Calbom v. Knudtzon

• Decision Date: 29 October 1964
• Docket Number: No. 37076,37076
• Court: Washington Supreme Court
• Parties: Harry B. CALBOM, Jr., Respondent, v. Halvor KNUDTZON, Sr., and Alice Knudtzon, husband and wife, and Halvor Knudtzon, Jr., and Esther Knudtzon, husband and wife, Appellants.

Page 157

65 Wn.2d 157

396 P.2d 148

Harry B. CALBOM, Jr., Respondent, v. Halvor KNUDTZON, Sr., and Alice Knudtzon, husband and wife and Halvor Knudtzon, Jr., and Esther Knudtzon husband and wife, Appellants.

No. 37076.

Supreme Court of Washington, Department 2.

Oct. 29, 1964.

Rehearing Denied Dec. 1, 1964.

Evans, McLaren, Lane, Powell & Moss, Frank W. Draper, Seattle, for appellants.

Atwell, Moore, Walstead & Hallowell, Longview, for respondent.

HAMILTON, Judge.

Plaintiff (respondent) instituted this action seeking recovery of damages upon the grounds that defendants (appellants) had interfered with an induced a breach of an attorney-client relationship. Defendants appeal from an adverse judgment.

On May 1, 1958, K. T. Henderson, sole proprietor of a successful general contracting business, unexpectedly died of a heart attack. His death created pressing problems pertaining to the continuing operations of his business. Mrs. Jessie Bridges, Mr. Henderson's office manager, immediately contacted plaintiff, who was personally acquainted with the Henderson and who, as a practicing attorney, had served them occasionally. Plaintiff, in substance, advised Mrs. Bridges that before he could intelligently give counsel he would have to know whether Mr. Henderson left a will and, if so, who was named as executor or executrix therein, and the provisions thereof. Mrs. Bridges then contacted Mrs. Henderson and a meeting was arranged between plaintiff, Mrs. Henderson, and Mrs. Bridges. At this meeting, it was disclosed that Mr. Henderson had left a will naming Mrs. Henderson his executrix, and that she desired to continue the business. She requested that plaintiff make arrangements to carry out her wishes.

Plaintiff prepared the necessary papers and at 4 p.m. on May 1, 1958, appeared with Mrs. Henderson and Mrs. Bridges before the Superior Court of Cowlitz County, at which time the will was offered for probate, Mrs. Henderson designated as executrix, and an order authorizing continuance of the business was entered. The following day, Mrs. Henderson was fully qualified as executrix and, with plaintiff's assistance, accounts at the bank were adjusted whereby business obligations, including the payroll of the business then due, were met, and a letter relating to and confirming an outstanding bid to a local school district for school construction dispatched. Plaintiff prepared to perfect and continue probate of the estate.

On May 6th, it was necessary for plaintiff to go to California. Before leaving, he checked with Mrs. Bridges to ascertain any immediate needs, and was informed there was none. Between May 6th and May 8th, Halvor Knudtzon, Sr., the senior member of the firm of Knudtzon and Associates certified public accountants, returned from a trip. On May 8th, he was consulted by Mrs. Henderson relative to performing the tax work in connection with the estate. At this meeting, Mr. Knudtzon inquired of Mrs. Henderson if she had selected an attorney, to which she replied 'Yes, I suppose Harry Calbom.' Whereupon, Mr. Knudtzon shook his head and indicated, by inference at least, that plaintiff was unsatisfactory. Mr. Knudtzon thereupon recommended a list of attorneys from which one was selected.

On May 9th, plaintiff returned and was advised by Mrs. Bridges that another attorney was handling the probate matter. Thereupon, he contacted Mr. Knudtzon, Sr., and requested a meeting, which was arranged for that morning. Mr. Knudtzon, who was at home when contacted by plaintiff, telephoned his son at the office and advised him that plaintiff was coming in to confer with them, and that they would give him 'a line of hot air.' When confronted by plaintiff at their office, plaintiff was advised by Mr. Knudtzon, Sr., that they, as accountants, hired and fired attorneys for their clients and made reference to a former probate matter in which they had been instrumental in discharging the attorney.

Subsequently, an effort was made to pay plaintiff for services he had performed and secure his signature upon a notice of substitution of attorneys. Plaintiff refused to submit a bill for his services up to the time of his termination, refused to agree to a substitution of attorneys, and instituted the present action against the defendants alleging intentional interference with plaintiff's employment contract.

Trial of the action consumed several days, at the conclusion of which the trial court rendered an oral decision in favor of plaintiff and thereafter entered findings of fact, conclusions of law, and judgment. The essence of the trial court's findings were: (a) Plaintiff was an ethical, reputable, and competent attorney; (b) plaintiff had a contract with the surviving widow to probate the estate of K. T. Henderson, pursuant to which plaintiff undertook performance of the probate proceedings; (c) defendants, with knowledge of plaintiff's contract of employment, intentionally maliciously, and without justification induced the surviving widow to discharge plaintiff as attorney for the estate, and (d) plaintiff suffered damage in the amount of the reasonable attorney's fee he would have earned had he continued to the conclusion of the probate.

On appeal, defendants make 13 assignments of error, which reduce themselves to five basic contentions: (1) The evidence does not support the trial court's finding that a contract of employment existed, or that defendants had knowledge of such contract; (2) the contract of employment, if any, was illegal and contrary to public policy; (3) the interference, if any, with the relationship was justified; (4) plaintiff failed to submit competent proof on the issue of damages and would, if entitled to recover, be entitled to recover only nominal damages; and (5) the trial court erred in admitting certain evidence.

Intentional and unjustified third-party interference with valid contractual relations or business expectancies constitutes a tort, with its taproot embedded in early decisions of the courts of England, e.g.: Keeble v. Hickeringill, 11 East 574, 11 Mod. 74, 130, 3 Salk 9, 103 Eng.Rep. 1127 (1809); Lumley v. Gye, 2 El. & Bl. 216, 118 Eng.Rep. 749 (1853); Bowen v. Hall, 6 Q.B.D. 333, 50 L.J.Q.B. 305 (1881); Temperton v. Russell, 1 Q.B. 715, 62 L.J.Q.B. 412 (1893); South Wales Miners' Federation v. Glamorgan Coal Co., A.C. 239, 74 L.J.K.B. 525 (1905).

From and with the English decisions, the tort has become engraved upon American law, generally unsullied in principle, although with some case by case distinctions. See, Carpenter, Interference with Contract Relations, 41 Harv.L.Rev. 728; Prosser on Torts (3rd ed.) § 123, p. 950; 30 Am.Jur., Interference § 61, p. 95; 84 A.L.R. 43; 9 A.L.R.2d 228; 26 A.L.R.2d 1227.

We have recognized the tort in its various forms. Jones v. Leslie, 61 Wash. 107, 112 P. 81, 48 L.R.A.,N.S., 893 (1910); Seidell v. Taylor, 86 Wash. 645, 151 P. 41 (1915); Pacific Typesetting Co. v. International Typographical Union, 125 Wash. 273, 216 P. 358, 32 A.L.R. 767 (1923); Sears v. International Brotherhood of Teamsters, Chauffeurs, Stablemen and Helpers of America, Local No. 524, 8 Wash.2d 447, 112 P.2d 850 (1941); Hein v. Chrysler Corp., 45 Wash.2d 586, 277 P.2d 708 (1954); Titus v. Tacoma Smeltermen's Union Local No. 25, International Union of Mine, Mill and Smelter Workers, 62 Wash.2d 461, 383 P.2d 504 (1963).

The fundamental premise of the tort--that a person has a right to pursue his valid contractual and business expectancies unmolested by the wrongful and officious intermeddling of a third party--has been crystallized and defined in Restatement, Torts § 766, as follows:

'Except as stated in Section 698 (betrothal promises), one who, without a privilege to do so, induces or otherwise purposely causes a third person not to

'(a) perform a contract with another, or

'(b) enter into or continue a business relation with another is liable to the other for the harm caused thereby.'

Clause (a) relates to those cases in which the purposeful interference of a third party induces or causes a breach of an existing and valid contract relationship. Clause (b) embraces two types of situations. One is that in which the interferor purposely induces or causes a party not to enter into a business relationship with another. The second is where a business relationship, terminable at the will of the parties thereto, exists, and the intermeddler purposely induces or causes a termination of such relationship. The distinction between the situations propounded by clauses (a) and (b) lies not so much in the nature of the wrong, as in the existence or nonexistence, and availability as a defense, of privilege or justification for the interference. Restatement, Torts § 766, Comment c.

The basic elements going into a prima facie establishment of the tort 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. Ill will, spite, defamation, fraud, force, or coercion, on the part of the interferor, are not essential ingredients, although such may be shown for such bearing as they may have upon the defense of privilege.

The burden of showing privilege for interference with the expectancy involved rests upon the interferor. Prosser on Torts (3rd ed.) § 123, p. 967; 30 Am.Jur., Interference § 57, p. 93. The basic issue raised by the assertion of the defense is whether, under the circumstances of the particular case, the interferor's conduct is justifiable, bearing in mind such factors as the nature of the interferor's conduct, the character of the expectancy with which the conduct interferes, the relationship between the various parties, the interest sought to be advanced by the interferor,...