Eldridge v. Johndrow
| Decision Date | 30 January 2015 |
| Docket Number | No. 20130263.,20130263. |
| Citation | 2015 UT 21,345 P.3d 553 |
| Parties | Joseph ELDRIDGE, Lindsey Eldridge, Harrison Companies, LLC, and Harrison Companies Property Management, LLC, dba Empire Luxury Lodging, Appellees, v. David JOHNDROW, Appellant. |
| Court | Utah Supreme Court |
Scott A. Dubois, Joseph E. Wrona, Gregory D. Marchant, Draper, Timothy R. Pack, Park City, for appellees.
Milo Steven Marsden, Gregory Saylin, Tyson C. Horrocks, Salt Lake City, for appellants.
Having recused himself, Chief Justice DURRANT does not participate herein; District Judge HRUBY–MILLS sat.
INTRODUCTION
¶ 1 This appeal concerns claims for tortious interference with economic relations by Joseph and Lindsey Eldridge against David Johndrow. Johndrow moved for summary judgment, and the district court partially granted his motion, concluding there was no evidence that he had interfered with the Eldridges' economic relations through an improper means. But the court denied summary judgment for the Eldridges' claims based on the allegation that Johndrow had acted with an improper purpose.
¶ 2 According to our decision in Leigh Furniture & Carpet Co. v. Isom, “improper purpose ... will support a cause of action for intentional interference with prospective economic relations even where the defendant's means were proper.” 657 P.2d 293, 307 (Utah 1982). Leigh Furniture recognized, however, that this doctrine posed risks. There are “[p]roblems inherent in proving motivation or purpose,” and if juries were allowed to find improper purposes too easily, it would result in tort liability for much legitimate “competitive commercial activity.” Id. We therefore sought to circumscribe the doctrine by allowing improper-purpose liability only where “the improper purpose predominate[s]” and by counseling that it would usually be “prudent” not to apply the doctrine to “commercial conduct.” Id.
¶ 3 Unfortunately, as the few subsequent cases allowing improper-purpose liability demonstrate, our efforts to circumscribe the doctrine have failed. Infra ¶¶ 46–50. Because of this failure, little law exists to guide juries' improper-purpose findings or to inform private parties of their legal rights and obligations.Infra ¶¶ 51–54. Consequently, if improper-purpose claims became commonplace, their unpredictable nature would deter much socially beneficial speech and conduct.
¶ 4 We could attempt to ameliorate this lawlessness by further refining the improper-purpose doctrine; for example, we could establish safe harbors like the Restatement's rule that the communication of truthful information never constitutes tortious interference. See Restatement (Second) of Torts § 772(a) (1979). But we are persuaded that the doctrine's flaws warrant not repair but rejection. We therefore hold that no tortious interference claim can succeed without evidence of improper means.
¶ 5 Appellees Joseph and Lindsey Eldridge are the owners and operators of Harrison Companies, LLC, and Harrison Companies Property Management, LLC. Through these limited liability companies, the Eldridges manage residential property and provide various other services for wealthy homeowners in Summit County. Because providing these services means taking responsibility for clients' homes, the Eldridges' success depends a great deal on their reputation.
¶ 6 Appellant David Johndrow is a former friend and client of the Eldridges who used to recommend their services to his friends and other associates in the area. But the friendship lasted only a year. Lindsey Eldridge accused Mr. Johndrow of attacking her at a restaurant, and Mr. Johndrow accused the Eldridges of spreading false rumors and stealing his mobile phone. The once amicable relationship gave way to threats of legal action.
¶ 7 The action Johndrow actually took, however, did not involve a lawsuit. Instead, he “turned [the matter] over” to an “investigative team,” which discovered various embarrassing facts about the Eldridges: liens, a foreclosure, an old felony conviction, and unflattering news reports from before they moved to Utah. Mr. Johndrow threatened that if the Eldridges refused to retract their accusations and compensate him for the allegedly stolen phone, he would have to protect his “credibility” by revealing what he had found to the people to whom he had recommended the Eldridges. When the Eldridges did not accede to his demands, he emailed embarrassing information to “at least nine” of the Eldridges' institutional clients and communicated it verbally to a number of their individual clients.
¶ 8 The Eldridges sued, asserting several theories of liability: tortious interference with economic relations, tortious interference with prospective economic relations, defamation, false light, and intentional infliction of emotional distress. The tortious interference theories each rested on two separate allegations: first, that by defaming the Eldridges, Mr. Johndrow had interfered with their economic relations through an improper means; and second, that because Mr. Johndrow's only goal was to hurt the Eldridges' business, he had interfered with their economic relations in pursuit of an improper purpose.2
¶ 9 After preliminary discovery, Mr. Johndrow moved for summary judgment on the tortious interference claims, the defamation claim, and the false light claim. The district court concluded that the information Johndrow had disseminated was “at least substantially true” and “not susceptible to a defamatory interpretation.” It therefore granted summary judgment on the defamation and false light claims. Further, because the “improper means” basis for tortious interference liability depended on Johndrow's alleged defamation of the Eldridges, the court granted summary judgment on the tortious interference claims insofar as they were based on improper means.
¶ 10 However, the district court denied summary judgment on the tortious interference claims insofar as they were based on allegations of improper purpose. Mr. Johndrow had argued that the court should follow the Restatement and hold that the communication of “truthful information,” regardless of purpose, cannot constitute tortious interference. Restatement (Second) of Torts § 772(a) (1979). But the court relied on our decision in Pratt v. Prodata, Inc., which explicitly rejected the Restatement's truth defense in the context of improper-purpose claims. 885 P.2d 786, 790 (Utah 1994). Correctly concluding that the reconsideration of Pratt was a matter for a higher tribunal, the court denied summary judgment with respect to the Eldridges' improper-purpose claims.
¶ 11 Mr. Johndrow filed an interlocutory appeal, and we reverse.
¶ 12 Denials of summary judgment are reviewed for correctness. Glenn v. Reese, 2009 UT 80, ¶ 6, 225 P.3d 185.
¶ 13 The Eldridges' remaining tortious interference claims depend on the allegation that Mr. Johndrow interfered with their economic relations for an improper purpose. This improper-purpose doctrine was adopted in Leigh Furniture & Carpet Co. v. Isom: “[I]n order to recover damages [for tortious interference], the plaintiff must prove (1) that the defendant intentionally interfered with the plaintiff's existing or potential economic relations, (2) for an improper purpose or by improper means, (3) causing injury to the plaintiff.” 657 P.2d 293, 304 (1982) (emphasis added). The Leigh Furniture court made clear that “improper purpose (or motive, intent, or objective) will support a cause of action for intentional interference with prospective economic relations even where the defendant's means were proper.” Id. at 307.
¶ 14 For reasons we articulate below, see infra ¶¶ 42–64, we hereby reject the improper-purpose rule. Contrary to Leigh Furniture, we hold that a claim for tortious interference may only succeed where the defendant has employed an improper means.
¶ 15 Before we explain our reasons for rejecting improper purpose liability, we must deal with two obstacles to our rejection of the doctrine. First, we conclude that although the reconsideration of improper purpose liability was not Mr. Johndrow's chief argument on appeal, it is nevertheless properly presented for our consideration. See infra ¶¶ 16–19. Second, we conclude that stare decisis does not prevent us from abandoning the improper purpose doctrine. See infra ¶¶ 20–41.
¶ 16 In Pratt v. Prodata, Inc., we declined to reconsider our support for improper-purpose liability because the parties had not asked us to do so and the question was therefore not properly presented. 885 P.2d 786, 789 n. 3 (Utah 1994) (opinion of Zimmerman, C.J.). The same obstacle does not exist in this case.
¶ 17 Admittedly, Johndrow's first brief did not focus on reconsideration of the improper-purpose doctrine, instead arguing that we should follow the Restatement and declare that truth is an absolute defense to tortious interference liability. See Restatement (Second ) of Torts § 772(a) (1979). It did, however, explain at some length “the difficulties associated with the improper purpose prong” and acknowledged that these difficulties could lead the court to “undertake a complete reconsideration” of it. In particular, it pointed out how “problematic” it is to “permit[ ] liability for otherwise legal and permissible conduct if the defendant can be said to have acted with ‘ill will’ towards the plaintiff.” Further, it argued that a growing number of states have limited or rejected claims based solely on improper purpose.
¶ 18 The Eldridges' brief seized on this discussion, accusing Johndrow of demanding the abandonment of improper-purpose liability and offering a full-throated defense of the doctrine: ...
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