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Current Developments in the Commercial Divisions of the
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Posted: July 11, 2018

Tortious Interference Claim Upheld; Defendant Did Not Establish Economic Interest Defense as a Matter of Law

On July 5, 2018, the First Department issued a decision in Normandy Real Estate Partners LLC v. 24 E. 12th St. Associates LLC, 2018 NY Slip Op. 04969, refusing to dismiss a tortious interference claim because the defendant could not defeat the economic interest defense as a matter of law, explaining:

The complaint states a cause of action for tortious interference with contract by alleging that plaintiff entered into a valid contract (the letter agreement) with Associates, that Tahari had knowledge of the letter agreement, that Tahari intentionally and improperly induced Associates to breach the enforceable provisions of the letter agreement by entering into an agreement with it to purchase the lease and purchase option during the exclusivity period, and that as a result plaintiff suffered damages. The allegations show that Tahari’s inducement of Associates to breach the enforceable provisions of the letter agreement exceeded a minimum level of ethical behavior in the marketplace.

Tahari failed to establish the economic interest defense to tortious interference with contract as a matter of law. The complaint’s allegations show that Tahari was effectively plaintiff’s competitor, that it did not appear to have a prior contractual or economic relationship with Associates, and that it had merely a generalized economic interest in soliciting Associates to sell the lease and the purchase option for profit.

(Internal quotations and citations omitted).

In New York, there are circumstances where a 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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