The Massachusetts Court of Appeals recently reversed a jury finding of tortious interference with advantageous customer relations on the grounds that it was not supported by the evidence. A distributor (Brewster) of wallpaper products brought a breach of contract suit against its supplier (Blue Mountain) after the supplier failed to deliver its products in a timely manner. Although the distributor was awarded substantial damages on the breach of contract claim, the Appeals court reversed on the tortuous interference claim due to lack of evidence.
Here is an excerpt from the court’s decision (full text can be found here):
E. Tortious interference. The deferential standard of review of jury’s verdicts does not insulate the finding that Blue Mountain tortiously interfered with Brewster’s advantageous relationships with its customers, which we reverse because Brewster’s evidence failed to establish the elements necessary to support this claim.
“There are four elements required to establish interference with advantageous business relations: (1) the plaintiff has a business relationship for economic benefit with a third party, (2) the defendants knew of that relationship, (3) the defendants interfered with that relationship through improper motive or means, and (4) the plaintiff’s loss of the advantage resulted directly from the defendants’ conduct.” McNamee v. Jenkins, 52 Mass. App. Ct. 503, 508 (2001). The “improper motive or means” element requires proof of the defendant’s “actual malice,” i.e., a “spiteful, malignant purpose, unrelated to the legitimate corporate interest.” Shea v. Emmanuel College, 425 Mass. 761, 764 (1997), quoting from Wright v. Shriners Hosp. for Crippled Children, 412 Mass. 469, 476 (1992).
Brewster failed to make a case that would permit the jury to find either actual malice or “loss of the advantage.” Brewster offered no evidence establishing that any specific customers terminated their dealings with it because of Blue Mountain’s unreliable service on GenCorp lines, nor did it present any documentation indicating that any customers cancelled their orders on that account. Moreover, as discussed below, Brewster failed to mitigate its damages and maintained no records of whether customers who cancelled orders for GenCorp wallpaper because of undue delay selected substitute Brewster products, which was conceded to be a common occurrence.
Finally, Brewster’s evidence failed to demonstrate that Blue Mountain’s actions challenged in this litigation were entirely malevolent and unrelated to any legitimate corporate interest. Even assuming that the facts revealed Blue Mountain to be motivated by a desire for financial or competitive gain at Brewster’s expense, or by its officers’ personal dislike of Brewster and its personnel for whatever reason, no inference of the requisite spiteful and malignant ill will would be warranted. See United Truck Leasing Corp. v. Geltman, 406 Mass. 811, 817 (1990); Boothby v. Texon, Inc., 414 Mass. 468, 487-488 (1993); King v. Driscoll, 418 Mass. 576, 587 (1994).
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BREWSTER WALLCOVERING COMPANY vs. BLUE MOUNTAIN WALLCOVERINGS, INC. (Massachusetts Appeals Court; No. 05-P-1044. Norfolk. September 20, 2006. – April 6, 2007).
