Opinion ID: 752950
Heading Depth: 3
Heading Rank: 2

Heading: Wrongful Means

Text: 59 The district court dismissed Hannex's second cause of action because it determined that Hannex introduced insufficient proof that Defendants engaged in criminal or fraudulent conduct. We believe that Hannex adduced sufficient evidence to prove fraudulent conduct. 60 To state a claim for interference with contractual and prospective business relations against a competitor, the alleged tortfeasor must employ wrongful means. See NBT Bancorp, 87 N.Y.2d at 624, 664 N.E.2d at 497, 641 N.Y.S.2d at 586; Guard-Life, 50 N.Y.2d at 190-91, 406 N.E.2d at 448-49, 428 N.Y.S.2d at 632; PPX, 818 F.2d at 269; see also Nifty Foods Corp. v. Great Atl. & Pac. Tea Co., 614 F.2d 832, 838 (2d Cir.1980). The definition of wrongful means under New York law includes physical violence, fraud or misrepresentation, civil suits and criminal prosecutions, and some degrees of economic pressure. Guard-Life, 50 N.Y.2d at 191, 406 N.E.2d at 449, 428 N.Y.S.2d at 632; see also NBT Bancorp, 87 N.Y.2d at 624, 664 N.E.2d at 497-98, 641 N.Y.S.2d at 586-87 (quoting definition in Guard-Life ). In PPX, we noted in dicta that under New York law [i]f the defendant's interference is intended, at least in part, to advance its own competing interests, the claim will fail unless the means employed include criminal or fraudulent conduct. 818 F.2d at 269 (citations omitted). 9 61 As we outlined above, Hannex adduced sufficient proof for a jury to conclude that Salvo knowingly breached his fiduciary duty and that GMI, Gallen and Brockway knowingly participated in the breach. A knowing breach of fiduciary duty may also, if it satisfies the usual common law elements, amount to a fraud or misrepresentation. See Gordon v. Bialystoker Ctr. & Bikur Cholim, Inc., 45 N.Y.2d 692, 698, 385 N.E.2d 285, 288, 412 N.Y.S.2d 593, 596-97 (1978) (stating that under New York law, where a fiduciary relationship exists between parties, the law of constructive fraud applies); see also Diduck v. Kaszycki & Sons Contractors, Inc., 974 F.2d 270, 275-76 (2d Cir.1992) (noting that breach of a fiduciary duty may constitute a fraud in the context of ERISA); United States v. Chestman, 947 F.2d 551, 571 (2d Cir.1991) (holding that a knowing breach of fiduciary duty may constitute a fraudulent scheme for purposes of the federal mail fraud statutes). Therefore, in this case, if a jury were to find the Defendants tortiously interfered with Salvo's fiduciary duties to Hannex, they could also find that such interference constituted wrongful means sufficient to support a tortious interference with contractual and prospective business relations claim. 62 Briefly, the circumstantial evidence adduced to support the tortious interference with fiduciary duty claim, viewed in the light most favorable to Hannex, arguably showed that the GMI Defendants actively participated in the alleged breach, in that they were on notice that Salvo was not supposed to meet with them and that Hannex did not want them talking to Yamaguchi, and they received numerous Hannex documents from Salvo. Furthermore, a jury could conclude that both Hannex and arguably S & S Japan were actively misled about Salvo's role in this. Defendants' use of the information provided by Salvo was critical to Defendants' ability to wrest prospective business relations from Hannex, and afford them to GMI. Accordingly, based on this same evidence, a reasonable jury could find that Defendants' conduct was sufficient to support the tortious interference with contractual and prospective business relations claim. Therefore, it was error to dismiss the second cause of action.