Court Opinion

ID: 9469004
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:29:12.32999+00
Date Added: 2024-06-11T17:41:09.684672
License: Public Domain

TIMBERS, Circuit Judge,
concurring in part and dissenting in part.
I concur in the majority’s dismissal of Durham’s cross-appeal, since I agree that under New York law Durham has no cause of action against North River for either bad faith breach of contract or punitive damages.
With respect to the majority’s reversal of the judgment, Robert W. Sweet, District Judge, entered upon a jury verdict in favor of Durham awarding damages based on prima facie torC however, I believe that the majority has misread New York law regarding prima facie tort. From this part of the majority opinion, I therefore respectfully dissent.
Under New York law, four elements must be shown to establish a case of prima facie tort. They are: “[1] the infliction of intentional harm, [2] resulting in damage, [3] without excuse or justification, [4] by an act or a series of acts which would otherwise be lawful.” ATI, Inc. v. Ruder & Finn, Inc., 42 N.Y.2d 454, 458, 368 N.E.2d 1230, 398 N.Y.S.2d 864, 866 (1977), quoting Ruza v. Ruza, 286 A.D. 767, 769, 146 N.Y.S.2d 808, 811 (1st Dept. 1955). I agree with the majority that Durham has proven the *42first, second, and fourth elements. I disagree with the majority’s holding that Durham has not established the third element.
The majority states that “New York courts have emphasized repeatedly that . . . a claim of prima facie tort does not lie where the defendant has any motive other than a desire to injure the plaintiff.” I recognize that the cases cited by the majority stand for that proposition. The majority’s list of cases, however, is conspicuous for the absence of any decision by the New York Court of Appeals. The “sole motivation” test appears to be followed only by the New York Appellate Division courts and by the federal district courts. It does not appear to be an accurate statement of the law of New York as enunciated by the New York Court of Appeals.
It seems to me that the proper test under New York law is not whether malice was the sole motive for the intentional harm, but whether the defendant has any other legitimate, legally cognizable motive for his action.1 As the New York Court of Appeals stated in ATI, supra:
“Of course, one can always advance an explanation for one’s conduct but, in this type of case, it must be an excuse or justification which the law will recognize .... Underlying the question of excuse or justification, it has been noted, is the question of whether the public’s gain outweighs the harm to another.” 42 N.Y.2d at 459, 368 N.E.2d at 1233, 398 N.Y.S.2d at 867.
Accord, Opera on Tour, Inc. v. Weber, 285 N.Y. 348, 34 N.E.2d 349 (1941); Burns Jackson Miller Summit & Spitzer v. Lindner, 108 Misc.2d 458, 437 N.Y.S.2d 895, 902 (Sup.Ct., Queens Co., 1981).
Thus, the correct approach to the problem here presented, I suggest, is to examine whether North River’s non-malicious motives were legitimate, legally cognizable ones — whether they would result in gain to the public which outweighed the harm to Durham. The record before us strongly indicates that they were not of that character. The jury was entitled to find that North River delayed, by the assertion of its unfounded affirmative defense of fraud, the payment of its legal obligation to Durham.2 As an excuse for this behavior, North River asserts that it desired to attempt to recover the $223,670.08 from a third party before it paid that amount to Durham. This surely is not a proper justification for North River’s action. Conduct such as this results in no gain to the public whatsoever. Indeed, the public is the victim of such shoddy and dishonest business dealings.
If conduct such as that by North River is to be considered proper, then some shrewd persons may attempt to avoid timely payment of their debts, ostensibly while waiting to collect their accounts receivable. If the stakes are high enough, they may even be willing to defend a lawsuit to delay payment, knowing that what they can earn on the money at market rates will more than cover their attorney’s fees and the artificially low legal rate of interest they will eventually have to pay on the judgment entered against them. Under the rationale of today’s majority’s opinion, they will be able to engage in such dishonest behavior, secure in the knowledge that they will prevail should their creditors sue them upon a claim of prima facie tort.
In short, in my view Durham clearly has established all the elements of a case of prima facie tort. It sustained obvious injury — the loss of the use of $223,670.08 — as a result of North River’s deliberate action in asserting the unfounded fraud defense. The assertion of this defense, ordinarily a lawful action, was rendered tortious by North River’s lack of any legitimate, legally *43cognizable excuse for asserting it. New York law provides Durham with a remedy for such injury.
From the majority’s refusal to recognize that remedy by reversing the judgment entered on the jury verdict in favor of Durham, I respectfully dissent.

. The majority quotes Justice Holmes’ classic formulation of the doctrine of prima facie tort. That formulation is that the tort will not lie where the harm was committed “as a means to some further end legitimately desired.” Aikens v. Wisconsin, 195 U.S. 194, 203 (1904) (emphasis added).

. The jury moreover, very well could have found that North River lied in its answers to interrogatories as part of its effort to delay payment.