Case Title: Dunn, McCormack & MacPherson v. Connolly

Citation: 

Docket Number: 100260

State: virginia

Court: Virginia Supreme Court

Date: 2011-04-21T00:00:00Z

Document:
Present:  Kinser, C.J., Lemons, Goodwyn, Millette, and Mims, 
JJ., and Koontz, S.J. 
 
DUNN, MCCORMACK & MACPHERSON 
 
v.  Record No. 100260 
 OPINION BY JUSTICE DONALD W. LEMONS 
 
 
 
 
 
 
 
   April 21, 2011 
GERALD CONNOLLY 
 
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY 
Dennis J. Smith, Judge 
 
 
In this appeal, we consider whether the circuit court 
erred when it sustained Gerald Connolly's ("Connolly") 
demurrer and held that Dunn, McCormack & MacPherson ("Dunn") 
failed to state a prima facie cause of action for tortious 
interference with a contract. 
I.  Facts and Proceedings Below 
Dunn, a Virginia law firm, served as legal counsel to the 
Fairfax County Redevelopment and Housing Authority (the 
"Authority") for approximately thirty years.  The attorney-
client relationship between Dunn and the Authority was based 
on an at-will contract for legal representation, which was 
terminated in September 2005.  
On April 2, 2008, Dunn filed a complaint against 
Connolly, Chairman of the Fairfax County Board of Supervisors, 
alleging that Connolly had tortiously interfered with Dunn's 
contract with the Authority.  The circuit court sustained 
Connolly's demurrer, holding that Dunn's complaint failed to 
state sufficient facts supporting a cause of action for 
intentional interference with a contract.  The circuit court 
granted Dunn 21 days to file an amended complaint.   
In its amended complaint, Dunn alleged additional facts 
in support of its claim, including that Connolly "verbally 
directed or persuaded" the Authority to communicate to a 
partner at Dunn that its contract with the Authority was 
terminated; that Connolly's actions "were intended by him to 
destroy the relationship between [Dunn] and the Authority and 
were not based on [Dunn's] poor performance, malfeasance or 
nonfeasance;" and that Connolly's actions were "outside the 
scope of his authority as a public official" and were 
"undertaken by him in his personal capacity and were motivated 
solely by his personal spite, ill will and malice" because 
Connolly had "verbally clashed" with a partner at Dunn. 
Dunn further claimed that Connolly had "no legal 
justification or legitimate business interest in inducing the 
termination of the contract," concluding that "Connolly used 
improper means and methods to interfere with [Dunn's] contract 
expectancy of continued legal representation of the Authority 
because his sole motive was the gratification of his ill 
will."  In response, Connolly filed a demurrer, arguing that 
Dunn's amended complaint "alleges mere conclusions" and was 
factually insufficient to show that Connolly employed improper 
methods of interference, a requisite element of the tort. 
 
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In a hearing on the demurrer, the circuit court stated: 
Let's say that [Connolly] talked to the 
[Authority] and after which they decided that 
they didn't want to continue the law firm's 
services in any new cases.  Let's say that all 
that occurred.  Let's say that it was what 
[Connolly] said that persuaded [the Authority] to 
do that.  How does that constitute tortious 
interference; how is that any illegal means or 
improper method?  Because you're implicating the 
First Amendment rights here as well.  [Connolly] 
doesn't give up his First Amendment rights to 
free speech. 
 
After further argument, the circuit court sustained Connolly's 
demurrer, holding: 
This case really is [about] First Amendment 
rights, not only the free speech right of 
[Connolly], but also with regard to his right to 
communicate to a political entity within the 
jurisdiction in which he lives. 
 
 
I think in order to make it illegal or an 
improper method under these circumstances, many 
more facts have to be pled to indicate that, and 
I don't find that in this pleading.  And without 
those facts I believe the case cannot go forward. 
 
The circuit court entered a final order dismissing the action 
with prejudice. 
We awarded Dunn an appeal on the following assignments of 
error: 
1. The circuit court erred by invoking an affirmative 
defense, privilege – a defense never claimed by Connolly 
– to sustain the demurrer to the amended complaint.  The 
only issue before the circuit court in considering the 
demurrer was whether the amended complaint stated a prima 
facie cause of action, not whether some defense might be 
available to defeat the cause of action. 
 
 
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2. The Noerr-Pennington privilege to petition the government 
is not implicated by the amended complaint, because the 
words of the amended complaint do not support the 
conclusion that Connolly interfered with the contract 
while in the course of petitioning the government or 
petitioning a governmental entity authorized to grant a 
petition to terminate the contract.  Thus, the circuit 
court erred by grounding its ruling on the Noerr-
Pennington privilege. 
 
3. It is difficult to determine from the circuit court's 
ruling whether it sustained the demurrer solely on the 
basis of First Amendment privilege, or because it also 
decided that the amended complaint failed to state a 
cause of action.  If the circuit court also based its 
ruling on a failure to state a cause of action, this was 
also error.  As a matter of law, the allegations of the 
amended complaint are proof against demurrer as they 
exactly parallel the elements of the tort of intentional 
interference with a business expectancy as those elements 
are set forth in the Restatement (Second) of Torts and in 
this [C]ourt's precedent.  
II.  Analysis 
A. Standard of Review 
We apply well-established principles to guide our review 
of a circuit court's judgment sustaining a demurrer. 
The purpose of a demurrer is to determine whether 
a motion for judgment states a cause of action 
upon which the requested relief may be granted.  
A demurrer tests the legal sufficiency of facts 
alleged in pleadings, not the strength of proof.  
Accordingly, we accept as true all properly pled 
facts and all inferences fairly drawn from those 
facts.  Because the decision whether to grant a 
demurrer involves issues of law, we review the 
circuit court's judgment de novo. 
 
Abi-Najm v. Concord Condominium, LLC, 280 Va. 350, 356-57, 699 
S.E.2d 483, 486-87 (2010) (citations and internal quotation 
marks omitted). 
 
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B. Sufficiency of Dunn's Amended Complaint 
In order to survive demurrer, we have held that a 
complaint must 
allege[] sufficient facts to constitute a 
foundation in law for the judgment sought, and 
not merely conclusions of law.  To survive a 
challenge by demurrer, a pleading must be made 
with sufficient definiteness to enable the court 
to find the existence of a legal basis for its 
judgment. In other words, despite the liberality 
of presentation which the court will indulge, the 
motion must state a cause of action. 
 
Hubbard v. Dresser, Inc., 271 Va. 117, 122-23, 624 S.E.2d 1, 4 
(2006) (citation and internal quotation marks omitted). 
 
In Chaves v. Johnson, 230 Va. 112, 335 S.E.2d 97 (1985), 
we expressly recognized the cause of action for tortious 
interference with contract rights as 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.  We have stated the 
elements necessary to support a cause of action for tortious 
interference with contract rights. 
 
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The elements required for a prima facie 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. 
 
DurretteBradshaw, P.C. v. MRC Consulting, L.C., 277 Va. 140, 
145, 670 S.E.2d 704, 706 (2009) (citing Chaves, 230 Va. at 
120, 335 S.E.2d at 102). 
 
Additionally, "when a contract is terminable at will, a 
plaintiff, in order to present a prima facie case of tortious 
interference, must allege and prove not only an intentional 
interference that caused the termination of the at-will 
contract, but also that the defendant employed 'improper 
methods.' "  Duggin v. Adams, 234 Va. 221, 226-27, 360 S.E.2d 
832, 836 (1987) (citation omitted) (emphasis in original); see 
also Restatement (Second) of Torts § 766 comment g (1979) 
(Until a party terminates an at-will contract, it is "valid 
and subsisting, and [a third party] may not improperly 
interfere with it." (emphasis added)).  In determining whether 
the interference is "improper," we have stated that 
interference is considered "improper" if it is illegal, 
independently tortious, or violates an established standard of 
trade or profession. 
 
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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 an established standard of a trade or 
profession, or involve unethical conduct.  Sharp 
dealing, overreaching, or unfair competition may 
also constitute improper methods. 
 
Duggin, 234 Va. at 227-28, 360 S.E.2d at 836-37 (citations 
omitted). 
Here, Dunn argues that comments d and f of § 767 of the 
Restatement (Second) of Torts support his claim that Connolly 
improperly interfered with its terminable at will contract 
with the Authority because they "were motivated solely by 
[Connolly's] personal spite, ill will and malice."  However, 
Dunn fails to appreciate the limited nature of what 
constitutes "improper" interference in cases involving 
contracts terminable at will.  We will not extend the scope of 
the tort to include actions solely motivated by spite, ill 
will and malice.  Therefore, Dunn's amended complaint fails to 
"state[] a cause of action upon which the requested relief may 
be granted." Tronfeld v. Nationwide Mut. Ins. Co., 272 Va. 
709, 712, 636 S.E.2d 447, 449 (2006).  Accordingly, the 
circuit court did not err in sustaining Connolly's demurrer. 
 
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C.  Basis of the Circuit Court's Holding 
Dunn further asserts that the circuit court erred by 
grounding its ruling on the Noerr-Pennington doctrine to 
petition the government.∗  We disagree with Dunn. 
The record clearly demonstrates that the circuit court 
sustained Connolly's demurrer on the grounds that Dunn failed 
to allege sufficient facts to state a cause of action for 
tortious interference with a contract.  During the circuit 
court's hearing on the demurrer, the court repeatedly asked 
Dunn how the facts in its amended complaint "constitute 
tortious interference," and the court ultimately held that 
"many more facts have to be pled to indicate [the element of 
impropriety]," and "without those facts . . . the case cannot 
go forward."  The circuit court's judgment sustaining 
Connolly's demurrer was based firmly on Dunn's failure to 
adequately state a prima facie cause of action, not the Noerr-
Pennington doctrine. 
III.  Conclusion 
                     
 
∗ The Noerr-Pennington doctrine, dealing with exposure to 
antitrust liability for actions taken to influence legislative 
or administrative action, under constitutional principles of 
free speech and the right to petition the government, springs 
from two United States Supreme Court decisions, Eastern 
Railroad Presidents Conference v. Noerr Motor Freight, Inc., 
365 U.S. 127 (1961), and United Mine Workers of America v. 
Pennington, 381 U.S. 657 (1965).  See generally Titan America, 
LLC v. Riverton Inv. Corp., 264 Va. 292, 301-05, 569 S.E.2d 
57, 61-64 (2002). 
 
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For the reasons stated, we hold that the circuit court 
did not err in sustaining Connolly's demurrer and dismissing 
the action.  Accordingly, we will affirm the judgment of the 
circuit court. 
Affirmed. 
 
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