NV Transport, Inc. v. V & Y Horizon, Inc.

707

Argued and submitted November 17, 2017; limited judgment reversed on

claims of defamation per se and interference with economic relations, otherwise

affirmed March 11, 2020

NV TRANSPORT, INC.,

Plaintiff-Appellant,

v.

V & Y HORIZON, INC.,

an Oregon corporation and

Vitaliy Fogel,

Defendants-Respondents.

Multnomah County Circuit Court

15CV21130; A163230

462 P3d 278

Plaintiff, who brought multiple claims against defendants arising out of

defendants’ allegedly wrongful appropriation of plaintiff’s customers, appeals a

limited judgment after the trial court granted defendants’ motion for summary

judgment on several of the claims, asserting that there are genuine issues of

material fact that preclude summary judgment. Held: Viewing the record on

summary judgment in the light most favorable to plaintiff, the court concluded

that there are genuine issues of material fact that preclude summary judgment

on plaintiff’s claims of intentional interference with economic relations and defa-

mation per se. The trial court therefore erred in granting defendants’ motion for

summary judgment on those claims.

Limited judgment reversed on claims of defamation per se and interference

with economic relations; otherwise affirmed.

Henry C. Breithaupt, Judge pro tempore.

Gary M. Bullock argued the cause for appellant. Also on

the briefs was Gary M. Bullock & Associates, P. C.

J. Aaron Landau argued the cause for respondents. On

the brief were Susan Marmaduke, Nathan Morales, and

Harrang Long Gary Rudnick P. C.

Before Armstrong, Presiding Judge, and Shorr, Judge,

and Sercombe, Senior Judge.

ARMSTRONG, P. J.

Limited judgment reversed on claims of defamation

per se and interference with economic relations; otherwise

affirmed.

708 NV Transport, Inc. v. V & Y Horizon, Inc.

ARMSTRONG, P. J.

Plaintiff NV Transport, Inc., brought multiple

claims against defendants Vitaliy Fogel and his company,

V & Y Horizon, Inc., arising out of defendants’ allegedly

wrongful appropriation of plaintiff’s customers, independent

contractor drivers, and employees, while serving as a dis-

patcher in plaintiff’s transport business. Plaintiff appeals a

limited judgment after the trial court granted defendants’

motion for summary judgment on several of the claims. We

write only to address plaintiff’s contentions that the trial

court erred in granting defendants’ motion for summary

judgment on two claims of intentional interference with eco-

nomic relations and a claim of defamation per se. Viewing

the record on summary judgment in the light most favorable

to plaintiff, we conclude there are genuine issues of material

fact that preclude summary judgment with respect to all

three claims, ORCP 47 C, and we therefore reverse that por-

tion of the limited judgment dismissing the two interference

claims and the defamation claim, and otherwise affirm.

I. BACKGROUND

We draw our summary of the evidence from the

record on summary judgment, viewed in the light most favor-

able to plaintiff. Plaintiff is a licensed motor carrier in the

business of freight transport. Plaintiff owns trucks and also

employs and contracts with drivers. One aspect of plaintiff’s

business is “drayage,” which involves the transport of freight

over short distances, often as a segment of a longer trans-

port, such as from a shipyard or railyard to a warehouse. In

its drayage business, plaintiff daily receives a list of trans-

port opportunities by email from customers and prospective

customers and then assigns drivers to those jobs.

Beginning in 2011, plaintiff desired to build up its

drayage business. It brought on Fogel and his company—

V & Y Horizon, Inc.—on a contract basis, to work as a broker

on commission, in plaintiff’s drayage business and under

plaintiff’s license, matching drayage customers in need of

freight transport with independent carriers.

Fogel did not have success as a broker but he accepted

plaintiff’s offer to work on commission as plaintiff’s drayage

Cite as 302 Or App 707 (2020) 709

dispatcher. As a dispatcher, Fogel received offers of dray-

age from customers, negotiated agreements for the trans-

port of freight, and oversaw the assignment of plaintiff’s

drivers. Under Fogel’s management, plaintiff’s drayage

business grew, and plaintiff hired several people to assist

Fogel. Fogel and his assistants communicated with freight

customers through an email account dedicated to drayage.

Beginning in 2014, Fogel decided to develop his

own transport business through V & Y Horizon, Inc. At that

time, V & Y Horizon, Inc. was not a licensed carrier and did

not have customers, trucks, or drivers. Fogel completed the

necessary applications and obtained a motor carrier license

for V & Y Horizon, Inc.

In early 2015, Fogel began in earnest to plan for

his departure from plaintiff and his transition to his own

drayage business under V & Y Horizon, Inc., and he decided

to bring most of plaintiff’s drayage business with him. He

began communicating with plaintiff’s drayage customers,

explaining that he was leaving plaintiff and that he would

continue in the drayage business as V & Y Horizon, Inc. In

an email to one of plaintiff’s customers, Fogel explained

that, although he was leaving plaintiff, he would still be in

the drayage business:

“Business as usual under V&Y Horizon Inc … All (90+%)

trucks I am working now with are migrating with me …

I’m leaving NVT only as I was under contract with them

and since I and they see best business practices and eth-

ics diametrically differently, so this was just waiting to

happen … I’m sure you as an intelligent person I know –

can read between the lines …

“Otherwise, I’m still in business and should there be the

need for you to cover existing moves I already did as NV

Drayage Manager, I’ll still do same pretty much volume

just under my own company now.”

(Boldface and underscoring in original.)

In the spring and summer of 2015, plaintiff expe-

rienced a significant drop in its earnings from many of its

customers. In July 2015, Fogel gave notice to plaintiff that

he was quitting, as did an employee who had been working

with Fogel in dispatch. It was then that plaintiff learned

710 NV Transport, Inc. v. V & Y Horizon, Inc.

that Fogel, while working for plaintiff, had been diverting

plaintiff’s drayage business to V & Y Horizon, Inc. Plaintiff

terminated Fogel before his planned departure.

Plaintiff then brought this action, alleging, among

other claims, that defendants had defamed plaintiff to its

customers and had intentionally interfered with plaintiff’s

economic relations with both current and prospective cus-

tomers. Defendants denied each allegation and sought sum-

mary judgment on six of plaintiff’s 11 claims, asserting that

plaintiff had failed to present evidence as to all elements

on each of the claims. In a limited judgment, the trial court

granted defendants’ motion. With respect to the interfer-

ence claims, the trial court concluded that “there is a failure

by Plaintiff to support as to each contract or business rela-

tionship both a wrongful method and harm.” With respect

to the defamation claim, the trial court explained that the

record lacked evidence of communications that were defam-

atory per se.

On appeal, plaintiff asserts that the trial court

erred, because the evidence in the record on summary judg-

ment gives rise to genuine issues of material fact with respect

to each element of the interference claims and the defamation

claim. Plaintiff, as the nonmoving party on summary judg-

ment, bears the burden to produce evidence presenting a gen-

uine issue of material fact as to each element of the claim on

which plaintiff would have the burden of persuasion at trial.

ORCP 47 C; Chapman v. Mayfield, 358 Or 196, 204, 361 P3d

566 (2015). As explained below, based on our review of the

record on summary judgment, viewed in the light most favor-

able to plaintiff, we conclude that plaintiff has presented evi-

dence sufficient to give rise to genuine issues of material fact

with respect to the interference and defamation claims, and

that the trial court therefore erred in granting defendants’

motion for summary judgment as to those claims.

II. ANALYSIS

A. Interference with Economic Relations and Prospective

Advantage

We first address the interference claims. To estab-

lish a claim for intentional interference with economic rela-

tions, a plaintiff must prove:

Cite as 302 Or App 707 (2020) 711

“(1) the existence of a professional or business relationship

(which could include, e.g., a contract or a prospective eco-

nomic advantage), (2) intentional interference with that

relationship, (3) by a third party, (4) accomplished through

improper means or for an improper purpose, (5) a causal

effect between the interference and damage to the relation-

ship or prospective advantage, and (6) damages.”

McGanty v. Staudenraus, 321 Or 532, 535, 901 P2d 841

(1995). The same elements are applicable to a claim of inter-

ference with “prospective economic advantage.” Allen v. Hall,

328 Or 276, 285, 974 P2d 199 (1999); Thompson v. Telephone

Data Systems, Inc., 130 Or App 302, 313 n 1, 881 P2d 819,

adh’d to as modified on recons, 132 Or App 103, 888 P2d 16

(1994) (liability for interference with a prospective economic

relationship arises “when the defendant, without a privi-

lege to do so, induces a third person not to enter into or to

continue a business relationship with the plaintiff”). There

is no dispute here that, during the relevant time, plaintiff

had relationships with customers as well as prospective

economic advantages with those customers and prospective

customers. The question in our review of the trial court’s

summary judgment ruling is whether there are genuine

issues of material fact on the elements of intentional inter-

ference, causation, harm, and improper means.

1. Intentional interference

The record includes evidence that, beginning in

2015, while serving as the drayage dispatcher for plaintiff,

Fogel diverted to V & Y Horizon, Inc., a portion of plaintiff’s

potential daily freight business. Plaintiff presented evidence

that Fogel daily selected jobs to divert to V & Y Horizon, Inc.,

carried out that business for V & Y Horizon, Inc., using plain-

tiff’s facilities, equipment, and contract drivers, as well as

plaintiff’s employees while they were being paid by plaintiff.

There is evidence in the record on summary judg-

ment that, while running plaintiff’s dispatch department,

Fogel communicated with plaintiff’s customers so as to cause

them to direct their business to V & Y Horizon, Inc. Those

communications include emails to customers from which it

could be found that Fogel disparaged plaintiff’s business,

and advised customers that he was taking plaintiff’s trucks

712 NV Transport, Inc. v. V & Y Horizon, Inc.

with him, that plaintiff would no longer be providing dray-

age, and that all future drayage business would be handled

by V & Y Horizon, Inc.

There is evidence in the record on summary

judgment that, upon his termination, Fogel placed an

“auto-forward” on the email account that plaintiff used

to communicate with its current and prospective drayage

customers, directing the customers to V & Y Horizon, Inc.’s

email account, and that Fogel blocked plaintiff’s access to

the account by changing access codes, preventing plaintiff

from following up with existing customers through email.

There is evidence that a person who attempted to reach

plaintiff through the usual drayage email account would

receive an automated reply that the email address was no

longer associated with plaintiff and that communications

for Fogel should be sent to “[Fogel’s] new group dispatch

mail box,” the email address of V & Y Horizon, Inc.

On appeal, defendants do not directly contest the

evidence of Fogel’s conduct described above. Instead, defen-

dants contend that, with respect to each customer, the

record lacks evidence of at least one element of the claimed

interference. For example, defendants note that plaintiff’s

complaint named 19 customers with whom defendants

allegedly interfered. Defendants assert that the record does

not include documentation of specific communications of a

separate interference by Fogel with 14 of those customers.

We reject defendants’ contention that the record

must include evidence of separate acts of interference as to

each individual customer or prospective customer when, as

here, the record on summary judgment includes evidence

of interference with plaintiff’s customers generally. Plaintiff

presented evidence that, on a daily basis and over a period

of months, Fogel diverted transport opportunities offered by

multiple customers with whom plaintiff had relationships,

away from plaintiff and to V & Y Horizon Inc., and that,

after he was terminated, Fogel redirected all of plaintiff’s

emails from drayage customers to a different account and

blocked plaintiff’s access to its email account. It was not nec-

essary, in light of that evidence, for plaintiff to also present

evidence of separate acts of interference with respect to each

Cite as 302 Or App 707 (2020) 713

individual customer. We readily conclude that the record on

summary judgment gives rise to genuine questions of mate-

rial fact as to the element of intentional interference.

2. Causation of “harm,” and damages

The trial court stated that the record did not include

evidence of “harm,” but did not specify whether it was refer-

ring to the causal effect of the alleged interference to the

harmed relationship, or to damages. We think the record on

summary judgment is sufficient to preclude summary judg-

ment as to both. The record on summary judgment includes

evidence from which it could be found that plaintiff’s dray-

age income from many of its existing customers declined

significantly in the spring and summer of 2015, after

defendant began diverting jobs to V & Y Horizon, Inc., and

declined again after Fogel diverted and blocked plaintiff’s

access to the drayage email account. Plaintiff presented evi-

dence that, among the business opportunities that plaintiff

lost as a result of Fogel’s diverting of prospective business

was a transport opportunity worth over $270,000. Also,

there is evidence that, in redirecting emails from plaintiff’s

drayage email account and blocking plaintiff’s access, Fogel

prevented plaintiff from managing transports in progress

and communicating with both current and prospective dray-

age customers, thereby causing plaintiff to lose business

and income. The coincidence of defendants’ interference and

plaintiff’s lost income allows a reasonable inference that it

was Fogel’s interference, rather than some unrelated cir-

cumstance, that caused both the harm to plaintiff’s rela-

tionships with its customers and plaintiff’s damages. The

evidence gives rise to genuine issues of material fact as to

the elements of causation and harm.

3. Improper means

An interference in another party’s contractual or

other economic relations is tortious only if it is “wrongful

by some measure beyond the fact of the interference itself,”

such as by improper means or improper motive. Northwest

Natural Gas Co. v. Chase Gardens, Inc., 328 Or 487, 498, 982

P2d 1117 (1999) (internal quotation marks omitted). If lia-

bility is asserted based on improper means, the means must

have violated some objective standard, such as a statute,

714 NV Transport, Inc. v. V & Y Horizon, Inc.

recognized rule of law, or established standard of a trade or

profession. Id. at 498. In Top Service Body Shop v. Allstate

Ins. Co., 283 Or 201, 210 n 11, 582 P2d 1365 (1978), the court

provided some examples of improper means, including “vio-

lence, threats or other intimidation, deceit or misrepresen-

tation, bribery, unfounded litigation, defamation, or dispar-

aging falsehood.”

There is evidence in the record on summary judg-

ment that would permit findings that, in order to divert

plaintiff’s business opportunities to V & Y Horizon, Inc.,

Fogel misappropriated plaintiff’s own equipment, employees,

and drivers, misrepresented that plaintiff would no longer

be in the drayage business, disparaged plaintiff’s business

practices and ethics, and cut off plaintiff’s ability to com-

municate with its drayage customers. Under the guidelines

established in Northwest Natural Gas Co. and Top Service

Body Shop, we conclude that that evidence gives rise to a

genuine question of material fact as to whether defendants’

means of interference were improper.

In summary, we conclude that the record on sum-

mary judgment presents genuine issues of material fact

on each element of the interference claims with respect to

plaintiff’s customers.1 The trial court therefore erred in

granting defendants’ motion for summary judgment as to

the interference claims.

B. Defamation per se

We next address plaintiff’s defamation claim. In the

business context, a defamatory statement is one that is false

and that “ascribes to another conduct, characteristics or a

condition incompatible with the proper conduct of his lawful

business, trade, [or] profession.” Brown v. Gatti, 341 Or 452,

458, 145 P3d 130 (2006). Plaintiff has pleaded its defama-

tion claim as a defamation per se. The claim of defamation

per se shares elements with the claim of defamation: the

making of a defamatory statement and the publication of

the defamatory material. L & D of Oregon, Inc. v. American

1

We have considered and reject without further discussion plaintiff’s con-

tention that the trial court erred in granting defendants’ motion for partial sum-

mary judgment as to the allegations of interference with plaintiff’s employees

and drivers.

Cite as 302 Or App 707 (2020) 715

States Ins. Co., 171 Or App 17, 25, 14 P3d 617 (2000). In def-

amation, a plaintiff ordinarily must show that a defamatory

publication resulted in “special harm.” But the requirement

for proof of special harm is dispensed with if the defamatory

statement is deemed to be defamatory per se. Id.

Some words are considered to be so defamatory that

they are harmful and actionable per se, “on the theory that

their injurious character is admitted by all men; and that

on that account they are conclusively presumed to result in

damage.” Id. at 24 (quoting Barnett v. Phelps, 97 Or 242,

244-45, 191 P 502 (1920)). Examples include “defamatory

words, falsely spoken of a person, which impute to the party

unfitness to perform the duties of an office or employment of

profit, or the want of integrity in the discharge of the duties

of such an office or employment.” Id; see also Neumann v.

Liles, 358 Or 706, 712, 369 P3d 1117 (2016) (a false accu-

sation of misconduct or dishonesty in the performance of a

profession or employment is defamation per se); Brown, 341

Or at 458 (same).

As previously noted, the trial court granted defen-

dants’ motion for summary judgment on the defamation

claim after concluding that the record does not include evi-

dence of communications by Fogel that were defamatory per

se. On appeal, defendants defend that conclusion, but we

disagree. Among the emails that Fogel sent to plaintiff’s

customers was one in which Fogel explained that he was

leaving NV Transport because

“I and they see best business practices and ethics diamet-

rically differently, so this was just waiting to happen

… I’m sure you as an intelligent person I know— can read

between the lines ….”

(Boldface and underscoring in original.) Defendants assert

the truth of the literal words of that statement—that defen-

dants and plaintiff “see best business practices and eth-

ics diametrically differently”—and contend that plaintiff

has not put on any evidence to dispute it. But whether a

statement is defamatory focuses on how a recipient would

understand it. Brown, 341 Or at 459. Defendants have

not addressed the potential defamatory implication of the

statement to the recipient. Fogel’s statement, viewed in the

716 NV Transport, Inc. v. V & Y Horizon, Inc.

light most favorable to plaintiff, is reasonably susceptible

to the implication that plaintiff is unethical or dishonest

and does not engage in best business practices. If untrue,

that implication would be defamatory per se. It is the role of

the factfinder to determine whether, in the context in which

the statement was made, the recipient would perceive that

implication and whether it is true or false. We conclude that

the trial court erred in granting defendants’ motion for sum-

mary judgment on the claim of defamation per se.

Limited judgment reversed on claims of defamation

per se and interference with economic relations; otherwise

affirmed.