Court Opinion

ID: 9685230
Source: CourtListenerOpinion
Date Created: 2023-08-24 14:26:42.56774+00
Date Added: 2024-06-11T18:18:03.397137
License: Public Domain

Danhof, C. J.
(dissenting). This controversy arose out of the construction project. Defendant, Henderson Brothers, Inc. (Henderson) is a general contractor which, through a trade publication, requested sealed bids from subcontractors, including both plaintiff, Northern Plumbing and Heating, Inc. (Northern), and defendant, Phoenix Contractors, Inc. (Phoenix). In submitting its own bid to the city, Henderson listed Northern as a subcontractor in the belief that Northern was the low bidder. From this point on the testimony and allegations are in conflict.
Mr. Buday, President of Northern, stated that when he arrived at Henderson’s office to fill out equipment questionnaires, Mr. Robinson of Henderson’s told him that two men from Phoenix had been in asking why Henderson had not chosen Phoenix, stating that Northern might not be capable of doing the job, and generally "badmouthing” Northern. Also at the meeting, Mr. Buday, was questioned about Northern’s ability to get a per*95formance bond. Although this was never mentioned before, Henderson claimed that Northern must be bonded if Henderson was to get a performance bond which was required by the contract.
Mr. Buday also testified that he later asked Mr. Henderson if "someone was knocking on your back door” and that he answered that Phoenix was. Mr. Henderson says that he might have made this statement. Around August 4, 1976, over lunch, some men from Henderson attempted to get Northern to agree to withdraw its bid in return for other work on the project. No agreement was reached. A day or so later, Henderson attempted to get Mr. Buday to sign a hold harmless agreement, but he refused to do so. On October 16, 1976, the city signed the contract with Henderson as general contractor, listing Phoenix as a subcontractor. Henderson then placed a purchase order with Phoenix for subcontracting work. Plaintiff then filed suit. The trial judge granted Phoenix’s motion for summary judgment stating that even if he assumed there was a contract between Henderson and Northern, he could not find allegations which would indicate that defendant tortiously interfered with plaintiff’s contract.
In his complaint plaintiff alleges that Phoenix committed three distinct torts: (1) a conspiracy to breach a contract between Northern and Henderson, (2) tortious interference with an existing contract, and (3) tortious interference with an advantageous business relationship. The trial judge granted defendant’s motion for summary judgment on the grounds that, assuming the existence of a contract, Phoenix had not taken any actions which amounted to tortious interference. I would hold that the order of summary judgment was proper *96since actions for wrongfully inducing a breach of contract are barred by the absence of an enforceable contract and because plaintiffs allegations failed to show that Phoenix took any action which amounts to tortious interference with an advantageous business relationship.
I
I agree with the majority that one must show an enforceable contract as a prerequisite to establishing a claim for conspiracy to breach a contract. When the statute of frauds, MCL 566.132; MSA 26.922, applies and there is no writing sufficient to satisfy the statute, there is no legal basis for a claim that defendant conspired to breach that contract, Jaques v Smith, 62 Mich App 719; 233 NW2d 839 (1975), lv den 395 Mich 829 (1976). The statute is applicable since the construction time was estimated at 900 days with mechanical subcontracting being one of the last jobs to be performed. The principle is well settled that to satisfy the statute of frauds the memorandum must contain the substantial elements of a contract expressed with such certainty that they may be understood without resort to parol evidence, Messmore v Cunningham, 78 Mich 623; 44 NW 145 (1889), Association of Hebrew Teachers v The Jewish Welfare Federation, 62 Mich App 54; 233 NW2d 184 (1975). Plaintiff contends that the requirements of the statute of frauds were satisfied by the proposal Henderson submitted to the city which listed Northern as the subcontractor and certain notes made by Henderson in computing the bids. These writings are not sufficient for the statute of frauds because they do not contain all the substantial elements of the contract.
As plaintiff asserts, the proposal submitted by *97Henderson may incorporate the city’s contract which lists the materials required and specifications. Even though this would provide substantial details on some issues, it does not cover all the terms. It does not purport to spell out any of the many possible alternatives that could govern a contractor-subcontractor relationship, such as manner of payment or penalty provisions. In a very similar case, the Washington Supreme Court also concluded that "[s]uch essentials, as manner of payment, time for completion of the mechanical portion of the work, penalty provisions, bonding, etc., are normally critical to any construction contract”. The Plumbing Shop, Inc v Pitts, 67 Wash 2d 514, 518; 408 P2d 382 (1965). The other internal working papers mentioned by the plaintiff do not cure this deficiency since they do not contain any internal reference to the proposal or each other, Hewett Grain & Provision Co v Spear, 222 Mich 608; 193 NW 291 (1923). I agree with the majority that if a contract is not enforceable, then the contracting party would not be liable for damages for nonperformance and neither would he, or a stranger, be liable for agreeing to not perform.
II
However, I cannot agree with the majority that the absence of a binding contract is not a bar to a claim of tortious interference with a contract. This holding is not consistent with the holding on the conspiracy claim or the ratio decidendi of Jaques v Smith, supra. Since the claim of conspiracy to breach a contract requires an enforceable contract, Jaques v Smith, supra, so does the claim for tortious interference. These claims, even though they sound in contract, are both essentially tort claims, 16 Am Jur 2d, Conspiracy, § 56, p 154. As *98the Court stated in Roche v Blair, 305 Mich 608, 613-614; 9 NW2d 861 (1943),
"The law is well established that in a civil action for damages resulting from wrongful acts alleged to have been committed in pursuance of a conspiracy, the gist or gravamen of the action is not the conspiracy but is the wrongful acts causing the damages. The conspiracy standing alone without the commission of acts causing damage would not be actionable. The cause of action does not result from the conspiracy but from the acts done.”
See also Fenestra, Inc v Gulf American Land Corp, 377 Mich 565; 141 NW2d 36 (1966), Bush v Sprague, 51 Mich 41; 16 NW 222 (1883). The major difference between the conspiracy claim and the tortious interference claim is that the conspiracy claim contains an additional element of an agreement between the nonperforming party and the stranger. The tort of (nonconspiracy) interference with a contract does not require this agreement. The gravamen of the conspiracy claim is that plaintiff suffered damages from the nonperformance of an enforceable contract. If a person does not suffer recoverable damages from the nonperformance of a nonenforceable contract, or from an agreement between the other party and the stranger not to perform a nonenforceable contract, likewise he should not recover any damages from the nonperformance of a nonenforceable contract which is induced by a stranger.
III
The tort of interference with an advantageous business relationship does not depend on the existence of an enforceable contract and therefore the statute of frauds is not available as a defense to *99these claims. However, I would affirm the order of summary judgment for the reasons given by the trial court, specifically, because plaintiff failed to allege any actions by defendant which amounted to tortious interference with an advantageous business relationship. To establish tortious interference with an advantageous business relationship by a competitor, one must show the use of improper or illegal means, 4 Restatement Torts, § 768, p 71; 45 Am Jur 2d, Interference, § 31, p 308. Plaintiff has not alleged the use of improper or illegal means.
Not all actions which bring about the nonperformance of a contract or hinder the development of an advantageous business relationship are tortious interference. One is liable only for actions taken without justification, 4 Restatement Torts, § 766, p 49, 45 Am Jur 2d, Interference, § 27, p 304; Prosser, Torts (4th ed), § 130, p 949. Public policy considerations weigh heavily in determining what constitutes tortious interference and when liability is not imposed because the actions are justifiable. In determining the standard of conduct relating to tortious interference, the law for policy reasons distinguishes between tortious interference with a contract and tortious interference with an advantageous business relationship. Certain actions which constitute tortious interference with a contract are not tortious in reference to interference with an advantageous business relationship. In other words, the reasons justifying interference with an advantageous business relationship may not be sufficient to justify the same action if it will interfere with a binding contract.
The primary reason for the requirement of "improper or illegal” means in a claim for tortious interference with an advantageous business rela*100tionship, rather than the standard used in contract cases, is to avoid unnecessarily stifling competition. The social desirability of encouraging competition will justify some actions in an advantageous business relationship case which would be tortious if a contract existed. A contract represents the final product of competition and when a contract is finally concluded, public policy favors the stability and planning made possible by it. Consequently, since most of the goals of competition have already been achieved, the law imposes liability on one who interferes with the performance of the contract. However, if a final agreement has not been reached, legitimate competition is still desirable. The courts are more reluctant to impose liability for actions taken in the furtherance of competition at this stage. The law does not want to unnecessarily restrict the available means of competition. It is for this reason, that one is only liable for tortiously interfering with an advantageous business relationship if he uses improper or illegal means.
To use the same standard in advantageous business relationship cases as is used in contract cases would unnecessarily restrict competition two ways. To apply this standard to all advantageous business relationship cases would unnecessarily limit the available means of competition in all advantageous business relationship cases. Also, because of the uncertainty of determining when an advantageous business relationship exists, the application of this standard of conduct could also chill competition in all cases on the fringe of an advantageous business relationship. The courts are reasonably certain of when an enforceable contract exists, but the perimeters of an advantageous business relationship have not been precisely established yet. *101Therefore, the fear of tort liability and the uncertainty of knowing whether an advantageous business relationship exists, could unnecessarily chill competition even in cases where an advantageous business relationship does not exist, if the standard used in interference with contract cases is applied.
Plaintiff has failed to allege any actions by defendant which meet the "illegal-or-impropér means” requirement.1 The questioning of plaintiffs ability to secure a performance bond is not an improper means of competition. Plaintiff has not alleged any improper motive on the part of defendant in taking this action. Also the mere allegation of "badmouthing” is not sufficient. Plaintiff does not allege any fraud, defamation, or bad motive on the part of defendant or even that the statements made were untrue, Regal Home Distributors, Inc v Gordon, 45 Del 49; 66 A2d 754 (1949). Even accepting the allegations as true, and realizing that such a practice is of questionable ethics, it does not amount to an improper or illegal method of competition, 45 Am Jur 2d, Interference, § 31, p 308. Consequently, summary judgment was proper on plaintiffs claim of interference with an advantageous business relationship.

 For cases interpreting "illegal or improper” means, see Show Management v Hearst Publishing Co Inc, 196 Cal App 2d 606; 16 Cal Rptr 731 (1961), Coleman & Morris v Pisciotta, 279 App Div 656; 107 NY Supp 2d 715 (1951), Terry v Dairymen’s League Cooperative Association, 2 App Div 2d 494; 157 NY Supp 2d 71 (1956), Brause v First National Real Estate Trust, 25 App Div 2d 624; 267 NY Supp 2d 876 (1966), Regal Home Distributors, Inc v Gordon, 45 Del 49; 66 A2d 754 (1949), Martin v Phillips Petroleum Co, 455 SW2d 429 (Tex Civ App, 1970).