Tortious Interference

Tortious Interference QUICK LINKS

Elements Needed to Prove Tortious Interference with Contract

Tortious Interference with Prospective Economic Advantage

What Constitutes Intentional Conduct?

What Constitutes Improper Conduct Rising to the Level of Interference?

What Constitutes Intentional Conduct?

Types of Damages in Tortious Interference Claims

Defenses to Tortious Interference

What Is the Michigan Statute of Limitations for Tortious Interference?

Why Hire Steve Crane Jr?

What is Tortious Interference?

In Michigan, tortious interference involves a third party disrupting an existing business relationship or contract between two parties. There are two main types of tortious interference: tortious interference with prospective business relations or tortious interference with contract.

If tortious interference is proven, the wronged parties are entitled to recover damages for tortious interference. If you have questions about pursuing a tortious interference claim or you’ve been served with a lawsuit, it’s important to contact a Michigan business litigation lawyer right away.

To schedule a discrete and confidential consultation about your matter, email or call Steve at (248) 963-6300.

Elements Needed to Prove Tortious Interference with Contract

In order to prevail in a tortious interference claim, the plaintiff is required to prove certain elements existed. In a tortious interference with contract claim, the elements are:

• A valid contract exists;
• The third party (defendant) was aware of the contract;
• There was an unjustified and intentional interference by the third party; and
• The plaintiff suffered damages due to the defendant’s actions.

If there is no contract, a tortious interference claim may be possible if there was an expectancy for a business contract to develop. This is more difficult to prove, and there has to be more evidence than just “hope” that the business opportunity was going to develop. There must be some type of concrete proof that demonstrates the relationship was well on its way to developing into a contractual one. With cases involving potential business relationships, there is an added element required. The plaintiff must show the interference took place through improper methods or means.

Tortious Interference with Prospective Economic Advantage

This second type of tortious interference occurs when a third party improperly interferes with a business relationship or an expected business transaction. For example, let’s say that you casually mention to a fellow business owner that you are in negotiations to lease a new building. You tell them how excited you are about the advantages this new location will bring to you.

This person then contacts the owner of the building and tells them how desperate you are to be in this location and that you will likely pay much more than they are asking. This leads the building’s owner to drastically increase their asking price. This may also give you a claim for tortious interference.

What Constitutes Intentional Conduct?

Interference with a contract or a business relationship or expectancy must be both intentional and improper to be actionable. In other words, an interference claim will fail if there is no intent to bring about a breach of a contract or relationship. Advocacy Org for Patients & Providers v Auto Club Ins Ass’n, 257 Mich App 365, 383; 670 NW2d 569 (2003) “The ‘improper’ interference can be shown either by proving (1) the intentional doing of an act wrongful per se, or (2) the intentional doing of a lawful act with malice and unjustified in law for the purpose of invading plaintiffs’ contractual rights or business relationship.” Id. (Emphasis added)

Careless or reckless conduct is not sufficient to establish tortious interference.

What Constitutes Improper Conduct Rising to the Level of Interference?

Under Michigan Law, tortious interference requires proof not only that the conduct was “intentional” but that it was “improper.” “Intentional” interference means that the defendant’s purpose or desire is to cause an interference with a contract or business relationship, while “improper” interference means conduct that is either (1) wrongful per se, or (2) lawful but done with malice and unjustified in law.

A “per se wrongful act” is an act that is inherently wrongful or one that is never justified under any circumstances. If the defendant’s conduct was not wrongful per se, the “improper” nature of an interference is shown by proving either (1) conduct that is inherently wrongful, or (2) conduct that is inherently legitimate, but which becomes wrongful in the context of the defendant’s actions and malice.

When determining whether otherwise, lawful conduct becomes wrongful and thus improper, a court can consider several factors, such as:

• the nature of the conduct,
• the actor’s motive,
• the parties’ competing interests,
• social interests and policy considerations,
• proximate cause, and
• the relationship between the parties. See Restatement (Second) of Torts § 767 (1979).

The defendant will try to prove that they were simply being competitive. Having an experienced attorney on your side can go a long way toward helping you show that the conduct was improper.

What Constitutes Intentional Conduct?

Both types of tortious interference require proof that the conduct was intentional. This requires proof that either:

• The primary purpose of the defendant’s conduct was to cause the breach of contract or interfere with the business relationship or expectation; or
• The defendant was substantially certain that this would be the result of their conduct.

Careless or reckless conduct is not sufficient to establish tortious interference.

Types of Damages in Tortious Interference Claims

Since tortious interference with a contract is essentially a breach of contract claim, the damages can be varied based on each situation. The plaintiff is entitled to recover compensatory damages, and, in some instances, they may be awarded punitive damages.

Compensatory damages are financial damages and include:

• Lost profits
• Expenses
• Contracts awarded, but no work was completed
• Partially completed project costs
• Loss of promised future contracts
• Damage to plaintiff’s reputation
• Permanent destruction of the business relationship

In limited situations, the plaintiff may be able to prove that the defendant acted in a manner that was so repugnant and outrageous that he or she is entitled to recover punitive damages. Reckless disregard or malicious intent are two elements that could lead to an award of punitive damages.

Defenses to Tortious Interference

The law does recognize several defenses to tortious interference. One of these is a qualified privilege, which means the defendant has a limited or qualified privilege to interfere in someone else’s contractual relations, but only under certain circumstances. A business has the limited privilege to protect its own pre-existing financial interests or legal rights for example. Your District of Columbia business litigation attorney will advise you what defenses are available if you’ve been accused of tortious interference.

What Is the Michigan Statute of Limitations for Tortious Interference?

The statute of limitations for tortious interference with a business relations claim is three years. See Michigan Compiled Law 600.5805(2). Under Michigan law, this limitation period begins to run at the time all elements can be alleged in a complaint.

For more than 20 years, Steve Crane Jr. has successfully prosecuted and defended against legal actions and has achieved client objectives through arbitrations and negotiated settlements. As an experienced lawyer, Steve can gauge when it makes sense to go to court. He knows that a letter or phone call — with proper wording and timing — can be more effective or cost-efficient than suing for damages or injunctive relief. For those cases that must be presented to a judge or jury, he is eminently qualified to assert your interests.

If you believe your business has been the victim of tortious interference , you should contact Steve. He can assess the facts of your case and help you determine whether you have a claim.

To schedule a discrete and confidential consultation about your matter, email or call Steve at (248) 963-6300.