Salsgiver Communications v. Consolidated Comm.

J-A13011-16
2016 PA Super 244SALSGIVER COMMUNICATIONS, INC., IN THE SUPERIOR COURT OF
SALSGIVER TELECOM, INC., AND PENNSYLVANIA
SALSGIVER, INC.,
Appellants
v.
CONSOLIDATED COMMUNICATIONS
HOLDINGS, INC., NORTH PITTSBURGH
SYSTEMS, INC., AND NORTH
PITTSBURGH TELEPHONE COMPANY,
INC.,
Appellees No. 946 WDA 2015
Appeal from the Judgment Entered June 2, 2015
In the Court of Common Pleas of Allegheny County
Civil Division at No(s): G.D. 08-007616
BEFORE: OLSON, STABILE AND MUSMANNO, JJ.:
OPINION BY OLSON, J.: FILED NOVEMBER 10, 2016
Appellants, Salsgiver Communications, Inc., Salsgiver Telecom, Inc.,
and Salsgiver, Inc., appeal from the June 2, 2015 judgment entered in favor
of defendants, Consolidated Communications Holdings, Inc., North
Pittsburgh Systems, Inc., and North Pittsburgh Telephone Company, Inc.
(collectively “Defendants”). We affirm.
On April 14, 2008, Appellants instituted the current action against
Defendants. Appellants’ amended complaint sounded in trespass and
alleged that Defendants tortiously interfered with their existing and
prospective contractual relations.
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Within Appellants’ amended complaint, Appellants averred that
Salsgiver Communications, Inc. (“Salsgiver Communications”) and Salsgiver
Telecom, Inc. (“Salsgiver Telecom”) are wholly-owned subsidiaries of
Salsgiver, Inc. Appellants claimed that, under the Federal
Telecommunications Act of 1996, 47 U.S.C. §§ 151 et seq. (“the Act”),
Salsgiver Communications is a “cable television system operator” and
Salsgiver Telecom is a “telecommunications carrier.” Appellants’ Amended
Complaint, 8/4/08, at ¶¶ 1-4. Defendants own and maintain utility poles in
Western Pennsylvania. Id. at ¶ 6.
According to Appellants, they “can provide [their cable television and
telecommunication] services to customers only by way of fiber optic cable[,]
which must be attached to utility poles en route to their destination.” Id. at
¶ 9. In addition, under “[t]he Pole Attachment Section of the [Act] (47
U.S.C. § 224)[,] cable television system operators, like Salsgiver
Communications, and telecommunications carriers, like Salsgiver Telecom,
must be granted access to those [utility] poles by utilities in their service
areas, such as [Defendants], which own the poles.”1 Id.____________________________________________
1
Section 224(f)(1) of the Act declares:
A utility shall provide a cable television system or any
telecommunications carrier with nondiscriminatory access to
any pole, duct, conduit, or right-of-way owned or controlled
by it.
47 U.S.C. § 224(f)(1).
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Appellants averred that, in September 2004, “Salsgiver
Communications entered into its first cable franchise agreement with a
municipality, the Borough of Freeport, Armstrong County.” Id. at ¶ 17A.
Under the agreement with Freeport, Salsgiver Communications is obliged to
provide “cable television programming and other cable services” to Freeport,
for a period of at least 50 years. Id. at ¶ 22D.
As Appellants alleged, the cable franchise agreement with Freeport
“entitled Salsgiver Communications to pole access as a ‘cable television
system’ under § 224 of the Act.”2 Id. at ¶ 17A. Therefore, in October 2004,
Salsgiver Communications “formally requested, in writing, access to the
telephone poles owned by Defendants,” so that Salsgiver Communications
could provide cable television services to its existing and prospective
customers. Id. at ¶ 11. Nevertheless, Appellants claimed:
knowing that such conduct would harm Salsgiver
Communications’ existing and prospective contractual
relations with its customers, . . . [Defendants] repeatedly
refused to allow Salsgiver Communications to attach to its
poles, despite the fact that Salsgiver Communications also
entered into cable franchise agreements with Buffalo
Township on December 31, 2004[] and with Harrison
Township on April 26, 2006.
Id. at ¶ 17C.
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2
On November 26, 2007, the Federal Communications Commission (“FCC”)
declared that Salsgiver Communications was a “cable television system”
under the Act. Appellants’ Amended Complaint, 8/4/08, at ¶ 20.
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Appellants alleged that Defendants’ actions were intentional and
harmed Salsgiver Communications’ reputation, as well as “Salsgiver
Communications’ existing and prospective contractual relations with its
customers.” Id. at ¶¶ 17C and 23.
Appellants also claimed that, in 2005, “the Pennsylvania Public Utilities
Commission [] provisionally approved Salsgiver Telecom’s application to
provide telecommunications services” in Pennsylvania. Id. at ¶ 28A. The
approval “entitle[d] Salsgiver Telecom to pole access as a [‘Competitive
Access Provider’] under § 224 of the Act.”3 Id. at ¶ 28A. Therefore, in
October 2005, Salsgiver Telecom requested, in writing, access to the
telephone poles owned by Defendants, so that Salsgiver Telecom could
provide telephone services to its existing and prospective customers. Id. at
¶ 12. However, Defendants “repeatedly refused to allow Salsgiver Telecom
to attach to their poles.” Id. at ¶ 28C. Appellants alleged that Defendants’
“willful, intentional[,] and negligent behavior” tortiously caused harm to
Salsgiver Telecom’s reputation and caused Salsgiver Telecom to lose
potential profits. Id. at ¶ 31.
Prior to trial, Defendants filed a motion for summary judgment and
claimed, amongst other things, that the two-year statute of limitations
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3
On May 23, 2007, the FCC declared that Salsgiver Telecom was a
“telecommunications carrier” under the Act. Appellants’ Amended
Complaint, 8/4/08, at ¶ 30.
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barred Appellants’ claims. Defendants’ Motion for Summary Judgment,
6/18/12, at ¶ 15. On February 12, 2013, the trial court entered an order
partially granting Defendants’ summary judgment motion and declaring that
“the two-year statute of limitations bars [Appellants’] claims [] for alleged
tortious conduct occurring prior to April 14, 2006.” Trial Court Opinion,
2/12/13, at 3; Trial Court Order, 2/12/13, at 1.
The case proceeded to a jury trial and, during trial, Defendants
introduced evidence that they did not allow Appellants utility pole access
because Defendants’ attorneys concluded that Appellants were neither a
“cable television system operator” nor a “telecommunications carrier,” as
defined under the Act. N.T. Deposition of Kevin Albaugh, 5/1/15, at 6 and
16 (introduced into evidence on May 8, 2015). Therefore, according to the
Defendants, they believed that Appellants were ineligible to receive utility
pole attachments. Id. at 11.
The evidentiary portion of the trial concluded on May 13, 2015. The
next morning, the trial court heard argument on the parties’ proposed jury
instructions.4 As is relevant to the current appeal, during argument,
Appellants objected to two proposed jury instructions that were proffered by
Defendants. First, Appellants objected to Defendants’ proposed instruction
____________________________________________
4
Defendants’ proposed jury instructions are attached to the certified record;
however, Appellants’ proposed jury instructions are not included in the
certified record.
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that Defendants “cannot be liable to [Appellants] for interference with a
prospective contract if [the jury finds] that the Defendants, in good faith,
were asserting a legally protected interest of their own.” See Defendants’
Proposed Jury Instructions, 5/13/15, at 9; N.T. Trial, 5/14/15, at 687-689.
According to Appellants, this instruction was improper because Pennsylvania
case law “does not . . . encompass any explicit good faith test in the context
of intentional interference with contractual relations” and because “the term
‘legally protected interest’ is kind of confusing to the jury.” N.T. Trial,
5/14/15, at 688-689. The trial court agreed that the term “legally protected
interest” was confusing and thus “knock[ed] out” that part of the instruction.
Id. at 690. However, the trial court declared that it would instruct the jury
on “good faith.” Id.
Second, Appellants objected to Defendants’ proposed jury instruction
regarding “mitigation of damages.” Id. at 691. According to Appellants,
“there was not much testimony at all” about how Appellants could have
mitigated their damages in this case and “the jury [would] really [have] no
context within which to view [the mitigation] instruction.” Id. at 692. The
trial court disagreed with Appellants, holding that it was “up to the
determination of the jury [] to determine whether or not there was
mitigation and whether or not [Appellants] did it and whether or not it was
reasonable.” Id. at 699.
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The trial court then instructed the jury on the tort of intentional
interference with prospective contractual relations5 in the following manner:
One who intentionally induces or otherwise intentionally
prevents another from entering into a prospective business
relationship with a third person or makes the entry into that
business relationship more expensive is responsible for the
loss that person or company suffered as a result of the
prevention or interference with such prospective business
relationship.
In order to succeed on this claim for tortious interference
with prospective business relations, the Plaintiff must prove
by a preponderance of the evidence, [number one,] the
existence of a prospective contractual or business relation
between the Plaintiffs and a third party; [number two],
purposeful action on the part of the Defendants intended to
interfere with or prevent the prospective relation from
occurring; [number three], the absence of privilege or
justification on the part of the Defendants; and [number
four], the occasioning of actual legal damage as a result of
the Defendants’ conduct.
These items are called the elements of Plaintiffs’ claim. The
term “prospective business relationship” includes any
prospective relationship leading to potentially profitable
contracts. A prospective relationship is less than a
contractual right, but more than a mere hope.
Plaintiffs must have had a realistic expectation that they
would have entered into a contractual relationship with
residential and business customers purchasing Plaintiffs’
services.
The tort of intentional interference with prospective
business relations requires Plaintiffs to prove by a fair
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5
The trial court did not instruct the jury on intentional interference with
existing contractual relations.
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preponderance of the evidence that the interference was
intentional and improper.
The term “intent” or “intentional” is not limited to
consequences which are desired. If the actor knows that
the consequences are certain or substantially certain to
result from his act and still goes ahead, he is treated by the
law as if he had, in fact, desired to produce the result.
If the Defendants did not have that intent, that conduct
does not subject them to liability to the Plaintiffs. If the
Defendants’ conduct was for a purpose other than
interference with the Plaintiffs’ prospective contractual
relations, you may take that into consideration in your
determination of whether the Defendants intended any
interference.
Intent to interfere does not require proof of ill will towards
the Plaintiffs. Defendants may be liable even if they act
with no desire to harm the Plaintiffs.
With respect to the propriety of Defendants’ conduct, it is
up to you to determine . . . whether the conduct of the
Defendants was improper in connection with those items
complained of by the Plaintiffs.
In order to determine whether the Defendants’ conduct is
improper, you should consider the following factors:
[number one], the nature of Defendants’ conduct; [number
two], the Defendants’ motive; [number three], the interest
of the Plaintiff with which the Defendants’ conduct allegedly
interfered; [number four], the interest of the Defendants
which they sought to advance by their conduct and whether
Defendants advanced it in good faith, the social interest in
protecting the freedom of action of the Defendants, the
contractual interest of the Plaintiffs, the proximity or
remoteness of the Defendants’ conduct of the interference
and the relationship between the parties in question.
You may consider society’s interest in protecting business
competition as well as its interest in protecting the
individual against interference with his or her pursuance of
gains.
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Id. at 786-789.
With respect to mitigation of damages, the trial court instructed the
jury:
The law requires a person who is injured by another to take
all reasonable steps to minimize the damages. The
Defendants have the burden of proving that the Plaintiffs
failed to act to take such steps and that some damages
could have been avoided.
Id. at 792.
Before the jury retired, Appellants “renew[ed] the same [exceptions
they made] in chambers beforehand” and the trial court declared: “Okay.
That’s on the record. Okay. Exceptions noted.” Id. at 795.
On May 14, 2015, the jury rendered its verdict: it found that
Defendants did not “intentionally interfere[] with [Appellants’] contractual
relations or prospective contractual relations.” Id. at 805. The verdict was
entered on May 15, 2015 and, after the trial court denied Appellants’ timely
post-trial motion,6 Appellants filed a timely notice of appeal to this Court.
Appellants raise two issues on appeal:
[1.] Whether the trial court erred when it instructed the jury
that it could consider, in connection with the propriety of
Defendants’ conduct in a tortious interference with business
relations case, whether Defendants acted in good faith?
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6
Appellants filed their post-trial motion on Tuesday, May 26, 2015. The
motion was timely because Monday, May 25, 2015 was Memorial Day.
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[2.] Whether the trial court erred in instructing the jury on
mitigation of damages?
Appellants’ Brief at 4 (some internal capitalization omitted).
Our standard of review when considering the adequacy of jury
instructions in a civil case is to determine whether the trial court committed
a clear abuse of discretion or error of law controlling the outcome of the
case. Pringle v. Rapaport, 980 A.2d 159, 165 (Pa. Super. 2009) (citation
omitted). “It is only when the charge as a whole is inadequate or not clear
or has a tendency to mislead or confuse[,] rather than clarify a material
issue[,] that error in a charge will be found to be a sufficient basis for the
award of a new trial.” Id. (quotation and citation omitted);
Commonwealth v. Chambers, 980 A.2d 35, 49-50 (Pa. 2009) (“[a] charge
will be found adequate unless the issues are not made clear, the jury was
misled by the instructions, or there was an omission from the charge
amounting to a fundamental error”). Further:
[i]n reviewing a trial judge’s charge, the proper test is not
whether certain portions taken out of context appear
erroneous. We look to the charge in its entirety, against the
background of the evidence in the particular case, to
determine whether or not error was committed and whether
that error was prejudicial to the complaining party.
Reilly by Reilly v. S.E. Pa. Transp. Auth., 489 A.2d 1291, 1305 (Pa.
1985).
Appellants claim that the trial court erred “when it instructed the jury
that it could consider, in connection with the propriety of Defendants’
conduct . . . , whether Defendants acted in good faith.” Appellants’ Brief at
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12 (some internal capitalization omitted). According to Appellants, the
instruction was erroneous because Pennsylvania does not recognize a good
faith “defense” to tortious interference with prospective contractual
relations.7 Id. This claim fails.
At the outset, the trial court did not instruct the jury that there was a
good faith “defense” to the tort of intentional interference with prospective
contractual relations. Rather, the trial court instructed the jury that one of
the eight factors that the jury should consider “to determine whether
the Defendants’ conduct [was] improper” was “the interest of the
Defendants which they sought to advance by their conduct and whether
Defendants advanced it in good faith.” N.T. Trial, 5/14/15, at 788-789.
Further, as will be explained below, the impropriety of Defendants’
interference was an element of Appellants’ cause of action. See Empire
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7
Within Appellants’ brief to this Court, Appellants also argue that the trial
court’s “good faith” instruction was confusing and that the trial court “should
have [] limited [its instruction] to the clear elements of the cause of action.”
Appellants’ Brief at 14-15. Appellants did not levy this specific objection at
trial. Indeed, to the extent Appellants claimed any portion of the charge was
confusing, Appellants’ argument at the charging conference was limited to
the claim that “the term ‘legally protected interest’ [was] kind of confusing
to the jury.” N.T. Trial, 5/14/15, at 688-689. Moreover, during the charging
conference, the trial court sustained that specific objection and, during its
charge, the trial court did not instruct the jury on the term “legally protected
interest.” Id. at 690. Therefore, Appellants’ current claim regarding the
trial court’s “confusing” good faith instruction is waived. Takes v. Metro.
Edison Co., 695 A.2d 397, 399-400 (Pa. 1997) (holding that the failure “to
timely and specifically object to [an allegedly] erroneous [jury] charge”
waives the issue on appeal).
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Trucking Co. v. Reading Anthracite Coal Co., 71 A.3d 923 (Pa. Super.
2013) (“[t]hus, in order to succeed in a cause of action for tortious
interference with a contract, a plaintiff must prove not only that a defendant
acted intentionally to harm the plaintiff, but also that those actions were
improper”); see also N.T. Trial, 5/14/15, at 787 (“[t]he tort of intentional
interference with prospective business relations requires Plaintiffs to prove
by a fair preponderance of the evidence that the interference was intentional
and improper”).
The trial court thus instructed the jury to determine whether
Defendants’ alleged interference was “improper” and to do so by engaging in
a multi-factor balancing test. The court further instructed the jury that one
of the factors they should consider and balance was “the interest of the
Defendants which they sought to advance by their conduct and whether
Defendants advanced it in good faith.” N.T. Trial, 5/14/15, at 788-789. As
such, Appellants’ characterization of the trial court’s instruction in this case
is simply incorrect. The trial court did not instruct the jury that there was a
good faith defense to the tort. Instead, the challenged instruction involved
one part of one factor of a multi-factor balancing test that the jury had to
consider and weigh (with the other factors), to determine whether
Appellants satisfied their burden of persuasion concerning an element of
their cause of action.
Moreover, the trial court’s instruction on the issue was consistent with
Pennsylvania law.
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The tort of intentional interference with existing or prospective
contractual relations seeks a balance between “two fundamental principles
underlying the American legal and economic systems:”
On the one hand, the fundamental premise of capitalism is
that all market participants should be free to pursue their
economic self-interest (which will, in turn, create the
greatest macroeconomic benefit to all participants) without
interference from excessive government regulation. On the
other hand, the American legal system enforces stability of
contract, protects against wrongful predatory conduct, and
thereby encourages economic investment and growth.
These competing principles conflict when self-interested or
competitive conduct is perceived as unfair, crossing the line
into tortious interference with another’s contracts or
economic expectancies.
Kevin M. Shelley & David W. Oppenheim, When Conflicting Principles Collide:
The Uncharted Boundary Between Fair Competition and Tortious Conduct, 22
FRANCHISE L.J. 184, 184-185 (2003).
Thus, although the American economic and legal systems place
tremendous value upon, and seek to safeguard, a person’s right to “compete
or protect his business interests in a fair and lawful manner,” the tort of
interference with contractual relations “draws a line beyond which an
individual may not go in intentionally interfering with the business affairs of
others.” Stuart M. Speiser, Charles F. Krause, & Alfred W. Gans, THE
AMERICAN LAW OF TORTS, § 31.38 (1991); see also Walnut Street Assocs.,
Inc. v. Brokerage Concepts, Inc., 20 A.3d 468, 475 (Pa. 2011) (“[o]urs is
a free society where citizens may freely interact and exchange information.
Tortious interference, as a basis for civil liability, does not operate to burden
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such interactions, but rather, to attach a reasonable consequence when the
defendant’s intentional interference was ‘improper’”).
This Court has declared:
The requisite elements of a cause of action for interference
with prospective contractual relations are as follows:
(1) a prospective contractual relationship;
(2) the purpose or intent to harm the plaintiff by
preventing the relation from occurring;
(3) the absence of privilege or justification on the part of
the defendant; and
(4) the occasioning of actual damage resulting from the
defendant's conduct.
Foster v. UPMC South Side Hosp., 2 A.3d 655, 665 (Pa. Super. 2010)
(internal quotations and citations omitted).8
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8
As noted, this Court in Foster defined the tort of interference with
prospective contractual relations as requiring “the absence of privilege or
justification on the part of the defendant.” Foster, 2 A.3d at 665. All of the
precedent we found declares that “the absence of privilege or justification on
the part of the defendant” is an element of the tort of interference with
prospective contractual relations. However, the phrase is antiquated and
does not align with the Second Restatement of Torts.
Pennsylvania recognized the tort of interference with prospective contractual
relations since at least the time of the First Restatement of Torts. See
Glenn v. Point Park Coll., 272 A.2d 895, 897 (Pa. 1971). The First
Restatement defined the torts of interference with existing and prospective
contractual relations in one section – Section 766. The torts were defined, in
relevant part, as follows:
. . . one who, without a privilege to do so, induces or
otherwise purposely causes a third person not to
(Footnote Continued Next Page)
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_______________________
(Footnote Continued)
(a) perform a contract with another, or
(b) enter into or continue a business relation with another
is liable to the other for the harm caused thereby.
Restatement (First) of Torts § 766 (emphasis added).
The Pennsylvania Supreme Court adopted Section 766 of the First
Restatement and held that, to plead a prima facie case for interference with
prospective contractual relations, a plaintiff must plead: “(1) a prospective
contractual relation between [the third party] and plaintiff[], (2) the purpose
or intent to harm plaintiff by preventing the relationship from occurring, (3)
the absence of privilege or justification on the part of the
[defendant], and (4) the occurrence of actual harm or damage to plaintiff
as a result of the [defendant’s] conduct.” Glenn, 272 A.2d at 898
(emphasis added); see also Thompson Coal Co. v. Pike Coal Co., 412
A.2d 466, 471 (Pa. 1979).
However, courts around the country had difficulty applying the element of
“absence of privilege or justification.” See Restatement (Second) of Torts at
Introductory Note to Chapter 37. Specifically, courts diverged on the issue
of whether the plaintiff or the defendant had the burden of pleading and
proving “the absence of privilege or justification” and courts had difficulty
defining the term “justification.” Id.Subnote.A
Subnote.A: The Pennsylvania Supreme Court held that the plaintiff had
the burden of pleading and proving “the absence of privilege or
justification” on the part of the defendant. See Glenn, 272 A.2d at 900
(holding that the plaintiff failed to plead a prima facie case because “the
complaint as presently drafted does not negate the existence of privilege
on the part of defendant”); see also Gresh v. Potter McCune Co., 344
A.2d 540, 542 (Pa. Super. 1975) (“[t]he presence of a privilege is not an
affirmative defense, rather the absence of such a privilege is an element
of the cause of action which must be pleaded and proved by the
plaintiff”) (internal citations and quotations omitted); see also Birl v.
Phila. Electric Co., 167 A.2d 472, 474 (Pa. 1960) (the plaintiff must
plead that the defendant’s act is “unprivileged”).
(Footnote Continued Next Page)
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(Footnote Continued)
Therefore, in 1979, the American Law Institute propounded the Second
Restatement of Torts and defined the tort in terms of an “improper”
interference. See Restatement (Second) of Torts § 767 cmt. b (“[u]nlike
other intentional torts . . . [the tort of interference with contractual
relations] has not developed a crystallized set of definite rules as to the
existence or non-existence of a privilege to act. . . . Because of this fact,
[Section 767] is expressed in terms of whether the interference is improper
or not, rather than in terms of whether there was a specific privilege to act
in the manner specified”). In particular, the Second Restatement defines
the tort of intentional interference with prospective contractual relations as
follows:
One who intentionally and improperly interferes with
another's prospective contractual relation (except a contract
to marry) is subject to liability to the other for the pecuniary
harm resulting from loss of the benefits of the relation,
whether the interference consists of
(a) inducing or otherwise causing a third person not to
enter into or continue the prospective relation or
(b) preventing the other from acquiring or continuing
the prospective relation.
Restatement (Second) of Torts § 766B (emphasis added).
The Pennsylvania Supreme Court has not explicitly adopted Section 766B of
the Second Restatement. Nevertheless, both the Supreme Court and this
Court have held that Restatement (Second) of Torts § 766 correctly restates
Pennsylvania law regarding interference with existing contractual relations.
Adler, Barish, Daniels, Levin & Creskoff v. Epstein, 393 A.2d 1175,
1183 (Pa. 1978) (“[a]n examination of this case in light of Restatement
(Second) of Torts, § 766 [defining the tort of interference with existing
contractual relations], reveals that the sole dispute is whether appellees’
conduct is ‘improper’”); Walnut Street Assocs., 20 A.3d at 478 (“[t]he
question [in the case] is whether [the defendant’s] intentional interference
with [appellant’s] contract was improper, and thus actionable”); Sears,
Roebuck & Co. v. 69th St. Retail Mall, L.P., 126 A.3d 959, 979 (Pa.
Super. 2015) (“Pennsylvania law follows the Restatement (Second) of Torts
§ 766’s standard for intentional interference with contractual relations”).
Section 766 is written similarly to Section 766B and declares:
(Footnote Continued Next Page)
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(Footnote Continued)
One who intentionally and improperly interferes with the
performance of a contract (except a contract to marry)
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.
Restatement (Second) of Torts § 766.
In addition, both this Court and the Pennsylvania Supreme Court have held
that Section 767 of the Second Restatement correctly restates the law of the
Commonwealth – and Section 767 explicitly focuses upon the factors that
should be considered in determining whether certain conduct is “improper.”
Adler, Barish, Daniels, Levin & Creskoff, 393 A.2d at 1184 (analyzing
the propriety of the defendant’s conduct by considering the factors listed in
Section 767); Ruffing v. 84 Lumber Co., 600 A.2d 545, 549-550 (Pa.
Super. 1991) (same). Finally, even though this Court continues to utilize
the phrase “the absence of privilege or justification on the part of the
defendant” to define the tort of interference with prospective contractual
relations, a careful review of our decisions shows that this Court simply
equates “the absence of privilege or justification on the part of the
defendant” with the term “improper.” Empire Trucking, 71 A.3d at 934(“the third element [of the tort] requires a showing that [defendant’s]
actions were not privileged. Thus, in order to succeed in a cause of action
for tortious interference with a contract, a plaintiff must prove not only that
a defendant acted intentionally to harm the plaintiff, but also that those
actions were improper. In determining whether a defendant’s actions were
improper, the trial court must take into account the [] factors listed in
Restatement (Second) of Torts section 767”) (some internal citations
omitted).
Given that this Court equates “impropriety” with “the absence of privilege or
justification on the part of the defendant” – and given that all of our recent
precedent continues to utilize the phrase “the absence of privilege or
justification on the part of the defendant” to describe the third element of
the tort – we also use the phrase in this opinion. Nevertheless, at some
point, this Court should stop using the antiquated phrase that originated in
the First Restatement of Torts and begin using the verbiage that appears in
(Footnote Continued Next Page)
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Further, as this Court has held:
the third element [of the tort] requires a showing that
[defendant’s] actions were not privileged. Thus, in order to
succeed in a cause of action for tortious interference with a
contract, a plaintiff must prove not only that a defendant
acted intentionally to harm the plaintiff, but also that those
actions were improper. In determining whether a
defendant’s actions were improper, the trial court must take
into account the [] factors listed in Restatement (Second) of
Torts section 767.
Empire Trucking, 71 A.3d at 934 (some internal citations omitted).
Section 767 of the Second Restatement, entitled “Factors in
Determining Whether Interference is Improper,” declares:
In determining whether an actor's conduct in intentionally
interfering with a contract or a prospective contractual
relation of another is improper or not, consideration is given
to the following factors:
(a) the nature of the actor's conduct,
(b) the actor's motive,
(c) the interests of the other with which the actor's
conduct interferes,
(d) the interests sought to be advanced by the actor,
(e) the social interests in protecting the freedom of
action of the actor and the contractual interests of the
other,
(f) the proximity or remoteness of the actor's conduct to
the interference and
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(Footnote Continued)
the Second Restatement, which, as we have said, accurately reflects the law
of this Commonwealth.
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(g) the relations between the parties.
Restatement (Second) of Torts § 767.
The trial court in this case instructed the jury on all of the Section 767
factors. See N.T. Trial, 5/14/15, at 788-789. Moreover, when the trial
court instructed the jury on the fourth factor – “the interests sought to be
advanced by the [defendant]” – the trial court included a “good faith”
element. Specifically, the trial court instructed the jury that they should
consider “the interest of the Defendants which they sought to advance by
their conduct and whether Defendants advanced it in good faith.” Id.
Appellants now claim that the inclusion of the “good faith” language
“fatally prejudiced” them and requires that we vacate the judgment and
remand for a new trial. Appellants’ Brief at 12. We disagree.
Read fairly, the trial court merely asked the jury to consider the
interests the Defendants sought to advance and to consider also whether
the means the Defendants utilized to advance their interests were in good
faith – i.e. whether the Defendants advanced their interest with a “state of
mind consisting in . . . observance of reasonable commercial standards of
fair dealing in [the] given trade or business.”9 BLACK’S LAW DICTIONARY 713
____________________________________________
9
We note that Restatement (Second) of Torts § 773 provides a defense for
an individual who asserts a bona fide claim. Section 773 declares:
One who, by asserting in good faith a legally protected
interest of his own or threatening in good faith to protect
the interest by appropriate means, intentionally causes a
(Footnote Continued Next Page)
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(8th ed. 2004). As such, the trial court’s instruction that the jury consider
“whether Defendants advanced [their interests] in good faith” merely asked
the jury to consider the “nature” of the Defendants’ conduct. Section 767
explicitly lists “[t]he nature of the [defendant’s] conduct” as a factor that
must be considered in “determining whether an actor's conduct in
intentionally interfering with a contract or a prospective contractual relation
of another is improper.” Restatement (Second) of Torts § 767. As the
comment to Section 767 declares:
The nature of the actor's conduct is a chief factor in
determining whether the conduct is improper or not, despite
its harm to the other person. The variety of means by
which the actor may cause the harm are stated in § 766,
Comments k to n. Some of them, like fraud and physical
violence, are tortious to the person immediately affected by
them; others, like persuasion and offers of benefits, are not
tortious to him. Under the same circumstances interference
by some means is not improper while interference by other
means is improper; and, likewise, the same means may be
permissible under some circumstances while wrongful in
others. The issue is not simply whether the actor is justified
in causing the harm, but rather whether he is justified in
causing it in the manner in which he does cause it. The
_______________________
(Footnote Continued)
third person not to perform an existing contract or enter
into a prospective contractual relation with another does not
interfere improperly with the other's relation if the actor
believes that his interest may otherwise be impaired or
destroyed by the performance of the contract or
transaction.
Restatement (Second) of Torts § 773. However, the trial court did not
instruct the jury on Section 773 of the Second Restatement of Torts.
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propriety of the means is not, however, determined as a
separate issue unrelated to the other factors. On the
contrary, the propriety is determined in the light of all the
factors present. Thus physical violence, fraudulent
misrepresentation and threats of illegal conduct are
ordinarily wrongful means and subject their user to liability
even though he is free to accomplish the same result by
more suitable means. A, C's competitor for B's business,
may justifiably induce B by permissible means not to buy
from C []; he is not justified in doing so by the predatory
means stated above. Yet even these means are not always
forbidden. The relation between the actor and the person
induced, and the object sought to be accomplished by the
actor, may be such as to warrant even physical violence.
For example, C operates a gambling den in the rear room of
his ice cream parlor. B's parent, A, having the privilege of
corporal punishment, may exercise that privilege in order to
cause B not to patronize C's ice cream parlor. This may
also be the case between an institution and its inmates.
The nature of the means is, however, only one factor in
determining whether the interference is improper. Under
some circumstances the interference is improper even
though innocent means are employed.
Restatement (Second) of Torts § 767 cmt. c.
Or, in the words of the Pennsylvania Supreme Court:
The absence of privilege or justification in the tort [of
interference with prospective contractual relations] is
closely related to the element of intent. As stated by
Harper & James, The Law of Torts, § 6.11, at 513: “where,
as in most cases, the defendant acts at least in part for the
purpose of protecting some legitimate interest which
conflicts with that of the plaintiff, a line must be drawn and
the interests evaluated. This process results in according or
denying a privilege which, in turn, determines liability.”
What is or is not privileged conduct in a given situation is
not susceptible of precise definition. Harper & James refer
in general to interferences which “are sanctioned by the
‘rules of the game’ which society has adopted”, and to “the
area of socially acceptable conduct which the law regards as
privileged.”
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Glenn, 272 A.2d at 899 (some internal corrections omitted).
In the case at bar, by instructing the jury that they must consider
“whether Defendants advanced [their interests] in good faith,” the trial court
was simply instructing the jury to consider whether Defendants acted in such
a way that was “sanctioned by the ‘rules of the game’ which society has
adopted.” Id. Therefore, the instruction was consistent with Pennsylvania
law and did not amount to an abuse of discretion. Appellants’ claim on
appeal fails.
For Appellants’ second argument on appeal, Appellants contend that
the trial court erred when it instructed the jury on mitigation of damages.
However, in this case, the jury found that Defendants were not liable.
Therefore, even if the trial court erred in instructing the jury on mitigation of
damages, the alleged error would be harmless. See Goldstein v. Aronson,
76 A.2d 217, 219 (Pa. 1950) (“[t]he instruction of the court was, therefore,
erroneous but it affected only the measure of damages. The verdict of the
jury against appellant made the question unimportant and the error
harmless”). As such, Appellants’ second claim on appeal does not entitle
them to relief.
Judgment affirmed. Jurisdiction relinquished.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/10/2016
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