Case Title: DurretteBradshaw, P.C. v. MRC Consulting, L.C.

Citation: 

Docket Number: 072418

State: virginia

Court: Virginia Supreme Court

Date: 2009-01-16T00:00:00Z

Document:
PRESENT: Hassell, C.J., Keenan, Koontz, Kinser, Goodwyn and 
Millette, JJ., and Russell, S.J. 
 
 
DURRETTEBRADSHAW, P.C. 
 
v.        Record No. 072418                  OPINION BY 
JUSTICE S. BERNARD GOODWYN 
MRC CONSULTING, L.C. 
       JANUARY 16, 2009 
 
 
FROM THE CIRCUIT COURT OF THE CITY OF NORFOLK 
Charles E. Poston, Judge 
 
In this appeal, we consider whether a defendant must act 
with the intent to interfere with a contract to which the 
plaintiff was a party in order for the plaintiff to have a 
claim against that defendant for tortious interference with 
contract rights. 
Background 
MRC Consulting, L.C. (“MRC”) filed a complaint in the 
Circuit Court of the City of Norfolk purporting to state a 
cause of action against DurretteBradshaw, P.C. 
(“DurretteBradshaw”) for tortious interference with a 
contractual relationship between SouthStar Systems, Inc. 
(“SouthStar”) and MRC.  DurretteBradshaw filed a demurrer, 
asserting that MRC’s complaint did not state a cause of action 
against DurretteBradshaw for tortious interference with the 
contract between SouthStar and MRC, because MRC did not allege 
that DurretteBradshaw intended to interfere with the contract 
between MRC and SouthStar.  The circuit court overruled the 
demurrer.  The matter proceeded to trial before a jury.  The 
jury returned a verdict in favor of MRC in the amount of 
$253,875.72, and the circuit court entered a judgment 
confirming that verdict.  DurretteBradshaw appeals.∗ 
The principles of appellate review that guide our 
consideration of this appeal are well-settled.  “A demurrer 
admits the truth of the facts contained in the pleading to 
which it is addressed, as well as any facts that may be 
reasonably and fairly implied and inferred from those 
allegations.  A demurrer does not, however, admit the 
correctness of the pleader’s conclusions of law.”  Yuzefovsky 
v. St. John’s Wood Apts., 261 Va. 97, 102, 540 S.E.2d 134, 136-
37 (2001) (internal citation omitted).  Accordingly, we will 
consider the facts stated, and those reasonably inferred from 
the complaint, in a light most favorable to the plaintiff, but 
we will review the sufficiency of the legal conclusions 
ascribed to those facts de novo.  Id. at 102, 540 S.E.2d at 
137.  Applying this standard, the relevant facts and legal 
conclusions in the plaintiff’s complaint are as follows. 
SouthStar entered a contract (“SouthStar/SEI contract”) with 
                     
∗ The Court will not address any of DurretteBradshaw’s 
assignments of error other than that concerning the demurrer 
because resolution of that assignment of error is dispositive.  
See, e.g., Lynchburg Div. of Soc. Servs. v. Cook, 276 Va. 465, 
477, 666 S.E.2d 361, 367 (2008); Pryor v. Commonwealth, 276 Va. 
312, 316 n.1, 661 S.E.2d 820, 821 n.1 (2008). 
 
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Spring Engineers of Dallas, Ltd., t/a SEI Metalforms, Ltd. 
(“SEI”) that involved the sale of 5,000 computer communication 
boards from SouthStar to SEI at the price of $205 each, for a 
total contract price of $1,025,000.  SouthStar expected to 
realize a profit of $200 per unit. 
Before the contract could be fulfilled, SouthStar suffered 
a casualty loss to its inventory of communication boards.  
SouthStar presented a claim to Maryland Casualty Company, its 
insurer, for business interruption and lost profits concerning 
the SouthStar/SEI contract.  Maryland Casualty did not pay the 
claim. 
 
To fulfill the obligation it had to SEI, and to mitigate 
its loss, SouthStar enlisted the assistance of MRC.  MRC agreed 
to fund the redesign of communication boards to meet SEI’s 
requirements, and to pay the cost to manufacture those boards.  
In exchange, SouthStar agreed to buy the boards it needed for 
the SouthStar/SEI contract from MRC for $102.50 each.  MRC 
expected to realize a profit of $500,000 on the transaction. 
 
Represented by DurretteBradshaw, Maryland Casualty filed a 
declaratory judgment action seeking a determination that 
Maryland Casualty was not required to pay SouthStar’s business 
interruption and lost profit claims.  During this 
representation of Maryland Casualty, one of DurretteBradshaw’s 
attorneys, acting within the scope of his employment, 
 
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purposefully disclosed to SEI confidential information 
DurretteBradshaw had obtained about SouthStar while 
investigating the insurance claim.  The attorney purportedly 
made this disclosure hoping that SEI would cancel the 
SouthStar/SEI contract.  SEI was informed about SouthStar’s 
large profit margin and that SouthStar was financially unable 
to perform its contract with SEI.  After the disclosure, SEI 
did, in fact, cancel the SouthStar/SEI contract, eliminating 
SouthStar’s claim for business interruption and lost profits 
under its Maryland Casualty policy. 
 
MRC alleged, in its complaint, that when DurretteBradshaw 
disclosed the confidential information to SEI, DurretteBradshaw 
knew of MRC’s contract with SouthStar and MRC’s involvement in 
the performance of the SouthStar/SEI contract.  MRC claimed 
that DurretteBradshaw intentionally interfered with the 
SouthStar/SEI contract, knowing of the obvious impact of that 
interference, not only on SouthStar, but on MRC as well.  MRC 
claimed that, as a result of DurretteBradshaw’s interference 
with the SouthStar/SEI contract, MRC lost the profits it would 
have made from its contract with SouthStar, and thus was 
entitled to damages because of DurretteBradshaw’s actions.  
Analysis 
 
DurretteBradshaw contends that the circuit court erred 
when it overruled DurretteBradshaw’s demurrer to MRC’s 
 
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complaint.  DurretteBradshaw argues that its demurrer should 
have been sustained because MRC did not plead that 
DurretteBradshaw intended to affect MRC when it disclosed 
information about SouthStar to SEI.  MRC counters that its 
complaint states a cause of action for tortious interference 
because the complaint contains allegations that 
DurretteBradshaw intentionally interfered with the 
SouthStar/SEI contract, knowing the obvious impact such 
interference would have upon the contract MRC had with 
SouthStar.  
 
In Chaves v. Johnson, 230 Va. 112, 335 S.E.2d 97 (1985), 
this Court expressly recognized that the cause of action for 
tortious interference with contract rights is succinctly 
described in the Restatement (Second) of Torts § 766 (1977): 
Intentional Interference with Performance 
of Contract by Third Party 
 
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 contract, 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. 
 
Chaves, 230 Va. at 120, 335 S.E.2d at 102. 
 
This Court, in Chaves, stated the elements necessary to 
support a cause of action for tortious interference with 
contract rights.  The elements required for a prima facie 
 
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showing of the tort are:  (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.  Id. 
 
MRC alleged that a contract existed between SouthStar and 
MRC, that DurretteBradshaw knew of this relationship, and that 
MRC lost the profits it would have made if the contract between 
MRC and SouthStar had been fulfilled.  The resolution of this 
appeal hinges upon whether MRC’s complaint alleges an act that 
constitutes “intentional interference inducing or causing a 
breach or termination of the relationship or expectancy” 
between MRC and SouthStar. 
 
DurretteBradshaw argues that the intentional interference 
inducing the breach or termination of the contract must be 
intentional interference with the specific contract for which 
the plaintiff claims damages.  Thus, DurretteBradshaw  argues 
that MRC’s complaint is insufficient because it fails to allege 
that DurretteBradshaw’s actions were intended to induce or 
cause a breach of the contract between MRC and SouthStar.  MRC, 
on the other hand, claims that a plaintiff need only plead 
intentional action, on the part of the defendant, with the 
 
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knowledge such action will result in a breach or termination of 
the plaintiff’s relationship or expectancy; the defendant’s 
purposeful act need not be with the intent to disrupt the 
plaintiff’s relationship or expectancy.  Thus, according to 
MRC, it stated a cause of action for tortious interference 
against DurretteBradshaw by alleging intentional interference 
by DurretteBradshaw with the SouthStar/SEI contract, and 
alleging that such interference resulted in the breach or 
termination of MRC’s relationship or expectancy with SouthStar, 
the existence of which DurretteBradshaw was aware.  We disagree 
with MRC. 
 
This Court applied § 766 of the Restatement (Second) of 
Torts in Chaves.  We find the commentary accompanying § 766 of 
the Restatement (Second) of Torts to be instructive. 
 
The plaintiff relies on Comment j to § 766 of the 
Restatement in support of its theory of the case.  That Comment 
states: 
j.  Intent and purpose.  The rule stated in this 
Section is applicable if the actor acts for the 
primary purpose of interfering with the performance 
of the contract, and also if he desires to interfere, 
even though he acts for some other purpose in 
addition.  The rule is broader, however, in its 
application than to cases in which the defendant has 
acted with this purpose or desire.  It applies also 
to intentional interference, . . . in which the actor 
does not act for the purpose of interfering with the 
contract or desire it but knows that the interference 
is certain or substantially certain to occur as a 
result of his action.  The rule applies, in other 
 
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words, to an interference that is incidental to the 
actor’s independent purpose and desire but known to 
him to be a necessary consequence of his action. 
 
Restatement (Second) of Torts § 766, cmt. j (1979). 
 
However, Comment p to § 766 of the Restatement further 
explains § 766 by stating: 
The person protected by the rule stated in [§ 766] is 
the specified person with whom the third person had a 
contract that the actor caused him not to perform.  
To subject the actor to liability under this rule, 
his conduct must be intended to affect the contract 
of a specific person.  It is not enough that one has 
been prevented from obtaining performance of a 
contract as a result of the actor’s conduct.  (Cf. 
§ 766A).  Thus, if A induces B to break a contract 
with C, persons other than C who may be harmed by the 
action as, for example, his employees or suppliers, 
are not within the scope of the protection afforded 
by this rule, unless A intends to affect them.  Even 
then they may not be able to recover unless A acted 
for the purpose of interfering with their contracts. 
 
Restatement (Second) of Torts § 766, cmt. p (1979). 
 
 
Reading these Comments harmoniously, it is clear that 
Comment j states the intended parameters of the cause of 
action for tortious interference with contract rights, and 
Comment p delineates the persons the cause of action is 
intended to protect.  Comment p makes it clear that, 
unlike a party to the contract that the defendant induced 
a third person not to perform, a plaintiff who is not a 
party to such contract must prove that the defendant acted 
with the purpose of interfering with the plaintiff’s 
contract, in order to maintain a cause of action for 
 
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tortious interference with contract rights against that 
defendant.  Thus, if DurretteBradshaw induced SEI to break 
its contract with SouthStar, persons or entities other 
than SouthStar, such as MRC, who may have been harmed by 
DurretteBradshaw’s act, may not maintain a cause of action 
for tortious interference with contract against 
DurretteBradshaw, unless such persons or entities can 
prove that DurretteBradshaw interfered with the 
SouthStar/SEI contract for the purpose of interfering with 
the contract of that person or entity. 
MRC states in its complaint that DurretteBradshaw, 
with knowledge of the contract between MRC and SouthStar, 
induced SEI to break the SouthStar/SEI contract.  MRC does 
not allege that DurretteBradshaw intended to affect MRC’s 
contract with SouthStar or that DurretteBradshaw acted 
with the purpose of interfering with that contract.  
Because MRC did not plead facts supporting such an 
intention, we hold that MRC did not sufficiently state a 
cause of action against DurretteBradshaw for tortious 
interference with MRC’s contract with SouthStar. 
Conclusion 
For the foregoing reasons, we hold that the circuit 
court erred in overruling DurretteBradshaw’s demurrer.  
Accordingly, we will reverse the judgment of the circuit 
 
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court and enter final judgment in favor of 
DurretteBradshaw. 
Reversed and final judgment.