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In a recent opinion, the Supreme Court of Virginia held that actions motivated solely by ill will or personal spite, that don’t include improper conduct, do not support a claim for tortious interference with an at-will contract. The court provided a helpful definition of when conduct is considered improper and decided that it is not enough if the actions were merely spiteful. Click here for opinion.
The facts of the case involve a Virginia law firm, Dunn, McCormack & Macpherson (“Dunn”), who had an at-will contract with the Fairfax County Redevelopment and Housing Authority (the “Authority”). Dunn had served as legal counsel for the Authority for around thirty years until the Authority terminated the contract in September 2005.
Dunn sued Gerald Connolly (“Connolly”), Chairman of the Fairfax County Board of Supervisors, alleging that Connolly tortiously interfered with Dunn’s contract with the Authority by persuading Authority to break the contract. Dunn claimed that Connolly’s actions were motived solely by his personal spite, ill will and malice, because he didn’t get along with a partner at Dunn.
The circuit court entered an order dismissing the action for Dunn’s failure to provide facts showing Connolly used illegal means or improper methods when he communicated with the Authority. This court reviewed the circuit court’s ruling de novo and came to the same conclusion.
The elements to support a cause of action for tortious interference with contract rights are: (1) the existence of a valid contractual relationship or business expectancy, (2) knowledge of the relationship or expectancy on the part of the interferer, (3) intentional interference inducing or causing a breach or termination of the relationship or expectancy, and (4) resultant damage to the party whose relationship or expectancy has been disrupted.
Additionally, when a contract is at-will, an element is added: the defendant must have employed improper methods. Op. at 6, citing Duggin v. Adams, 234 Va. 221, 226-27, 360 S.E.2d 832, 836 (1987).
The court explained that interference is improper if it is illegal, independently tortious, or violates an established standard of trade or profession. The court quoted the Duggin case, stating:
Methods of interference considered improper are those means that are illegal or independently tortious, such as violations of statutes, regulations, or recognized common-law rules. Improper methods may include violence, threats or intimidation, bribery, unfounded litigation, fraud, misrepresentation or deceit, defamation, duress, undue influence, misuse of inside or confidential information, or breach of a fiduciary relationship…
Methods also may be improper because they violate and established standard of a trade or profession, or involve unethical conduct. Sharp dealing, overreaching, or unfair competition may also constitute improper methods.
234 Va. at 227-28, 360 S.E.2d at 836-37.
Dunn’s argument that Connolly improperly interfered with its terminable at-will contract with the Authority because his actions were motived solely by Connolly’s personal spite, ill will and malice was found to be insufficient. The court found that Dunn failed to appreciate the limited nature of what constitutes “improper” interference. The court stated that it “will not extend the scope of the tort to include actions solely motivated by spite, ill will and malice.” Op. at 7. Because there were no facts alleged that showed improper interference, there was no merit to Dunn’s claim and the action was dismissed.