Opinion ID: 449646
Heading Depth: 2
Heading Rank: 1

Heading: Sufficiency of Plaintiffs' Evidence on Interference with

Text: 15 a Prospective Advantage 16 Having made a firm quotation to Surf, which was by its terms to remain open for thirty days and which would have produced a $715,205 profit if accepted, Teleflex was asked by Surf and Zippertubing to permit their customer Nab, until then undisclosed, to inspect its facilities. Teleflex agreed to the inspection. It contends that in these circumstances New Jersey law would not impose any obligation on it to refrain from taking actions which would interfere with the prospective contract between Zippertubing and Nab, even when those actions amount to Teleflex's making false representations to Nab with respect to its relationship with Zippertubing and Surf, and Teleflex's resort to deceit in its dealings with Zippertubing and Surf with regard to its intention to make the extrusions. 17 The law of New Jersey is otherwise. Tort liability for interference with a prospective advantage has been a settled feature of that state's law for many years. The cause of action was recognized years ago for inducing the termination of an at-will employment relationship. E.g., Frank v. Herold, 63 N.J.Eq. 443, 52 A. 152 (Ch. 1901), appeal dismissed, rehearing denied, 64 N.J.Eq. 371, 51 A. 774 (1902); Jersey City Printing Co. v. Cassidy, 63 N.J.Eq. 759, 53 A. 230 (Ch. 1902); George Jonas Glass Co. v. Glass Bottle Blowers' Ass'n, 77 N.J.Eq. 219, 79 A. 262 (1911). The cause of action was available against third parties even on behalf of an at-will employee who could not recover in contract against his former employer. Brennan v. United Hatters of North America, Local No. 17, 73 N.J.L. 729, 65 A. 165 (1902). These at-will employment cases, however, are examples of a more general principle. In Van Horn v. Van Horn, 56 N.J.L. 318, 28 A. 669 (1894) the tort was recognized in favor of a retailer whose supplier was induced to withhold favorable credit terms. In that well known case the Court of Errors and Appeals cited with approval two famous cases from other jurisdictions, Lumley v. Gye, 118 Eng.Rep. 749 (1853) and Walker v. Cronin, 107 Mass. 555 (1871) dealing with interference with prospective employment. 56 N.J.L. at 322, 28 A. at 670. The Van Horn court observed: 18 The rule to be deduced from these cases, and one which has most ample support, is that while a trader may lawfully engage in the sharpest competition with those in like business, by holding out extraordinary inducements, by representing his own wares to be better and cheaper than those of others, yet when he oversteps that line, and commits an act with the malicious intent of inflicting injury upon his rival's business, his conduct is illegal, and, if damage results from it, the injured party is entitled to redress. Nor does it matter whether the wrongdoer effects his object by persuasion or by false representation. The courts look through the instrumentality or means used to the wrong perpetrated with malicious intent, and base the right of action on that. 19 Id. at 323, 28 A. at 670. Consistent with its roots in cases dealing with at-will employment, moreover, the cause of action in New Jersey does not depend upon the existence of a legally enforceable relationship. The mere fact that a contract is unenforceable between the parties affords no justification for the act of a third person, who, for his own purposes, takes steps which prevent its performance by one of the parties to it, who, although not bound to execute it, is willing and anxious to do so. Aalfo Co. v. Kinney, 105 N.J.L. 345, 347, 144 A. 715, 716 (1929). 20 The leading New Jersey case dealing with the tort of interference with a prospective advantage is Justice Heher's opinion in Kamm v. Flink, 113 N.J.L. 582, 175 A. 62 (1934). In that case the Guarantee Building and Loan Association owned a theater which it desired to sell. Kamm, a broker, aware that the theater was for sale and that his prospect, Levin, a theater operator, might buy it, disclosed the name of the customer to Flink, the president of the association. Flink disclosed Levin's name to his brother, who was also a broker. The sale to Levin was consummated without Kamm's participation, and a commission paid to Flink's brother. Reversing a dismissal of Kamm's complaint at the pleading stage, Justice Heher wrote: 21 If the challenged action were taken for the indirect purpose of doing injury to appellant, or of benefiting respondents at the former's expense, it is a wrongful act, unless done in the exercise of an equal or superior right, and therefore a malicious act, and actionable. But the case made by appellant clearly negatives the existence of an equal or superior right. The identity of its customer was disclosed, under the seal of confidence, for the legitimate use of the loan association only, and an obligation was thereby imposed upon Flink not to make an unfair use of the information thus given. Appellant had a property interest therein which the law will protect against unjust use by one who has gained it by virtue of a confidential relation. And this obligation may, in certain circumstances, be implied.... Where the duty is imposed, either expressly or by implication, its breach is tortious, and therefore actionable. 22 Id. at 588-89, 175 A. at 67 (citations omitted). Kamm v. Flink is significant in two respects. First, it reiterates the rule that the relationship interfered with need not be an enforceable contract, but only must be such that there is a reasonable expectation that a contract would have been entered into but for the interference. Id. at 590, 175 A. at 68. Second, it recognizes that no prior relationship need exist between the victim and the tortfeasor, and that no express undertaking of confidentiality is required. 1 Id. at 590, 175 A. at 67. The duty of confidentiality may arise by implication from the circumstances in which disclosure is made to the wrongdoer. Id. 23 The circumstances held in Kamm v. Flink to give rise to a cause of action for wrongful interference are largely replicated in the record before us. Just as Kamm had no prior relationship with the Association or Flink and no contract with Levin, Zippertubing had no prior relationship with Teleflex and no contract with Nab. While the facts in Kamm v. Flink itself dealt with an express assurance of confidentiality, Justice Heher, writing for a unanimous court, left no doubt that the circumstances surrounding a transaction can give rise to an implied duty of confidentiality. Id. The circumstances providing the basis for the relationship between Zippertubing/Surf and Teleflex as it had developed by the time of the meeting of February 11 is an example of what the Kamm court meant. The jury could have found that all participants were aware that Zippertubing's business was to design, procure extrusion of, and resell closeable insulators; that Teleflex issued to Surf a quotation, firm for 30 days, for the extrusions: that when the quotation was issued Teleflex was not in the business of manufacturing and selling closeable insulators; that Teleflex did not know Zippertubing's customer, but did know that Zippertubing had a customer; that Zippertubing maintained the identity of that customer in confidence until satisfied that Teleflex was ready and willing to go forward with the extrusions at the price indicated in the quotation; that the only purpose of the disclosure was to facilitate the inspection of facilities requested by the purchaser. The New Jersey courts would hold, we confidently predict, that Teleflex received the name of Nab under an implied duty of confidentiality. 24 Teleflex urges that the tort recognized in Kamm v. Flink is confined to the real estate brokerage context. While the tort has received widespread recognition in that context, 2 it has historically been applied, as noted above, in other contexts. New Jersey continues to impose liability for interference with forms of prospective advantage other than brokerage commissions. E.g. Zelenka v. Benevolent and Protective Order of Elks, 129 N.J.Super. 379, 324 A.2d 35 (App.Div.1974) (interference with membership in a fraternal order); Association Group Life, Inc. v. Catholic War Veterans, 120 N.J.Super. 85, 293 A.2d 408 (App.Div.1971) (Conford, J.) (interference with expectancy of commissions on insurance policy renewals); Mayflower Industries v. Thor Corp., 15 N.J.Super. 139, 83 A.2d 246; 15 N.J.Super. 337, 83 A.2d 366 (Ch.Div.1951) (Francis, J.), aff'd, o.b., 9 N.J. 605, 89 A.2d 242 (1952) (interference with proposed distributorship agreement by threats of groundless litigation); Di Cristofaro v. Laurel Grove Memorial Park, 43 N.J.Super. 244, 128 A.2d 281 (App.Div.1957) (fee requirements imposed by cemetery constituted interference with business of independent monument sellers); Newark Hardware & Plumbing Supply Co. v. Stove Mfrs. Corp., 136 N.J.L. 401, 56 A.2d 605 (Sup.Ct.), aff'd 137 N.J.L. 612, 61 A.2d 240 (1948) (accepting misdelivery of a consignment intended for a competitor an interference with competitor's business). We therefore are convinced that New Jersey has not in the past, and would not in the future restrict the boundaries of this tort to a real estate context. However, even if the New Jersey Supreme Court in the future would desire limiting the expansion of this cause of action, we do not doubt that it would apply the Kamm v. Flink rule in circumstances such as those disclosed in the present record where Zippertubing's role as a subcontractor, designing and procuring the manufacture of closeable insulators is factually analogous to the role of a broker in facilitating real estate transactions. 25 Teleflex also urges that the evidence of a prospective advantage was insufficient to go to the jury. We disagree. From the testimony the jury could have found that Nab would have contracted with Zippertubing if it was satisfied that Zippertubing had an extruder with sufficient production capacity available. It could have inferred from the quotation issued by Teleflex to Surf, and Teleflex's subsequent delivery of extrusions to Nab, that until Teleflex's tortious conduct, the plaintiffs had a reasonable expectation that such an extruder was available. As noted in Part II B, infra, this was the factual theory on which the case was submitted to the jury. Certainty of economic advantage need not be shown; reasonable probability of that advantage, absent interference, suffices. Myers v. Arcadio, Inc., 73 N.J.Super. 493, 180 A.2d 329 (App.Div.1962).