One of the more common “business tort” causes of action we see in the world of commercial litigation is a claim for tortious interference with a contract. Often a competing company, knowing that its competitor has a contract with a certain customer or employees, will intentionally and improperly interfere with that contract by causing the customer or employee to breach the contract, thus resulting in harm to the competing business. This interference usually consists of improperly soliciting the customer or employee away from the competing business, making disparaging and/or defamatory comments about the competing business, or even fraudulently deceiving the customer or employee to induce a breach of the contract with the competing business.
When alleging a tortious interference claim, it is critical to include sufficient allegations in the Complaint that support the necessary elements of the claim itself. It is not enough to merely recite the elements without any specific factual allegations detailing the improper conduct of the company/individuals who allegedly committed the tortious interference. A recent decision from Justice Garguilo in the Suffolk County Commercial Division provides a perfect example of a deficient tortious interference claim resulting in dismissal of the Complaint.
In Airweld, Inc. v. Airgas U.S.A., LLC d/b/a/ Airgas, Inc., Plaintiff Airweld, Inc. alleged that Defendant Airgas U.S.A., LLC tortiously interfered with contracts Airweld had with two of its customers. The Complaint alleges that Airgas “attempted to solicit” the two customers by providing the same products that Airweld was providing to these customers under the separate contracts Airweld had with the customers. Even after Airweld sent cease and desist letters concerning the two customers and the existence of the contracts for each customer, Airgas continued to solicit business from them, and Airweld stopped doing business with each customer due to the interference by Airgas.
The Court noted that to succeed on a claim for tortious interference with contractual relations, “a plaintiff must show the existence of a valid contract between the plaintiff and a third-party, and the defendant’s knowledge of such contract, the defendant’s intentional and improper procurement of the breach of such contract by the third-party, and damages.” See White Plains Coat & Apron Co., Inc. v. Cintas Corp., 8 N.Y.3d 422 (2007).
The Court acknowledged that Airweld had sufficiently alleged the existence of a contract and Airgas’s knowledge of the contacts at issue. However, the Court dismissed the tortious interference claim, finding that the Complaint failed to provide any specifics as to the improper conduct Airgas engaged in to solicit the customers. Mere solicitation by itself is not sufficient to satisfy a tortious interference claim. Id. Furthermore, the Court held that it was unclear and unknown based on the allegations in the Complaint whether the two customers at issue actually breached their contracts with Airweld as a result of any actions by Airgas. Given the very vague, conclusory allegations set forth in the Complaint, the Court dismissed the action.
As an aside and perhaps as a word of advice at the end of the decision, the Court noted that it was curious why Airweld did not simply pursue breach of contract actions against the two customers who were allegedly in violation of the terms of their contracts with Airweld. This certainly could have been an easier path to recovery, as the Court noted.
A key takeaway from Justice Garguilo’s decision in Airweld is the importance of taking the time before filing the Complaint to make sure you have the necessary facts to withstand a motion to dismiss. Although a Court is required to take allegations in a Complaint as true on a motion to dismiss, it is not enough merely to recite basic elements of a claim. Without at least some specifics, the action will be short-lived.