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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: April 4, 2019

That Defendant Caused Plaintiff to Breach Contract With Third Party Cannot Be Basis of Tortious Interference Claim

On March 22, 2019, the Fourth Department issued a decision inĀ Canandaigua Natl. Bank & Trust Co. v. Acquest S. Park, LLC, 2019 NY Slip Op. 02243, holding that the defendant causing the plaintiff to breach a contract with a third party cannot serve as the basis for a tortious interference claim, explaining:

We reject Kingsbury’s contention that the court erred in dismissing the cross claim for tortious interference with contract. The tort of inducement of breach of contract, now more broadly known as interference with contractual relations, consists of four elements: (1) the existence of a contract between plaintiff and a third party; (2) defendant’s knowledge of the contract; (3) defendant’s intentional inducement of the third party to breach or otherwise render performance impossible; and (4) damages to plaintiff.

Here, although the cross claim alleges that Acquest caused Kingsbury to breach its contract with a third party, it does not allege that CNB or any other third party breached a contract with Kingsbury. Thus, contrary to Kingsbury’s contention, the cross claim fails to state a cause of action for tortious interference with contract. Kingsbury relies on Stiso v Inserra Supermarkets (179 AD2d 878 [3d Dept 1992], lv denied 80 NY2d 757 [1992]) for the proposition that a cause of action for tortious interference with contract exists where the defendant caused the plaintiff to breach a contract with a third party. But Stiso predates Kronos, Inc. (81 NY2d at 94) and Lama Holding Co. (88 NY2d at 424-425), and in both of those cases the Court of Appeals explicitly stated that an element of the cause of action for tortious interference with contract is the defendant’s intentional procurement of a third-party’s breach of the contract without justification. We decline Kingsbury’s invitation to modify the elements of the cause of action outlined by the Court of Appeals.

(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.

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