C.R. Eng. v. Swift Transp. Co.

• Decision Date: 27 February 2019
• Docket Number: No. 20170561,20170561
• Citation: 437 P.3d 343
• Parties: C.R. ENGLAND, Plaintiff-Appellant, v. SWIFT TRANSPORTATION COMPANY; Swift Transportation Company of Arizona; and Swift Transportation Services, Defendants-Appellees.
• Court: Utah Supreme Court

437 P.3d 343

C.R. ENGLAND, Plaintiff-Appellant,

v.SWIFT TRANSPORTATION COMPANY; Swift Transportation Company of Arizona; and Swift Transportation Services, Defendants-Appellees.

No. 20170561

Supreme Court of Utah.

Filed February 27, 2019

Scott A. Hagen, Robert O. Rice, Michael K. Erickson, Salt Lake City, for appellant

Stephen E. Hale, Bryan S. Johansen, Rachel L. Wertheimer, Salt Lake City, for appellees

Chief Justice Durrant authored the opinion of the Court, in which Associate Chief Justice Lee, Justice Himonas, Justice Pearce and Justice Petersen joined.

Chief Justice Durrant, opinion of the Court:

Introduction

¶1 In this case¹ we are asked to interpret, and ultimately overturn, a rule we established in St. Benedict’s Development Co. v. St. Benedict’s Hospital .² In St. Benedict’s we held that to prevail on a claim for intentional interference with contract, the plaintiff must show that the defendant interfered through "improper means."³ C.R. England, Inc. (England) argues that St. Benedict’s was wrongly decided and should, therefore, be overruled.

¶2 In so arguing, England asserts that the factors for overruling precedent we established in Eldridge v. Johndrow⁴ —(1) the persuasiveness of the authority and (2) how firmly the precedent has become established in law—weigh in England’s favor. We disagree. Because the "improper means" element has become firmly embedded in Utah law since St. Benedict’s was decided, and because it remains a good rule, we decline to overturn it.

¶3 Additionally, we are asked to clarify what constitutes improper means for the purposes of a claim for intentional interference with contract. In Leigh , we explained that the element of "improper means is satisfied where the means used to interfere with a party’s economic relations are contrary to law, such as violations of statutes, regulations, or recognized common-law rules," or if "they violate an established standard of a trade or profession."⁵ And in St. Benedict’s we applied this definition of improper means to claims involving existing contracts.⁶ We reaffirm this definition⁷ and clarify that to constitute an "established standard of a trade or profession," the standard or rule must be an objective one accepted throughout the relevant industry.

Background⁸

¶4 England is a trucking company. As part of its business, it trains and hires individuals to work as truck drivers. To protect its investment in training individuals to work as truck drivers, England enters into employment contracts wherein the truck drivers agree to work exclusively for England for a nine-month period.⁹ England alleges that it has previously provided notice of these agreements to other trucking companies, and that it also provides notice on an ongoing basis when competing companies seek to hire England drivers who are still within the nine-month period.

¶5 Swift Transportation Company (Swift) is also a trucking company. England alleges that Swift regularly and knowingly induces England’s truck drivers to breach their employment contracts with England by offering higher wages and better benefits.

¶6 In response to this activity, England filed suit against Swift, alleging that Swift intentionally interfered with England’s contracts with its employees. Swift filed a motion for summary judgment against England on the ground that England failed to provide proof of "improper means"—an allegedly essential element of the tort—to support its claim.¹⁰ In its opposition, England argued that "improper means" is not an element of the tort of intentional interference with contract in Utah. Instead, it maintained that it must prove only that (1) Swift had knowledge of England’s employment agreements with its truck drivers, (2) Swift recruited the drivers, (3) the drivers went to work with Swift, and (4) England suffered damages as a result, unless the "action causing the breach was done with just cause of excuse."¹¹

¶7 Noting conflicting holdings in the federal district court of Utah regarding the elements of the tort of intentional interference with contract, the federal court requested supplemental briefing from the parties. Upon reviewing the briefing, the court concluded that there appears to be no "clear, controlling Utah law" regarding whether "improper means" is required as part of the tort. Additionally, the court concluded that if improper means is required, there is no clear law regarding what would constitute improper means.

Standard of Review

¶8 This case comes to us by certified question from the federal district court. "A certified question from the federal district court does not present us with a decision to affirm or reverse a lower court’s decision; as such, traditional standards of review do not apply."¹² Instead, we merely answer the question presented without resolving the underlying dispute.¹³ We have jurisdiction pursuant to Utah Code section 78A-3-102(1) and article VIII, section 3 of the Utah Constitution.

Analysis

¶9 This case requires us to answer two questions. First, does the tort of intentional interference with contract require proof of "improper means"? And second, if it is required, what constitutes "improper means" in the context of tortious interference with contract?

¶10 England argues that the elements of the tort of intentional interference with contract come from our opinion in Bunnell v. Bills .¹⁴ In Bunnell , we adopted the rule that "one who persuades another or conspires with another to breach a contract is guilty of an actionable tort, unless such persuasion or other action causing the breach was done with just cause of excuse."¹⁵ England argues that this should still be the law in Utah, and, to the extent subsequent cases have stated a different rule, we should overrule them under the factors for overturning precedent we articulated in Eldridge v. Johndrow .¹⁶

¶11 Swift, on the other hand, argues that our decisions in Leigh Furniture & Carpet Co. v. Isom¹⁷ and St. Benedict’s Development Co. v. St. Benedict’s Hospital¹⁸ govern. According to Swift, Leigh established a three-part test for the tort of intentional interference with economic relations, which includes interference with both existing and prospective contracts. We agree with Swift.

¶12 Although the court in Leigh did not clearly state whether its three-part test applied to the tort of intentional interference with contract, the court in St. Benedict’s later interpreted Leigh as having done so.¹⁹ And following St. Benedict’s , Utah courts have regularly stated that the element of "improper means" is part of the prima facie case for intentional interference with contracts.²⁰ Because the rule established in St. Benedict’s has become firmly established in Utah caselaw, and the reasoning behind it remains persuasive, we decline to overturn it.

I. We Decline to Overturn St. Benedict’s and We Hold that "Improper Means" is an Element of the Tort of Intentional Interference with Contract

¶13 We first consider whether "improper means" is an element of the tort of intentional interference with contract. England argues that we should disavow any language from our decision in St. Benedict’s Development Co. v. St. Benedict’s Hospital²¹ that includes the element of "improper means" as part of the tort of intentional interference with contract. The court in St. Benedict’s based its decision on language in Leigh Furniture & Carpet Co. v. Isom .²² But, according to England, the language in Leigh applied only to the related, but distinct, tort of intentional interference with prospective economic relations. For this reason, England argues that St. Benedict’s interpretation of Leigh —as including the "improper means" element in the torts of intentional interference with contracts and prospective contracts—is incorrect.

¶14 Swift disagrees with England’s reading of our caselaw. According to Swift, our decision in Leigh established elements for the tort of interference with economic relations, which "protects both existing contractual relationships and those not yet reduced to formal contract or not expected to be."

¶15 Although Leigh is best read as having applied only to the tort of intentional interference with prospective contracts, St. Benedict’s clearly extended the Leigh test so that it applied to claims involving existing contracts as well as prospective ones. Because this resulted in a sound rule that has become firmly embedded in Utah law, we decline to overturn it.²³

A. Before Leigh, the tort of intentional interference with contract required some showing of improper or unprivileged conduct by defendant

¶16 Due to the debate surrounding the development of the tort of intentional interference with economic relations, we first consider the origins of the legal theory in Utah. Specifically, it should be noted that Utah’s caselaw has always held that a defendant could not be found liable for intentionally interfering with an existing contract absent proof that the interference was unexcused or unjustified. And, based on a review of the caselaw from other jurisdictions, it appears that an unexcused or unjustified interference is widely viewed as the functional equivalent of interference by an "improper means" or an "improper purpose."²⁴

¶17 In Utah, the tort of intentional interference with contract has always required some proof that the alleged interference was done with some level of impropriety. In Bunnell v. Bills , the case on which England’s entire argument relies, the court held that "one who persuades another or conspires with another to breach a contract is guilty of an actionable tort, unless such persuasion or other action causing the breach was done with just cause of excuse ."²⁵ It also explained that "even though a defendant’s action brings about a breach of contract, he is not liable where the breach was caused by the doing of an act which he had a legal right to do."²⁶ The court then explained that "[w]here persons have merely pursued their own ends without any desire or intention of...