Day on Torts
While a claim for intentional interference with business relationships does not “arise out of a claim for interference with contract rights” and is thus not expressly listed in the GTLA as a cause of action for which a governmental entity retains immunity, because it is an intentional tort, a plaintiff seeking to assert an intentional interference with business relationships claim against a governmental entity must still show negligent supervision or some direct negligence by the entity.
In Robinson v. City of Clarksville, Tennessee, No. M2019-02053-COA-R3-CV (Tenn. Ct. App. Jan. 31, 2023), plaintiffs owned a restaurant in defendant City. In 2002, plaintiffs sold a portion of an empty lot next to the restaurant to defendant. Plaintiffs claim that the mayor at the time promised that the City would install utilities and build a public alleyway on the property. In 2015, plaintiffs decided to build a second restaurant on the empty lot and asked the City to build the promised alleyway, which the City refused to do. Further, while constructing a sewer line, the City inadvertently placed part of the line on plaintiffs’ property. This suit followed, asserting several contract and property claims, as well as a tort claim for intentional interference with business relationships. The trial court dismissed the tort claim against the City pursuant to the GTLA, and dismissal was affirmed on appeal.
The only tort claim at issue in this case was plaintiff’s claim of intentional interference with business relationships. While governmental entities are generally immune from suit, the GTLA specifically removes immunity for certain claims. At issue here was Tenn. Code Ann. § 29-20-205, which states that immunity is not removed “if the injury arises out of…interference with contract rights.” Based on this language, the trial court ruled that immunity was not removed, but the Court of Appeals disagreed with this analysis.
Noting that the GTLA is to be strictly construed, the Court stated that the issue here was “whether the claim of interference with business relationships arises out of a claim for interference with contract rights and whether it can be used interchangeably with that claim under the GTLA.” (internal quotations omitted). Looking to the Tennessee Supreme Court case that first adopted the tort of intentional interference with business relationships, the Court noted that a plaintiff asserting this claim must prove five elements, and that “the business relationships protected may include a continuing business or other customary relationship not amounting to a formal contract.” (internal citation and quotation omitted). The tort of interference with contract rights, however, includes as its first element that “a legal contract existed.” (internal citation omitted).
After reviewing the elements of each claim, the Court of Appeals reasoned:
Although they are similar in some ways, the two causes of action are separate and distinct, with the chief distinction being that a cause of action for interference with business relationship does not require an existing contract. We do not find that the claim of interference with business relationship necessarily ‘arises out of’ a claim for interference with contract rights because no contract is required in order to pursue the claim of interference with business relationship. Our Supreme Court has cautioned that we must construe the GTLA ‘strictly’ and confine the statute ‘to its express terms,’ therefore, we find that the trial court erred in conflating the torts of interference with contract rights and interference with business relations under Tenn. Code Anno. § 29-20-205(2).
(internal citation omitted).
Having determined that the tort of intentional interference with business relationship was not expressly listed in the statute, the Court pointed out that “where an intentional tort is not specifically enumerated in section 29-20-205(2), the governmental entity may still be liable for its negligent failure to prevent its employees from committing the intentional tort.” (internal citation omitted). Looking at the complaint, the Court ruled that there were “no allegations of negligent supervision or any other negligent conduct on the part of the City that caused the intentional conduct at issue.” (internal citations omitted). The Court therefore found that the City retained its immunity, and dismissal of this tort claim was affirmed.
While this opinion specifically addresses intentional interference with business relationships under the GTLA, it is a good read for anyone litigating a case that includes this tort.
This opinion was released 4.5 months after oral arguments in this case.
Note: Chapter 41, Section 7 and Chapter 65, Section 1 of Day on Torts: Leading Cases in Tennessee Tort Law has been updated to include this decision.
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