476 F.2d 746 (5th Cir. 1973), 72-2062, Thompson v. Allstate Ins. Co.

Docket Nº:72-2062.
Citation:476 F.2d 746
Party Name:James H. THOMPSON, Jr., Individually and d/b/a Rusty Thompson Mid Town Auto Service, Plaintiff-Appellant, v. ALLSTATE INSURANCE COMPANY, Defendant-Appellee.
Case Date:March 27, 1973
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 746

476 F.2d 746 (5th Cir. 1973)

James H. THOMPSON, Jr., Individually and d/b/a Rusty Thompson Mid Town Auto Service, Plaintiff-Appellant,

v.

ALLSTATE INSURANCE COMPANY, Defendant-Appellee.

No. 72-2062.

United States Court of Appeals, Fifth Circuit.

March 27, 1973

Page 747

         Barry Hess, Roderick P. Stout, Mobile, Ala., for plaintiff-appellant.

         Lewis G. Odom, Jr., J. Knox Argo, Montgomery, Ala., Robert E. Gibney, Mobile, Ala., for defendant-appellee.

         Before WISDOM, BELL and COLEMAN, Circuit Judges.

         WISDOM, Circuit Judge:

         In appeals to this Court, judgments dismissing a complaint for failure to state a claim on which relief could be granted have a high mortality rate. They should-under federal rules of pleading. In this case the plaintiff, James H. Thompson, Jr., appeals from the district court's decision dismissing his complaint for failure to state a claim on which relief could be granted under Alabama law. In his complaint, the plaintiff alleged facts showing that the defendant, Allstate Insurance Company, had intentionally interfered with his business for the purpose of causing injury, that the defendant acted with malice and for no legitimate economic reason, and that Thompson's business had been injured as a result. We reverse.

         I.

         James H. Thompson, Jr., owns and operates an automobile repair business in Mobile, Alabama, known as "Rusty Thompson Mid Town Auto Service". On April 19, 1971, Thompson filed the complaint in this case in the Circuit Court of Mobile County, Alabama, against Allstate Insurance Company, an automobile casualty and liability insurer. On Allstate's motion, the case was removed on the basis of diversity jurisdiction to the federal district court. The district court granted Allstate's motion to dismiss the plaintiff's original complaint

Page 748

and later granted three successive motions to dismiss amended complaints for failure to state a claim on which relief could be granted under Alabama law. In his third amended complaint, the plaintiff alleged that Allstate, through its agents, had intentionally interfered with the plaintiff's business by informing the plaintiff's customers that Allstate would not make any estimates of repair on damaged automobiles taken to Thompson's garage and that Allstate would not honor any claims against it if Thompson performed the repair work. The plaintiff further averred that Allstate acted with malice for the purpose of injuring the plaintiff's business and for no legitimate economic reason, and that the plaintiff's business was damaged as a result. On Allstate's motion, the district court again dismissed the complaint, this time with prejudice, for failure to state a claim on which relief could be granted. The plaintiff appealed.

         II.

          Alabama has long recognized a cause of action in tort for intentional interference with another's business. See Sparks v. McCrary, 1908, 156 Ala. 382, 47 So. 332; Carter v. Knapp Motor Co., 1943, 243 Ala. 600, 11 So.2d 383; Lash v. State, 1943, 31 Ala.App. 121, 14 So.2d 235, cert. den. 244 Ala. 568, 14 So. 2d 242, cert. den. 320 U.S. 784, 64 S.Ct. 192, 88 L.Ed. 471. Allstate contends, however, that the plaintiff's complaint is deficient because it states only that Allstate did not act for "any legitimate economic reason or purpose" and thus fails to negative the possibility of a non-economic justification for its actions. In effect, Allstate argues that in order to state a claim for which relief can be granted under Alabama law, the plaintiff must affirmatively allege that the defendant's actions were unqualifiedly "without justification."

          Our reading of Alabama law discloses no such requirement. Instead, as we read the cases, they have consistently held that, prima facie, a cause of action for intentional interference with another's business is established by showing: (1) an intentional act of interference and (2) some consequential harm to the plaintiff's business. See Sparks v. McCrary, supra; Carter v. Knapp Motor Co., supra; Kelite Products v. Binzel, 5 Cir. 1955, 224 F.2d 131. 1 Justification for interference in another's business is an affirmative defense and is no part of the plaintiff's case. It "is enough to allege and prove the conduct and effect, leaving the defendant to justify if he can." American Well Works Co. v. Layne & Bowler Co., 1916, 241 U.S. 257, 259, 36 S.Ct. 585, 586, 60 L.Ed. 987 (Holmes, J.)

         Cases in other jurisdictions providing a similar cause of action for intentional interference with another's business hold that the plaintiff does not have to negative justification. Mitchell v. Aldrich, 1960, 122 Vt. 19, 163 A.2d 833; Ross v. Wright, 1934, 286 Mass. 269, 190 N.E. 514, 515; Hartnett...

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