Torts: Intentional Interference With Contractual Relations

Elements of Proof

To recover for a claim for intentional interference with contractual relations, a plaintiff must establish the following elements:

(1) the existence of a contract;

(2) Defendants’ knowledge of this contract;

(3) that it intended to cause its breach;

(4) its conduct caused the breach;

(5) this breach resulted in damages to [the plaintiff]; and

(6) Defendant had no privilege or justification to excuse its conduct.

CMI, Inc. v. Intoximeters, Inc., 918 F.Supp. 1068, 1079 (W.D.Ky.1995); see also Hunt, 18 F.Supp.2d at 702–703 (citing Blair v. Gen. Motors Corp., 838 F.Supp. 1196, 1200 (W.D.Ky.1993)) (internal quotation marks omitted) (“In order to prove a claim for tortious interference, [a plaintiff] must demonstrate that a wrongdoer intentionally meddled with an agreement without justification or invaded contractual relations by engaging in significantly wrongful conduct.”).

However, as an affirmative defense, a defendant “may escape liability by showing that he acted in good faith to assert a legally protected interest of [its] own.” NCAA v. Hornung, 754 S.W.2d 855, 858 (Ky.1988). Kentucky courts have consistently held that a conduct within the scope of a contractual agreement cannot form the basis for an intentional interference claim. E.g., Hunt, 18 F.Supp.2d at 702; Hornung, 754 S.W.2d at 860 (holding that defendant’s decision to decline to approve and hire the plaintiff as a broadcaster was a bargained-for right that was an essential element of the contract, so defendant “entitled to assert its right even to the detriment of [plaintiff’s] prospective contractual relation”); cf. Blair, 838 F.Supp. at 1200 (“[A] claim of tortious interference should not [lie] where [a manufacturer in a dealership agreement] is asserting legitimate contract rights.”).

From Epps Chevrolet Company, D/B/a Tom Epps Nissan, Plaintiff, V. Nissan North America, Inc., Defendant, 99 F.Supp.3d 692 United States District Court, E.D. Kentucky, Central Division, at Frankfort.  District Court, Gregory F. Van Tatenhove, J. (now on Sixth Circuit).

See also,

Throughout this litigation, the parties and the lower courts have relied upon Sections 766B, 767, and 773 of the Restatement (Second) of Torts. While this Court has never adopted these sections, the Court of Appeals in Cullen v. South East Coal Co., Ky.App., 685 S.W.2d 187 (1983), followed Section 766B and recognized that intentional and improper interference with the prospective contractual relations of another gives rise to liability. Several other Kentucky decisions recognize that contractual relations or prospective contractual relations are protected from improper interference. See Brooks v. Patterson, 234 Ky. 757, 29 S.W.2d 26 (1930); Derby Road Building Co. v. Commonwealth, Ky., 317 S.W.2d 891 (1958); Carmichael – Lynch – Nolan, Etc. v. Bennett, Etc., Ky.App., 561 S.W.2d 99 (1977); and Henkin, Inc. v. Berea Bank & Trust Co., Ky.App., 566 S.W.2d 420 (1978). Upon examination of our decisions, we conclude that the foregoing sections of the Restatement fairly reflect the prevailing law of Kentucky.

Our law is clear that a party may not recover under the theory presented in the absence of proof that the opposing party “improperly” interfered with his prospective contractual relation. To determine whether the interference is improper, Section 767 sets forth seven factors to be considered by the court in ruling on the motion for directed verdict and, if the case is submitted, considered by the jury. Unless there is evidence of improper interference, after due consideration of the factors provided for determining such, the case should not be submitted to the jury. Even if evidence is presented which would otherwise make a submissible case, the party whose interference is alleged to have been improper may escape liability by showing that he acted in good faith to assert a legally protected interest of his own. While the party seeking recovery bears the burden of proving that the interference was improper, the party asserting a right to protect his own interest bears the burden of proving his defense.

National Collegiate Athletic Ass’n By and Through Bellarmine College v. Hornung, 754 S.W.2d 855 (SC 1988).