NAJAM, Judge.
Carol Sparks Drake appeals the trial court's entry of summary judgment for Thomas A. Dickey, Craig Anderson, Charles E. Podell, and Duke Realty Corporation (collectively, "Duke Realty") on Drake's claim that Duke Realty intentionally interfered with her partnership agreement with the law firm of Parr Richey Obremskey & Morton ("Parr Richey").
We affirm in part, reverse in part, and remand for further proceedings.
Drake is an attorney who joined Parr Richey in 1983 and was a partner in the firm for twenty-one years, from 1985 to 2006. In 2003, Duke Realty, a client of Parr Richey, announced its intention to construct a mixed-use development (the "Anson Project") on land adjacent to real property owned by Drake in Boone County.
Drake and Duke Realty had numerous disagreements following execution of the Land Use Agreement. In October of 2005, Drake applied to the Lebanon Community School Corporation to be its appointee on the Boone County Area Plan Commission. Her application prompted a representative of Duke Realty to contact a Parr Richey partner and "tell[] him that if [Drake] did not withdraw that application ... he would not ... represent Duke [Realty] again." Appellant's App. at 211. At that partner's subsequent request, Drake withdrew her application for the school board appointment to the Boone County Area Plan Commission.
Drake's disputes with Duke Realty culminated on October 25, 2006. Drake
However, on November 15, shortly after Duke Realty had issued its ultimatum to Parr Richey, the two partners who had met with Duke Realty described their meeting to the other partners, including Drake. After that meeting, one Parr Richey partner told Drake that "the situation with [Duke Realty] was a problem that needed to go away" and that "this could be your job ... if you don't sell your farm to Duke Realty." Id. at 10. A couple of weeks later, two other partners told Drake that she "would be terminated from the partnership unless the farm was sold to Duke Realty." Id. at 11. Drake refused to sell her property to Duke Realty. On December 9, the Parr Richey partners held a meeting, reconstituted their partnership agreement, and removed Drake as a partner.
On August 7, 2009, Drake filed suit against Duke Realty for tortious interference with her partnership agreement with Parr Richey. Duke Realty moved for summary judgment, which the court granted on January 18, 2013. In granting Duke Realty's motion for summary judgment, the trial court stated, in relevant part:
Appellees' App. at 11 (emphases added). This appeal ensued.
Drake appeals the trial court's entry of summary judgment for Duke Realty. Our
Dreaded, Inc. v. St. Paul Guardian Ins. Co., 904 N.E.2d 1267, 1269-70 (Ind.2009) (citations omitted).
The trial court's order on summary judgment included a statement of reasons for the trial court's decision. While such statements aid our review by allowing us to know the trial court's rationale, we are not bound by them. See Great Lakes Transfer, LLC v. Porter Cnty. Highway Dept., 952 N.E.2d 235, 241 (Ind.Ct.App. 2011). In other words, the trial court's explanation notwithstanding we employ our usual de novo standard of review for cases disposed of by summary judgment. Id.
Here, Drake claims that Duke Realty tortiously interfered with her partnership agreement with Parr Richey. "Indiana has long recognized that intentional interference with a contract is an actionable tort, and includes an intentional, unjustified interference by third parties with an employment contract." Winkler v. V.G. Reed & Sons, Inc., 638 N.E.2d 1228, 1234 (Ind.1994) (citing Bochnowski v. Peoples Fed. Sav. & Loan, 571 N.E.2d 282, 284 (Ind.1991)). This tort reflects the public policy that contract rights are property and, under proper circumstances, are entitled to enforcement and protection from those who tortiously interfere with those rights. Id. Tortious interference with a contractual relationship consists of the following elements: (1) that a valid and enforceable contract exists; (2) the defendant's knowledge of the existence of the contract; (3) defendant's intentional inducement of breach of the contract; (4) the absence of justification; and (5) damages resulting from defendant's wrongful inducement of the breach. Id. at 1235. On appeal, the parties dispute only the third and fourth elements, and they agree that Drake has met her burden to show a genuine issue of material fact on the remaining elements. We address each issue in turn.
Drake first contends that the designated evidence shows a genuine issue of material fact on the question of whether Duke Realty intentionally induced the Parr Richey partners to remove her from the partnership. The trial court concluded that summary judgment on this issue was appropriate on the theory that, while Duke Realty used its "clout" with Parr Richey to intervene on Duke Realty's behalf in its dispute with Drake, "it is not obvious" that Duke Realty intended that Parr Richey remove Drake as a partner. Appellees' App. at 11. We conclude, however, that the designated evidence demonstrates a
This issue is controlled by our Supreme Court's opinion in Bochnowski. The relevant facts of Bochnowski are as follows:
In September of 1984, [Thomas] filed suit against Peoples Federal Savings and Loan Association....
571 N.E.2d at 283. The trial court entered summary judgment for Peoples Federal on Thomas's claim for intentional interference with a contract.
On transfer, our Supreme Court reversed the trial court's entry of summary judgment and remanded for a trial. In doing so, the court reasoned in relevant part as follows:
Id. at 285 (emphases added).
Bochnowski closely parallels this case. First, Drake's designated evidence demonstrates the existence of genuine issues of material fact. As relevant here, the designated evidence shows that Drake had resolved her dispute with Duke Realty when she entered into a Land Use Agreement. The designated evidence also supports the inference that it was Duke Realty's breach of that agreement, together with Duke Realty's threat conveyed to Parr Richey that Parr Richey would lose Duke Realty as a client if Drake sought to enforce the agreement, that caused Parr Richey to remove Drake from the partnership.
Various inferences, which would alter the outcome of this case, can be drawn from the undisputed facts. See id. In Bochnowski, Peoples Federal and Lee had a business relationship, Lee was Thomas's employer, and Peoples Federal and Thomas were in the midst of a dispute. Likewise, Duke Realty and Parr Richey had a business relationship, Parr Richey was Drake's employer, and Duke Realty and Drake were in the midst of a dispute. In Bochnowski, Peoples Federal used its business relationship with Lee to have Lee intervene in Peoples Federal's dispute with Thomas. Here, too, Duke Realty used its business relationship with Parr Richey to have Parr Richey intervene in Duke Realty's dispute with Drake. In Bochnowski, Peoples Federal specifically threatened Lee with the loss of its business if Lee could not personally assure that Thomas "would not be involved in any way with appraisals assigned by Peoples Federal to Lee." Id. at 283. Here, Duke Realty specifically threatened Parr Richey with the loss of Duke Realty as a client if Drake pursued her legal remedies against Duke Realty based on Duke Realty's alleged breach of the Land Use Agreement. And, following the intervention of Peoples Federal and Duke Realty, Thomas and Drake, respectively, lost their jobs. Here, as in Bochnowski, "[v]arious inferences could be drawn" from these undisputed facts, and "a reasonable trier of fact could find evidence of a claim for tortious interference" against Duke Realty following Parr Richey's removal of Drake as a partner. Id. at 285.
We note that, although Drake relies on Bochnowski in her appellate brief, Duke Realty almost completely ignores it.
Appellee's Br. at 16 n.11. In support of this contention, Duke Realty cites Gatto v. St. Richard School Inc., 774 N.E.2d 914, 922 (Ind.Ct.App.2002). In Gatto, a teacher sued her school, after the school had terminated her employment, for breach of contract, and she sued two parents for tortious interference with her employment
Gatto does not account for the holding in Bochnowski that a claim of tortious interference with a contract can survive summary judgment even where the decision to terminate the employment contract is at the discretion of the employer. Again, in Bochnowski our Supreme Court held that, even if a contract for employment can be terminated by the employer at will, termination due to the unjustified interference of a third party may be tortious. 571 N.E.2d at 285. As the court stated: "An employee with an at will employment contract must be able to expect that his continued employment depends on the will of his employer and not upon the whim of a third party interferes" Id. Likewise, this court has also recognized that, "where a third party's conduct substantially and materially impairs the execution of an employment contract, frustrating an employee's expectations under her contract and making performance of her contractual duties more burdensome, the inducement of breach element of a claim for tortious interference with a contractual relationship is satisfied." Levee v. Beeching, 729 N.E.2d 215, 222 (Ind.Ct.App.2000).
To the extent that Gatto stands for the proposition that a third party's unjustified interference with an employer's discretion is not a breach of the contract, Bochnowski and Levee hold otherwise. Here, Drake's partnership agreement with Parr Richey is equivalent to an at-will employment agreement since her status as a partner is terminable at will by a majority vote of the partners. Duke Realty's attempt to distinguish the partnership agreement from an employment-at-will contract is an insignificant distinction on these facts. Bochnowski and Levee control.
Duke Realty also spends a significant portion of its brief asserting that summary judgment is appropriate because it did not specifically intend to have Parr Richey interfere with Drake's employment. In particular, Duke Realty argues that it is liable only if it specifically intended to have Drake removed as a partner of Parr Richey. This is incorrect. It may be enough that Duke Realty interfered with the partnership agreement for Duke Realty to be found liable. In other words, it is not necessary for Duke Realty to have specifically intended only that Drake be terminated as a partner for Duke Realty to have tortiously interfered with the partnership agreement. The evidence clearly supports the trial court's statement that "there is no doubt that [Duke Realty] did contribute to [Drake's] termination as a partner with Parr Richey." Appellees' App. at 11. Thus, the evidence would support a finding that there is a causal relationship between Duke Realty's conduct and Parr Richey's removal of Drake as a partner of the firm, and that evidence is sufficient to withstand Duke Realty's motion for summary judgment. We note, however, that even where the element of causation has been satisfied,
Further, although Duke Realty is correct that one way to demonstrate an actor's intent to induce another to breach a contract is to show that the actor specifically intended that result, that is not the only way to demonstrate the actor's intent. As the Restatement (Second) of Torts explains:
Restatement (Second) of Torts § 766 cmt.j (1979). And, as stated in § 8A of the Restatement:
(Emphasis added.)
Thus, Duke Realty's intent may be demonstrated by showing either that it specifically intended to interfere with the partnership agreement or that it acted for another purpose but knew that the interference was certain or substantially certain to occur. See id. § 766 cmt.j. That is, even if Duke Realty did not specifically intend to interfere with the partnership agreement, it may still be liable for an incidental interference when such interference was a necessary consequence of Duke Realty's conduct, whether or not that consequence was desired. Id. However, if the interference was purely incidental to a legitimate interest of Duke Realty's, Duke Realty may be found not liable if that interference was of "such a minor and incidental consequence and so far removed from the defendant's object that as against the plaintiff the interference may be found to be not
In considering the law and the designated evidence, there is no question that it is for the jury to judge the credibility of the witnesses, weigh the evidence, and determine whether Duke Realty intended to interfere with Drake's partnership agreement. It is also for the jury to determine whether Duke Realty knew that its conduct was certain or substantially certain to interfere with Drake's partnership. See id. at 285. Thus, tortious interference will have been established if the jury determines either that Duke Realty actually intended that its conduct would interfere with Drake's partnership agreement or that it was within the reasonable contemplation of Duke Realty that its conduct would or would likely interfere with the partnership agreement, in which latter case Duke Realty will be deemed by law to have desired that result. The intentional inducement element of tortious interference may be proven either directly or indirectly and inferentially. We agree with Drake that the trial court's reasoning in its order on summary judgment involved weighing conflicting evidence and drawing inferences from that evidence, both of which are functions reserved for the jury. The trial court erred when it concluded that Drake had failed to present a genuine issue of material fact as to whether Duke Realty intentionally induced Parr Richey to terminate Drake as a partner.
Duke Realty also asserts that summary judgment is appropriate because, even assuming that it did interfere with Drake's partnership agreement, it had a legitimate business reason to do so. The trial court rejected that argument as a basis for summary judgment, but Duke Realty contends on appeal that it "had a legitimate business interest in exercising its unfettered right to end its attorney-client relationship with Parr Richey...." Appellees' Br. at 13.
But our Rules of Professional Conduct do not justify a client's tortious behavior toward an attorney. While Duke Realty has an unfettered right to terminate its attorney-client relationship with Parr Richey, Duke Realty could have exercised that right without issuing a threat or ultimatum regarding Drake. A client's first-party right to terminate an attorney-client relationship does not include a corresponding third-party right to interfere
Moreover, Duke Realty's argument on this issue ignores the designated evidence that is most favorable to Drake, the nonmovant in the summary judgment proceedings, and is contrary to the summary judgment standard. Rule of Professional Conduct 1.10(a) states:
(Emphasis added.) According to Drake's designated evidence, Duke Realty engaged Parr Richey in three significant contacts about Drake. First, when Duke Realty first sought to purchase Drake's property, Parr Richey suspended its representation of Duke Realty with respect to the Anson Project. But, after Drake and Duke Realty had entered into their confidential Land Use Agreement, Parr Richey resumed its previously suspended representation of Duke Realty. The resumed representation indicates that, after execution of the Land Use Agreement, Drake's personal interest did not "present a significant risk of materially limiting the representation of the client by the remaining lawyers of the firm." Prof. Cond. R. 1.10(a).
Second, notwithstanding resolution of the apparent conflict of interest, Duke Realty used its status with Parr Richey to compel Drake to withdraw her application for a position on the Boone County Area Plan Commission in 2005. And, despite Duke Realty's influence over her partners, following execution of the Land Use Agreement "none of the partners had indicated in any way that [Drake's] future with the firm was in any jeopardy" and Drake "did not sense a change in tenor with respect to the other partners' attitude[s] towards [her]" prior to Duke Realty's November 2007 meeting with the two Parr Richey partners. Appellant's App. at 9.
But this changed after the third contact, the November 2007 meeting. There, Duke Realty did not ask that Parr Richey once again suspend its representation with respect to the Anson Project but instead threatened to terminate all of its business with Parr Richey if Drake sought to enforce her legal rights under the Land Use Agreement. The contemporaneous notes of a Parr Richey partner who attended the November 2007 meeting do not show that Duke Realty expressed concern about a conflict of interest but, rather, state only that Duke Realty had informed the partners that, "[i]f Drake[] formally intervene[s] or protest[s] or either party files a complaint on the [Land Use Agreement, Parr Richey's] relationship with [Duke Realty] will be terminated." Id. at 99 (emphasis removed).
The designated evidence most favorable to Drake presents a genuine issue of material fact as to whether there was an absence of justification for Duke Realty's interference with the partnership agreement. Duke Realty's dispute with Drake, which was at one time unresolved and open-ended, had been settled and reduced to a single written document, the Land Use Agreement. Thus, in particular, there is a genuine issue of material fact regarding whether Drake's personal interest adverse to Duke Realty "present[ed] a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm." Prof. Cond. R. 1.10(a). And it is for the jury to determine whether Duke Realty's November 2007 meeting with the Parr Richey partners to deliver a threat and ultimatum to Parr Richey was intended to induce Parr Richey to interfere with Drake's employment or was motivated entirely by a legitimate concern over a conflict of interest with Parr Richey. Thus, we affirm the trial court's conclusion that a genuine issue of material fact precludes the entry of summary judgment on this issue.
In sum, it is for a jury to weigh the evidence and competing inferences and to determine Duke Realty's intent, including whether Duke Realty intended to interfere with Drake's partnership agreement, whether Duke Realty reasonably contemplated that its threat was certain or substantially certain to interfere with that agreement without regard to whether Duke Realty actually intended or desired that result, or whether Duke Realty's threat to withdraw all of its business from Parr Richey was merely an expression of a client's legitimate concern about a conflict of interest.
Affirmed in part, reversed in part, and remanded for further proceedings.
MATHIAS, J., and BROWN, J., concur.
