part that Peoples’ performance was inadequate. Peoples characterizes Fannie Mae’s action as resulting from a “dangerous combination of ignorance and incompetence,” and based upon an “erroneous conclusion,” stemming from a “frighteningly incompetent audit” performed by Fannie Mae, Peoples’ Mem. at 2-3. However, there is no evidence that Fannie Mae did not have an honest belief that it was terminating Peoples for cause. In addition to requiring that a dispute be “honest” if its settlement is to serve as consideration for a new agreement, Pennsylvania courts have required that the dispute be “reasonable.” Warren Tank Car Co., 330 Pa. at 285, 199 A. at 141. The reasonableness of the dispute is “to be judged as it appeared to the parties at the time.” Restatement (Second) of Contracts § 74, Comment b. Because the evidence submitted by the parties is not such that this court could enter summary judgment or a directed verdict in Peoples’ favor as to the issue of whether Peoples’ termination was for cause, we conclude as a matter of law that Fannie Mae’s stance was reasonable as well as honest. See Anderson, 477 U.S. at 250, 106 S.Ct. at 2511 (summary judgment inappropriate when “reasonable minds could differ as to the import of the evidence”). Any other conclusion would vitiate the purpose of this exception to the pre-existing duty rule by inviting litigation of the underlying dispute whenever a party to a settlement of that dispute is later unsatisfied with the terms of the settlement. Peoples argues that even if the withdrawal of the termination in favor of a suspension constituted “new” consideration not already due to Peoples under the Contract, a failure of consideration ensued when Fannie Mae failed to perform on its promise. In essence, Peoples argues that Fannie Mae’s suspension was “a suspension in name only,” and that Fannie Mae “has continued to treat Peoples as a terminated lender since May 1991.” Peoples Mem. at 70. Peoples’ argument is without merit for two reasons. First, as discussed above, Peoples has acknowledged that, because of the effect on its warehouse line of credit with Core-States Bank, it did derive some benefit from its status as a suspended, rather than terminated, lender. Additionally, the Letter Agreement does not promise that Peoples would eventually be fully reinstated. Reinstatement is not even mentioned in the Letter Agreement. See FNMA Ex. E. Even the May 20 first draft of the agreement, made by Peoples’ counsel, is open ended about the length of the suspension and does not contemplate a date of reinstatement. See FNMA Ex. H. Thus, Fannie Mae never promised to reinstate Peoples at some time in the future. According to the testimony of Fannie Mae’s counsel and representatives, Fannie Mae discussed the possibility of reinstating Peoples many times after execution of the Letter Agreement, but each time decided not to reestablish a selling relationship with Peoples. Reich Dep., FNMA Ex. 8 at 53-54, 84-87; Logan Dep., FNMA Ex. 9 at 121-22. Although the Letter Agreement does not contemplate a reinstatement, Peoples argues that eventual reinstatement of a suspended lender is required by Fannie Mae’s Servicing Guide. According to Peoples, the Guides “clearly contemplated a suspension as a rehabilitative measure to be used in connection with improving, not ending, a lender’s performance.” Peoples Mem. at 35-37. The sections of the Guides relied upon by Peoples, however, do not support its argument. We first note that the Letter Agreement, which states that it is the “full agreement” between Fannie Mae and Peoples, does not state that the duration of the suspension is to be controlled by the Guides. Moreover, the sections of the Guides relied upon by Peoples speak in terms of what Fannie Mae will “generally” or “usually” do when making a termination or suspension, not of what Fannie Mae is bound to do. See Servicing Guide § 209, Peoples Ex. 31; Servicing Guide § 206, Peoples Ex. 32. Finally, the Guides explicitly envision that a suspension may be for an “indefinite period.” Id. Thus, the Guides provide no support for Peoples’ position. See also Nichols Dep., Peoples Ex. 13 at 138-39 (suspension, as used by Fannie Mae, “usually” involves the possibility of reinstatement). In summary, the Letter Agreement promised a suspension, and a suspension is what Peoples received. The withdrawal of the termination in favor of the suspension provided consideration for the Agreement. It is of no relevance that the suspension was not later withdrawn in favor of reinstatement. b. The right to retain certain files Even if we were to accept Peoples’ argument that the withdrawal of the termination was not consideration for the Letter Agreement because it gave Peoples no more than that to which it was already legally entitled under the Contract, we find that another promise made by Fannie Mae in the Letter Agreement gave Peoples a benefit to which it was not already entitled under the Contract. The Letter Agreement gives Peoples permission to retain certain files for that portion of the portfolio, the servicing of which Peoples was attempting to transfer to Landmark Savings Bank or Fidelity Bond and Mortgage Corporation. FNMA Ex. E, Letter Agreement at ¶ 2. The Contract, on the other hand, specifically provided that those files belonged to Fannie Mae. Contract § V.C, FNMA Ex. 4; see also Berger Dep., FNMA Ex. D at 122 (admitting that Fannie Mae owned the mortgage records and files). Thus, the Letter Agreement gave a benefit to Peoples, possession of the files, to which it was not already entitled under the Contract, and this benefit serves as consideration for the Agreement. Peoples argues that this benefit was illusory. According to Peoples, “[s]ince the Landmark transaction had already collapsed prior to the execution of the Letter Agreement, Fannie Mae’s ‘permission’ to Peoples to retain certain files in connection with that transaction was already moot by the time the Letter Agreement was executed.” Peoples Mem. at 70. Peoples’ assertion, however, is without merit. Whatever the status of the Landmark transaction when the Letter Agreement was executed, there is no evidence that the prospective deal with Fidelity Bond and Mortgage Corporation was “moot” at the time that the Agreement was signed. Indeed, Peoples’ own evidentiary submission shows that Fidelity sent Peoples a Letter of Intent for purchase of the Portfolio on November 14, 1991, more than five months after the Letter Agreement was executed. Peoples Ex. 50; see also Peoples Mem. at 85-87 (describing ongoing relationship between Peoples and Fidelity for several months after the Letter Agreement was executed). We conclude that Fannie Mae’s allowing Peoples to retain these files served as consideration for the Letter Agreement. c. Termination without cause Finally, although neither party has fully discussed the issue, we find mutual consideration stemming from the fact that Fannie Mae could have terminated Peoples without cause. Fannie Mae’s termination of Peoples without cause would have left Peoples in the same “terminated” situation, except it would have been entitled to a fee as calculated under the Contract. Peoples would not, however, have been entitled to any of the benefits of the Letter Agreement, including the withdrawal of the termination. Thus, the benefits conferred upon Peoples by the Letter Agreement, together with Peoples’ relinquishment of any claim to the fee due upon a termination without cause, furnish mutual consideration for that agreement. S. Unconscionability Peoples argues that the Letter Agreement is unenforceable because it is unconscionable. The court disagrees. Although the concept of unconscionability “is not susceptible of precise definition,” Stanley A. Klopp, Inc. v. John Deere Co., 510 F.Supp. 807, 810 (E.D.Pa.1981), aff'd without opinion, 676 F.2d 688 (3d Cir.1982); see also, Kennington Ltd., Inc. v. Wolgin, Civil Action No. 89-80, 1989 WL 55395 at * 7 (E.D.Pa. May 23, 1989) (precise definition of unconscionability is difficult to ascertain from Pennsylvania case law), Pennsylvania courts have repeatedly stated that: Unconseionability has generally been recognized to include an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party. Witmer v. Exxon Corp., 495 Pa. 540, 551, 434 A.2d 1222 (1981) (emphasis omitted) (quoting Williams v. Walker-Thomas Furniture Co., 350 F.2d 445, 449 (D.C.Cir.1965)); accord, Denlinger, Inc. v. Dendler, 415 Pa.Super. 164, 608 A.2d 1061, 1068 (1992); Wagner v. Estate of Rummel, 391 Pa.Super. 555, 571 A.2d 1055, 1059 (1990), appeal denied, 527 Pa. 588, 588 A.2d 510 (1991); Kennington, 1989 WL 55395 at * 7; Melso v. Texaco, Inc., 532 F.Supp. 1280, 1295-96 (E.D.Pa.), aff'd without opinion, 696 F.2d 983 (3d Cir.1982); Stanley A. Klopp, 510 F.Supp. at 810; 14 Williston on Contracts § 1632A (3d ed. 1972). A party claiming that an agreement is unconscionable may be found to have had an “absence of meaningful choice” when it executed the agreement in either of two circumstances. As Judge Joseph S. Lord, III, of this court has explained: One variety of unconscionable contract is very much like contracts of adhesion____ It usually involves a party whose circumstances, perhaps his unworldliness or ignorance, when compared with the circumstances of the other party, make his knowing assent to the fine-print terms fictional.... Another species concerns what is basically economic duress. In the absence of a general mandate to review the adequacy of consideration, there has sometimes been a review of the economic positions of the parties and a finding that the position of one was so vulnerable as to make him the victim of a grossly unequal bargain. In re Elkins-Dell Manufacturing Co., 253 F.Supp. 864, 871 (E.D.Pa.1966) (citing 3 Corbin, Contracts § 559, at pp. 270-71 (12960)). In neither of the above-described senses did Peoples suffer from an “absence of meaningful choice.” The first of the above-described species of unconseionability arises in situations “where a sophisticated, knowing party was dictating terms to an unsophisticated party placing the latter in a perilous position without his knowledge.” Kennington, 1989 WL 55395 at * 8 (citing Germantown Manufacturing Co. v. Rawlinson, 341 Pa.Super. 42, 491 A.2d 138, 145-148 (1985)). In contrast, Peoples is a sophisticated business and was represented by counsel at all stages of negotiation and execution of the letter agreement. See Kennington at * 8 (rejecting unconseionability claim made by “sophisticated businessperson, well accustomed to dealing in millions of dollars”). As to the second type of unconseionability, arising out of “economic duress,” we have already determined as a matter of law that such duress was not present in the instant case. See supra Section IV.A.1. We conclude that the Letter Agreement is not unconscionable. It may well be that Peoples “entered into a less than ideal business arrangement. Pennsylvania contract law, however, is not in place to act as an insurance policy for those who suffer some sort of loss as a result of a contractual relations---- [T]he freedom to contract includes the freedom to enter into bad deals.” Kennington Ltd., Inc. v. Wolgin, Civil Action No. 89-80, 1989 WL 55395 at *8 (E.D.Pa. May 23, 1989). B. Peoples’ Claims Against Fannie Mae Having determined that the Letter Agreement is enforceable, we proceed to consider each of Peoples’ claims against Fannie Mae. Peoples complaint against Fannie Mae alleges: (1) breach of the Contract (Count I); (2) conversion of the servicing income from the Servicing Portfolio (Count II); (3) intentional interference with contractual agreement (Count III); (4) intentional interference with prospective advantage (Count IV); and (5) negligence (Count VI). Peoples asks the court to declare that the termination provisions of the Contract are unconscionable, void and unenforceable, and that the right to service the loans sold by Peoples to Fannie Mae belongs to Peoples (Count VII). Finally, Peoples asks the court to enjoin Fannie Mae from selling the Servicing Portfolio (Count VIII). 1. Breach of the Contract In Count I of its complaint, Peoples alleges that Fannie Mae breached the Contract when it terminated the Contract’s selling and servicing provisions on May 17, 1991. In particular, Peoples asserts that Fannie Mae breached the Contract by terminating Peoples for cause when in fact no cause existed. Peoples argument, however, cannot stand in light of the existence and enforceability of the Letter Agreement. The Letter Agreement states that it is a “resolution of all disputed issues” between Fannie Mae and Peoples, and that it “represents] the full agreement” reached by the parties. Fannie Mae Ex. E. Because the Letter Agreement, and not the Contract, defines Peoples’ contractual rights against Fannie Mae, Peoples cannot maintain a claim for breach of the Contract. All claims for breach of the Contract were rendered moot when the Letter Agreement was executed. Indeed, the Letter Agreement states that the termination was “for cause,” specifically negating Peoples’ claim that the termination was actually without cause. Accordingly, Count I must be dismissed. 2. Conversion of servicing income from the Servicing Portfolio Count II of Peoples’ complaint attempts to state a claim for conversion of the servicing income from the Servicing Portfolio. Under Pennsylvania law, conversion is defined as “the deprivation of another’s right of property in, or use or possession of, a chattel, or other interference therewith, without the owner’s consent and without lawful justification.” Stevenson v. Economy Bank of Ambridge, 413 Pa. 442, 451, 197 A.2d 721, 726 (1964); accord, Bank of Landisburg v. Burruss, 362 Pa.Super. 317, 524 A.2d 896, 898 (1987). The party claiming conversion must have had an immediate right to possession of the property at the time it was allegedly converted. Bank of Landisburg, 524 A.2d at 898 (citing Potts Run Coal Co. v. Benjamin Coal Co., 285 Pa.Super. 128, 135, 426 A.2d 1175, 1178 (1981)). Money may be the subject of a conversion. Shonberger v. Oswell, 365 Pa.Super. 481, 530 A.2d 112, 114 (1987) (citing Pearl Assurance Co. v. National Ins. Agency, 151 Pa.Super. 146, 156, 30 A.2d 333, 337 (1943)). In order to understand Peoples’ conversion claim, it is necessary to appreciate the way in which Peoples allegedly garnered servicing income under the terms of the Contract. When Fannie Mae purchased loans from Peoples pursuant to the Contract, it contracted to receive a fixed “pass-through” rate or “required net yield” of return from each loan payment made to Peoples by the borrower. This “pass-through” or “net yield” payment was made to Fannie Mae by Peoples, the servicer of the loan. Complaint ¶ 101. The “pass-through” rate is less than the full amount of principal and interest due each month from the borrower, Complaint ¶ 102, and the difference between the principal and interest paid by the borrower to Peoples, and the “pass-through” rate paid by Peoples to Fannie Mae represented the servicing fee to which Peoples was entitled under the Contract, Complaint ¶ 103. The Complaint alleges that the “servicing fee for each loan serviced by Peoples belongs to Peoples, not Fannie Mae.” Complaint ¶ 105. Because Peoples has not received any servicing income from the Portfolio since it was seized by Fannie Mae in May 1991, Peoples concludes that Fannie Mae has “converted the servicing income from the Peoples servicing portfolio to their own use and benefit.” Complaint ¶ 106. In short, Peoples contends that it owns the income acquired by servicing the Portfolio, and that Fannie Mae has converted that income by taking it away from Peoples. Peoples’ argument is belied by the undisputed facts and the plain language of the Letter Agreement. The Complaint’s allegation that the “servicing fee for each loan serviced by Peoples belongs to Peoples, not Fannie Mae,” Complaint ¶ 105, is beside the point, since none of the loans in the Portfolio are “serviced by Peoples,” nor have they been serviced by Peoples since May 1991, having instead been “subserviced” for Fannie Mae by Meridian Mortgage Corporation. If Peoples means to claim that it owns the servicing fee for each loan in the Portfolio, irrespective of who actually does the servicing, this claim must fall in light of the plain language of the Letter Agreement, which states: “Except as specifically provided in this letter, Fannie Mae has all rights to the Servicing Portfolio.” FNMA Ex. E. Thus, when Peoples executed the Letter Agreement, it gave up all rights to the servicing income, except insofar as such rights may be specifically provided by that agreement. Because any rights Peoples might have to servicing income are defined by the terms of the Letter Agreement, which we have determined to be an enforceable contract, Peoples cannot sue in tort for conversion of that income. Instead, any rights to servicing income granted to Peoples by the Letter Agreement would properly be protected by a contract action seeking enforcement of the Letter Agreement or damages for its breach. As Judge Poliak of this court has explained: While it is true that the mere existence of a contract between parties does not foreclose the possibility of a tort action arising between them, it does not follow that a plaintiff should be allowed to sue in tort for damages arising out of a breach of contract. To hold otherwise would be to blur one reasonably bright line between contract and tort, and hence introduce needless confusion into the judicial process, a step that Pennsylvania’s state and federal courts alike have refused to take. Stout v. Peugeot Motors of America, 662 F.Supp. 1016, 1018 (E.D.Pa.1986) (citing, Standard Pipeline Coating Co. v. Solomon & Teslovich, Inc., 344 Pa.Super. 367, 496 A.2d 840, 843-44 (1985); Glazer v. Chandler, 414 Pa. 304, 308 & n. 1, 200 A.2d 416 (1964); Iron Mountain Security Storage Corp. v. American Specialty Foods, Inc., 457 F.Supp. 1158, 1165-66 (E.D.Pa.1978)); accord, Montgomery v. Federal Insurance Co., 836 F.Supp. 292, 301-302 (E.D.Pa.1993) (dismissing conversion claim because of, inter alia, the “firmly accepted ... doctrine that an action for conversion will not lie where damages asserted are essentially damages for breach of contract”); Neyer, Tiseo & Hindo, Ltd. v. Russell, Civil Action No. 92-2983, 1993 WL 53579 at *3-4 (E.D.Pa. March 2, 1993) (dismissing conversion claim); Browne v. Maxfield, 663 F.Supp. 1193, 1201 (E.D.Pa.1987) (“Pennsylvania courts, state and federal, have consistently rejected tort remedies for conduct that is remediable as a breach of contract.”); see also Northcraft v. Edward C. Michener Associates, Inc., 319 Pa.Super. 432, 447, 466 A.2d 620, 628 (1983) (action for conversion must be limited to chattels of existing nature, i.e., those whose existence is ascertainable by some concrete proof; in absence of such proof, circumstances are more amenable to cause of action for breach of contract). We would be particularly loathe to blur the line between contract and tort actions in the instant case, where the Complaint’s conversion claim does not even mention the Letter Agreement upon which any rights of Peoples to servicing income must rest. Thus, Count II of the Complaint must be dismissed. S. Intentional interference with contractual relations Count III of Peoples’ complaint alleges that Fannie Mae intentionally interfered with a contractual agreement between Peoples and Landmark Savings Bank (“Landmark”) for the purchase by Landmark of a portion of the servicing rights for the Servicing Portfolio. Under the undisputed evidence, Count III must be dismissed. The record reveals that Landmark and Peoples entered into a transaction in April 1991, to be completed by the end of May 1991, whereby Landmark would purchase from Peoples the servicing rights to approximately 320 loans. Bollman Dep., Peoples Ex. 51 at 14-15, 21-23; Peoples Ex. 52 (Landmark letter of intent). The Letter Agreement granted Peoples the right to attempt this sale to Landmark, FNMA Ex. E at ¶¶ 2, 4, and Fannie Mae’s approval of the transaction had been obtained, Berger Dep., Peoples Ex. 14 at 299-300; Loan Servicing Purchase and Sale Agreement, Peoples Ex. 53 at 29. Shortly after Landmark learned that Fannie Mae had removed the Servicing Portfolio from Peoples, Landmark notified Peoples that it was withdrawing its letter of intent to purchase. Bollman Dep., Peoples Ex. 51 at 29. Peoples alleges that Fannie Mae intentionally interfered with the Landmark contract, and caused Landmark to back out of the deal. According to Peoples, this interference took two forms: (1) Fannie Mae allegedly made excessive demands that Peoples repurchase loans previously sold by Peoples to Fannie Mae; and (2) Fannie Mae allegedly terminated the Servicing Contract for cause when there was actually no cause for termination. Pennsylvania courts analyze claims for intentional interference with contract under Section 766. of the Restatement (Second) of Torts. Windsor Securities, Inc. v. Hartford Life Ins. Co., 986 F.2d 655, 659 (3d Cir.1993) (citing, Adler, Barish, Daniels, Levin & Creskoff v. Epstein, 482 Pa. 416, 429-31, 393 A.2d 1175, 1181-83 (1978), cert. denied, 442 U.S. 907, 99 S.Ct. 2817, 61 L.Ed.2d 272 (1979); Nathanson v. Medical College of Pennsylvania, 926 F.2d 1368, 1386 (3d Cir.1991)); Geofreeze Corp. v. C. Hannah Constr. Co., 588 F.Supp. 1341, 1344 (E.D.Pa.1984). Section 766 provides: One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person by inducing or otherwise causing the third person not to perform the contact, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract. Section 766 “addresses disruptions caused by an act directed not at the plaintiff [Peoples], but at a third person [Landmark]: the defendant causes the promisor [Landmark] to breach its contract with the plaintiff [Peoples].” Windsor Securities, 986 F.2d at 660. It is undisputed that all of Fannie Mae’s acts allegedly disrupting Peoples’ deal with Landmark, the allegedly unlawful termination of the Contract and the allegedly excessive loan repurchase requests, were directed at Peoples, not at Landmark. Therefore, Peoples cannot make out a claim against Fannie Mae under § 766, even if Fannie Mae’s conduct was intended to and did cause Landmark’s failure to perform. Windsor Securities, 986 F.2d at 659-60. Section 766A of the Restatement (Second) of Torts covers situations where, as here, the defendant’s alleged tortious interference is directed toward the plaintiff, rather than toward a third person with whom the plaintiff has a contractual relation. Section 766A provides: One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person, by preventing the other from performing the contract or causing his performance to be more expensive or burdensome, is subject to liability to the other for the pecuniary loss resulting to him. The Pennsylvania Supreme Court has not adopted § 766A. See Windsor Securities, 986 F.2d at 659-60. The third circuit has stated that it “is far from clear” that the Pennsylvania Supreme Court would adopt § 766A, id., 986 F.2d at 661, has criticized that section, id., 986 F.2d at 659-63, and has “eounsel[ed] some caution in expanding tortious interference liability” to include the behavior that section describes, id. at 662-63. The third circuit did not finally reach the issue of whether § 766A would be adopted by the Pennsylvania Supreme Court, however, because it found that even if that section were adopted the plaintiff had not made out a claim. Id., 986 F.2d at 663-65; see also Stepanuk v. State Farm Mutual Automobile Insurance Co., Civil Action No. 92-6095, 1993 WL 114036 at *10-11 (E.D.Pa. April 14, 1993) (describing the Windsor Securities court’s criticism of § 766A and finding that the plaintiff could not prevail under that section even if it was the law of Pennsylvania); Stepanuk v. State Farm Mutual Automobile Insurance Co., Civil Action No. 92-6095, 1993 WL 166748 at *1 (E.D.Pa. May 14, 1993) (same, on motion for reconsideration). Given the third circuit’s negative appraisal of § 766A, this court would be hesitant to adopt it as an expression of Pennsylvania law. Like the Windsor Securities court, however, we need not decide if § 766A would be adopted by the Pennsylvania Supreme Court. Even if Pennsylvania were to adopt § 766A, Fannie Mae is not liable under that section. Its conduct either did not cause Landmark to withdraw from the deal, or was not “improper” within the meaning of § 766A. The undisputed evidence shows that Fannie Mae’s allegedly excessive loan repurchase requests had nothing to do with Landmark’s withdrawal from the deal. Deposition testimony of Jay Berger and of John Bollman, head of Landmark’s secondary marketing and servicing operation, shows that Landmark decided to withdraw from the deal when it was notified by Peoples, during the week of May 20, 1991, that Fannie Mae was removing the servicing from Peoples. Boll-man Dep., Peoples Ex. 51 at 24, 29-30, 53; Berger Dep., FNMA Ex. D at 222. All of the allegedly excessive loan repurchase requests were made after May 30,1991. Complaint ¶40. Thus, it is clear that the loan repurchase requests had nothing to do with Landmark’s withdrawal, since they all came after the decision to withdraw had been made. On the other hand, it is undisputed that Fannie Mae’s termination of the Contract with Peoples was a factor in Landmark’s decision to withdraw. Bollman Dep., Peoples Ex. 51 at 29-30, 53. However, Fannie Mae’s termination of the Contract cannot be considered “improper” in the sense required for liability under § 766A, for in the Letter Agreement Peoples acknowledges that the termination of the Contract was “for cause.” FNMA Ex. E. Thus, Peoples cannot now claim that the termination was an “improper” action subjecting Fannie Mae to liability under § 766A. Even in the absence of the Letter Agreement, Fannie Mae’s termination of the contract “for cause” when there allegedly was none is not the kind of action envisioned as “improper” under § 766A. Windsor Securities, 986 F.2d at 663-665 (breach of contract does not constitute the type of “improper” conduct required to make out a claim under § 766A). Where “the allegations and evidence only disclose that defendant breached his contracts with plaintiff and that as an incidental consequence thereof plaintiffs business relationships with third parties have been affected, an action lies only in contract for defendant’s breaches, and the consequential damages recoverable, if any, may be adjudicated only in that action.” Glazer v. Chandler, 414 Pa. 304, 308, 200 A.2d 416, 418 (1964); accord, Adler, Barish, 482 Pa. at 430 n. 13, 393 A.2d at 1182 n. 13; Windsor Securities, 986 F.2d at 663-665; Prosser & Keaton, The Law of Torts § 129, at 990 (5th ed. 1984). Accordingly, Count III will be dismissed. b. Intentional interference with prospective contractual relation Count IV of Peoples’ complaint alleges that Fannie Mae intentionally interfered with a prospective contractual relation by causing Fidelity Bond and Mortgage Corporation (“Fidelity”) to withdraw from negotiations with Peoples for the purchase of the servicing. Peoples avers that Fannie Mae’s “initiating excessive and unreasonable loan repurchase demands” caused Fidelity “not to enter into an agreement with Peoples to purchase the Peoples Servicing Portfolio.” Complaint ¶ 134. Under Pennsylvania law, a plaintiff asserting intentional interference with prospective contractual relations must prove the following elements: “(1) a prospective contractual relationship; (2) the purpose or intent to harm plaintiff by preventing the relationship from occurring; (3) the absence of privilege or justification on the part of the defendant; and (4) occurrence of actual damage.” Advent Systems Ltd. v. Unisys Corp., 925 F.2d 670, 673 (3d Cir.1991); accord, Silver v. Mendel, 894 F.2d 598, 601-02 (3d Cir.) (citing Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 412 A.2d 466, 471 (1979)), cert. denied, 496 U.S. 926, 110 S.Ct. 2620, 110 L.Ed.2d 641 (1990). Peoples must also establish that there is a reasonable likelihood that the transaction would have been completed but for Fannie Mae’s interference. Thompson Coal Co., 488 Pa. at 209-10, 412 A.2d at 471; Tose v. First Pennsylvania Bank, N.A., 648 F.2d 879, 898 (3d Cir.), cert. denied, 454 U.S. 893, 102 S.Ct. 390, 70 L.Ed.2d 208 (1981); Posner v. Lankenau Hospital, 645 F.Supp. 1102, 1111 (E.D.Pa.1986). Deposition testimony of Fidelity’s President, James Dougherty, explicitly addresses the role Fannie Mae played in Fidelity’s decision to withdraw from negotiations with Peoples: Q: Did Fannie Mae have any impact on your decision not to go through with the deal? A: I don’t think Fannie Mae — Fannie Mae had no — you know, obviously in the back of your mind you are thinking here’s our major customer and our main customer and you take that into consideration, obviously, when you are doing these types of deals. But they [Fannie Mae] put no pressure on us either way to do or not to do this deal. Q: Did Fannie Mae do anything or not do anything that impacted on your decision not to go through with the deal? A: No. I might have had a conversation with Phil Nichols about that, us doing this deal. I might have called him, and I don’t recall, though. Something tells me I did when I think a little bit about it.... Q: Did Mr. Nichols say anything to you that had any impact on whether or not Fidelity would do or not do this deal? A: No, he did not. Dougherty Dep., FNMA Ex. 6 at 48-50 (emphasis added). Dougherty’s deposition testimony makes it clear beyond doubt that nothing Fannie Mae did or said to Fidelity had anything to do with Fidelity’s decision not to go forward with the deal. While Fannie Mae’s position in the market as Fidelity’s major customer may have influenced Fidelity’s decision, such indirect influence cannot be taken to be the type of “purpose or intent to harm” Peoples, Advent Systems, supra, needed to make out a claim for intentional interference with a prospective contract. See also Harper, James & Gray, The Law o