Durrettebradshaw, Pc v. Mrc Consulting, Lc

PRESENT: Hassell, C.J., Keenan, Koontz, Kinser, Goodwyn and
Millette, JJ., and Russell, S.J.

DURRETTEBRADSHAW, P.C.

v. Record No. 072418 OPINION BY
JUSTICE S. BERNARD GOODWYN
MRC CONSULTING, L.C. JANUARY 16, 2009

FROM THE CIRCUIT COURT OF THE CITY OF NORFOLK
Charles E. Poston, Judge

In this appeal, we consider whether a defendant must act

with the intent to interfere with a contract to which the

plaintiff was a party in order for the plaintiff to have a

claim against that defendant for tortious interference with

contract rights.

Background

MRC Consulting, L.C. (“MRC”) filed a complaint in the

Circuit Court of the City of Norfolk purporting to state a

cause of action against DurretteBradshaw, P.C.

(“DurretteBradshaw”) for tortious interference with a

contractual relationship between SouthStar Systems, Inc.

(“SouthStar”) and MRC. DurretteBradshaw filed a demurrer,

asserting that MRC’s complaint did not state a cause of action

against DurretteBradshaw for tortious interference with the

contract between SouthStar and MRC, because MRC did not allege

that DurretteBradshaw intended to interfere with the contract

between MRC and SouthStar. The circuit court overruled the
demurrer. The matter proceeded to trial before a jury. The

jury returned a verdict in favor of MRC in the amount of

$253,875.72, and the circuit court entered a judgment

confirming that verdict. DurretteBradshaw appeals. ∗

The principles of appellate review that guide our

consideration of this appeal are well-settled. “A demurrer

admits the truth of the facts contained in the pleading to

which it is addressed, as well as any facts that may be

reasonably and fairly implied and inferred from those

allegations. A demurrer does not, however, admit the

correctness of the pleader’s conclusions of law.” Yuzefovsky

v. St. John’s Wood Apts., 261 Va. 97, 102, 540 S.E.2d 134, 136-

37 (2001) (internal citation omitted). Accordingly, we will

consider the facts stated, and those reasonably inferred from

the complaint, in a light most favorable to the plaintiff, but

we will review the sufficiency of the legal conclusions

ascribed to those facts de novo. Id. at 102, 540 S.E.2d at

137. Applying this standard, the relevant facts and legal

conclusions in the plaintiff’s complaint are as follows.

SouthStar entered a contract (“SouthStar/SEI contract”) with

∗
The Court will not address any of DurretteBradshaw’s
assignments of error other than that concerning the demurrer
because resolution of that assignment of error is dispositive.
See, e.g., Lynchburg Div. of Soc. Servs. v. Cook, 276 Va. 465,
477, 666 S.E.2d 361, 367 (2008); Pryor v. Commonwealth, 276 Va.
312, 316 n.1, 661 S.E.2d 820, 821 n.1 (2008).

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Spring Engineers of Dallas, Ltd., t/a SEI Metalforms, Ltd.

(“SEI”) that involved the sale of 5,000 computer communication

boards from SouthStar to SEI at the price of $205 each, for a

total contract price of $1,025,000. SouthStar expected to

realize a profit of $200 per unit.

Before the contract could be fulfilled, SouthStar suffered

a casualty loss to its inventory of communication boards.

SouthStar presented a claim to Maryland Casualty Company, its

insurer, for business interruption and lost profits concerning

the SouthStar/SEI contract. Maryland Casualty did not pay the

claim.

To fulfill the obligation it had to SEI, and to mitigate

its loss, SouthStar enlisted the assistance of MRC. MRC agreed

to fund the redesign of communication boards to meet SEI’s

requirements, and to pay the cost to manufacture those boards.

In exchange, SouthStar agreed to buy the boards it needed for

the SouthStar/SEI contract from MRC for $102.50 each. MRC

expected to realize a profit of $500,000 on the transaction.

Represented by DurretteBradshaw, Maryland Casualty filed a

declaratory judgment action seeking a determination that

Maryland Casualty was not required to pay SouthStar’s business

interruption and lost profit claims. During this

representation of Maryland Casualty, one of DurretteBradshaw’s

attorneys, acting within the scope of his employment,

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purposefully disclosed to SEI confidential information

DurretteBradshaw had obtained about SouthStar while

investigating the insurance claim. The attorney purportedly

made this disclosure hoping that SEI would cancel the

SouthStar/SEI contract. SEI was informed about SouthStar’s

large profit margin and that SouthStar was financially unable

to perform its contract with SEI. After the disclosure, SEI

did, in fact, cancel the SouthStar/SEI contract, eliminating

SouthStar’s claim for business interruption and lost profits

under its Maryland Casualty policy.

MRC alleged, in its complaint, that when DurretteBradshaw

disclosed the confidential information to SEI, DurretteBradshaw

knew of MRC’s contract with SouthStar and MRC’s involvement in

the performance of the SouthStar/SEI contract. MRC claimed

that DurretteBradshaw intentionally interfered with the

SouthStar/SEI contract, knowing of the obvious impact of that

interference, not only on SouthStar, but on MRC as well. MRC

claimed that, as a result of DurretteBradshaw’s interference

with the SouthStar/SEI contract, MRC lost the profits it would

have made from its contract with SouthStar, and thus was

entitled to damages because of DurretteBradshaw’s actions.

Analysis

DurretteBradshaw contends that the circuit court erred

when it overruled DurretteBradshaw’s demurrer to MRC’s

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complaint. DurretteBradshaw argues that its demurrer should

have been sustained because MRC did not plead that

DurretteBradshaw intended to affect MRC when it disclosed

information about SouthStar to SEI. MRC counters that its

complaint states a cause of action for tortious interference

because the complaint contains allegations that

DurretteBradshaw intentionally interfered with the

SouthStar/SEI contract, knowing the obvious impact such

interference would have upon the contract MRC had with

SouthStar.

In Chaves v. Johnson, 230 Va. 112, 335 S.E.2d 97 (1985),

this Court expressly recognized that the cause of action for

tortious interference with contract rights is 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.

This Court, in Chaves, stated the elements necessary to

support a cause of action for tortious interference with

contract rights. The elements required for a prima facie

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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. Id.

MRC alleged that a contract existed between SouthStar and

MRC, that DurretteBradshaw knew of this relationship, and that

MRC lost the profits it would have made if the contract between

MRC and SouthStar had been fulfilled. The resolution of this

appeal hinges upon whether MRC’s complaint alleges an act that

constitutes “intentional interference inducing or causing a

breach or termination of the relationship or expectancy”

between MRC and SouthStar.

DurretteBradshaw argues that the intentional interference

inducing the breach or termination of the contract must be

intentional interference with the specific contract for which

the plaintiff claims damages. Thus, DurretteBradshaw argues

that MRC’s complaint is insufficient because it fails to allege

that DurretteBradshaw’s actions were intended to induce or

cause a breach of the contract between MRC and SouthStar. MRC,

on the other hand, claims that a plaintiff need only plead

intentional action, on the part of the defendant, with the

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knowledge such action will result in a breach or termination of

the plaintiff’s relationship or expectancy; the defendant’s

purposeful act need not be with the intent to disrupt the

plaintiff’s relationship or expectancy. Thus, according to

MRC, it stated a cause of action for tortious interference

against DurretteBradshaw by alleging intentional interference

by DurretteBradshaw with the SouthStar/SEI contract, and

alleging that such interference resulted in the breach or

termination of MRC’s relationship or expectancy with SouthStar,

the existence of which DurretteBradshaw was aware. We disagree

with MRC.

This Court applied § 766 of the Restatement (Second) of

Torts in Chaves. We find the commentary accompanying § 766 of

the Restatement (Second) of Torts to be instructive.

The plaintiff relies on Comment j to § 766 of the

Restatement in support of its theory of the case. That Comment

states:

j. Intent and purpose. The rule stated in this
Section is applicable if the actor acts for the
primary purpose of interfering with the performance
of the contract, and also if he desires to interfere,
even though he acts for some other purpose in
addition. The rule is broader, however, in its
application than to cases in which the defendant has
acted with this purpose or desire. It applies also
to intentional interference, . . . in which the actor
does not act for the purpose of interfering with the
contract or desire it but knows that the interference
is certain or substantially certain to occur as a
result of his action. The rule applies, in other

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 words, to an interference that is incidental to the
actor’s independent purpose and desire but known to
him to be a necessary consequence of his action.

Restatement (Second) of Torts § 766, cmt. j (1979).

However, Comment p to § 766 of the Restatement further

explains § 766 by stating:

The person protected by the rule stated in [§ 766] is
the specified person with whom the third person had a
contract that the actor caused him not to perform.
To subject the actor to liability under this rule,
his conduct must be intended to affect the contract
of a specific person. It is not enough that one has
been prevented from obtaining performance of a
contract as a result of the actor’s conduct. (Cf.
§ 766A). Thus, if A induces B to break a contract
with C, persons other than C who may be harmed by the
action as, for example, his employees or suppliers,
are not within the scope of the protection afforded
by this rule, unless A intends to affect them. Even
then they may not be able to recover unless A acted
for the purpose of interfering with their contracts.

Restatement (Second) of Torts § 766, cmt. p (1979).

Reading these Comments harmoniously, it is clear that

Comment j states the intended parameters of the cause of

action for tortious interference with contract rights, and

Comment p delineates the persons the cause of action is

intended to protect. Comment p makes it clear that,

unlike a party to the contract that the defendant induced

a third person not to perform, a plaintiff who is not a

party to such contract must prove that the defendant acted

with the purpose of interfering with the plaintiff’s

contract, in order to maintain a cause of action for

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tortious interference with contract rights against that

defendant. Thus, if DurretteBradshaw induced SEI to break

its contract with SouthStar, persons or entities other

than SouthStar, such as MRC, who may have been harmed by

DurretteBradshaw’s act, may not maintain a cause of action

for tortious interference with contract against

DurretteBradshaw, unless such persons or entities can

prove that DurretteBradshaw interfered with the

SouthStar/SEI contract for the purpose of interfering with

the contract of that person or entity.

MRC states in its complaint that DurretteBradshaw,

with knowledge of the contract between MRC and SouthStar,

induced SEI to break the SouthStar/SEI contract. MRC does

not allege that DurretteBradshaw intended to affect MRC’s

contract with SouthStar or that DurretteBradshaw acted

with the purpose of interfering with that contract.

Because MRC did not plead facts supporting such an

intention, we hold that MRC did not sufficiently state a

cause of action against DurretteBradshaw for tortious

interference with MRC’s contract with SouthStar.

Conclusion

For the foregoing reasons, we hold that the circuit

court erred in overruling DurretteBradshaw’s demurrer.

Accordingly, we will reverse the judgment of the circuit

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court and enter final judgment in favor of

DurretteBradshaw.

Reversed and final judgment.

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