On June 6, 2018, Justice Ostrager of the New York County Commercial Division issued a decision in Gorayeb & Associates, P.C. v. Toledo, 2018 NY Slip Op. 31153(U), holding that inducing a client to switch lawyers cannot be the basis for a claim of tortious interference with contract, explaining:
Plaintiff Gorayeb law firm is entitled to a judgment of liability on the first cause of action for tortious interference with prospective economic relations based on proof that defendant intentionally interfered with the law firm’s business relations with clients by persuading some clients to discharge Gorayeb and retain Zaremba, causing financial injury to Gorayeb. The law firm’s request for judgment on the second cause of action for tortious interference with contract is denied. An essential element is the defendant’s intentional procuring of a breach of a contract between Gorayeb and a third party, that contract being the retainer agreement between Gorayeb and the client. However, as a party always has a right to discharge his counsel, the client’s decision to change counsel does not constitute a breach of contract.
(Internal citations omitted).
In this decision, the defendant was found liable for interfering with a law firm’s business by persuading some of its clients to discharge the firm, but the court dismissed the very similar claim that the defendant caused the clients to breach their contracts with the law firm. This is because a client always has a right to terminate a law firm, so the dismissal of the firm was not a breach of the client’s contract with the law firm. Contact Schlam Stone & Dolan partner John Lundin at firstname.lastname@example.org if you or a client have a question regarding a competitor improperly interfering with a business relationship.
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