Present: Carrico, C.J., Compton, Lacy, Hassell, Keenan, and 

Kinser, JJ., and Whiting, Senior Justice 

MAXIMUS, INC. 

v. Record No. 962519 OPINION BY JUSTICE ELIZABETH B. LACY 

 October 31, 1997 

LOCKHEED INFORMATION MANAGEMENT 

SYSTEMS COMPANY, INC., ET AL. 

FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND 

Randall G. Johnson, Judge 

 This appeal requires us to determine the elements required 

to establish a prima facie case of tortious interference with 

contract expectancy in Virginia. 

 I. 

 The instant case arose out of a dispute between Maximus, 

Inc., (Maximus) and Lockheed Information Management Systems 

Company, Inc., (Lockheed) over bids to privatize two child 

support enforcement offices in Northern Virginia. 

 In November 1994, the Virginia Department of Social Services 

(DSS) released a Request for Proposals to privatize the two child 

support offices pursuant to the Virginia Public Procurement Act, 

Code §§ 11-35 through -80. Maximus and Lockheed were the only 

two bidders. To evaluate the bids, DSS created a selection panel 

composed of five state employees. The panel heard oral 

testimony, reviewed and scored the proposals, and issued a Notice 

of Intent to Award the contract to Maximus dated April 13, 1995. 

 On April 25, 1995, pursuant to Code § 11-66, Lockheed filed 

a formal protest of DSS's decision to award the contract to 

Maximus. In its protest, Lockheed alleged that two members of 

the evaluation panel had undisclosed conflicts of interest which 
 2 

interfered with their objectivity and compromised the integrity 

of the evaluation process.1

 State officials conducted an 

investigation and canceled the Notice of Intent to Award the 

contract to Maximus. 

 On February 5, 1996, Maximus filed this action against 

Lockheed. In its motion for judgment, Maximus alleged that 

Lockheed had tortiously interfered with its contract expectancy 

with DSS.2 Maximus claimed that Lockheed knew, or had reason to 

know, that the allegations advanced in its formal protest were 

false, that the false allegations were intentionally and 

selectively presented to create an appearance of impropriety, and 

that the protest was calculated to wrongfully interfere with 

Maximus' contractual relationship with DSS so that DSS would 

award the contract to Lockheed instead. Lockheed filed a 

demurrer, asserting in part that it filed its protest pursuant to 

a statutory right and was, therefore, entitled to absolute 

immunity or privilege based on both the protections afforded 

government petitioners established in 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), and the principle that statements made within a judicial 

 

 1In its protest, Lockheed alleged that the panel's 

decision was arbitrary and capricious on two other grounds 

which are not relevant to this appeal. 

 2 Maximus also alleged conspiracy, but that claim is not 

at issue in this appeal. 
 3 

 

or quasi-judicial proceeding are protected. However, that 

portion of the demurrer was denied by the trial court.3

 

 Following the conclusion of Maximus' case in chief in the 

subsequent jury trial, Lockheed moved to strike the evidence. 

The trial court determined that Lockheed had a "qualified 

privilege" and that Maximus was therefore required to show malice 

or "that the improper conduct is so egregious as to override the 

qualified privilege" in order to reach the jury. Concluding that 

Maximus had failed to meet this evidentiary burden, the trial 

court sustained the motion to strike and entered judgment in 

favor of Lockheed. 

 Maximus filed an appeal claiming that it had presented 

sufficient evidence to establish a prima facie case of tortious 

interference with contract expectancy, and that the trial court 

erred by striking the evidence for failure to show malice as an 

element of the cause of action. Because we conclude that the 

trial court did not apply the correct standard for determining 

whether Maximus had established a prima facie case for tortious 

interference with contract expectancy, we will reverse the 

judgment of the trial court and remand the case for further 

proceedings. 

 II. 

 In reaching its decision, the trial court considered the law 

 3 Lockheed did not assign cross-error to the denial of its 

demurrer; therefore, the issues in the demurrer are not before 

us. 
 4 

of defamation analogous to the law of interference with business 

relationships and applied principles based on that analogy. The 

trial court first concluded that Lockheed was entitled to a 

"qualified privilege."4

 According to the trial court, the 

existence of this privilege required the plaintiff to satisfy a 

"different burden," similar to the additional burden of showing 

malice placed upon a plaintiff in a defamation action when a 

qualified privilege is established. The trial court concluded 

that in this case, the "different burden" should be a "showing of 

malice or a showing that the improper conduct is so egregious as 

to override the qualified privilege." 

 The trial court's use of the defamation analogy was based 

on Chaves v. Johnson, 230 Va. 112, 121, 335 S.E.2d 97, 103 

(1985), in which we recognized a similarity between the 

affirmative defense of justification or privilege in a tortious 

interference with contract suit and the defense of qualified 

privilege in a defamation suit. The similarity, however, arises 

from the circumstances in which the offending words, or in this 

context, the offending conduct, occurs. In certain 

circumstances, the interests of society require that the question 

of liability be resolved by balancing the rights involved, 

acknowledging that this balancing process may shield a party from 

liability even though he engaged in the offensive acts. For 

 

 4 The record does not reflect the trial court's basis for 

this determination on the specific nature of the qualified 

privilege. 
 5 

example, in the defamation context, an actor has an absolute 

privilege and is not liable for defamatory statements made in the 

course of a judicial proceeding. Massey v. Jones, 182 Va. 200, 

204, 28 S.E.2d 623, 626 (1944); Penick v. Ratcliffe, 149 Va. 618, 

627, 140 S.E. 664, 667 (1927). In the context of causes of 

action involving interference with a business relationship, 

freedom of action is balanced against protection of the business 

relationship involved to determine whether the affirmative 

defense of justification or privilege precludes liability for 

actions which would otherwise be culpable. Chaves, 230 Va. at 

121, 335 S.E.2d at 103. 

 Liability determinations in both instances involve balancing 

of interests; however, this similarity neither suggests nor 

demands that the specific requirements for imposition of 

liability in one cause of action must be applied to the other 

cause of action. Other than acknowledging the similarity, we 

have not extended the defamation law construct to business torts 

and, for the reasons expressed below, we decline to extend it to 

the tortious interference with a contract expectancy cause of 

action at issue here. 

 We have already rejected imposing an additional evidentiary 

burden in an action for intentional interference with a contract. 

 In Chaves, we determined that malice was not an element of the 

cause of action and also specifically recognized certain 

affirmative defenses of privilege and justification available to 
 6 

defendants. Id. at 120-21, 335 S.E.2d at 102-03. Thus, by 

definition Chaves eliminated any requirement that the plaintiff 

show malice, even if the defendant establishes an affirmative 

defense. 

 In Duggin v. Adams, 234 Va. 221, 360 S.E.2d 832 (1987), we 

considered the elements of a cause of action for interference 

with a contract terminable at will. We found that not all 

business relationships are entitled to the same level of 

protection and concluded that a contract not terminable at will 

was entitled to more protection than a contract terminable at 

will. Id. at 226, 360 S.E.2d at 836. Reflecting this 

distinction, we held that one of the elements of a cause of 

action for tortious interference with a contract terminable at 

will is that the acts or methods used for the interference must 

themselves be "improper."5 Id. at 226-27, 360 S.E.2d at 836. As 

in Chaves, Duggin acknowledged the availability of certain 

affirmative defenses. Id. at 229, 360 S.E.2d at 838. Other than 

the "improper methods" requirement, no additional elements were 

imposed to establish a prima facie case, even when an affirmative 

defense was asserted. 

 Our prior cases, however, have not addressed the level of 

protection or the elements of a cause of action attaching to the 

business interest at issue in this case, a contract expectancy. 

 

 5 Not all jurisdictions follow this approach. See

Restatement (Second) of Torts § 767 cmt. k (1977). 
 7 

The Restatement (Second) of Torts § 766B (1977) describes the 

cause of action as follows: 

 One who intentionally and improperly interferes with 

another's prospective contractual relation (except a 

contract to marry) is subject to liability to the other for 

the pecuniary harm resulting from loss of the benefits of 

the relation, whether the interference consists of 

 (a) inducing or otherwise causing a third person 

not to enter into or continue the prospective relation 

or 

 (b) preventing the other from acquiring or 

continuing the prospective relation. 

The Restatement notes that a contract terminable at will is 

"closely analogous" to the business relationship described in 

this section because both are based on an interest in a future 

relationship with no legal assurance of such future relationship. 

 Restatement (Second) of Torts § 766 cmt. g (1977). We agree. 

 The virtual identity of interests and the legal ability to 

enforce those interests in a contract terminable at will and a 

contract or business expectancy lead to the conclusion that the 

level of protection afforded, and the elements of the cause of 

action, should also be the same. There is no basis to impose an 

additional requirement to differentiate the protection afforded 

to a contract terminable at will and to a contract or business 

expectancy. 

 Thus, to establish a prima facie cause of action in this 

case, Maximus was required to show that: (1) it had a contract 

expectancy; (2) Lockheed knew of the expectancy; (3) Lockheed 

intentionally interfered with the expectancy; (4) Lockheed used 

improper means or methods to interfere with the expectancy; and 
 8 

(5) Maximus suffered a loss as a result of Lockheed's disruption 

of the contract expectancy. Maximus was not required to show 

malice or any other egregious conduct. 

 The trial court stated at the close of Maximus' case in 

chief that "if this were the end of the case," there was enough 

evidence to submit the issue "whether the conduct of the 

defendants was improper" to the jury. While it is not clear 

whether this statement referred to the "improper methods" element 

of the cause of action or the ultimate issue of liability, either 

construction shows that the trial court struck the evidence based 

on its belief that Maximus had to produce additional evidence to 

establish a prima facie case. Accordingly, the trial court erred 

in sustaining Lockheed's motion to strike.6

 Nevertheless, Lockheed argues that its motion to strike was 

properly granted because Maximus did not show that Lockheed 

engaged in "improper acts," one of the elements of a prima facie 

case. Lockheed asserts that to qualify as "improper methods," 

the actions must be illegal or independently tortious, and 

Maximus failed to show that it engaged in such acts. We reject 

Lockheed's interpretation of "improper methods." 

 While we have identified actions as improper which were 

also independently tortious or illegal, Duggin, 234 Va. at 227-

28, 360 S.E.2d at 836-37, we have also identified actions as 

 

 6 In light of this holding, we need not address the trial 

court's finding that Lockheed was entitled to a qualified 

privilege. 
 9 

improper which are not themselves tortious or illegal, such as 

unfair competition or unethical conduct. Id. at 228, 360 S.E.2d 

at 837. Nor does the name given the cause of action impart a 

requirement of independently tortious acts. "Tortious 

interference" means only that the interference was intentional 

and improper under the circumstances, not that the "improper 

methods" used were inherently illegal or tortious.7 

 Moreover, to adopt Lockheed's interpretation of "improper 

methods" would either negate the ability of a defendant to use 

some of the recognized affirmative defenses or shift the burden 

of proving an element of those defenses to the plaintiff. Chaves

referred to the affirmative defense of justification or privilege 

based on five grounds discussed in the Restatement (Second) of 

Torts §§ 768-72 (1977). Chaves, 230 Va. at 121, 335 S.E.2d at 

103. Four of these, including competition, the ground relied on 

by Lockheed here, require the defendant to prove that it did not 

employ "wrongful means." Restatement (Second) of Torts §§ 768-71 

(1977). None of our cases suggest that the affirmative defense 

grounds recognized in Chaves are different when raised in an 

action for interference with a contract terminable at will or 

 

 7 To limit improper methods as suggested by Lockheed 

returns the cause of action to its status in the nineteenth 

century, when recovery for interference with contract 

expectancy required that the conduct utilized by the interferer 

be "essentially tortious in nature." That requirement was 

eliminated in 1893, when liability for this cause of action was 

extended to circumstances where the methods used were not 

themselves tortious. Temperton v. Russell [1893] 1 Q.B. 715 

(Eng.). 
 10 

with a business or contract expectancy. While plaintiffs in 

these actions must show that the methods of interference were 

improper, defendants asserting certain affirmative defenses must 

prove that those methods were not "wrongful." The plaintiff, of 

course, retains the burden of persuasion on the ultimate 

question: whether the defendant intentionally and improperly, in 

other words tortiously, interfered with the plaintiff's business 

relationship causing loss to the plaintiff. See Restatement 

(Second) of Torts § 767 (1977); Duggin, 234 Va. at 226-27, 360 

S.E.2d at 836. 

 Accordingly, for the above reasons, we will reverse the 

judgment of the trial court and remand the case for further 

proceedings consistent with this opinion. 

Reversed and remanded.