Present: Kinser, C.J., Lemons, Goodwyn, Millette, and Mims,
JJ., and Koontz, S.J.
DUNN, MCCORMACK & MACPHERSON
v. Record No. 100260 OPINION BY JUSTICE DONALD W. LEMONS
April 21, 2011
GERALD CONNOLLY
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Dennis J. Smith, Judge
In this appeal, we consider whether the circuit court
erred when it sustained Gerald Connolly's ("Connolly")
demurrer and held that Dunn, McCormack & MacPherson ("Dunn")
failed to state a prima facie cause of action for tortious
interference with a contract.
I. Facts and Proceedings Below
Dunn, a Virginia law firm, served as legal counsel to the
Fairfax County Redevelopment and Housing Authority (the
"Authority") for approximately thirty years. The attorney-
client relationship between Dunn and the Authority was based
on an at-will contract for legal representation, which was
terminated in September 2005.
On April 2, 2008, Dunn filed a complaint against
Connolly, Chairman of the Fairfax County Board of Supervisors,
alleging that Connolly had tortiously interfered with Dunn's
contract with the Authority. The circuit court sustained
Connolly's demurrer, holding that Dunn's complaint failed to
state sufficient facts supporting a cause of action for
intentional interference with a contract. The circuit court
granted Dunn 21 days to file an amended complaint.
In its amended complaint, Dunn alleged additional facts
in support of its claim, including that Connolly "verbally
directed or persuaded" the Authority to communicate to a
partner at Dunn that its contract with the Authority was
terminated; that Connolly's actions "were intended by him to
destroy the relationship between [Dunn] and the Authority and
were not based on [Dunn's] poor performance, malfeasance or
nonfeasance;" and that Connolly's actions were "outside the
scope of his authority as a public official" and were
"undertaken by him in his personal capacity and were motivated
solely by his personal spite, ill will and malice" because
Connolly had "verbally clashed" with a partner at Dunn.
Dunn further claimed that Connolly had "no legal
justification or legitimate business interest in inducing the
termination of the contract," concluding that "Connolly used
improper means and methods to interfere with [Dunn's] contract
expectancy of continued legal representation of the Authority
because his sole motive was the gratification of his ill
will." In response, Connolly filed a demurrer, arguing that
Dunn's amended complaint "alleges mere conclusions" and was
factually insufficient to show that Connolly employed improper
methods of interference, a requisite element of the tort.
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In a hearing on the demurrer, the circuit court stated:
Let's say that [Connolly] talked to the
[Authority] and after which they decided that
they didn't want to continue the law firm's
services in any new cases. Let's say that all
that occurred. Let's say that it was what
[Connolly] said that persuaded [the Authority] to
do that. How does that constitute tortious
interference; how is that any illegal means or
improper method? Because you're implicating the
First Amendment rights here as well. [Connolly]
doesn't give up his First Amendment rights to
free speech.
After further argument, the circuit court sustained Connolly's
demurrer, holding:
This case really is [about] First Amendment
rights, not only the free speech right of
[Connolly], but also with regard to his right to
communicate to a political entity within the
jurisdiction in which he lives.
I think in order to make it illegal or an
improper method under these circumstances, many
more facts have to be pled to indicate that, and
I don't find that in this pleading. And without
those facts I believe the case cannot go forward.
The circuit court entered a final order dismissing the action
with prejudice.
We awarded Dunn an appeal on the following assignments of
error:
1. The circuit court erred by invoking an affirmative
defense, privilege – a defense never claimed by Connolly
– to sustain the demurrer to the amended complaint. The
only issue before the circuit court in considering the
demurrer was whether the amended complaint stated a prima
facie cause of action, not whether some defense might be
available to defeat the cause of action.
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2. The Noerr-Pennington privilege to petition the government
is not implicated by the amended complaint, because the
words of the amended complaint do not support the
conclusion that Connolly interfered with the contract
while in the course of petitioning the government or
petitioning a governmental entity authorized to grant a
petition to terminate the contract. Thus, the circuit
court erred by grounding its ruling on the Noerr-
Pennington privilege.
3. It is difficult to determine from the circuit court's
ruling whether it sustained the demurrer solely on the
basis of First Amendment privilege, or because it also
decided that the amended complaint failed to state a
cause of action. If the circuit court also based its
ruling on a failure to state a cause of action, this was
also error. As a matter of law, the allegations of the
amended complaint are proof against demurrer as they
exactly parallel the elements of the tort of intentional
interference with a business expectancy as those elements
are set forth in the Restatement (Second) of Torts and in
this [C]ourt's precedent.
II. Analysis
A. Standard of Review
We apply well-established principles to guide our review
of a circuit court's judgment sustaining a demurrer.
The purpose of a demurrer is to determine whether
a motion for judgment states a cause of action
upon which the requested relief may be granted.
A demurrer tests the legal sufficiency of facts
alleged in pleadings, not the strength of proof.
Accordingly, we accept as true all properly pled
facts and all inferences fairly drawn from those
facts. Because the decision whether to grant a
demurrer involves issues of law, we review the
circuit court's judgment de novo.
Abi-Najm v. Concord Condominium, LLC, 280 Va. 350, 356-57, 699
S.E.2d 483, 486-87 (2010) (citations and internal quotation
marks omitted).
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B. Sufficiency of Dunn's Amended Complaint
In order to survive demurrer, we have held that a
complaint must
allege[] sufficient facts to constitute a
foundation in law for the judgment sought, and
not merely conclusions of law. To survive a
challenge by demurrer, a pleading must be made
with sufficient definiteness to enable the court
to find the existence of a legal basis for its
judgment. In other words, despite the liberality
of presentation which the court will indulge, the
motion must state a cause of action.
Hubbard v. Dresser, Inc., 271 Va. 117, 122-23, 624 S.E.2d 1, 4
(2006) (citation and internal quotation marks omitted).
In Chaves v. Johnson, 230 Va. 112, 335 S.E.2d 97 (1985),
we expressly recognized the cause of action for tortious
interference with contract rights as succinctly described in
the Restatement (Second) of Torts § 766 (1977):
Intentional Interference with Performance of
Contract by Third Party
One who intentionally and improperly interferes
with the performance of a contract (except a
contract to marry) between another and a third
person by inducing or otherwise causing the third
person not to perform the contract, is subject to
liability to the other for the pecuniary loss
resulting to the other from the failure of the
third person to perform the contract.
Chaves, 230 Va. at 120, 335 S.E.2d at 102. We have stated the
elements necessary to support a cause of action for tortious
interference with contract rights.
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The elements required for a prima facie showing
of the tort are: (i) the existence of a valid
contractual relationship or business expectancy;
(ii) knowledge of the relationship or expectancy
on the part of the interferor; (iii) intentional
interference inducing or causing a breach or
termination of the relationship or expectancy;
and (iv) resultant damage to the party whose
relationship or expectancy has been disrupted.
DurretteBradshaw, P.C. v. MRC Consulting, L.C., 277 Va. 140,
145, 670 S.E.2d 704, 706 (2009) (citing Chaves, 230 Va. at
120, 335 S.E.2d at 102).
Additionally, "when a contract is terminable at will, a
plaintiff, in order to present a prima facie case of tortious
interference, must allege and prove not only an intentional
interference that caused the termination of the at-will
contract, but also that the defendant employed 'improper
methods.' " Duggin v. Adams, 234 Va. 221, 226-27, 360 S.E.2d
832, 836 (1987) (citation omitted) (emphasis in original); see
also Restatement (Second) of Torts § 766 comment g (1979)
(Until a party terminates an at-will contract, it is "valid
and subsisting, and [a third party] may not improperly
interfere with it." (emphasis added)). In determining whether
the interference is "improper," we have stated that
interference is considered "improper" if it is illegal,
independently tortious, or violates an established standard of
trade or profession.
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Methods of interference considered improper
are those means that are illegal or independently
tortious, such as violations of statutes,
regulations, or recognized common-law rules.
Improper methods may include violence, threats or
intimidation, bribery, unfounded litigation,
fraud, misrepresentation or deceit, defamation,
duress, undue influence, misuse of inside or
confidential information, or breach of a
fiduciary relationship. . . .
Methods also may be improper because they
violate an established standard of a trade or
profession, or involve unethical conduct. Sharp
dealing, overreaching, or unfair competition may
also constitute improper methods.
Duggin, 234 Va. at 227-28, 360 S.E.2d at 836-37 (citations
omitted).
Here, Dunn argues that comments d and f of § 767 of the
Restatement (Second) of Torts support his claim that Connolly
improperly interfered with its terminable at will contract
with the Authority because they "were motivated solely by
[Connolly's] personal spite, ill will and malice." However,
Dunn fails to appreciate the limited nature of what
constitutes "improper" interference in cases involving
contracts terminable at will. We will not extend the scope of
the tort to include actions solely motivated by spite, ill
will and malice. Therefore, Dunn's amended complaint fails to
"state[] a cause of action upon which the requested relief may
be granted." Tronfeld v. Nationwide Mut. Ins. Co., 272 Va.
709, 712, 636 S.E.2d 447, 449 (2006). Accordingly, the
circuit court did not err in sustaining Connolly's demurrer.
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C. Basis of the Circuit Court's Holding
Dunn further asserts that the circuit court erred by
grounding its ruling on the Noerr-Pennington doctrine to
petition the government. ∗ We disagree with Dunn.
The record clearly demonstrates that the circuit court
sustained Connolly's demurrer on the grounds that Dunn failed
to allege sufficient facts to state a cause of action for
tortious interference with a contract. During the circuit
court's hearing on the demurrer, the court repeatedly asked
Dunn how the facts in its amended complaint "constitute
tortious interference," and the court ultimately held that
"many more facts have to be pled to indicate [the element of
impropriety]," and "without those facts . . . the case cannot
go forward." The circuit court's judgment sustaining
Connolly's demurrer was based firmly on Dunn's failure to
adequately state a prima facie cause of action, not the Noerr-
Pennington doctrine.
III. Conclusion
∗
The Noerr-Pennington doctrine, dealing with exposure to
antitrust liability for actions taken to influence legislative
or administrative action, under constitutional principles of
free speech and the right to petition the government, springs
from two United States Supreme Court decisions, Eastern
Railroad Presidents Conference v. Noerr Motor Freight, Inc.,
365 U.S. 127 (1961), and United Mine Workers of America v.
Pennington, 381 U.S. 657 (1965). See generally Titan America,
LLC v. Riverton Inv. Corp., 264 Va. 292, 301-05, 569 S.E.2d
57, 61-64 (2002).
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For the reasons stated, we hold that the circuit court
did not err in sustaining Connolly's demurrer and dismissing
the action. Accordingly, we will affirm the judgment of the
circuit court.
Affirmed.
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