Opinion ID: 534410
Heading Depth: 1
Heading Rank: 3

Heading: Intentional Interference with Contract Claims

Text: 33 Plaintiff's state law intentional interference with contract allegations are three-fold. First, plaintiff alleges that defendants Ravi and Sood interfered with his exclusive contract to provide radiology services by encouraging Casa Grande to terminate the contract. Second, plaintiff claims that the defendants interfered with his ability to practice radiology by making the hospital unavailable to him, presumably by refusing to grant privileges after the contract was terminated. Third, plaintiff asserts that the defendants interfered with other contractual relations of Dr. Moss to provide radiology services in the Casa Grande area. 34 The district court dismissed the third aspect of plaintiff's allegations on the ground that he had failed to provide any instances of such other interference. Plaintiff does not contest this ruling, so we proceed to analyze plaintiff's arguments as they relate to the first two allegations of interference. 35
36 Plaintiff alleges that the defendants intentionally interfered with his contract to provide radiology services at Hoemako Hospital. Although the amended complaint does not name the specific defendants, the claim appears to be directed against Ravi and Sood. Moss claims that after he had blown the whistle about the TLA procedure, Ravi and Sood complained to the hospital administration that plaintiff was not being cooperative in performing the TLA's. Later, Dr. Ravi initiated a physical altercation with plaintiff, after which Dr. Ravi demanded that he be terminated. 37 The district court dismissed plaintiff's claim of intentional interference with his exclusive services contract against Ravi and Sood on Arizona statute of limitations grounds. A two year limitations period applies to the interference with contract claims. Ariz.Rev.Stat.Ann. § 12-542; Clark v. AiResearch Mfg. Co. of Arizona, 138 Ariz. 240, 673 P.2d 984, 987 (Ct.App.1983). 38 Plaintiff's amended complaint, which added defendants Ravi and Sood, was filed on May 9, 1985. Dr. Moss received notice in February 1983 that his contract would be terminated, but was not actually terminated until May 12, 1983. He maintains that until May 12, 1983 there remained the chance that his contract would be renewed, and that the elements of his claim for intentional interference with contract had not accrued. 39 In this case, Arizona law governs when the cause of action for interference with contract accrues. See Daniels v. Fesco Division of Cities Service Co., 733 F.2d 622 (9th Cir.1984). No Arizona case resolves whether a cause of action for interference with an employment contract accrues on the date of notice of termination, or actual date of termination. However, Daniels, which interprets California law, is closely analogous. 40 In Daniels, plaintiff appealed the district court's dismissal of his wrongful discharge claim on statute of limitations grounds where plaintiff filed suit more than two years after notice of termination, but less than two years after termination. This court was unable to find a relevant California case, and sought to apply the rule that the California courts would follow given a similar situation. Accordingly, it turned to federal labor law, since California courts have turned to federal labor law in developing state labor law. Id. at 623. The Daniels court held that [f]ederal case law supports the position that an employer's liability for wrongful discharge commences upon notice of the employee's termination even though the employee continues to serve the employer after receipt of the notice. Id. 41 Daniels presents a nearly identical factual situation, and provides the proper framework for filling the gap in Arizona law. We can see no reason not to apply the holding in Daniels to a claim for intentional interference with contract as well as to a claim for wrongful discharge. The district court was therefore correct in granting judgment in favor of defendants Ravi and Sood on plaintiff's first interference with contract claim. 42
43 Plaintiff's final intentional interference allegation is that defendants interfered with his ability to practice radiology by making Hoemako Hospital unavailable to him. At oral argument we ascertained that this claim is based upon the failure of Ravi and Sood (and the Medical Staff as a whole) to support or approve his application for privileges post-termination. 44 The district court held that plaintiff had failed to note any instances of business lost as a result of his inability to practice at Hoemako, and granted summary judgment in favor of defendants. Plaintiff argues that the district court's focus was too narrow, and that he should not have to show the loss of any particular patient to prove damage. Instead, he points to the cessation of a steady influx of patients from the hospital, and loss of the place to practice medicine which he had enjoyed under the terms of the contract. 45 Plaintiff bases this allegation on post-termination conduct. Under Arizona law, an element of the tort of interference with contract is the existence of valid contractual relationship or business expectancy. Antwerp Diamond Exchange v. Better Business Bureau, 130 Ariz. 523, 637 P.2d 733, 740 (1981). Since plaintiff cannot allege the terminated exclusive services contract as the basis of a valid business expectancy, he must rely on the general expectancy of an influx of patients, which he argues would come from his admission to the Medical Staff. This, of course, cannot be an expectancy, but only a hope, and cannot support the interference action. Cf. Marmis v. Solot, 117 Ariz. 499, 573 P.2d 899, 902 (Ct.App.1977).