Day on Torts
Where plaintiffs asserting a tortious interference with a business relationship claim could not show that the defendants intended to cause a breach or termination of the relationship, which had already been breached before defendants’ involvement, or that defendants acted with an improper motive, summary judgment for defendants was affirmed.
In Throckmorton v. Lefkovitz, No. M2022-01124-COA-R3-CV (Tenn. Ct. App. Feb. 29, 2024), plaintiff attorneys had previously represented clients in a property dispute in which clients’ goal was to be awarded the property at issue. Plaintiffs and clients had entered into a contingency fee agreement stating that clients would pay plaintiffs a percentage of the recovery, but recovery was not defined. After clients successfully obtained the property, plaintiff attorneys attempted to recover the percentage in the fee agreement based on a contract for the sale of the land that clients entered into. Clients contested that the amount sought was reasonable, and clients eventually hired defendant attorneys to represent them in the fee dispute.
Defendants advised clients to attempt to settle the dispute, and defendants engaged in settlement discussions with plaintiffs on behalf of clients. Defendants informed plaintiffs that if a settlement was not reached, clients would file for bankruptcy. Clients ultimately did file for bankruptcy, and through the bankruptcy process, plaintiffs and clients settled the fee dispute. Thereafter, plaintiff attorneys filed this case against defendant attorneys for tortious interference with a business relationship. The trial court granted defendants summary judgment, finding that the bankruptcy was a legitimate option, that defendants did not act with improper intent, and that there was no evidence that defendants “acted in self-interest.” Summary judgment was affirmed on appeal.
To establish a claim for tortious inference with business relationship, a plaintiff must prove several elements, including “the defendant’s intent to cause the breach or termination of the business relationship” and “the defendant’s improper motive or improper means.” Here, the Court of Appeals ruled that plaintiffs could not prove either of these elements.
Plaintiffs relied heavily on a statement by defendant attorney that he would “f*** them out of their fees” to show that defendants intended to cause the breach or termination, but the Court of Appeals found that “Attorney’s vulgarity alone, which Plaintiffs acknowledged was said in frustration, does not create a genuine issue for trial…” The Court pointed out that clients had “contested the amount of the fee and refused payment before Attorney or his law firm entered the picture,” and it found that “Attorney could not intend to cause a breach or termination of the business relationship when such breach had already occurred before his involvement.”
Plaintiffs also could not prove an improper motive on defendants’ part. The Court noted that plaintiffs did not assert that the bankruptcy was illegitimate or improper in the bankruptcy proceedings, but instead took part in the process. The Court found that plaintiffs had not shown that defendants’ primary purpose in advising clients to file for bankruptcy was to injure plaintiffs, as defendants had encouraged clients to speak directly to plaintiffs first. Further, plaintiffs knew before representing clients that clients had a cash liquidity problem. Based on these undisputed facts, plaintiffs could not show the elements of intent and/or improper motive or improper means.
Because plaintiffs could not prove the elements of tortious interference with a business relationship, summary judgment for defendants was affirmed.
There are few appellate cases addressing this tort, so anyone litigating a tortious interference with business relationship claim would be wise to review this opinion. The case highlights the need to prove causation in every tort case.
This opinion was released six months after oral arguments in this case.