A recent Massachusetts appeals court ruling provides guidance on the required elements of a claim for intentional interference with contractual relations (IICR).   IICR claims are very common in commercial litigation cases and often arise in the context of a contract dispute.  Unlike a contract claim, IICR claims provide a potential for more extensive damage claims and offer a plaintiff a different legal argument outside the terms of a particular contract that may be in dispute.  However, the law is that IICR claims have to be based on more than just a breach of contract.  There has to be more nefarious conduct that would justify this level of liability.  This case addresses the requirements for that standard.  The key finding here is that negligence or even gross negligence is not sufficient – the conduct has to be intentional.

In the case of Cutting Edge Homes, Inc. v. Alan J. Mayer, the Appeals Court affirmed a summary judgment dismissing Cutting Edge’s claim for intentional interference with contractual or advantageous business relations against Alan J. Mayer. Cutting Edge, a general contractor, had contracted with homeowners Rory and Sharon Shapiro for a renovation project. The Shapiros hired Mayer to perform architectural services and review Cutting Edge’s work and invoices. Mayer regularly criticized Cutting Edge’s invoices, alleging overbilling by hundreds of thousands of dollars. Eventually, the Shapiros terminated their contract with Cutting Edge based on Mayer’s advice and engaged a different contractor.

The central question was whether Mayer’s conduct was “improper in motive or means.”  The improper means or motive required to support a claim for intentional interference is “actual malice” or “a spiteful, malignant purpose, unrelated to the legitimate corporate interest” The motivation of personal gain, including financial gain, however, generally is not enough” to constitute improper motive

The court ruled that Cutting Edge failed to provide sufficient evidence to support this claim. While Mayer may have been critical of Cutting Edge’s billing practices, the evidence did not show deceit or intentional misrepresentation. Mayer’s actions were seen as fulfilling his professional obligations as requested by the Shapiros. Therefore, the court found that negligent or even grossly negligent conduct was insufficient to meet the standard of “improper means.”

The key legal points in this case include:

1. Elements of Tortious Interference: To establish a claim of intentional interference with contractual relations, Cutting Edge needed to demonstrate four elements: (a) the existence of a contract between Cutting Edge and the Shapiros, (b) Mayer’s knowledge of this contract, (c) Mayer’s intentional inducement of the Shapiros to breach the contract, and (d) Mayer’s interference being improper in motive or means.
2. “Improper” Conduct Requirement: A crucial aspect of the case is determining whether Mayer’s conduct was “improper” as required by law. This involves assessing whether Mayer acted with deceit, dishonesty, or other wrongful motives or means beyond mere negligence.
3. Standard for “Improper Means”: The court discussed the legal standard for “improper means,” emphasizing that negligence or even gross negligence is insufficient to establish improper conduct. Instead, the plaintiff must show conduct amounting to deceit or dishonesty.
4. Good Faith Requirement: The court examined whether Mayer acted in good faith in providing his advice to the Shapiros regarding Cutting Edge’s invoices. Good faith is crucial in determining whether Mayer’s actions were improper.
5. Burden of Proof: Cutting Edge had the burden of proving that Mayer’s actions met the legal standard for intentional interference with contractual relations. This requires presenting sufficient evidence to establish each element of the claim.

Tags: improper motive and means, intentional interference with contracttual relations, tortious interference with contractual relations