Opinion ID: 901716
Heading Depth: 1
Heading Rank: 3

Heading: Third PartyConduct Outside Scope of Employment

Text: [¶ 13.] A third party is an indispensable element in the tort of intentional interference with contractual relations. With interference suits against corporate officers, determination of such element precedes any further analysis. Without the protection of the third party element of the tort, virtually every supervisory decision affecting employment status would be subject to judicial challenge through the Trojan horse of the intentional interference tort. [6] In what circumstances, then, will a corporate officer's actions be considered the actions of a third party? In keeping with the principle of respondeat superior, when employees act within the scope of their employment, their acts are the acts of their company. State v. Hy Vee Food Stores, Inc., 533 N.W.2d 147, 149 (S.D.1995). A corporate entity cannot contractually interfere with itself. [W]hen an employee is acting within the scope of the employee's employment, and the employer, as a result, breaches a contract with another party, that employee is not a third party for the tort of intentional interference with economic relations. McGanty, 901 P.2d at 846. [¶ 14.] Accordingly, when claiming tortious interference with a contractual relationship, the plaintiff must plead and prove that the officer acted outside the scope of employment. [7] See Mueller, 2002 SD 38, ¶ 38, 643 N.W.2d at 68-69 (quoting Landstrom, 1997 SD 25, ¶ 75, 561 N.W.2d at 16). Generally, if an act is connected either directly or indirectly with the business of the employer (designed to benefit the employer's business), that act is conducted within the scope of employment. Deuchar v. Foland Ranch, Inc., 410 N.W.2d 177, 180 (S.D.1987) (citation omitted). Further, [t]he fact that the servant's act is expressly forbidden by the master, or is done in a manner which he has prohibited, is to be considered in determining what the servant has been hired to do, but it is usually not conclusive, and does not in itself prevent the act from being within the scope of employment. An essential focus of inquiry remains: Were the servant's acts in furtherance of his employment? Id. at 180-81 (internal citations omitted) (emphasis omitted). [8] Considerations of time, place, and circumstance assist [the] evaluation. South Dakota Public Entity Pool for Liability v. Winger, 1997 SD 77, ¶ 9, 566 N.W.2d 125, 128. The following considerations are relevant: (1) did the officer's acts occur substantially within the time and space limits authorized by the employment; (2) were the actions motivated, at least in part, by a purpose to serve the employer; and (3) were the actions of a kind that the officer was hired to perform. See id.; see also McGanty, 901 P.2d at 846 n. 3. If the officer's actions were at least in part motivated by a purpose to serve the employer, then those actions cannot be the acts of a third party. [9] Indeed, under the Restatement (Second) of Agency § 236 cmt b (1958), [t]he fact that the predominant motive of the [officer] is to benefit himself . . . does not prevent the act from being within the scope of employment. An officer's actions are outside the scope of employment only if they are done with no intention to perform [them] as a[n] . . . incident to a service. . . . Id. at § 235. [¶ 15.] In sum, when corporate officers act within the scope of employment, even if those actions are only partially motivated to serve their employer's interests, the officers are not third parties to a contract between the corporate employer and another in compliance with the requirements for the tort of intentional interference with contractual relations.