Opinion ID: 1852214
Heading Depth: 1
Heading Rank: 3

Heading: Interference With Contractual Relationship.

Text: Grimm alleged McAllister interfered with Grimm's contractual relationship with U.S. West. The elements of this claim are (1) the plaintiff had a valid contractual relationship with U.S. West, (2) the defendant knew of that relationship, (3) the defendant intentionally interfered with that relationship, (4) the defendant's action caused U.S. West to breach its contractual relationship with the plaintiff, and (5) the amount of damages. See Water Dev. Co. v. Bd. of Water Works, 488 N.W.2d 158, 161 (Iowa 1992). The problem for the plaintiff in this case is that McAllister is a supervisory employee of U.S. West, one of the parties to the employment contract. We have held such employees cannot be held liable for tortious interference with the employment contract. See Harbit v. Voss Petroleum, Inc., 553 N.W.2d 329, 331 (Iowa 1996) (action for tortious interference, based on alleged retaliation for reporting sexual harassment, could not be maintained if all defendants were either plaintiff's employers or the employer's agents); Klooster v. N. Iowa State Bank, 404 N.W.2d 564 (Iowa 1987) (action related to existing contracts between the parties and no third parties were involved, therefore no claim of tortious interference). This is so because ordinarily when both parties are parties to a contract the proper remedy is a suit for breach of contract. Tyler v. Percell, 506 N.W.2d 805, 808 (Iowa Ct.App.1993) (citing K & K Management, Inc. v. Lee, 316 Md. 137, 557 A.2d 965, 974 (1989)). Grimm cites Hunter v. Board of Trustees, 481 N.W.2d 510 (Iowa 1992), to support her argument that, in situations such as this, supervisors may be held liable for interference with a contract. Although Grimm's argument is not clearly illuminated, Hunter recognized a cause of action for tortious interference with an employment contract when a supervisor discharges another employee in violation of the employment contract, and the discharge is found to exceed the qualified privilege to which the supervisor is entitled as an officer or director. Id. at 518. This court has also found that, in the absence of evidence of bad faith, fraud, or improper means, there is no cause of action against an agent for breach of contract by a corporation. Bossuyt v. Osage Farmers Nat'l Bank, 360 N.W.2d 769, 778 (Iowa 1985); see also 45 Am.Jur.2d. Interference § 6, at 277 (1999) ([A] corporation's officer or director generally cannot be held liable under a theory of tortious interference for causing the corporation to breach a contract, nor can an agent be held liable for inducing his principal to breach a contract so long as he is acting within the scope of his authority.). Because Grimm alleges McAllister's actions were malicious, wanton, and pursued for an improper purpose, her claim may fall within the beyond-the-scope-of-the-agency exception to the rule that parties to a contract cannot tortiously interfere with that contract. These allegations are sufficient to survive a motion to dismiss because they allege McAllister was acting outside the scope of her agency, and thus in effect removed herself from the contract.