Opinion ID: 1224814
Heading Depth: 3
Heading Rank: 1

Heading: The TICR Claim

Text: The requisite elements of TICR are: (1) a contract between the plaintiff and a third party; (2) the defendant's knowledge of the contract; (3) the defendant's intentional inducement of the third party to breach the contract; (4) the absence of justification on the defendant's part; (5) the subsequent breach of the contract by the third party; and (6) damages to the plaintiff. Weinberg v. Mauch, 78 Hawai`i 40, 50, 890 P.2d 277, 287 (1995). The existence of a contract/settlement agreement between Lee and Aiu, and Aiu's breach thereof, are established. See supra section II.B. Based upon our examination of the record, we believe that there is substantial evidence to support the jury's findings that the Dixons were cognizant of the settlement agreement between Lee and Aiu and that they intentionally proceeded to encourage Aiu to breach that agreement by convincing him to enter into a new contract with them. The evidence further supports the finding that the Dixons were without justification, that is, that they were motivated only by their own personal gain. This is particularly so in light of: (1) Dixon's advice to Aiu that $25,000.00 for Aiu's putative interest in the Keha Place property was a ridiculous sum of money and that Aiu would be ill-advised to honor it; and (2) the Dixons' subsequent acquisition of Aiu's putative interest for that same ridiculous sum. However, because we have directed the trial court to reform the deed to reflect Lee as the sole owner, Lee may now sell the property and reap all profits therefrom. Her damages, which the jury found to be $28,500.00 (that is, the amount of the windfall that the Dixons' might have realized as a result of their tortious interference with the settlement agreement) are therefore negated. Lee, however, argues that the trial court erred in refusing to allow her to introduce evidence of her attorney's fees incurred in litigating with Aiu as an element of damages in her TICR claim. We agree. Normally, pursuant to the American Rule, each party is responsible for paying for his or her own litigation expenses. Survivors of Medeiros v. Maui Land & Pineapple Co., 66 Haw. 290, 296, 660 P.2d 1316, 1320 (1983); Thornley v. Sanchez, 9 Haw.App. 606, 618, 857 P.2d 601, 608 (1993). This general rule, however, is subject to a number of exceptions: attorney's fees are chargeable against the opposing party when so authorized by statute, rule of court, agreement, stipulation, or precedent. Id. As a matter of precedent, other jurisdictions have recognized that attorney's fees are chargeable against the wrongdoer in the context of a TICR claim. See, e.g., Dassance v. Nienhuis, 57 Mich.App. 422, 225 N.W.2d 789 (1975); Prospero Assocs. v. Redactron Corp., 682 P.2d 1193 (Colo.Ct.App. 1983). Although not in the context of a TICR claim, this court has applied the exception where the wrongful act of the defendant causes the plaintiff to litigate with a third party. In Uyemura v. Wick, 57 Haw. 102, 551 P.2d 171 (1976), we held that, where the wrongful act of the defendant[, (in this case, the Dixons' TICR),] has involved the plaintiff in litigation with [another, (in this case, Aiu) ], or placed [the plaintiff] in such relations with others as makes it necessary to incur expenses to protect his [or her] interest, such expenses, including attorneys' fees, should be treated as the legal consequences of the original wrongful act, and may be recovered as damages. Id. at 108-09, 551 P.2d at 176 (emphasis added); see also Restatement (Second) of Torts § 914(2)(1979) [hereinafter, Restatement ]. [10] Thus, where the wrongful act of a defendant causes a plaintiff to engage in litigation with a third party in order to protect his or her rights or interests, attorney's fees incurred in litigating with that third party may be chargeable against the wrongdoer as an element of the plaintiff's damages. [11] Id. at 110, 551 P.2d at 176. In order to recover attorneys' fees under this principle, the plaintiff must establish: (1) that the plaintiff had become involved in a legal dispute either because of a breach of contract by the defendant, or because of defendant's tortious conduct, that is, that the party sought to be charged with the fees was guilty of a wrongful or negligent act or breach of agreement; (2) that the litigation was with a third party, not with the defendant from whom the fees are sought to be recovered; (3) that the attorneys' fees were incurred in that third-party litigation; and (4) whether the fees and expenses were incurred as a result of defendant's breach of contract or tort, that they are the natural and necessary consequences of the defendant's act, since remote, uncertain, and contingent consequences do not afford a basis for recovery[.] Uyemura, 57 Haw. at 109, 551 P.2d at 176 (citations omitted). As previously discussed, Lee became involved in a legal dispute with Aiu because of the Dixons' tortious interference with the contractual relation between Lee and Aiu. As a natural and necessary consequence of the Dixons' tortious interference, Lee was required to litigate with Aiu, which in turn caused her to incur attorney's fees. Although some jurisdictions have held that this exception to the American Rule does not apply where the plaintiff consolidates his or her actions against both the contract breacher (in this case, Aiu) and the tortfeasor (in this case, the Dixons), we are in accord with those jurisdictions that hold that it is of no consequence whether the actions are brought together or separately. As aptly stated by the Colorado Court of Appeals, we see no reason why attorneys' fees should be recoverable when the aggrieved party files separate lawsuits against the contract breacher and the tortfeasor, but should be denied when he [or she] consolidates both into one law suit. Prospero Assocs., 682 P.2d at 1199. In such a case, the jury will be required to make a determination as to that portion of attorney's fees incurred by the plaintiff in the consolidated action that is attributable to the plaintiff's litigation with the third party, that is, Lee's litigation with Aiu. For purposes of clarity, we note that our holding in this section does not also entitle Lee to include the attorney's fees she incurred in litigating with the Dixons as an element of her TICR damages. In order to recover those attorney's fees from the Dixons, she must establish an independent exception; otherwise, the general rule that one is responsible for his or her own litigation expenses applies. On the facts of this case, Lee has successfully demonstrated that she is entitled to recover the attorney's fees she expended in litigating with the Dixons. See infra section II.C.3. Accordingly, with regard to the TICR claim, we affirm the trial court's finding of liability, but vacate the damage award and remand with instructions to retry the issue of damages. On remand, Lee will be permitted to introduce, as an element of her damages, evidence of any attorney's fees that she incurred in litigation with Aiu that were caused by the Dixons' tortious interference with the contractual relation between Lee and Aiu.