Delaware Court Plows New Ground In The Field of Tortious Interference With A Contract Right.
Delaware courts have long been known for rendering cutting edge opinions, particularly in
the area of corporate law. The Superior Court of Delaware has now given approval for the expansion of the tort of tortious interference with a contract right.
In Allen Family Foods, Inc. v. Capital Carbonic Corporation, C.A. No. N10C-10-313 JRS CCLD, decided March 31, 2011, the Superior Court of Delaware, for the first time in Delaware, recognized an action arising under Section 766A of the Restatement (Second) of Torts. Section 766A states in pertinent part: “One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person, by preventing the other from performing the contract or causing his performance to be more expensive or burdensome, is subject to liability to the other for the pecuniary loss resulting to him.”
Heretofore, only the other parts of Section 766 of the Restatement had been a basis for actions. Those were the portions that stated that an intentional and improper interference with a third party, which caused such third party to breach an agreement, was a basis for an action.
In the instant case, Allen Family Foods had a requirements contract with Capital Carbonic Corporation that stated that Capital Carbonic would supply Allen with all the dry ice Allen needed. Supposedly, Allen thought the agreement with Capital Carbonic had expired and entered into a new agreement with Praxair for the same thing. Capital Carbonic's attorneys sent a hotly worded letter to Praxair accusing Praxair of tortiously interfering with the contract between Capital Carbonic and Allen. As a result of the letter, Allen ceased doing business with Praxair and re-upped its agreement with Capital Carbonic. Allen then sued Capital Carbonic for tortious interference with its agreement with Praxair. There was no indication in the opinion about how bad customer service got after the filing of the lawsuit.
Capital Carbonic responded that a cause of action did not exist when the alleged interference was just with the plaintiff and it merely caused the performance of an agreement with a third party to be more expensive or more burdensome. Capital Carbonic pointed to a federal court case that stated that such court believed that an action under Section 766A would be rejected by a Delaware court because of its "...inherently speculative..." nature.
The Delaware court acknowledged that Delaware already recognized claims under "...Section 766 (tortious interference with a third party’s performance of a contract) and Section 766B (tortious interference with prospective contractual relations)". The Court went on to say that not all 766A claims would be totally speculative and that courts dealt with speculative claims all the time anyway. The Court reasoned that it made no sense to allow third parties to interfere in this manner without sanction, while recognizing that they could not interfere with other parts of the transaction. "The Court can think of no rational basis to encourage behavior which would be tantamount to targeted tortious interference."
Having found that a cause of action could rise under Section 766A, the Court then found that the plaintiff had not properly pled such an action and dismissed that portion of the claim.
So, look for this to be a new arrow in the quiver for plaintiffs to plead in contract interference cases. To observe how courts across the nation deal with this and measure the damages that might accrue will be very interesting. Stay tuned.
