Williamson, Picket, Gross, Inc. v. 400 Park Ave. Co.

• Decision Date: 06 June 1978
• Citation: 63 A.D.2d 880,405 N.Y.S.2d 709
• Parties: WILLIAMSON, PICKET, GROSS, INC., Plaintiff-Respondent, v. 400 PARK AVENUE COMPANY, a partnership, Defendant-Appellant, and Irving Trust Company, Defendant.
• Court: New York Supreme Court — Appellate Division

Page 709

405 N.Y.S.2d 709

63 A.D.2d 880

WILLIAMSON, PICKET, GROSS, INC., Plaintiff-Respondent, v. 400 PARK AVENUE COMPANY, a partnership, Defendant-Appellant and Irving Trust Company, Defendant.

Supreme Court, Appellate Division,First Department.

June 6, 1978.

C. S. Barasch, New York City, for plaintiff-respondent.

C. G. Moerdler, New York City, for defendant-appellant.

Before KUPFERMAN, J. P., and EVANS, FEIN, LANE and SULLIVAN, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, New York County, entered October 6, 1977, denying defendant 400 Park Avenue's motion to dismiss for failure to state a cause of action under CPLR 3211(a)(7), is reversed on the law, without costs and disbursements, and said motion is granted, the complaint dismissed and the action severed as to defendant-appellant.

Defendant Irving Trust Co. was a tenant in a building owned by defendant 400 Park Avenue under a lease which permitted Irving to assign, without the landlord's permission, or sublet to a well established organization (insurance company, bank, trust company, title company) which had at the time of subletting a combined capital and surplus of no less than 50 million dollars. Irving told plaintiff, a real estate broker, of its plans to sublet and plaintiff advised that Banco di Napoli was interested, and negotiations between the two principals began. 400 Park was approached by plaintiff about a direct lease to Banco, but the discussions were not successful. 400 Park was dissatisfied with the possible Irving-Banco lease and stated that it wanted Security National Bank in the Irving space. 400 Park then began a lawsuit against Irving and Banco to enjoin the sub-lease and asked for damages and declaratory relief.

The suit was based on an alleged agreement wherein Irving agreed to cancel the Irving-400 Park lease, when actually Irving could sublet without the consent of 400 Park. Banco di Napoli eventually backed away from the agreement and 400 Park withdrew its suit.

Special Term found a tortious interference with a brokerage agreement because 400 Park knew of the brokerage agreement; began an action based upon a fiction; intended to prevent a lease so it could get a more favorable lease with another; and that the plaintiff would have been entitled to commission but for 400's unlawful conduct.

Interference with precontractual relations is actionable when a contract would have been entered into had it not been for the malicious conduct of a third person. It is sufficient to show that negotiations were reasonably certain to result in a contract advantageous to the plaintiff. ( § 45 Am.Jur.2d, Interference, § 40). The seminal case of Union Car Advertising Co. v. Collier, 263 N.Y. 386, 189 N.E. 463, gives as the general rule that an action will lie for interference in favor of one who would have received a contract but for the malicious, fraudulent, and deceitful acts of a third party. Benton v. Kennedy-Van Saun Mfg., 2 A.D.2d 27, 29, 152 N.Y.S.2d 955, 958, spells out interference citing Campbell v. Gates, 236 N.Y. 457, 460, 141 N.E. 914, 915, as " 'It is a wrongful act, done intentionally, without just cause or excuse, and from this a malicious motive is to be inferred. This does not necessarily mean actual malice or ill-will . . . The action is predicated, not on the intent to injure, but on the intentional interference, without justification with A's contractual rights, with knowledge thereof. It is a legal wrong and one who commits it, if damage be sustained, must answer therefor.' (Citing Campbell.) Self-interest may be the legal justification which negatives intent to injure, but of course it cannot afford legal justification for the intent to interfere with a contract by unlawful means."

It is undisputed that a lawsuit may be the basis for a claim of interference (Muller v. Star Supermarkets, 49 A.D.2d 696, 370 N.Y.S.2d 768), and plaintiff characterizes 400 Park's institution of suit, allegedly without cause, as sufficient to support a cause of action for interference with its brokerage agreement with Irving. Although 400 Park knew of the brokerage agreement, plaintiff's standing to sue is brought into serious contention. If there was actionable interference it was directed against the proposed sub-lease, not the brokerage agreement. This court knows of no precedent that would extend this tort theory to cover claims of a stranger to the contract interfered with.

Plaintiff complains that 400 Park was motivated by a desire to benefit from a lease of substantially more space to another bank. This would appear to be sound economic policy when dealing with one's own property, or as stated in Reinforce v. Birney, 308 N.Y. 164, 169, 124 N.E.2d 104, 106, "If the doers, by means not in themselves unlawful, of acts not in themselves unlawful, have any proper purpose to serve, they are not liable for the damage they cause." The act of the defendant in bringing the suit was not unlawful and the defendant's desire to so dispose of his property to his own advantage not being inherently malicious, fraudulent or motivated by a desire to damage the plaintiff, he thus had a proper purpose to serve. " "In general, it may be said that any purpose sufficient to create a privilege to disturb existing contractual relations such as the . . . protection of the interests of . . . the defendants own property or business interests, . . . will also justify interference with relations which are merely prospective. " (Prosser, Torts, 4th Ed., ch. 25, § 130, p. 954).

All concur except FEIN and LANE, JJ., who dissent in a memorandum by LANE, J., as follows:

LANE, Justice (dissenting):

Irving Trust Company (Irving) was the lessee of premises owned by 400 Park Avenue Company (Park Avenue). The lease terms permitted Irving to assign or sublet the premises without the landlord's consent to "a well-established organization such as an insurance, banking, trust or title company," provided that at the time of subletting the proposed tenant had a combined capital and surplus of not less than $50,000,000. The lease...