Opinion ID: 2229677
Heading Depth: 2
Heading Rank: 10

Heading: tortious interference with business relationship or expectancy.

Text: Nelson further claims the trial court erred in granting summary judgment for WEB on his claim that the directors as individuals interfered in his business relationship or damaged his expectancy. In Tibke, we set forth the essential elements of the claim of tortious interference with business relationships or expectancy: (1) the existence of a valid business relationship or expectancy; (2) knowledge by the interferer of the relationship or expectancy; (3) an intentional and unjustified act of interference on the part of the interferer; (4) proof that the interference caused the harm sustained; and (5) damage to the party whose relationship or expectancy was disrupted. Tibke, 479 N.W.2d at 908 (citing Miller Chem. Co., v. Tams, 211 Neb. 837, 320 N.W.2d 759 (1982); Nesler v. Fisher & Co., 452 N.W.2d 191 (Iowa 1990)). We have never before decided the question of whether a director or officer of a corporation may be liable for tortious interference of a business contract or expectancy in discharging an employee. The trial court found the overwhelming majority of jurisdictions refuse to hold a corporation's directors, officers or employees liable for tortious interference with a corporate contract or expectancy as they are considered parties to the contract while acting to serve the corporate interests within the scope of their authority. Nordling v. Northern States Power Co., 465 N.W.2d 81 (Minn. App.1991); Bossuyt v. Osage Farmers Nat'l Bank, 360 N.W.2d 769 (Iowa 1985); Dzierwa v. Michigan Oil Co., 152 Mich.App. 281, 393 N.W.2d 610 (1986); Thomas G. Fischer, Annotation, Liability of Corporate Director, Officer, or Employee for Tortious Interference With Corporation's Contract With Another, 72 A.L.R. 4th 492 (1989). In Nordling, the Minnesota Court of Appeals affirmed a grant of summary judgment to the defendant corporate officer on a claim of tortious interference with contract where the officer had no personal capacity to discharge an employee. The acts of a corporate officer within the scope of his or her duties constitute the acts of the corporation, and the officer is thus shielded from personal liability for tortious interference with contract. Nordling, 465 N.W.2d at 86-7. In Bossuyt, the Supreme Court of Iowa affirmed summary judgment for a bank officer acting in his official capacity, reasoning: [T]hey (defendants) had the right while acting as corporate officers and agents to counsel and advise with the defendant corporation as to the management of its affairs in all matters with which the corporation was concerned without the risk of rendering themselves personally liable to third parties for their acts in that regard if they should err. `Any other rule would make it impossible for corporate business to be carried on at all except at the peril that every agent who advised concerning corporate action would be suable under some such allegations as are made in this complaint.' Bossuyt, 360 N.W.2d at 779 (quoting Rhine v. Sanders, 100 Ga.App. 68, 110 S.E.2d 128, 132 (1959)). As the Bossuyt court quoted: To hold otherwise would be dangerous doctrine, and would subject corporate officers and directors continually to liability on corporate contracts and go far toward undermining the limitation of liability which is one of the principal [sic] objects of corporations. Bossuyt, 360 N.W.2d at 779 (quoting In re Brookside Mills, 276 A.D. 357, 94 N.Y.S.2d 509, 518 (1950)). This reasoning is consistent with South Dakota law which gives corporations the power to indemnify directors, officers, employees or agents of the corporation for corporate actions they performed while acting in good faith and not against the best interests of the corporation. SDCL 47-22-65.1 through -65.5. In South Dakota, no cause of action for tortious interference with contract may be maintained against a corporate officer who, acting within the scope of his or her authority, discharges an employee. The trial court's grant of summary judgment is affirmed on this issue.