Tortious Interference Claim Dismissed on Summary Judgment

On December 26, 2018, Justice Bransten of the New York County Commercial Division issued a decision in Capital Stack, LLC v. Raharney Capital, LLC, 2018 NY Slip Op. 33389(U), dismissing a tortious interference claim on summary judgment, explaining:

Capital Stack also seeks summary judgment with respect to its fifth cause of action, for Rahamey's tortious interference with its prospective economic relations. This cause of action is premised on allegations that Rahamey and Murray directly harmed Capital Stack, in its relations with Meir Kahtan Public Relations, Capital Stack's public relations consultant, and PR Newswire, an organization through which Capital Stack published press releases.

Capital Stack alleges Rahamey tortiously interfered by improperly contacting Meir Kahtan and PR Newswire and making misrepresentations to them for the sole purpose of harming Capital Stack's business relationships with them. Capital Stack also alleges that Chris Murray, who is both defendant Sean Murray's brother and served as Rahamey's counsel of record in the New York dissolution action and appeal, contacted Meir Kahtan and, through fraudulent misrepresentations, induced Meir Kahtan to disclose to it nonpublic information about Capital Stack.

Capital Stack also alleges Rahamey interfered with its existing relationship with PR Newswire. Murray is alleged have contacted PR Newswire complaining about a "fake press release" which identified Capital Stack and Daily Funder as companies affiliated with eProdigy.

To prevail on a claim for tortious interference with prospective economic advantage, a party must prove (1) that it had a business relationship with a third party; (2) that the defendant knew of that relationship and intentionally interfered with it; (3) that the defendant acted solely out of malice or used improper or illegal means that amounted to a crime or independent tort; and (4) that the defendant's interference caused injury to the relationship with the third party.

Tortious interference with prospective economic relations requires an allegation that plaintiff would have entered into an economic relationship but for the defendant's wrongful conduct. Capital Stack, however, does not allege that Meir Kahtan Public Relations or PR Newswire would have entered, or continued, their economic relationships with Capital Stack, but for Defendants' wrongdoing.

Rather, Capital Stack asserts that a call from Chris Murray to Meir Kahtan was only one of the factors that led to the termination of the relationship, not the "but for" cause for its termination. Furthermore, although Capital Stack alleges that it had a business relationship with PR Newswire and that Defendants tortiously interfered with it, it fails to allege that this interference had anything to do with the termination of the relationship. Accordingly, Capital Stack fails to state a cause of action for tortious interference with prospective economic relations. Capital Stack's motion for summary judgement is therefore denied and Defendants' motion for summary judgment, dismissing Capital Stack's fifth cause of action, is granted.

(Internal quotations and citations omitted) (emphasis added).

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.