Blackstone v. Cashman

• Decision Date: 18 January 2007
• Citation: 860 N.E.2d 7,448 Mass. 255
• Parties: Thomas B. BLACKSTONE v. James M. CASHMAN.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

860 N.E.2d 7

448 Mass. 255

Thomas B. BLACKSTONE v. James M. CASHMAN.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued October 3, 2006.

Decided January 18, 2007.

COPYRIGHT MATERIAL OMITTED

George C. Deptula, Boston, for the defendant.

George P. Lordan, Jr., Salem (Dennis P. Derrick, Essex, with him) for the plaintiff.

Present: MARSHALL, C.J., GREANEY, IRELAND, SPINA, COWIN, SOSMAN, & CORDY, JJ.

CORDY, J.

This case is before us for the limited purpose of considering whether the defendant was entitled to an "actual malice" instruction when the plaintiff's claim of intentional interference with advantageous economic relations was submitted to the jury. To answer this question, we first consider what must be proved to establish that the interference was improper, where the defendant is an official of the corporation that employed the plaintiff, and the economic relation allegedly interfered with is one of employment or prospective employment. We next consider whether the defendant's position as a corporate director and a fifty per cent shareholder qualifies him as a "corporate official" against whom actual malice must be established as an element of the plaintiff's claim. We then turn to the jury instructions.

We conclude that the defendant was entitled to an actual malice instruction, and that the failure to give such an instruction was prejudicial. Accordingly, the verdict is set aside and the judgment for the plaintiff is vacated.

1. Background. We summarize the evidence at trial. The plaintiff, Thomas B. Blackstone, an accountant, was employed by J.M. Cashman, Inc. (company), for approximately seven years beginning in 1988. By June, 1995, his title at the company was chief financial officer and vice-president, and he had a written employment contract expiring June 30, 1995. The defendant, James M. Cashman (Cashman), owned fifty per cent of the shares of the company and was a director. The remaining fifty per cent of the company shares were owned by Cashman's brother, Jay Cashman (Jay), who was also a director.

By August, 1994, the two brothers had become deadlocked over the direction of their business and entered into an agreement to wind up and liquidate the company. To supervise this process, they agreed to hire an outside manager to serve as the chief executive officer of the company. After the first manager hired left the company, David Ferrari assumed the duties of chief executive officer on May 5, 1995. Ferrari had complete day-to-day control of the business. Both Ferrari and Blackstone worked at the company's offices in Quincy. Cashman did not work at that location or visit it regularly.

The Cashman brothers did not involve themselves in the day-to-day management of the company. Ferrari, however, received and solicited advice from Jay on a regular basis; he almost never spoke with Cashman. Cashman's primary concern was that the business be run in an even-handed manner. He felt that the company's management had favored his brother, and had expressed particular suspicion to Ferrari and others that Blackstone was biased against him.¹

The events relevant to this suit occurred on June 5, 1995. As part of the windup agreement, each Cashman brother was due a check from the company for $20,000, payable monthly on the first day of the month. Blackstone was responsible for sending these checks. Cashman, concerned that he had not received his monthly check for June, and believing that Blackstone was improperly withholding it, telephoned Blackstone at the company office in Quincy.² In the telephone call Cashman demanded that Blackstone send the check as required, but Blackstone refused. Blackstone testified that Cashman was irate and swore at him during the conversation but did not threaten him.³ The call ended after approximately five minutes with Cashman telling Blackstone that he was going to call Ferrari.

Cashman then telephoned Ferrari, who took the call on a mobile telephone in his automobile. Cashman was highly agitated. He complained that Blackstone was improperly withholding his check, and insisted that Ferrari rectify the problem. During an outburst, Cashman used words to the effect that he would "go down and shoot [Blackstone]" or that he would "bash [Blackstone] over the head with a baseball bat"; and that this would be Ferrari's fault because of his failure to ensure fair treatment by Blackstone. Ferrari asked Cashman if he was serious, and Cashman said, "yes."⁴ Ferrari promised Cashman that he would investigate the problem. The conversation turned to other business matters, and ended after approximately twenty-five minutes.

Following the telephone call, Ferrari attended a business meeting before returning to the company offices in Quincy. There he spoke with Jay, and then to the company's attorney. Jay told Ferrari that he believed his brother's comments were driven by anger and were not serious threats to do harm to Blackstone. The attorney recommended that Ferrari send Blackstone home for the day, which he did without any explanation to Blackstone. Ferrari then spoke with Cashman's attorney, who similarly assured Ferrari that his client was not seriously threatening harm to Blackstone. Finally, later that same day, Cashman called Ferrari and assured him that his comments were an expression of his anger about his check and not a serious threat. He apologized to Ferrari for making the comments.

Blackstone did not learn of the comments until the next day, when Ferrari informed him. Blackstone became visibly agitated. Ferrari did not tell Blackstone about any of his subsequent conversations, including Cashman's apology. Rather, Ferrari discussed with Blackstone possible measures to safeguard the premises, including installing bulletproof glass. Blackstone then left the office.

Three days later, after a meeting which included Ferrari, the company's attorney, Cashman, and his attorney, Cashman signed a written letter of apology addressed to Ferrari. In that letter, he reiterated that his comments arose from his frustration and not from any serious intent, and he expressed embarrassment and remorse to Blackstone. Nonetheless, and despite repeated requests and assurances from Ferrari, Blackstone did not return to the company offices and worked from home until his contract expired at the end of the month. He testified that he remained "very, very concerned" that Cashman might come to the office to "finish me off." Ferrari testified that he would have retained Blackstone past the expiration of his contract had Blackstone wanted to stay. Blackstone, however, expressed no interest in doing any more work with the company in light of what had transpired.⁵

Blackstone instituted the present action on June 2, 1998, by filing a two-count complaint in the Superior Court. He alleged intentional interference with his employment contract and intentional interference with advantageous future relations— that is, with the prospect of his continued employment with the company beyond the expiration of his contract. The case went to trial only on the claim of interference with future advantageous relations.⁶ Before the case was submitted to the jury, Cashman requested an instruction on actual malice, which the judge declined. The jury returned a verdict in favor of Blackstone. Cashman's motions for judgment notwithstanding the verdict and for a new trial were denied. The Appeals Court affirmed. See Blackstone v. Cashman, 64 Mass.App. 1106, 833 N.E.2d 189 (2005). We granted Cashman's request for further appellate review on the limited question whether there should have been an instruction on actual malice. See Blackstone v. Cashman, 445 Mass. 1107, 840 N.E.2d 55 (2005).

2. Intentional interference with advantageous relations. The tort of intentional interference with advantageous relations protects a plaintiff's present and future economic interests from wrongful interference. The various species of this tort are described in Restatement (Second) of Torts §§ 766-766B (1979). This case involves interference described in § 766B(b),⁷ in that Cashman allegedly interfered with Blackstone's prospective employment contract with a third party, the company,⁸ by preventing him from acquiring or continuing the prospective relationship.⁹

To make a successful claim for intentional interference with advantageous relations, a plaintiff must prove that (1) he had an advantageous relationship with a third party (e.g., a present or prospective contract or employment relationship); (2) the defendant knowingly induced a breaking of the relationship; (3) the defendant's interference with the relationship, in addition to being intentional, was improper in motive or means; and (4) the plaintiff was harmed by the defendant's actions. See Weber v. Community Teamwork, Inc., 434 Mass. 761, 781, 752 N.E.2d 700 (2001) (Weber). The "actual malice" instruction at issue here goes to the third element, whether the interference was "improper in motive or means."

We have often considered intentional interference with advantageous relations in the context of employment. See, e.g., Weber, supra at 781-783, 752 N.E.2d 700; Harrison v. NetCentric Corp., 433 Mass. 465, 476-479, 744 N.E.2d 622 (2001); Shea v. Emmanuel College, 425 Mass. 761, 764, 682 N.E.2d 1348 (1997) (Shea); Boothby v. Texon, Inc., 414 Mass. 468, 486-488, 608 N.E.2d 1028 (1993) (Boothby); Wright v. Shriners Hosp. for Crippled Children, 412 Mass. 469, 476, 589 N.E.2d 1241 (1992) (Wright); Gram v. Liberty Mut. Ins. Co., 384 Mass. 659, 663-665, 429 N.E.2d 21 (1981), S.C., 391 Mass. 333, 461 N.E.2d 796 (1984) (Gram). That context affects how a plaintiff employee must prove the element of "improper motive or means," when the defendant is an official of the employer. In Gram, supra, a case involving the firing of an employee whose supervisors believed he was consistently violating company policies, we affirmed that "corporate officials" acting "within the scope of their...