explaining there was “substantial evidence ... regarding the existence of a valid business expectancy based on the numerous witnesses who testified at trial”
How later courts described this case
- explaining there was “substantial evidence ... regarding the existence of a valid business expectancy based on the numerous witnesses who testified at trial”
- noting that elements of tortious interference claim include “intentional interference [that] induc[es] or caus[es] a breach or termination of the relationship or expectancy.”
- noting that “the relations between the parties” is one factor to consider when determining whether a defendant’s conduct is “improper”
- noting that the element of intent is met when the defendant knew that breach “was substantially certain to be produced by his conduct”
Written by the judges who cited it.
The opinion
Robert L. Brown, Justice, concurring. I concur with the majority opinion’s result but write because of the serious ness of this opinion and the potential for far-reaching consequences as it relates to business competition. In my opinion, the focus for the test needs to be the employment of improper means to interfere with American Abstract’s economic expectancy and not the intent to take away business from a competitor. I agree that improper means were used by Stewart Title and for that reason, I agree to affirm.
In its appeal, Stewart Title contends that more must be shown to prove a business expectancy, which is the first criterion, than a prior business relationship. 1 And this court has said that a business expectancy must be precise. See, e.g., Country Corner Food & Drug, Inc. v. First State Bank & Trust Co., 332 Ark. 645 , 966 S.W.2d 894 (1998). See also Shank v. William R. Hague, Inc., 192 F.3d 675, 689 (7th Cir. 1999) (prospective relationship must be “certain, concrete and definite”). Whether a past business relationship is sufficiently precise or concrete or definite would appear to be a jury question and not one of law. Thus, I disagree with Stewart Title that this issue is solely one of law, and I would affirm the circuit court on this point.
But that takes me to the next three criteria: knowledge of the expectancy by the competing business, intent to interfere, and damage to the plaintiff business in the form of lost profits. Taken alone, these elements are involved whenever legitimate business competition occurs. There is nothing wrong with targeting a customer and employing means to take that customer away from a competing business. It happens every day.
So the essence of our analysis must be the improper means used to acquire that business. Otherwise, legitimate business practices would be curtailed.
I turn then to what improper conduct was used by Stewart Title to take away American Abstract’s business. The jury was presented with evidence of various schemes which were set in motion to benefit real estate firms that used Stewart Title or referred it business. Arguments were made and evidence was presented that Stewart Title’s actions violated the Real Estate Settlement Procedures Act in that it used shell corporations and other devices to pay illegal referral fees. This clearly amounts to substantial evidence of improper conduct. For that reason, I concur that this case must be affirmed.
The four criteria are: (1) the existence of a valid contractual relationship or business expectancy; (2) knowledge of the relationship or expectancy on the part of the interferor; (3) intentional interference inducing or causing a breach or termination of the relationship or expectancy; and (4) resultant damage to the party whose relationship or expectancy has been disrupted. See Mason v. Funderburk, 247 Ark. 521 , 446 S.W.2.d 543 (1969). Impropriety was added in lieu of malice in recent years. See Vowell v. Fairfield Bay Community Club, Inc., 346 Ark. 270 , 58 S.W.3d 324 (2001).