Opinion ID: 1159154
Heading Depth: 2
Heading Rank: 5

Heading: Improper Means

Text: The alternative requirement of improper means is satisfied where the means used to interfere with a party's economic relations are contrary to law, such as violations of statutes, regulations, or recognized common-law rules. Such acts are illegal or tortious in themselves and hence are clearly improper means of interference, Searle v. Johnson, Utah, 646 P.2d 682 (1982) (secondary boycott); Gammon v. Federated Milk Producers Association, Inc., 14 Utah 2d at 295-96, 383 P.2d at 405-06 (1963) (price fixing), unless those means consist of constitutionally protected activity, like the exercise of First Amendment rights. NAACP v. Claiborne Hardware Co., ___ U.S. ___, 102 S.Ct. 3409, 73 L.Ed.2d 1215 (1982). Commonly included among improper means are violence, threats or other intimidation, deceit or misrepresentation, bribery, unfounded litigation, defamation, or disparaging falsehood. Top Service Body Shop, Inc., 582 P.2d at 1371 & n. 11. Means may also be improper or wrongful because they violate an established standard of a trade or profession. Id. at 1371. By forcing Isom to defend what appear to have been two groundless lawsuits, the Leigh Corporation was clearly employing an improper means of interference with Isom's business. Such use of civil litigation as a weapon to damage another's business, besides being an intolerable waste of judicial resources, may give rise to independent causes of action in tort for abuse of process and malicious prosecution. Crease v. Pleasant Grove City, 30 Utah 2d 451, 455, 519 P.2d 888, 890 (1974) (abuse of process); Baird v. Intermountain School Federal Credit Union, Utah, 555 P.2d 877, 878 (1976) (malicious prosecution); Johnson v. Mount Ogden Enterprises, Inc., 23 Utah 2d 169, 169-73, 460 P.2d 333, 334-46 (1969) (malicious prosecution); W. Prosser, Handbook of the Law of Torts §§ 120, 121 (4th ed. 1971). The jury's verdict can therefore be sustained on the ground that the Leigh Corporation intentionally interfered with Isom's economic relations by improper means. There is also another basis for affirming that verdict on the basis of improper means. A deliberate breach of contract, even where employed to secure economic advantage, is not, by itself, an improper means. Because the law remedies breaches of contract with damages calculated to give the aggrieved party the benefit of the bargain, there is no need for an additional remedy in tort (unless the defendant's conduct would constitute a tort independent of the contract). [10] Neither a deliberate breach of contract nor an immediate purpose to inflict injury which does not predominate over a legitimate economic end will, by itself, satisfy this element of the tort. However, they may do so in combination. This is so because contract damages provide an insufficient remedy for a breach prompted by an immediate purpose to injure, and that purpose does not enjoy the same legal immunity in the context of contract relations as it does in the competitive marketplace. As a result, a breach of contract committed for the immediate purpose of injurying the other contracting party is an improper means that will satisfy this element of the cause of action for intentional interference with economic relations. Two cases illustrate how breach of contract (or lease), when done with a purpose to injure, satisfy this element of the tort. In both cases, the defendant committed a breach not just to obtain relief from its obligation under the contract or lease (for which contract damages would have made the plaintiff whole), but to achieve a larger advantage by injuring the plaintiff in a manner not compensable merely by contract damages. In both cases, the defendant ruined the plaintiff's business by its breach, and in both cases the plaintiff was given substantial damages for the tort of interference with prospective economic relations. In Buxbom v. Smith, 23 Cal.2d 535, 145 P.2d 305 (1944), a retail grocery chain contracted with the plaintiff to publish and distribute a shopping news. In order to do so, the plaintiff abandoned his printing customers and expanded his distribution organization. After becoming the plaintiff's sole customer and acquiring complete knowledge of his business, the retailer deliberately breached its contract in order to ruin the plaintiff's business by cutting off the work required to sustain it and then hired his employees. The California Supreme Court affirmed a verdict for the plaintiff, awarding damages for breach of contract and additional damages for tortious interference with his business in order to give him complete recompense for his combined injuries... . Id. at 546, 145 P.2d at 310. The gravamen of the tort, the court explained, was the defendant's breaching its contract with plaintiff as a means of acquiring plaintiff's employees: Although defendant's conduct may not have been tortious if he had merely broken the contract and subsequently decided to hire plaintiff's employees, an additional factor is present in this case. From the evidence the trial court could reasonably infer that the breach, at the time it was made, was intended as a means of facilitating defendant's hiring of plaintiff's employees. A breach of contract is a wrong and in itself actionable. It is also wrongful when intentionally utilized as the means of depriving plaintiff of his employees, and, in our opinion, constitutes an unfair method of interference with advantageous relations within the rule set forth above. [Emphasis added.] Id. at 548, 145 P.2d at 311. In Cherberg v. Peoples National Bank of Washington, 88 Wash.2d 595, 564 P.2d 1137 (1977), a lessor deliberately breached its duty to repair a structurally unsound wall on the leased premises in order to destroy the restaurant business of a lessee who had leased a portion of the premises. The lessor's purpose was to retake the entire building as soon as possible, demolish the structure, and erect a more profitable building. The jury gave a verdict of $42,000 against the lessor. Apart from the $3,100 damages for breach of the lease (economic losses from temporary closure of the restaurant business), this verdict represented a recovery of damages for inconvenience, discomfort, and mental anguish for the tort of intentional interference with business expectancies. The Washington Supreme Court sustained the verdict in an opinion that squarely relies on the combination of improper means and improper purpose in defendant's deliberate breach for the purpose of injuring the plaintiff. After reviewing cases holding that a breach of covenants may also give rise to liability in tort, the court summarized: It appears to be the general view that, in those instances in which the conduct of the breaching party indicates a motive to destroy some interest of the adverse party, a tort action may lie and items of damage not available in contract actions will be allowed. Id. at 603, 564 P.2d at 1143. The court then acknowledged the separate line of cases holding that a breach of duty under a contract or a lease does not constitute an independent tort even where it interferes with the injured party's business relations. The court explained as follows: The distinguishing feature between the two lines of cases would seem to be whether the interference with business relations was a mere incidental consequence of the breach or a motive or purpose therefor. Id. at 604, 564 P.2d at 1143. In Cherberg, the court found that the defendant had breached its lease and interfered with the plaintiff's business not for the privileged reason of escaping from an unsatisfactory return on its investment in the leased premises (upon payment of contract damages), but for the impermissible purpose of injuring the tenant in order to secure an advantage beyond the scope of the lease: There is, instead, evidence in the record from which the jury could have inferred the lessor used the condition of the wall as a means to oust the petitioners and gain possession of the leased premises in order that the lessor might put those premises to a different and perhaps considerably more profitable use. Proof of a breach based upon such a motive demonstrates a failure to make a good faith effort to meet obligations under the lease and may give rise to liability in tort. [Emphasis added.] Id. at 605, 564 P.2d at 1143-44. As stated by the court in Schisgall v. Fairchild Publications, Inc., 207 Misc. 224, 232, 137 N.Y.S.2d 312, 319 (1955): If the defendant acted merely as a contracting party (at legal liberty perhaps to breach its agreement upon payment of damage), that is one thing. But if the defendant went further, and acted with intent to inflict injury beyond that contemplated as a result of the mere breach of contract, I would hold that the contract does not grant the defaulter immunity from tort liability. [Emphasis added.] In the case at bar, the Leigh Corporation breached its contract in various ways. It breached its implied duty to exercise all of its rights under the contract reasonably and in good faith. Cahoon v. Cahoon, Utah, 641 P.2d 140, 144 (1982); Rio Algom Corp. v. Jimco Ltd., Utah, 618 P.2d 497, 505 (1980); Ferris v. Jennings, Utah, 595 P.2d 857, 859 (1979). Leigh's unexplained refusal to approve Isom's prospective business partners without consideration of their merits indicates an absence of good faith and provides evidence that the Corporation's breach was intended to deprive Isom's business of additional capital and valuable expertise which (at least with regard to Talbot) Leigh himself had repeatedly urged Isom to acquire. Similar refusals to approve prospective subtenants under a contract clause in order to injure the tenant's business have been held to constitute tortious interference with economic relations. Homa-Goff Interiors, Inc. v. Cowden, Ala., 350 So.2d 1035 (1977); Nizzo v. Amoco Oil Co., Fla. Dist. Ct. App., 333 So.2d 491 (1976). In addition, Leigh, his wife, and his bookkeeper continually interrupted sales activities with their visits, letters, threats, and demands, causing customers to comment and complain and sometimes to leave. Although the contract entitled the Corporation, as lessor and secured party, to reasonable supervision of Isom's business, the jury had sufficient evidence to conclude that this conduct constituted an unreasonable exercise of contract rights and/or was done in bad faith for the purpose of injuring Isom's business relations. The Corporation also breached its contractual duty by refusing Isom's tender of the balance of the purchase price and by refusing to appoint an appraiser to establish a price for the sale of the entire building, thereby preventing Isom from exercising his purchase option. There is evidence of Leigh's purpose in the fact that he openly regretted his contract with Isom and frequently expressed his desire to get Richard out of the business and building. Furthermore, he continually contacted prospective buyers for the building, even approaching two of Isom's employees for this purpose. All of the above provide substantial evidence from which the jury could have concluded that the Corporation breached its express and implied contractual duties for the purpose of ruining Isom's business and obtaining possession of the building in order to sell it more profitably elsewhere. By themselves, the Corporation's breaches would not satisfy the requirement of improper means, but they could do so when coupled with the improper purpose of injuring Isom. In combination, a breach of contract and an intent to injure satisfy the improper means requirement for the cause of action for intentional interference with prospective economic relations.