Court Opinion

ID: 9649336
Source: CourtListenerOpinion
Date Created: 2023-08-23 14:49:36.46483+00
Date Added: 2024-06-11T18:12:09.853896
License: Public Domain

DISSENTING OPINION TO COURT’S DENIAL OF REHEARING Opinion Delivered May 28, 1998 Tom Glaze, Justice, dissenting. As a caveat to the bench and bar, I point out that today’s decision changes this court’s AMI Civ. 3d Instructions 406 and 407. I think unnecessarily so; thus, I dissent.1  The mischief triggering this court’s decision to overrule longstanding precedent is primarily due to our opinion in Fisher v. Jones, 311 Ark. 450, 844 S.W.2d 954 (1993), which misstates this court’s holding in Walt Bennett Ford v. Pul. Co. Spl. Sch. Dist., 274 Ark. 208, 214-A, 624 S.W.2d 426, 429 (1981) (Supplemental Opinion on Denial of Rehearing). In chronological order, those two holdings are as follows: “The general rule is that an improper motive or bad faith is no longer an essential part of the plaintiff’s case in the tort of interference with existing contractual relations. However, the defendant may show his interference was privileged. Stebbins & Roberts, Inc. v. Halsey, 265 Ark. 903, 582 S.W.2d 266 (1979). 274 Ark. at 214-A, 624 S.W.2d at 419 (1981). (Emphasis added.) * * * For an interference [with a contract relation] to be actionable, it must be improper. 311 Ark. at 458, 844 S.W.2d at 959 (1993). (Emphasis added.) Obviously, the above two holdings are at odds. To confuse matters further, the court’s opinion in Fisher not only misstated the rule firmly announced in Walt Bennett Ford, but also it listed factors from the Restatement (Second) of Torts needed to determine whether an interference is “improper.” Only making the situation worse, we later decided Hunt v. Riley, 322 Ark. 453, 909 S.W.2d 329 (1995), and citing both Fisher and Walt Bennett Ford, the Hunt court set out the four elements of a tortious interference claim, but added that, “for an interference to be actionable, it must be improper.” This court in Fisher and Hunt never mentioned any intent to depart from its holding in Walt Bennett Ford or other cases that routinely followed the established rule in Walt Bennett Ford which held a plaintiff need not show a defendant’s interference was improper. In 1995, our Civil Instructions Committee met and adopted AMI Civ. 3d 406, which requires that the plaintiff must prove the following five elements to prove interference with contractual relationship or business expectancy: (1) plaintiff sustained damages; (2) plaintiff had a valid contractual relationship (and/or business expectancy); (3) defendant had knowledge of the contractual relationship and/or business expectancy; (4) defendant by intentional interference induced or caused a disruption or termination of the relationship and/or expectancy; and (5) the disruption or termination was a proximate cause of the plaintiff’s damages.2  The foregoing instruction on (and definition of) tortious interference with contractual relationship was based upon a host of Arkansas cases where this court required the elements listed above, but made no mention of any “improper motive” requirement. As the reader will note, a number of these cases were decided even after the 1993 Fisher and 1995 Hunt decisions were rendered. See Brown v. Tucker, 330 Ark. 435, 954 S.W.2d 262 (1997); Cross v. Arkansas Livestock & Poultry Comm’n, 328 Ark. 255, 943 S.W.2d 230 (1997); Belin v. West, 315 Ark. 611, 864 S.W.2d 838 (1993); Nicholson v. Simmons First Nat’l Corp., 312 Ark. 291, 849 S.W.2d 483 (1993) (Holt, C.J., Newbern and Brown, JJ., dissenting opinion); W. E. Long Co. v. Holsum Baking Co., 307 Ark. 345, 820 S.W.2d 440 (1991); Mid-South Beverages, Inc. v. Forrest City Grocery Co., Inc., 300 Ark. 204, 778 S.W.2d 218 (1989); Conway Corp. v. Construction Eng’rs, Inc., 300 Ark. 225, 782 S.W.2d 36 (1989) (Substituted Opinion on Denial of Rehearing); Jim Orr & Associates v. Waters, 299 Ark. 526, 773 S.W.2d 99 (1989); L. L. Cole & Son, Inc. v. Hickman, 282 Ark. 6, 665 S.W.2d 278 (1984). In the 1984 L. L. Cole & Son, Inc. v. Hickman decision, this court said that the law has long been in general agreement that a third party who intentionally, and with malice, interferes with the contractual relations of another incurs liability for his action in tort. 282 Ark. at 9, 665 S.W.2d at 280 (1984). The court further explained this tort as follows: Such a tort is commonly termed “interference with contractual relations” or “tortious interference with contract,” and has long been recognized in Arkansas. Mason v. Funderburk, 247 Ark. 521, 446 S.W.2d 543 (1969). For a full discussion see Dobbs, Dan B., “Tortious Interference with Contractual Relationships,” 34 Ark. L. Rev. 334. The elements of the tort of interference with contractual rights are thoroughly set out in Walt Bennett Ford v. Pul. Co. Spl. Sch. Dist., 274 Ark. 208, 624 S.W.2d 426. See also Restatement, (Second) of Torts § 766 (1979). Malice, or bad faith, is no longer in Arkansas an essential part of the plaintiff’s case. See Walt Bennett Ford, Supplemental Opinion on Petition for Rehearing, supra, and Stebbins & Roberts, Inc. v. Halsey, 265 Ark. 903, 582 S.W.2d 266 (1979). Punitive damages for the tort of interference with contractual relations may be awarded. Id. (Emphasis added.) Later, in 1989, the court, citing to the Walt Bennett Ford Supplemental Opinion, again restated its rule that bad faith need not be proven by the plaintiff in order to recover for tortious interference with a contractual or business expectancy. Conway Corp., 300 Ark. 225, 233, 782 S.W.2d 36, 40 (1989). (Emphasis added.) Instead, the court added, “[T]he defendant may show his interference was privileged . . . meaning ”a defendant will not be liable if he acts, without bad faith, to protect the public interest or a third person to whom he stands in a relation of responsibility." Id. The court in Conway Corp. held that the defendants were entitled to such a privilege and concluded they had acted without bad faith. The Conway Corp. court adhered to the definition of bad faith as consisting of dishonest, malicious, or oppressive conduct with a state of mind characterized by hatred, ill will, or a spirit of revenge. Id. Confronted with the above case authority, our Civil Instructions Committee in 1995 quite accurately concluded AMI 3d 406, after listing the five recognized elements of the tortious interference of contract cause of action, by setting out the following affirmative defense: As a defense to the claims of the plaintiff, the defendant contends his conduct was privileged in that he acted without bad faith. Defendant has the burden of proving this defense.3  In sum, the AMI Civ. 3d 406 and 407 pattern instructions correctly reflect the above case authority defining tortious interference of a contractual relationship — only the misstatements of law wrongly attributed to Walt Bennett Ford by Fisher and Hunt fail to fit. Accordingly, I opt to follow the law as set out in instructions 406 and 407, and in doing so, I would reverse the trial court’s decision. I recognize that, based on the facts and evidence before us, Wal-Mart likely would prevail on the bad-faith defense issue. However, that is not the issue now before this court. Too, I would add that, while it might arguably be reasonable to place the burden on the plaintiff to show the defendant acted in “bad faith” in these type claims, that is not what the majority opinion requires. Rather, the majority, citing Fisher and Hunt, provides that, for an interference to be actionable, it must be “improper”— whatever that term means. Although Fisher sets out factors from § 767 of the Restatement (Second) of Torts that may be used to determine the meaning of “improper interference,” I suggest those factors are meaningless and offer no real guidance or measure. See Fisher, 311 Ark. at 458-59, 844 S.W.2d at 959 (1993).4 To answer the questions posed by those factors offers no definitive character to the term “improper motive or means” and would leave the trial court and jury at a loss as to when improper interference by a defendant has occurred. To the contrary, the term “bad faith” in AMI Civ.3d 407 is clearly defined to mean “dishonest, malicious, or oppressive conduct carried out with a state of mind characterized by hatred, ill will, or a spirit of revenge,” and is consistent with the “malicious interference” terminology used in this court’s cases of Halsey, Hickman, Sampson, and Cross, supra. At the very least, if the majority is to change Arkansas’s existing law on this subject, it should take this opportunity to utilize terminology that has a definitive meaning and require plaintiff to show the defendant acted and interfered with bad faith. Because I adhere to the heretofore long-settled Arkansas rule that placed the burden on the defendant to show his interference was justified, I would grant the appellant’s petition for rehearing and reverse and remand this case. In conclusion, I note that the majority opinion relies heavily on Professor Dobbs’s suggestion that the tort of interference claim would be best served by placing the burden on the plaintiff to prove the defendant improperly interfered with the plaintiff’s contractual relationship. See Dobbs, Dan B., Tortious Interference with Contractual Relationships, 34 Ark. L. Rev. 334 (1984), citing Restatement (Second) Torts, § 766 (1979). That suggestion, however, was rejected by this court in L. L. Cole & Son, Inc., 282 Ark. 6, 665 S.W.2d 278 (1984). As already fully discussed, except for the aberrant holdings in the Fisher and Hunt cases that clearly misstate Arkansas law, our case law and AMI Civ. 3d Instructions very plainly provide that the plaintiff has no burden to show “improper” motive (or means) when posing interference, and instead requires the defendant to show his interference was justified. Arnold, C.J., joins this dissent.   This dissenting opinion was prepared to be handed down on April 30, 1998, when the majority court’s decision was rendered with Chief Justice W. H. “Dub” Arnold and me dissenting. For some reason, the dissent was not filed, so it is now handed down in response to appellant’s petition for rehearing.    Cases often refer to four elements, combining (1) and (5) relating to damages, e.g., Hunt v. Riley, supra.    The instruction concludes with “If you find from the evidence in this case that plaintiff has proven each of the five essential propositions and that defendant has failed to prove the defense of privilege, then your verdict should be for the plaintiff. . but if, on the other hand, you find from the evidence that any of the five propositions has not been proved by plaintiff (or that defendant has proved the defense of privilege), then your verdict shall be for the defendant.    Those factors are listed as follows: (a) the nature of the actor’s conduct; (b) the actor’s motive; (c) the interests of the other with which the actor’s conduct interferes; (d) the interests sought to be advanced by the actor; (e) the social interests in protecting the freedom of action of the actor and the contractual interests of the other; (f) the proximity or remoteness of the actor’s conduct to the interference; and (g) the relations between the parties.