In Dunn, McCormack & MacPherson v. Connolly, the Supreme Court of Virginia affirmed the circuit court’s judgment sustaining the defendant’s demurrer and dismissing a tortious interference with contract action for failure to state a claim. The case reaffirms that a defendant must have used “improper methods” to interfere with the contract in order to have a viable claim for tortious interference under Virginia law. More after the break.
Dunn, McCormack & MacPherson (“Dunn”) served as legal counsel to the Fairfax County Redevelopment and Housing Authority (“Authority”) for many years. This relationship was based on at at-will contract for legal representation, which ended in September 2005. Dunn subsequently filed suit against Gerald Connolly, Chairman of the Fairfax County Board of Supervisors, alleging tortious interference with contract. Connolly filed a demurrer seeking to dismiss the action for failure to state a claim, and the circuit court granted the demurrer and dismissed the complaint. Dunn then filed an amended complaint alleging that Connolly had “verbally directed or persuaded” the Authority to terminate its contract with Dunn, and that Connolly’s actions were “motivated solely by his personal spite, ill will and malice.”
Connolly filed another demurrer stating that the amended complaint “allege[d] mere conclusions” and was “factually insufficient to show that Connolly employed improper methods of interference, a requisite element of the tort.” The circuit court agreed with Connolly, stating at the hearing on the demurrer that even if Connolly had talked to the Authority and persuaded them to terminate the contract, that alone did not constitute tortious interference because there were no illegal means or improper method of interference alleged. The court also noted that the case implicated First Amendment rights to free speech.
On appeal to the Virginia Supreme Court, Dunn argued that the circuit court erred in sustaining the demurrer because the amended complaint exactly paralleled the elements of the tort. The supreme court stated that the elements of a prima facie case for tortious interference were: “(i) the existence of a valid contractual relationship or business expectancy; (ii) knowledge of the relationship or expectancy on the part of the interferor; (iii) intentional interference inducing or causing a breach or termination of the relationship or expectancy; and (iv) resultant damage to the party whose relationship or expectancy has been disrupted.” Further, when the contract at issue is terminable at will, the plaintiff must also show that the defendant used “improper methods” for interfering with the contract. This means that the methods employed were “illegal or independently tortious” or involved “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.” Improper methods may also be those that “violate an established standard of a trade or profession, or involve unethical conduct.” The court found that Dunn’s assertion that Connolly was motivated by personal spite or ill will was insufficient to constitute an improper method of interference as required for cases involving at-will contracts. The court declined to expand the scope of the tort “to include actions solely motivated by spite, ill will and malice.” Thus, the court affirmed the circuit court’s judgment and dismissed the complaint.
The Court’s opinion can be found here.