Insurance Associates Corp. v. Hansen

JOHNSON, Justice,

concurring and dissenting.

I concur with all parts of the majority opinion, except part V(A), concerning tortious interference with contract. From that part of the opinion, I dissent.

In my view, the trial court implicitly ruled that IAC had established a prima facie case that Swan tortiously interfered with the IAC/Hansen agreement, but that there was justification for the interference. In Barlow v. International Harvester Co., 95 Idaho 881, 522 P.2d 1102 (1974), this Court stated that a prima facie case of the tort of interference with a contract is established when the plaintiff proves: “(a) the existence of a contract, (b) knowledge of the contract on the part of the defendant, (c) intentional interference causing a breach of the contract, and (d) injury to the plaintiff resulting from the breach.” 95 Idaho at 893, 522 P.2d at 1114. The Court continued: “Once the plaintiff has made a prima facie case, the burden is on the defendant to prove justification.” Id.

Although the trial court stated in its final memorandum opinion and order that the evidence did not establish that Swan intentionally interfered with the contractual relationship between Hansen and IAC, it is clear to me that the trial court was really addressing the question of justification and not whether there was a prima facie case of interference with contract. Otherwise, the trial court’s reference to Swan’s acting in accordance with the advice of counsel and the terms of the trial court’s preliminary injunction makes no sense.

The record indicates that the advice of counsel referred to by the trial court was given on or about November 1, 1982. The advice was that the IAC/Hansen agreement permitted Hansen to solicit customers to whom he had sold insurance while employed by IAC before February 12, 1982— the date of the agreement. The Court of Appeals determined that this advice was legally incorrect. I am not prepared to allow tortious interference with contract to be justified by reliance on erroneous legal advice. An erroneous interpretation of a contract by a lawyer is entitled to no more weight in attempting to justify an interference with the contract than is an erroneous interpretation by the lawyer’s client. Meyer v. Washington Times Co., 76 F.2d 988, 993 (D.C.Cir.1935).

I am prepared to accept Swan’s reliance on the trial court’s preliminary injunction as justification for interference after May 23, 1983 — the date the preliminary injunction was filed. Among other things, the injunction enjoined Hansen from soliciting insurance business from any of the customers of IAC to whom he had sold insurance during the period from February 12, 1982, to October 6, 1982 — the date of Hansen’s employment by Swan. Although this restriction on Hansen’s activities was subsequently found to be too limited by the Court of Appeals, the preliminary injunction gave Swan justification after May 23, 1983, for allowing Hansen to sell insurance to customers of IAC to whom he had sold insurance prior to February 12, 1982.

The exhibits reveal that among the insurance policies sold by Hansen after Swan learned of the IAC/Hansen agreement and before the preliminary injunction was issued by the trial court were several that insured customers to whom Hansen had sold insurance while he was employed by IAC before the date of the agreement. After Swan had received a copy of the agreement, Swan instructed Hansen that he could not solicit any customers to whom he had sold insurance while he was employed by IAC after the date of the agreement. The only reasonable implication from this instruction was that Hansen could solicit customers to whom he had sold insurance while he was employed by IAC before the date of the agreement. I can only interpret this as encouragement to Hansen that led to his breach of the agreement.

In my view, there was no legal basis for a finding of justification by the trial court. I would reverse that portion of the trial court’s decision and remand for a determination of the amount of damages to which IAC is entitled.