Facts
- United Truck Leasing Corporation leased trucks to business customers.
- Ronald D. Geltman, through his closely held consulting business, advised companies on obtaining more favorable truck-lease arrangements.
- Universal Fixtures had an existing lease with United; after receiving Geltman’s advice, Universal terminated its lease with United and leased instead from a competitor.
- United had pursued a potential leasing arrangement with Matthew’s Salad House for several years; when Matthew’s was ready to lease, Geltman did not invite United to bid, stating United did not provide him business “leads” as other companies did.
- The evidence showed Geltman acted to advance his clients’ financial interests and his own economic interests as a consultant.
- The record contained no evidence of threats, fraud, misrepresentation, or other unlawful tactics by Geltman.
- United sued for (1) intentional interference with contract (Universal lease) and (2) intentional interference with a prospective contractual relation (Matthew’s opportunity).
Issues
- For intentional interference with an existing contract, must the plaintiff prove the defendant’s interference was “improper” (by improper motive or improper means), or is “justification” solely an affirmative defense?
- For intentional interference with a prospective contractual relation, what elements must the plaintiff prove, including whether “improper” interference is required?
Decision
- The Supreme Judicial Court held that, for both torts, the plaintiff must prove the defendant intentionally interfered and did so improperly.
- The court adopted “improperly” (improper motive or improper means) as the operative requirement, replacing confusing “malice” terminology and aligning Massachusetts law with the Restatement (Second) of Torts.
- Applying that standard, the court concluded United presented insufficient evidence that Geltman used improper means or acted with an improper motive.
- The directed verdict for the defendants was proper on both claims; the judgment for the defendants was affirmed.
Legal Principles
- Intentional interference with contract requires proof of: (1) a contract with a third party, (2) the defendant’s knowing inducement of breach, (3) harm, and (4) intentional interference that was improper (improper motive or improper means).
- Intentional interference with a prospective contractual relation requires proof of: (1) a probable future business relationship of economic value, (2) the defendant’s knowledge of it, (3) intentional and improper interference (improper motive or improper means), and (4) harm.
- “Improper” interference is not shown by lawful competitive or advisory conduct aimed at economic advantage, absent coercion, deception, threats, or other independently wrongful methods.
- The plaintiff bears the burden to produce evidence of improper interference; liability does not follow from intent and causation alone.
Conclusion
Massachusetts imposes liability for interference with contractual or prospective relations only when the defendant’s intentional interference is shown to be improper, proved through improper motive or improper means; absent evidence of coercion or deception, a consultant’s economically motivated efforts to secure better deals for clients do not support recovery.