Durrettebradshaw, P.C. v. Mrc Consulting

• Decision Date: 16 January 2009
• Docket Number: Record No. 072418.
• Citation: 277 Va. 140,670 S.E.2d 704
• Parties: DURRETTEBRADSHAW, P.C. v. MRC CONSULTING, L.C.
• Court: Virginia Supreme Court

670 S.E.2d 704

277 Va. 140

DURRETTEBRADSHAW, P.C. v. MRC CONSULTING, L.C.

Record No. 072418.

Supreme Court of Virginia.

January 16, 2009.

S. Vernon Priddy III (Douglas P. Rucker, Jr.; Sands Anderson Marks & Miller, on briefs), Richmond, for appellant.

L. Steven Emmert (William C. Bischoff; Sykes, Bourdon, Ahern & Levy; Stallings & Bischoff, on brief), Virginia Beach, for appellee.

Present: HASSELL, C.J., KEENAN, KOONTZ, KINSER, GOODWYN and MILLETTE, JJ., and RUSSELL, S.J.

OPINION BY Justice S. BERNARD GOODWYN.

In this appeal, we consider whether a defendant must act with the intent to interfere with a contract to which the plaintiff was a party in order for the plaintiff to have a claim against that defendant for tortious interference with contract rights.

Background

MRC Consulting, L.C. ("MRC") filed a complaint in the Circuit Court of the City of Norfolk purporting to state a cause of action against DurretteBradshaw, P.C. ("DurretteBradshaw") for tortious interference with a contractual relationship between SouthStar Systems, Inc. ("SouthStar") and MRC. DurretteBradshaw filed a demurrer, asserting that MRC's complaint did not state a cause of action against DurretteBradshaw for tortious interference with the contract between SouthStar and MRC, because MRC did not allege that DurretteBradshaw intended to interfere with the contract between MRC and SouthStar. The circuit court overruled the demurrer. The matter proceeded to trial before a jury. The jury returned a verdict in favor of MRC in the amount of $253,875.72, and the circuit court entered a judgment confirming that verdict. DurretteBradshaw appeals.^*

The principles of appellate review that guide our consideration of this appeal are well-settled. "A demurrer admits the truth of the facts contained in the pleading to which it is addressed, as well as any facts that may be reasonably and fairly implied and inferred from those allegations. A demurrer does not, however, admit the correctness of the pleader's conclusions of law." Yuzefovsky v. St. John's Wood Apts., 261 Va. 97, 102, 540 S.E.2d 134, 136-37 (2001) (internal citation omitted). Accordingly, we will consider the facts stated, and those reasonably inferred from the complaint, in a light most favorable to the plaintiff, but we will review the sufficiency of the legal conclusions ascribed to those facts de novo. Id. at 102, 540 S.E.2d at 137. Applying this standard, the relevant facts and legal conclusions in the plaintiff's complaint are as follows.

SouthStar entered a contract ("SouthStar/SEI contract") with Spring Engineers of Dallas, Ltd., t/a SEI Metalforms, Ltd. ("SEI") that involved the sale of 5,000 computer communication boards from SouthStar to SEI at the price of $205 each, for a total contract price of $1,025,000. SouthStar expected to realize a profit of $200 per unit.

Before the contract could be fulfilled, SouthStar suffered a casualty loss to its inventory of communication boards. SouthStar presented a claim to Maryland Casualty Company, its insurer, for business interruption and lost profits concerning the SouthStar/SEI contract. Maryland Casualty did not pay the claim.

To fulfill the obligation it had to SEI, and to mitigate its loss, SouthStar enlisted the assistance of MRC. MRC agreed to fund the redesign of communication boards to meet SEI's requirements, and to pay the cost to manufacture those boards. In exchange, SouthStar agreed to buy the boards it needed for the SouthStar/SEI contract from MRC for $102.50 each. MRC expected to realize a profit of $500,000 on the transaction.

Represented by DurretteBradshaw, Maryland Casualty filed a declaratory judgment action seeking a determination that Maryland Casualty was not required to pay SouthStar's business interruption and lost profit claims. During this representation of Maryland Casualty, one of DurretteBradshaw's attorneys, acting within the scope of his employment, purposefully disclosed to SEI confidential information DurretteBradshaw had obtained about SouthStar while investigating the insurance claim. The attorney purportedly made this disclosure hoping that SEI would cancel the SouthStar/SEI contract. SEI was informed about SouthStar's large profit margin and that SouthStar was financially unable to perform its contract with SEI. After the disclosure, SEI did, in fact, cancel the SouthStar/SEI contract, eliminating SouthStar's claim for business interruption and lost profits under its Maryland Casualty policy.

MRC alleged, in its complaint, that when DurretteBradshaw disclosed the confidential information to SEI, DurretteBradshaw knew of MRC's contract with SouthStar and MRC's involvement in the performance of the SouthStar/SEI contract. MRC claimed that DurretteBradshaw intentionally interfered with the SouthStar/SEI contract, knowing of the obvious impact of that interference, not only on SouthStar, but on MRC as well. MRC claimed that, as a result of DurretteBradshaw's interference with the SouthStar/SEI contract, MRC lost the profits it would have made from its contract with SouthStar, and thus was entitled to damages because of DurretteBradshaw's actions.

Analysis

DurretteBradshaw contends that the circuit court erred when it overruled DurretteBradshaw's demurrer to MRC's complaint. DurretteBradshaw argues that its demurrer should have been sustained because MRC did not plead that DurretteBradshaw intended to affect MRC when it disclosed information about SouthStar to SEI. MRC counters that its complaint states a cause of action for tortious interference because the complaint contains allegations that DurretteBradshaw intentionally interfered with the SouthStar/SEI contract, knowing the obvious impact such interference would have upon the contract MRC had with SouthStar.

In Chaves v. Johnson, 230 Va. 112, 335 S.E.2d 97 (1985), this Court expressly recognized that the cause of action for tortious interference with contract rights is succinctly described in the Restatement (Second) of Torts § 766 (1977):

Intentional Interference with Performance of Contract by Third Party

One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract.

Chaves, 230 Va. at 120, 335 S.E.2d at 102.

This Court, in Chaves, stated the elements necessary to support a cause of action for tortious interference with contract rights. The elements required for a prima facie showing of the tort are: (i) the existence of a valid contractual relationship or business expectancy; (ii)...