Dunlap v. Cottman Transmissions Systems

PRESENT: All the Justices
JAMES M. DUNLAP
OPINION BY
v. Record No. 131318 CHIEF JUSTICE CYNTHIA D. KINSER
FEBRUARY 27, 2014
COTTMAN TRANSMISSION SYSTEMS,
LLC, ET AL.
UPON QUESTIONS OF LAW
CERTIFIED BY THE UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
The United States Court of Appeals for the Fourth Circuit
(the Fourth Circuit) entered an order of certification
requesting this Court to exercise jurisdiction pursuant to
Article VI, Section 1 of the Constitution of Virginia and Rule
5:40, and to answer the following questions of law:
1. May a plaintiff use tortious interference
with contract or tortious interference with
business expectancy as the predicate
unlawful act for a claim under the Virginia
business conspiracy statute, Va. Code
§§ 18.2-499, 18.2-500?
2. Does a [I] two-year or [II] five-year
statute of limitations apply to claims of
tortious interference with contract and
tortious interference with business
expectancy under Va. Code § 8.01-243?
(Roman numeral designators added).
With regard to the first question, we hold that causes of
action for tortious inference with contract and tortious
interference with business expectancy qualify as the requisite
unlawful act to proceed on a business conspiracy claim under
Code §§ 18.2-499 and -500 because both claims are predicated on
an independent common law duty arising outside of contract. As
to the second question, we hold that the five-year statute of
limitations in Code § 8.01-243(B) applies because both tortious
interference claims involve injury to property rights.
I. RELEVANT FACTS AND PROCEEDINGS 1
James Dunlap brought an action against Cottman Transmission
Systems, LLC, and Todd P. Leff (collectively, Cottman), alleging
claims for tortious interference with contract, tortious
interference with business expectancy, and business conspiracy
in violation of Code §§ 18.2-499 and -500. 2 The claims arose
from franchise agreements between Dunlap and AAMCO
Transmissions, Inc., under which Dunlap had operated two AAMCO
transmission and repair facilities for more than 30 years. In
2006, a company that already owned a controlling interest in
Cottman Transmission Systems, LLC, a competitor of AAMCO,
acquired a controlling interest in AAMCO. According to Dunlap,
the new owner sought to convert all Cottman Transmission
franchises into AAMCO franchises. That decision resulted in
1
The pertinent facts are undisputed and are taken primarily
from the certification order in Dunlap v. Cottman Transmission
Systems, LLC, No. 11-2327 (4th Cir. Aug. 21, 2013).
2
Dunlap filed the action in the Circuit Court for the City
of Chesapeake, but Cottman subsequently removed it to the United
States District Court for the Eastern District of Virginia,
Norfolk Division (the District Court), under 28 U.S.C. §§ 1332
and 1441(a).
2
some existing AAMCO franchises being closed, including those
owned by Dunlap. He alleged that the closing of his AAMCO
transmission and repair facilities was brought about by a
conspiracy between Cottman and others who stood to benefit from
his franchises' closure.
The District Court dismissed the business conspiracy claim
pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure
to allege an unlawful act or an unlawful purpose as required to
establish such a claim. Dunlap v. Cottman Transmission Sys.
LLC, No. 2:11cv272, slip op. at 1 (E.D. Va. Nov. 7, 2011). It
concluded that "[a]ll of the duties involved in this case
[arose] out of and the damages flow[ed] from contractual
obligations" between Dunlap and AAMCO and that to allow
"allegations of . . . contractual interference . . . to serve
as the requisite unlawful act for purposes of the business
conspiracy statute would turn what should be contractual claims
into a tort." Id. at 3-4 (citing Station #2, LLC v. Lynch, 280
Va. 166, 695 S.E.2d 537 (2010)).
The District Court dismissed Dunlap's remaining two tort
claims as barred by the two-year statute of limitations in Code
§ 8.01-248. Id. at 5. The District Court concluded that our
decision in Station #2 abrogated the Court's prior ruling
in Worrie v. Boze, 198 Va. 533, 95 S.E.2d 192 (1956), and thus
rejected Dunlap's contention that his tortious interference
3
claims constituted an injury to his property, which would be
subject to a five-year statute of limitations under Code § 8.01-
243(B). Id. at 4-5. The District Court viewed Dunlap's claimed
damages as "disappointed economic expectations" and held that
such do not constitute an injury to property. Id. at 5
(citing Willard v. Moneta Building Supply, 262 Va. 473, 551
S.E.2d 596 (2001)).
Dunlap appealed to the Fourth Circuit. In its
certification order, the Fourth Circuit stated: "the two
questions together determine the outcome of this case." Rule
5:40 requires that a certified question be "determinative" in
"any proceeding pending before the certifying court." We agree
that the questions are determinative. The viability of the
business conspiracy claim turns on whether the tortious
interference claims qualify as the requisite unlawful act. The
tortious interference claims are time-barred if subject to a
two-year statute of limitations. Accordingly, we accepted the
certified questions of law by order entered September 10, 2013.
II. ANALYSIS
We will address each certified question separately.
A. Question #1
The first certified question asks whether tortious
interference with contract and tortious interference with
business expectancy qualify as an unlawful act for purposes of a
4
claim under the business conspiracy statutes, Code §§ 18.2-499
and -500. The common law has long recognized actions based on a
conspiracy resulting in business-related damages. For instance,
in Crump v. Commonwealth, 84 Va. 927, 6 S.E. 620 (1888), we
stated that "[a] conspiracy or combination to injure a person in
his trade or occupation is indictable." Id. at 934, 6 S.E. at
624; see also Harris v. Commonwealth, 113 Va. 746, 749, 73 S.E.
561, 562 (1912) (stating that "a conspiracy must be a
combination of two or more persons, by some concerted action, to
accomplish some criminal or unlawful purpose, or to accomplish
some purpose not in itself criminal or unlawful, by criminal or
unlawful means"); Reg. v. Druitt, 10 Cox C.C. 592 (1867) ("The
public had an interest in the way in which a person disposes of
his industry and his capital; and if two or more persons
conspired, by threats, intimidation, or molestation to deter or
influence him in the way he should employ his industry, his
talents, or his capital, they would be guilty of a criminal
offence. This was the common law of the land.").
Years later, in Werth v. Fire Companies' Adjustment Bureau,
160 Va. 845, 171 S.E. 255 (1933), we explained that
[a] conspiracy consists of an unlawful
combination of two or more persons to do
that which is contrary to law, or to do that
which is wrongful and harmful towards
another person [and] may be punished
criminally by indictment, or civilly by an
action on the case in the nature of
5
conspiracy if damage has been occasioned to
the person against whom it is directed. It
may also consist of an unlawful combination
to carry out an object not in itself
unlawful by unlawful means.
Id. at 854, 171 S.E. at 258 (internal quotation marks omitted).
We further elaborated in Gallop v. Sharp, 179 Va. 335, 19 S.E.2d
84 (1942), that
[t]he gist of the civil action of conspiracy
is the damage caused by the acts committed
in pursuance of the formed conspiracy and
not the mere combination of two or more
persons to accomplish an unlawful purpose or
use unlawful means. In other words, the
basis of the action is the wrong which is
done under the conspiracy and which results
in damage to the plaintiff. No cause of
action exists without the resulting injury,
and the damage produced must arise as the
effective result of the conspiracy.
Id. at 338, 19 S.E.2d at 86; accord CaterCorp, Inc. v. Catering
Concepts, Inc., 246 Va. 22, 28, 431 S.E.2d 277, 281-82 (1993).
In 1964, the General Assembly enacted the predecessors of
Code §§ 18.2-499 and -500, the statutes at issue in the first
certified question. 3 1964 Acts ch. 623. The provisions of Code
§ 18.2-500 provide civil relief, including treble damages, for
persons "injured in his reputation, trade, business or
3
The conspiracy statute was originally codified in 1962 as
part of the Commonwealth's antitrust laws. See Former Code §
59.21.1 (Cum. Supp. 1962) (superseded). The General Assembly
moved the statute to the criminal code with much greater
sanctions in 1964. See Former Code § 18.1-74.1:1 (Cum. Supp.
1975)(superseded), as enacted by 1964 Acts ch. 623); see also
Andrews v. Ring, 266 Va. 311, 319, 585 S.E.2d. 780, 784 (2003).
6
profession by reason of a violation of § 18.2-499." In turn,
Code § 18.2-499 imposes criminal liability on
[a]ny two or more persons who combine,
associate, agree, mutually undertake or
concert together for the purpose of (i)
willfully and maliciously injuring another
in his reputation, trade, business or
profession by any means whatever or (ii)
willfully and maliciously compelling another
to do or perform any act against his will,
or preventing or hindering another from
doing or performing any lawful act.
To recover in an action under these statutes, a plaintiff
must establish: "(1) a combination of two or more persons for
the purpose of willfully and maliciously injuring plaintiff in
his business[;] and (2) resulting damage to plaintiff." Allen
Realty Corp. v. Holbert, 227 Va. 441, 449, 318 S.E.2d 592, 596
(1984); accord CaterCorp, 246 Va. at 28, 431 S.E.2d at 282. It
is not necessary for a plaintiff to prove that the defendant
conspirators acted with actual malice, i.e., ill-will, hatred,
or spite directed toward the plaintiff. Commercial Bus. Sys.,
Inc. v. BellSouth Servs., 249 Va. 39, 47, 453 S.E.2d 261, 266-67
(1995). Rather, a plaintiff must establish by clear and
convincing evidence only that the conspirators acted with legal
malice, i.e., "intentionally, purposely, and without lawful
justification." Id. at 47, 453 S.E.2d at 267; accord Northern
Va. Real Estate v. Martins, 283 Va. 86, 110, 720 S.E.2d 121, 133
(2012); Williams v. Dominion Tech. Partners, L.L.C., 265 Va.
7
280, 290, 576 S.E.2d 752, 757 (2003); Simmons v. Miller, 261 Va.
561, 578, 544 S.E.2d 666, 677 (2001).
Because there can be no conspiracy to do an act that the
law allows, Werth, 160 Va. at 855, 171 S.E. at 259, we have held
that "an allegation of conspiracy, whether criminal or civil,
must at least allege an unlawful act or an unlawful purpose" to
survive demurrer. Hechler Chevrolet, Inc. v. General Motors
Corp., 230 Va. 396, 402, 337 S.E.2d 744, 748 (1985). 4 In other
words, actions for common law civil conspiracy and statutory
business conspiracy lie only if a plaintiff sustains damages as
a result of an act that is itself wrongful or
tortious. See Beck v. Prupis, 529 U.S. 494, 501
(2000); see also Almy v. Grisham, 273 Va. 68, 80, 639 S.E.2d
182, 188 (2007) ("[I]n Virginia, a common law claim of civil
conspiracy generally requires proof that the underlying tort was
committed."); Werth, 160 Va. at 855, 171 S.E. at 259 ("'To give
action there must not only be conspiracy, but conspiracy to do a
wrongful act.'") (quoting Transportation Co. v. Standard Oil
Co., 40 S.E. 591, 594 (W.Va. 1902)); McCarthy v. Kleindienst,
741 F.2d 1406, 1413 n.7 (D.C. Cir. 1984) ("[C]onspiracy
allegations . . . do not set forth an independent cause of
4
The term "unlawful act" is defined as "[c]onduct that is
not authorized by law; a violation of a civil or criminal law."
Black's Law Dictionary 1678 (9th ed. 2009).
8
action; instead, such allegations are sustainable only after an
underlying tort claim has been established."); Halberstam v.
Welch, 705 F.2d 472, 479 (D.C. Cir. 1983) ("Since liability for
civil conspiracy depends on performance of some underlying
tortious act, the conspiracy is not independently actionable;
rather, it is a means for establishing vicarious liability for
the underlying tort."); Koster v. P&P Enters., 539 N.W.2d 274,
278 (Neb. 1995) ("[A] claim of civil conspiracy is not
actionable in itself, but serves to impose vicarious liability
for the underlying tort of those who are a party to the
conspiracy."); Selle v. Tozser, 786 N.W.2d 748, 756 (S.D. 2010)
("[C]ivil conspiracy is merely a method of establishing joint
liability for the underlying tort.").
To determine whether tortious interference with contract
and tortious interference with business expectancy qualify as
the requisite "unlawful act" for purposes of the business
conspiracy statutes, we must examine the nature of those causes
of action. We recognized a cause of action for tortious
interference with contract rights in Chaves v. Johnson, 230 Va.
112, 335 S.E.2d 97 (1985). The necessary elements to establish
a prima facie case are: "(1) the existence of a valid
contractual relationship or business expectancy; (2) knowledge
of the relationship or expectancy on the part of the interferor;
(3) intentional interference inducing or causing a breach or
9
termination of the relationship or expectancy; and (4) resultant
damage to the party whose relationship or expectancy has been
disrupted." Id. at 120, 335 S.E.2d at 102; accord Dunn,
McCormack & MacPherson v. Connolly, 281 Va. 553, 558-59, 708
S.E.2d 867, 870 (2011). However, if a contract is terminable at
will or involves only a contract or business expectancy, "'a
plaintiff, in order to present a prima facie case of tortious
interference, must allege and prove not only an intentional
interference . . . , but also that the defendant employed
"improper methods."'" 5 Dunn, McCormack & McPherson, 281 Va. at
559, 708 S.E.2d at 870 (quoting Duggin v. Adams, 234 Va. 221,
226-27, 360 S.E.2d 832, 836 (1987)); see also Preferred Sys.
Solutions, Inc. v. GP Consulting, LLC, 284 Va. 382, 403-04, 732
S.E.2d 676, 688 (2012); Maximus, Inc. v. Lockheed Info. Mgmt.
Sys. Co., 254 Va. 408, 414-15, 493 S.E.2d 375, 378-79 (1997).
5
"Methods of interference considered improper are those
means that are illegal or independently tortious, such as
violations of statutes, regulations, or recognized common-law
rules." Duggin v. Adams, 234 Va. 221, 227, 360 S.E.2d 832, 836
(1987). Improper methods may include "violence, threats or
intimidation, bribery, unfounded litigation, fraud,
misrepresentation or deceit, defamation, duress, undue
influence, misuse of inside or confidential information, or
breach of a fiduciary relationship." Dunn, McCormack &
MacPherson, 281 Va. at 559, 708 S.E.2d at 870 (internal
quotation marks omitted). We have also stated that methods may
be improper if "they violate an established standard of a trade
or profession, or involve unethical conduct[, s]harp dealing,
overreaching, or unfair competition." Id. (internal quotation
marks omitted).
10
The tortious interference cause of action is historically
rooted in the principle that "the common law right of contract
necessarily brought with it, as a corollary, a right to seek
recompense against those who interfered with a valid
contract." Wyatt v. McDermott, 283 Va. 685, 693, 725 S.E.2d
555, 558 (2012); see Restatement (Second) of Torts § 766, cmt. v
(1979) (stating that a plaintiff who has an action for breach of
contract against a third person is not precluded "from
maintaining an action . . . against the person who has induced
or otherwise caused the breach"). Indeed, Cottman acknowledges
that "there is a common law duty to refrain from interfering
with contractual rights." Relying on this Court's decision
in Station #2, Cottman, however, asserts that a tortious
interference claim cannot form the requisite unlawful act
because it "necessarily depends on, and is not independent of,
contract obligations."
In Station #2, we addressed whether a conspiracy merely to
breach a contract qualifies as the required unlawful act for a
claim under Code §§ 18.2-499 and -500. 280 Va. at 173-74, 695
S.E.2d at 541. There, the plaintiff alleged that the defendants
conspired to breach their agreement to allow the plaintiff to
install soundproofing material in the void space above the
ceiling of its restaurant. Id. at 171, 695 S.E.2d at 539-40.
11
The unlawful act, according to the plaintiff, was the breach of
that agreement.
On appeal, we affirmed the trial court's judgment
sustaining a demurrer to the statutory business conspiracy
claim. Id. at 176, 695 S.E.2d at 543. We concluded that a
"conspiracy merely to breach a contract that does not involve an
independent duty arising outside the contract is insufficient to
establish a civil claim under § 18.2-500." Id. at 174, 695
S.E.2d at 541 (emphasis added); see also Richmond Metro. Auth.
v. McDevitt Street Bovis, Inc., 256 Va. 553, 559, 507 S.E.2d
344, 347 (1998) ("A tort action cannot be based solely on a
negligent breach of contract."); Dunn Constr. Co. v. Cloney, 278
Va. 260, 267, 682 S.E.2d 943, 946-47 (2009) ("[T]he
determination whether a cause of action sounds in contract or
tort depends on the source of the duty violated."). We
explained that mere non-performance of a contract cannot "rise
to the level of an 'unlawful act' under Code § 18.2-500
[because] the duty of performance under the contract springs
solely from the agreement; the duty is not imposed extrinsically
by statute, whether criminal or civil, or independently by
common law." Station #2, 280 Va. at 174, 695 S.E.2d at 541. We
therefore concluded that the non-performance of a contract could
not, without more, qualify as an "unlawful act." Id. at 174,
695 S.E.2d at 541.
12
In reaching this conclusion, we emphasized that the
plaintiff's agreement with the defendants did not "implicate
[any] statutory or independent common law duties" and thus a
conspiracy merely to breach that agreement was insufficient to
state a claim under the business conspiracy statutes. Id. at
175, 695 S.E.2d at 542. However, the following cases involving
statutory business conspiracy claims, we explained, were
distinguishable from Station #2 because they, unlike Station #2,
did involve conduct violating independent common law
duties: Commercial Bus. Sys., 249 Va. at 41, 453 S.E.2d at 263
(a defendant's employee awarded a contract to the plaintiff's
employer as a result of a bribe); Advanced Marine Enters. v.
PRC, 256 Va. 106, 112, 501 S.E.2d 148, 151 (1998) (a defendant
hired the plaintiff's employees although they were subject to a
non-compete agreement); CaterCorp, 246 Va. at 26-27, 431 S.E.2d
at 280-81 (a defendant conspired with a plaintiff's employee to
breach his common law duty of loyalty); Simmons, 261 Va. at 577-
78, 544 S.E.2d at 676-77 (plaintiff alleged breach of fiduciary
duties); and Feddeman & Co. v. Langan Assocs., P.C., 260 Va. 35,
46, 530 S.E.2d 668, 675 (2000) (same). Moreover, in Station #2,
the plaintiff did not allege claims for tortious interference
with contract and/or tortious interference with business
expectancy so we had no occasion to address the issue raised in
the first certified question.
13
As we discussed in Station #2, the only duties at issue in
a breach of contract claim are those arising solely from the
contract itself; therefore, a breach of contract "does not,
without more, create a basis for recovery in tort." 280 Va. at
174, 695 S.E.2d at 541. In contrast, both tortious interference
with contract and tortious interference with business expectancy
are intentional torts predicated on the common law duty to
refrain from interfering with another's contractual and business
relationships. That duty does not arise from the contract
itself but is, instead, a common law corollary of the
contract. See Wyatt, 283 Va. at 693, 725 S.E.2d at 558. The
duty arises outside the contract even though the intentional
interference must induce or cause a breach or termination of the
contractual relationship or business expectancy. See Dunn,
McCormack & McPherson, 281 Va. at 558, 708 S.E.2d at 870.
Accordingly, we hold that tortious interference with
contract and tortious interference with business expectancy each
constitute the requisite "unlawful act" to proceed on a business
conspiracy claim under Code §§ 18.2-499 and -500. See Bray &
Gillespie Mgmt. LLC v. Lexington Ins. Co., 527 F. Supp. 2d 1355,
1370 (M.D. Fla. 2007) ("Tortious interference with a business
relationship can constitute an unlawful act for the purposes of
pleading a claim for civil conspiracy."); Advanced Power Sys. v.
Hi-Tech Sys., 801 F. Supp. 1450, 1458 (E.D. Pa. 1992) ("To
14
establish an underlying unlawful act . . . , plaintiff must
prove that the parties came together for the express purpose of
committing either a criminal act or an intentional
tort."); John's Insulation, Inc. v. Siska Constr. Co., 774
F. Supp. 156, 161 (S.D.N.Y. 1991) (noting that a plaintiff must
plead "specific wrongful acts which constitute an independent
tort" to establish the predicate unlawful act in a civil
conspiracy claim); American Diversified Ins. Servs. v. Union
Fidelity Life Ins. Co., 439 So. 2d 904, 906 (Fla. Dist. Ct. App.
1983) ("[A]ppellant has stated a cause of action for civil
conspiracy based on an independent tort, specifically the tort
of intentional interference with business
relationships."); Avery v. Rossford Ohio Transp. Dist., 762
N.E.2d 388, 395 (Ohio Ct. App. 2001) ("[T]he underlying unlawful
act must be a tort.").
B. Question #2
The second question asks whether a two-year or five-year
statute of limitations applies to claims of tortious
interference with contract and tortious interference with
business expectancy. Under Code § 8.01-243(A), an action for
personal injuries is subject to a two-year statute of
limitations, while under Code § 8.01-243(B) an action for injury
to property is subject to a five-year statute of limitations.
The dispositive issue is whether tortious interference with
15
contract and tortious interference with business expectancy
allege injury to property. See Willard, 262 Va. at 482, 551
S.E.2d at 600 (holding that the "applicable statute of
limitations is determined by the type of injury alleged"). If
so, they must be brought within five years after the cause of
action accrues. Code § 8.01-243(B). If not, the two-year
statute of limitations in either Code § 8.01-243(A) or -248
applies. 6
We have held that "the right to performance of a contract
and the right to reap profits therefrom are property rights
which are entitled to protection in the courts." Worrie, 198
Va. at 536, 95 S.E.2d at 196 (emphasis added); accord Chaves,
230 Va. at 120, 335 S.E.2d at 102; see also Downey v. United
Weatherproofing, Inc., 253 S.W.2d 976, 980 (Mo. 1953) ("The
right to perform a contract and to reap the profits therefrom,
and the right to performance by the other party, are property
rights entitling each party to the fulfillment of the contract
by performance."); Raymond v. Yarrington, 73 S.W. 800, 803 (Tex.
6
The second certified question asks only about the two-year
and five-year statutes of limitations in Code § 8.01-243.
Cottman, however, argues that the applicable statute of
limitations is the catchall two-year provision in Code § 8.01-
248. As the statute's plain language indicates, it applies only
to "[e]very personal action . . . for which no limitation is
otherwise prescribed." In determining whether Code § 8.01-248
applies, we analyze the nature of the cause of action at issue.
Parker-Smith v. Sto Corp., 262 Va. 432, 439, 551 S.E.2d 615, 619
(2001).
16
1903) ("It seems to us that where a party has entered into a
contract with another to do or not to do a particular act or
acts, he has as clear a right to its performance as he has to
his property, either real or personal; and that knowingly to
induce the other party to violate it is as distinct a wrong as
it is to injure or destroy his property."); cf. Andrews v. Ring,
266 Va. 311, 319, 585 S.E.2d 780, 784 (2003) (holding that Code
§§ 8.01-499 and -500 "apply to business and property interests,
not to personal or employment interests").
As Cottman notes, determination of the applicable statute
of limitations in Worrie depended on whether the alleged cause
of action for conspiracy to breach a contract was of the nature
to survive the death of the plaintiff. 198 Va. at 536, 95
S.E.2d at 195. At that time, actions that survived and thus
subject to a longer statute of limitations were those for
"'wrong to property, real or personal, or which [grew] out of
breach of contract.'" Id. at 536, 95 S.E.2d at 195
(quoting Winston v. Gordon, 115 Va. 899, 915-16, 80 S.E. 756,
763 (1914)). Because of statutory enactments in 1977,
survivability is no longer germane in deciding which statute of
limitations applies. Willard, 262 Va. at 479, 551 S.E.2d at
598; Pigott v. Moran, 231 Va. 76, 80, 341 S.E.2d 179, 181
(1986). Nevertheless, the Court's analysis in Worrie to
17
determine whether an alleged injury is to property or to the
person remains relevant and binding. 7
That analysis centered on the plaintiffs' claim that "their
business or estate, their property" in an employment contract
with a dancing instructor was destroyed by the defendants'
conspiracy to induce breach of the employment contract and to
solicit the plaintiffs' customers, depriving the plaintiffs of
business. Worrie, 198 Va. at 536-37, 95 S.E.2d at 196. We
concluded that based on those allegations, "the wrong done and
damage done [was] directed to the estate or property of the
plaintiffs and not to them personally." Id. at 537, 95 S.E.2d
at 196; compare Willard, 262 Va. at 481, 551 S.E.2d at 599
(holding that a shareholder's rights to dissent to corporate
action "are property interests and that allegations of loss of
dissenters' rights constitute an allegation of 'injury to
property' within the meaning of Code § 8.01-243(B)"), and Lavery
v. Automation Mgmt. Consultants, Inc., 234 Va. 145, 154, 360
S.E.2d 336, 341-42 (1987) (holding that an action seeking
damages for the unauthorized use of a person's name, portrait,
or picture was a claim for injury to property), with Pigott, 231
Va. at 81, 341 S.E.2d at 182 (holding that alleged fraud by a
realtor was directed at the plaintiffs personally and not to
7
Likewise, that portion of the decision in Worrie is not
affected by the Court's subsequent decision in Station #2.
18
their property because the fraud had no impact on the real
property, which remained in the same condition and was available
for the same use both before and after the alleged fraud was
perpetrated).
As already discussed, one of the elements of a claim for
tortious interference with either a contract or business
expectancy requires intentional interference inducing or causing
a breach or termination of the contractual relationship or
business expectancy. Chaves, 230 Va. at 120, 335 S.E.2d at 102.
Such interference is directed at and injures a property right,
i.e., the right to performance of a contract and to reap profits
and benefits not only from the contract but also from expected
future contracts or otherwise advantageous business
relationships. See Worrie, 198 Va. at 536, 95 S.E.2d at
196; see also Pure Milk Ass'n v. Kraft Foods Co., 130 N.E.2d
765, 772 (Ill. App. Ct. 1955) ("'[T]he right to perform a
contract and to reap the profits resulting from such performance
. . . are property rights which entitle each party to
protection, and to seek compensation by action in tort for any
injuries to such contract.'"); Johnson v. Gustafson, 277 N.W.
252, 254 (Minn. 1938) ("[T]he interest in a contract being a
property right, a party thereto has a right of action against
persons who are by their conduct substantially interfering with
the performance thereof."); Barr v. Essex Trade Council, 30 A.
19
881, 885 (N.J. Ch. 1894) ("A man's business is [his]
property."); Carolina Overall Corp. v. East Linen Supply, Inc.,
174 S.E.2d 659, 661 (N.C. Ct. App. 1970) ("The theory of the
doctrine which permits recovery for the tortious interference
with a contract is that the right to the performance of a
contract and to reap the profits therefrom are property rights
which entitle each party to protection and to seek compensation
by action in court for an injury to such contract."). Contrary
to Cottman's argument, tortious interference is not an
allegation of nothing more than disappointed economic
expectations, which are redressed by the law of
contracts. See Sensenbrenner v. Rust, Orling & Neale,
Architects, Inc., 236 Va. 419, 425, 374 S.E.2d 55, 58 (1988).
Therefore, we hold that the five-year statute of
limitations in Code § 8.01-243(B) applies to both tortious
interference with contract and tortious interference with
business expectancy.
III. CONCLUSION
In summary, we hold that both tortious interference with
contract and tortious interference with business expectancy
qualify as an unlawful act for purposes of a business conspiracy
claim under Code §§ 18.2-499 and -500. We also hold that the
five-year statute of limitations in Code § 8.01-243(B) applies
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to causes of action for tortious interference with contract and
tortious interference with business expectancy.
Certified question 1 answered in
the affirmative.
Certified question 2, alternative
II answered in the affirmative.
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