Blogs

Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: October 24, 2018

Allegations of Conspiracy to Breach Contract Do Not Bar Tortious Interference Claim

On October 4, 2018, Justice Bransten of the New York County Commercial Division issued a decision in EVEMeta, LLC v. Siemens Convergence Creators Corp., 2018 NY Slip Op. 32530(U), holding that allegations of a conspiracy to breach a contract do not bar a tortious interference claim, explaining:

A claim of tortious interference with contract requires proof of (1) the existence of a valid contract between plaintiff and a third party; (2) the defendant’s knowledge of that contract; (3) the defendant’s intentional procuring of the breach, and (4) damages.

The Defendant argues that Courts have declined to find a defendant to be a but for cause of a breach of contract where the Defendants had an alleged conspiracy to breach the contract. As the Defendants are well aware, however, an alleged civil conspiracy is not a viable cause of action in New York. The premise advanced by the Defendants, that a purported conspiracy precludes a claim for tortious interference, would effectively deny the Plaintiff its ability to recover against the conspiring, Plaintiff its ability to recover against the conspiring, non-breaching, parties. The premise serves only to undermine the elements of knowledge of the contract and intentional procurement of a breach inherent in tortious interference claims. The Court finds this argument unpersuasive.

The Synacor Defendant also argues that the premise behind a claim for tortious interference with contract is a third-party’s inducement of a breach, whereas the breaching party may be liable under a breach of contract theory. This assertion is not mutually exclusive of the Plaintiffs claims. The Plaintiff has adequately alleged Siemens, as a non-party to the Synacor Agreement, induced Synacor to breach its agreement by offering to cut out the Plaintiff from the deals. Similarly, Synacor, as a non-party to the Siemens Agreement, induced Siemens to breach its agreement by offering to deal directly with Siemens rather than using Evemeta as the intermediary. The second and sixth causes of action for tortious interference with contract are adequately stated.

(Internal quotations and citations omitted).

In New York, there are circumstances where someone can be held liable for causing someone else to break their contract with you (tortious interference with contract), and they can even be held liable for causing someone not to enter into a contract with you in the first place (tortious interference with prospective economic advantage). Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client think someone has interfered with your rights relating to a contract.

Click here to subscribe to this or another of Schlam Stone & Dolan’s blogs.

View posts