Liebe v. City Finance Co.
| Decision Date | 09 June 1980 |
| Docket Number | No. 79-1436,79-1436 |
| Parties | Robert R. LIEBE, Plaintiff-Appellant, v. CITY FINANCE COMPANY and Better Business Bureau of Greater Milwaukee, Defendants-Respondents. |
| Court | Wisconsin Court of Appeals |
Review Denied.
Robert E. Sutton, Milwaukee, for plaintiff-appellant.
Pegeen Brosnan, of Phillip & Sletteland and Ernest J. Phillip, Milwaukee, of counsel, for defendant-respondent, City Finance Co, City Finance Co.
James P. Brennan of Brennan & Collins, Milwaukee, for defendant-respondent, Better Business Bureau.
Before DECKER, C. J., MOSER, P. J., and CANNON, J.
Robert Liebe appeals from a judgment which dismissed Liebe's action for tortious interference with contract on the merits as to all defendants, including City Finance Company and the Better Business Bureau of Greater Milwaukee. Liebe contends that the trial court erred in instructing the jury on the 1977 version of secs. 766, 767, and 772 of the Restatement (Second) of Torts; 1 in setting aside the jury verdict returned in favor of Liebe; and in granting the defendants' motion for a directed verdict which had been taken under advisement until after the jury returned a verdict. We disagree with the contentions and affirm.
In 1976, Liebe mailed approximately 1,000 flyers advertising a book he had written entitled "I'm Fed Up With The Cost of Finance Company Loans." The flyer offered information on how to save substantially on loans if the recipient mailed $10 to R & K Publishing, P.O. Box 282, Plover, Wisconsin, 54467.
The Memphis office of City Finance received one of the flyers. It passed from Mr. Smith, the president of City Finance, to Paul Slicer, an attorney for City Finance, to James Werson, the executive director of the National Consumer Finance Association, to William Devine, the president of the Midwest Finance Association, to Werner Wilking, the executive vice-president of the Wisconsin Consumer Finance Association. Mr. Wilking sought the identity of the owners of R & K through Robert Hampton, president of the Better Business Bureau of Greater Milwaukee, who obtained Liebe's name as owner of the post office box from the postal inspector of the Milwaukee office of the postal service.
Mr. Hampton mailed Liebe a standard Business Bureau information form. Liebe filled it out and returned it. On the form and in an attached letter, Liebe requested that his employment with the Thorp Finance Corporation in Stevens Point, Wisconsin, be kept confidential.
Hampton called Wilking to tell him that Liebe and his wife appeared to be the principals of R & K, and that Liebe was employed by a finance company. Hampton then mailed Liebe's cover letter to Wilking. That letter did not identify Liebe's employer, but included Liebe's request that his employment remain confidential.
Wilking phoned the two members of the Wisconsin Consumer Finance Association in the Plover-Stevens Point area and was informed that Liebe worked for Thorp Finance. Wilking phoned Basil Solberg, vice-president of ITT Thorp in Wisconsin, and informed him of the flyer and Liebe's association with it. After Solberg contacted City Finance and received the flyer, Liebe was discharged on June 22, 1976, pursuant to Solberg's order.
A jury concluded that City Finance and the Better Business Bureau intentionally and improperly interferred with the employment contract between Liebe and his employer, and awarded him pecuniary damages of $100,000, and punitive damages of $7,000. The court subsequently directed a verdict for the defendants, and from the resulting judgment, Liebe appeals.
The basic issue is whether the trial court erred in instructing the jury in accordance with sec. 772 of the Restatement (Second) of Torts (1979), that one who intentionally causes a third person not to perform a contract by giving truthful information does not "interfere improperly" with a contractual relation. To use the language of the 1939 Restatement and the 1969 tentative draft of the Restatement, the issue is whether transmission of truthful information is "privileged." We hold that the transmission of truthful information is privileged, does not constitute improper interference with a contract, and cannot subject one to liability for tortious interference with a contract.
The trial court instructed the jury in accordance with the version of the Restatement (Second) (1979) adopted by the American Law Institute in 1977, secs. 766, 767, and 772, respectively:
One who intentionally and improperly interferes with the performance of a contract 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.
Also, in determining whether a defendant's conduct is improper, you should consider the following factors. Consider the nature of the defendant's conduct, consider the defendant's motives, consider the interest of the plaintiff with which the defendant's conduct interfered, consider the interest sought to be advanced by the defendant, consider the social interest in protecting the freedom of action against the defendant and the contractual interest of the plaintiff, consider the proximity or remoteness of the defendant's conduct to the interference, and consider the relations between the parties.
One who intentionally causes a third person not to perform a contract or not to enter into a prospective contractual relation with another does not interfere improperly with the other's contractual relation by giving the other third person truthful information or honest advice within the scope of a request for the advice.
Adoption of sec. 772 of the Restatement (Second) (1979) was intimated in Charolias Breeding Ranches, Ltd. v. FPC Securities Corp. 2 The 1969 tentative draft of sec. 766 of the Restatement states that as a general rule one who intentionally induces a third person to not perform a contract with another is liable unless the conduct is privileged. 3
The Restatement (Second) (1979) substitutes a concept of propriety, but establishes that "truthful information" or "honest advice" is privileged, that is, it cannot constitute "improper interference." Section 766 of the Restatement (Second) (1979) provides that one who "intentionally and improperly" interferes with the performance of a contract is liable. 4 In Charolais, this court adopted sec. 766 of the Restatement (Second) of Torts (1979).
Section 722 is, in a sense, a subsection of sec. 766 in that it specifies proper and improper conduct within the meaning of sec. 766. The commentators to the Restatement (Second) (1979) explain the relationship in comment a to sec. 766.
In order for the actor to be held liable, this Section requires that his interference be improper. The factors of importance in determining this issue are stated and explained in § 767, which must be closely read with this Section. Sections 768-773 deal with special situations in which the application of the factors has produced more clearly identifiable decisional patterns. 5
The drafters of the Restatement (Second) (1979) recognize that "the law in (the area of tortious interference in contracts) has not fully congealed but is still in a formative stage." 6 Adoption of the sections clarifying application of a general rule previously adopted in this state is a logical progression which should be made barring Wisconsin precedent to the contrary.
Wisconsin courts have long recognized the concept of privilege in the area of tortious interference with contract. Not all intentional interference with contract is actionable. Only "one who, without a privilege to do so, induces or otherwise purposely causes a third person not to perform a contract with another . . . is liable . . . ." 7 Wisconsin courts have also intimated that transmission of truthful information is proper by stating that improper means of interfering with contracts include transmission of false information. 8
Therefore, if the defendants come within the provisions of sec. 768 of the Restatement of Torts, they are liable to the plaintiffs only if they used improper means of inducement to terminate contracts with the plaintiffs. Such improper means within the principles of the Restatement are coercion by physical force, or fraudulent misrepresentation. 9
Considerations of public policy support the conclusion foreshadowed by the case law. In Augustine, supra, the supreme court agreed with the trial court's conclusion that a phone call made by a defendant was privileged interference with contract because it was made in exercise of a "privilege to assert complaints." 10 The trial court based its conclusion on the compulsion of the right of free speech as guaranteed by both the Wisconsin and United States Constitutions. 11 The policy choice here is narrower and is fortified by the conclusion suggested by Wisconsin precedent. Transmission of truthful information is privileged and proper.
Liebe claims that Hartridge v. State Farm Mutual Automobile Insurance Co., 12 establishes that our supreme court has adopted the 1969 draft and rejected the Restatement (Second) (1979) sections concerning tortious interference with a contract. This argument is unconvincing on two counts. First, there was no dispute as to which version to use in the Hartridge case. The parties did not contend and the court, as evidenced by the opinion, did not consider using the Restatement (Second). Therefore, use of the 1969 draft cannot be interpreted to reject the Restatement (Second). In fact, in 1979, the court acknowledged the new version of secs. 766 and 768, with tacit approval. 13 Use of the 1969 draft in Hartridge indicates a tendency by the supreme court to stay current with the developments in tort law as...
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