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In Good Form

Pattern interrogatories for interference with business relations.

By Kevin R. Culhane

November/December 2007 Table of Contents

 

Editor’s note: The documents described and boldfaced in this article are available by clicking on the form's name in the article or by visiting the "Forms" section of our Web site.

This article contains interrogatories for use by both plaintiffs and defendants keyed to the essential elements of the parties' liability and damage claims.

 

Interrogatories From Plaintiff to Defendant:

Interrogatories From Defendant to Plaintiff:


 

This article presents interrogatories for use when the plaintiff claims that the defendant’s conduct wrongfully interfered with the plaintiff’s business relations. The article and interrogatories address two related but conceptually distinct torts represented by claims that the defendant’s conduct (1) wrongfully interfered with the plaintiff’s existing contractual relationship, either by inducing a breach of contract or rendering the plaintiff’s performance more difficult or burdensome; and (2) wrongfully interfered with the plaintiff’s prospective economic advantage.

Interrogatories or Depositions First?

Obtaining the best litigation advantage by using interrogatories often involves careful consideration of how the various discovery devices should be used with respect to one another. Often, there is no right or wrong timing for interrogatory discovery, but there are some general concepts that merit discussion.

In some cases, the critical issue is a factual one that depends on the observations, perception and veracity of a witness or participant. Intersection collision cases in which each party claims to have had the right of way are good examples. The opponent’s version of the facts often is more effectively tested by deposition in these cases, since the responses will be based on the opponent’s memory perception or veracity. Every trial lawyer knows that even erroneous statements of fact tend to “harden” in the opponent’s memory over time, and thus spontaneity may in fact be at a premium in these sort of cases. In contrast, allowing the individual to respond by interrogatory enables the respondent and his or her counsel to carefully and meticulously formulate their answers, and it’s less likely that interrogatory discovery will reveal the same defects in the respondent’s version of the facts.

Thus, generally, where the critical issues in a case are factual in nature and limited in number, those issues probably are most effective when examined first by deposition, reserving interrogatories regarding the more objectively verifiable issues, such as the existence of witnesses, the extent of damages and the nature of a party’s contentions, for later.

By contrast, many cases don’t turn on an individual’s version of disputed facts, but on the legal effect of a transaction or series of transactions. The complaint in a business case often will  not disclose the exact nature of the plaintiff’s accusations or otherwise identify the individual or individuals who might have knowledge of the pertinent facts. In these cases, the goal of spontaneity might be less important or impossible to achieve, and the opening discovery might, of necessity, be conducted by interrogatory. For example, the opening interrogatories may seek to flesh out the party’s contentions, identify witnesses and locate relevant documents. Once this information is obtained in response to the interrogatories, the attorney can begin to refine and focus the remaining discovery by taking the depositions of the individuals identified, particularly where the opponents will be deposed regarding the contents of documents.

A Note on Business Torts

The contours of the business torts discussed are subject to ongoing judicial development, and therefore careful attention must be paid to the statu­tory and case law of your jurisdiction regarding the elements of the claims and related defenses. Nevertheless, several generalizations are in order regarding those causes of action that provide redress for interference with business relations.

The first of these is that, in gen­eral, the current trend of case law affords heightened protection to business relationships that have been consummated as existing contracts, and correspondingly less protection when a defendant interferes with a prospective relationship.

For example, the privilege for fair competition rarely provides a recognized justification for inducing the breach of an existing contract, but frequently constitutes a complete defense to claims for interference with prospective economic advantage. Indeed, some courts have held that liability for inducing breach of an existing contract may be predicated on the fact of inducement itself, whereas conduct giving rise to liability for interference with prospective economic advantage must be wrongful by some measure other than the fact of interference. (See Della Penna v. Toyota Motor Sales USA, 11 Cal.4th 376 (1995).)

A second observation relates to the fact that, where the necessary elements are proven, interference with contractual relations constitutes a tort. Since tort damages are recoverable, the courts have attempted to carefully define the range of potential defendants in interference cases to ensure that the liability of the contracting parties is limited to damages available for breach of contract. This has led to a complex body of law that focuses on whether the defendant is, in fact, a “stranger” to the existing contractual relationship.

Third, it should be noted that in many cases the wrongful conduct establishes other independently actionable torts such as defamation and fraudulent misrepresentation. Of course, the plaintiff can elect to frame his complaint on any theory supported by the facts. 

Finally, and perhaps most fundamental, several cases have recognized that tort liability for interference with business relations protects the secure enjoyment of contractual and economic relations at the expense of a freely competitive economy. (See, e.g., Pacific Gas & Electric Co. v. Bear Stearns & Co., 50 Cal.3d 1118, 1137 (1990).) Accordingly, some courts have been hesitant to expand the reach of interference torts, and the recognized defenses are designed to protect legitimate competition and related values. These various policy considerations are reflected in the elements of both the claims and defenses applicable to interference with business relations claims. Accordingly, the interrogatories provided with this article explore the parties’ respective contentions regarding these issues.

Elements of Plaintiff’s Cause of Action

In order to advance a claim for interference with contractual relations, the plaintiff must plead and prove that: (1) a valid contract existed; (2) the contract existed between the plaintiff and a third party; (3) the defendant knew of the existence of the contract; (4) the defendant intentionally engaged in conduct which either (a) induced the third party to breach the contract, or (b) prevented the plaintiff’s performance or caused the plaintiff’s performance to be more expensive or burdensome; and (5) the conduct of the defendant caused damage to the plaintiff. Each of the foregoing elements is the subject of the interrogatories listed on this page.

Where the relationship between the plaintiff and the third party has not yet resulted in an existing contract, the plaintiff’s claim must be for interference with prospective economic advantage. In order to prevail in such a case, the plaintiff must plead and prove that: (1) an economic relationship existed; (2) the relationship existed between the plaintiff and a third party; (3) the relationship contained a probable future economic benefit to the plaintiff; (4) the defendant knew of the existence of the relationship; (5) the defendant engaged in conduct designed to interfere with the relationship; (6) the relationship was actually disrupted; and (7) the disruption caused damage to the plaintiff.

Defenses in Interference with Business Relations Cases

As previously noted, the conduct that gives rise to a claim for interference with contractual relations or prospective economic advantage may be independ­ently actionable under other tort theories. Accordingly, careful attention should be paid to the defenses available for the “underlying tort.” In addition, certain recognized defenses are available in business interference cases. 

Defenses available in business interference cases generally effectuate competing social policies, such as legitimate competition, free speech, access to the courts and related concepts. Accordingly, the defenses to interference torts generally pass under the rubric of “justification” or “privilege,” and include fair competition, justification, constitutional privilege, litigation privilege and related defensive concepts.

Interrogatories From Plaintiff to Defendant

As noted in the introductory material, liability may attach for the defendant’s wrongful conduct that interferes with an existing contractual relationship. The following interrogatories are for use in cases in which the plaintiff claims that the defendant either induced the other party to breach the existing contract or prevented the plaintiff’s performance of the contract or rendered such a performance more expensive or burdensome. The interrogatories are organized according to the necessary elements of the plaintiff’s proof.

Interrogatories From Defendant to Plaintiff

The interrogatories set forth in the following list are for use by defendants in interference with contract cases. They are organized according to the necessary elements of the plaintiff’s proof.

Set your team up for success. The next time an interference with business relations case comes across your desk, whether your team represents the plaintiff or the defendant, arm yourself with effective interrogatories for cases regarding interference with existing contractual relationships or interference with prospective economic advantages.

 


 

Kevin R. Culhane is a partner at Hansen, Boyd, Culhane & Watson in Sacramento, Calif. His practice consists primarily of professional liability and appellate law. He has been a member of the California State Bar Board of Governors and the Judicial Council of California. He is the author of Model Interrogatories (www.JamesPublishing.com or 800-440-4780), from which this article is excerpted.

 

Visit the Forms Directory page for links to the forms discussed in this article, as well as over 100 forms relating to a variety of other topics.

 

 

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