Opinion ID: 2123862
Heading Depth: 1
Heading Rank: 4

Heading: Conspiracy and Tortious Interference

Text: Count II of the complaint alleges that Typoservice, Overbay and Reed & Sons conspired to breach Winkler's employment contract. Count III alleges that the defendants tortiously interfered with the employment contract. As did the Court of Appeals, we address both counts together because civil conspiracy is not an independent cause of action. Indianapolis Horse Patrol, Inc. v. Ward (1966), 247 Ind. 519, 522, 217 N.E.2d 626, 628. [7] Indiana has long recognized that intentional interference with a contract is an actionable tort, and includes any intentional, unjustified interference by third parties with an employment contract. Bochnowski v. Peoples Fed. Sav. & Loan (1991), Ind., 571 N.E.2d 282, 284. The tort reflects the public policy that contract rights are property, and under proper circumstances, are entitled to enforcement and protection from those who tortiously interfere with those rights. See Miller v. Ortman (1956), 235 Ind. 641, 670, 136 N.E.2d 17, 34. In Indiana, the tort appears to have evolved from judicial loathing of conspiracies in restraint of free enterprise by trade associations. See, e.g., Jackson v. Stanfield (1893), 137 Ind. 592, 36 N.E. 345 (lumber association liable to independent retailer when association influenced wholesalers not to deal with retailer, thereby preventing the retailer from fulfilling a favorable order from Studebaker Corporation); Fort Wayne Cleaners & Dyers Ass'n v. Price (1956), 127 Ind. App. 13, 137 N.E.2d 738 (association of dry cleaners enjoined from fixing prices for the dry cleaning business and from interfering with plaintiff independent dry cleaner's employees). The absence of justification for the conduct of the trade associations in these cases was eventually incorporated as an element necessary to establish the tort in more routine contractual disputes. E.g., Helvey v. O'Neill (1972), 153 Ind. App. 635, 645, 288 N.E.2d 553, 559. In Daily v. Nau (1975), 167 Ind. App. 541, 339 N.E.2d 71, Judge Staton clearly enunciated for the first time the now-familiar five elements necessary for recovery for tortious interference with a contractual relationship: (i) existence of a valid and enforceable contract; (ii) defendant's knowledge of the existence of the contract; (iii) defendant's intentional inducement of breach of the contract; (iv) the absence of justification; and (v) damages resulting from defendant's wrongful inducement of the breach. Id. at 549, n. 6, 399 N.E.2d at 76 n. 6. In summary judgment proceedings, the burden is on the moving party to prove the non-existence of a genuine issue of material fact. Oelling v. Rao (1992), Ind., 593 N.E.2d 189, 190. Movants may meet this burden by demonstrating that the undisputed material facts negate at least one element of the plaintiff's claim. Moore v. Sitzmark Corp. (1990), Ind. App., 555 N.E.2d 1305, 1307. If the movant sustains this burden, the opponent may not rest upon the pleadings, but must set forth specific facts showing that there is a genuine issue for trial. T.R. 56(E). We agree with the trial court, as did the Court of Appeals, that the undisputed facts demonstrate the absence of element (iv). That is, there is no genuine issue of material fact about whether the defendants here acted with justification. They did. In determining whether a defendant's conduct in intentionally interfering with a contract is justified or not, the Restatement suggests that the following factors be considered: (a) the nature of the defendant's conduct; (b) the defendant's motive; (c) the interests of the plaintiff with which the defendant's conduct interferes; (d) the interests sought to be advanced by the defendant; (e) the social interests in protecting the freedom of action of the defendant and the contractual interests of the plaintiff; (f) the proximity or remoteness of the defendant's conduct to the interference; and (g) the relations between the parties. Restatement (Second) of Torts § 767 (1977). Other courts have considered these factors. See, e.g. Bendix Corp. v. Adams, 610 P.2d 24, 30 (Ala. 1980); Snow v. Western Sav. & Loan Ass'n, 152 Ariz. 27, 730 P.2d 204, 212 (1986); Swager v. Couri, 77 Ill.2d 173, 32 Ill.Dec. 540, 547, 395 N.E.2d 921, 928 (1979); Turner v. Halliburton Co., 240 Kan. 1, 722 P.2d 1106, 1115 (1986); United Truck Leasing Corp. v. Geltman, 406 Mass. 811, 551 N.E.2d 20, 21 (1990); Morrow v. FBS Ins., 236 Mont. 394, 770 P.2d 859 (1989). As the comments to § 767 indicate, the weight to be given to each consideration may differ from case to case depending upon the factual circumstances, but the overriding question is whether the defendants' conduct has been fair and reasonable under the circumstances. Id., § 767, cmt. j. We begin our analysis with the observation that Winkler makes no contention that defendants' conduct was malum in se. Compare Bochnowski v. Peoples, 571 N.E.2d at 285 (attempt to force settlement of litigation by inducing a litigant to terminate an employee does not constitute a legitimate business purpose which would justify interference with appellant's employment contract) and Miller v. Ortman (1956), 235 Ind. 641, 136 N.E.2d 17 (defendant's commission of illegal acts causing others to breach their contracts with plaintiff-distributor is not justified). Winkler does not contend that defendants made any misrepresentations, applied unfair economic pressure, or threatened litigation which induced Typoservice to breach its contract with him. Winkler also does not suggest that defendants' motive was a willful or spiteful intent to injure him. In fact, the evidence is undisputed that Typoservice sold its business assets because it was in serious financial trouble, and that Midwest purchased the assets because its parent company, Reed & Sons, believed it could return the enterprise to profitability. Although Winkler's interest in continued employment under the contract is certainly entitled to protection, contract law provides those protections. Assuming that Typoservice has breached Winkler's employment contract, it was within its right to do so subject to its responsibility to pay compensatory damages due under the contract. Miller Brewing Co. v. Best Beers of Bloomington (1993), Ind., 608 N.E.2d 975, 984, reh'g denied. Winkler gives, and we perceive, no reasons why his contract interests should receive greater protection in tort law than the business interests sought to be advanced by defendants here, namely, acquiring the Typoservice business and attempting to put it on a sound financial footing. See Neterer v. Slabaugh (1990), Ind. App., 548 N.E.2d 832, 833, trans. denied (manager not liable for interference with owner's contract where cause of breach was not manager's activities, but promissor's impending bankruptcy). See also Heheman v. E.W. Scripps Co., 661 F.2d 1115, 1126-28 (6th Cir.1981), reh'g denied, 668 F.2d 878 (1982), cert. denied, 456 U.S. 991, 102 S.Ct. 2272, 73 L.Ed.2d 1286 (1982). In Heheman, printers sued two newspaper publishers for tortious interference with an employment contract that guaranteed lifetime employment for the printers. Following a partial reorganization and merger between the publishers, the workers covered by the agreement were terminated. Summary judgment against the workers was affirmed because there was no evidence that the second publisher's negotiation of a joint operation agreement was motivated by spite or ill will against the printers, with whom it had never dealt. We perceive no reasonable argument that, given the legitimate business intent of Typoservice and Reed & Sons in engaging in the sales transaction, any tort was committed. Although public policy concerns do not dictate that there be a totally free and unrestrained ability to purchase and sell businesses without regard to pre-existing employment contracts, Winkler offers no reasons why such interests in the free purchase and sale of businesses are outweighed by policy considerations in maintaining his contract here. In instances where there is a goodfaith purchase of a business, the justification necessary to avoid tort liability for altering existing employment contract will usually be present. Of course, the injured party will be left with contract remedies.