Phillips v. Montana Education Ass'n

610 P.2d 154, 187 Mont. 419, 1980 Mont. LEXIS 727
CourtMontana Supreme Court
DecidedApril 28, 1980
Docket14846
StatusPublished
Cited by51 cases

This text of 610 P.2d 154 (Phillips v. Montana Education Ass'n) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Phillips v. Montana Education Ass'n, 610 P.2d 154, 187 Mont. 419, 1980 Mont. LEXIS 727 (Mo. 1980).

Opinions

MR. JUSTICE HARRISON

delivered the opinion of the Court.

Appellant Larry L. Phillips appeals from an order and judgment of the District Court granting a motion by the Montana Education Association (herein referred to as MEA); and John Board, C. D. “Bud” Beagle, Maurice Hickey, Noel Furlong, and Betty Lockey (herein referred to as individual defendants) for summary judgment.

Phillips was hired by the MEA on April 2, 1974, and commenced employment on July 1, 1974. The terms of his employment as executive secretary were specified in a written, two-year contract. On [421]*421December 30, 1974, the Board of Directors of the MEA terminated Phillips’ contract and employment as of December 30, 1974.

On January 28, 1975, Phillips filed a complaint against the MEA alleging breach of employment contract and failure to give the requisite three months notice of termination. On March 19, 1976, Phillips filed an amended complaint and alleged five counts which included the earlier claims, and added claims for slander, malicious inducement by agents of the MEA to breach the employment contract, and that the MEA had blacklisted him from further employment. The amended complaint added eight John and Mary Does as defendants.

The MEA made a number of motions to dismiss, strike, to make more definite statements and to dismiss defendants. In an order dated November 8, 1976, the District Court dismissed the slander count for failure to state a claim, and struck Phillips’ claim for punitive damages, penalties and attorney fees.

Phillips appealed to this Court, and the MEA filed a motion to dismiss the appeal on the grounds that the order was not appeal-able. This Court granted the MEA’s motion to dismiss the appeal, and the cause was remanded to the District Court.

On August 1, 1977, the MEA deposed Phillips and he was unable to provide information concerning the alleged malicious inducement of breach of contract; and three days after that deposition, the MEA served interrogatories on Phillips seeking answers concerning the alleged malicious inducement of breach of contract. Phillips did not answer the interrogatories, and on April 3, 1978, the MEA filed a motion to compel answers. A hearing was held on May 2, 1978, and the District Court ordered Phillips to answer the interrogatories.

Phillips did not answer the interrogatories within the time ordered by the District Court; and on August 31, 1978, the MEA again filed a motion to dismiss the amended complaint. A hearing was held on September 26, 1978, and the District Court found that Phillips had violated the court order by not answering the interrog-aties; and ordered that the amended complaint would be dismissed [422]*422with prejudice if Phillips did not answer the interrogatories by October 13, 1978. The District Court further found that Phillips had failed to comply with a previous court order by not having filed a second amended complaint, and ordered that Phillips’ complaint would be dismissed with prejudice if Phillips did not file a second amended complaint by October 13, 1978. Phillips filed a second amended complaint and answers to the interrogatories on October 13, 1978.

On November 16, 1978, the MEA and the individual defendants moved for summary judgment on count two, the alleged malicious inducement of breach of contract; and count three, the alleged MEA blacklisting of Phillips from further employment, of Phillips’ second amended complaint.

The motion was briefed and a hearing held; and on April 4, 1979, the District Court granted the motion for summary judgment. On April 10, 1979, final judgment was entered pursuant to Rule 54(b), Mont.R.Civ.P. The judgment specifically stated that Phillips was entitled to proceed with counts one and four of the second amended complaint concerning the cause of action for breach of contract. Phillips has not appealed the granting of summary judgment on count three; therefore, Phillips’ appeal is limited to the granting of summary judgment on count two.

The following issue is raised by Phillips for our consideration on appeal:

Whether the District Court erred in granting summary judgment on count two of the second amended complaint wherein Phillips alleged that the individual defendants were personally liable for the tort of malicious inducement of breach of contract.

Causes of action for interference with contract rights have long been recognized in Montana. Pelton v. Markegard (1978), 179 Mont. 102, 586 P.2d 306; Taylor v. Anaconda Federal Credit Union (1976), 170 Mont. 51, 550 P.2d 151; Quinlivan v. Brown Oil Co. (1934), 96 Mont. 147, 29 P.2d 374; Burden v. Elling State Bank (1926), 76 Mont. 24, 245 P. 958; Simonsen v. Barth (1922), 64 Mont. 95, 208 P. 938. See also W. Prosser, The Law of Torts, § [423]*423129 at 927 (4th Ed. 1975). A complaint seeking damages for inducing a breach of contract is sufficient where it alleges (1) that a contract was entered into, (2) that its performance was refused, (3) that such refusal was induced by the unlawful and malicious acts of the defendant, and (4) that damages have resulted to the plaintiff. Pelton v. Markegard, supra, 586 P.2d at 308; Burden v. Elling State Bank, supra, 245 P. at 959.

The law, independent of the contract, imposes upon strangers to a contract the duty not to interfere with its performance. The violation of this duty is a tort, the remedy for such interference is by action in tort. Burden v. Elling State Bank, supra, 245 P. at 959. One type of interference with economic relations has been marked out rather definitely by the courts, and regarded as a separate tort, under the name of inducing breach of contract.

The parties do not dispute the fact that Phillips has a cause of action against the corporation for the alleged breach of contract, and this cause of action is pending in District Court. The fact that there is an available action against the party who breaks the contract is no defense to the one who induces the breach, since the two are joint wrongdoers, and each is liable for the loss. Prosser, supra, § 129 at 948. In terms of legal theory, it is therefore possible to bring suit for breach of contract and also to bring suit for the tort of inducing breach of contract.

The specific issue of whether agents, employees, officers and directors of a corporation may be held individually liable for the tort of malicious inducement of breach of an employment contract is one of first impression in Montana.

Phillips contends that the MEA and the individual defendants are in fact joint tortfeasors. He argues that the tort of malicious inducement of breach of contract is impugnable individually to the individual defendants who sought to, and took steps to see that the corporation did breach the employment contract. Phillips further contends that individual officers cannot, with impunity, commit torts and be allowed to hide behind the corporate veil in order to escape accountability for those torts. The individual defendants [424]

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Wingfield v. DPHHS
2020 MT 120 (Montana Supreme Court, 2020)
Knox v. Monsanto Company
D. Montana, 2019
Harrell v. Farmers Educational Cooperative Union
2013 MT 367 (Montana Supreme Court, 2013)
Kurtzenacker v. Davis Surveying, Inc.
2012 MT 105 (Montana Supreme Court, 2012)
Parker v. Bac Home Loans Servicing Lp
831 F. Supp. 2d 88 (District of Columbia, 2011)
Lester Ammondson v. Northwestern Co
2009 MT 331 (Montana Supreme Court, 2009)
Ammondson v. Northwestern Corp.
2009 MT 331 (Montana Supreme Court, 2009)
Sherner v. NATIONAL LOSS CONTROL SER. CORP.
2005 MT 284 (Montana Supreme Court, 2005)
Sherner v. National Loss Control Services Corp.
2005 MT 284 (Montana Supreme Court, 2005)
Conti v. Newton, 01-2340 (r.I.super. 2005)
Superior Court of Rhode Island, 2005
Bellanger v. American Music Co.
2004 MT 392 (Montana Supreme Court, 2004)
Leonard v. McMorris
63 P.3d 323 (Supreme Court of Colorado, 2003)
Riggs v. Home Builders Institute
203 F. Supp. 2d 1 (District of Columbia, 2002)
Albers v. Edelson Technology Partners L.P.
31 P.3d 821 (Court of Appeals of Arizona, 2001)
Ettenson v. Burke
2001 NMCA 003 (New Mexico Court of Appeals, 2000)
Hannon v. Avis Rent a Car System, Inc.
107 F. Supp. 2d 1256 (D. Montana, 2000)

Cite This Page — Counsel Stack

Bluebook (online)
610 P.2d 154, 187 Mont. 419, 1980 Mont. LEXIS 727, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phillips-v-montana-education-assn-mont-1980.