Walnut Street Associates, Inc. v. Brokerage Concepts, Inc.

982 A.2d 94, 2009 Pa. Super. 191, 2009 Pa. Super. LEXIS 3289, 2009 WL 2998927
CourtSuperior Court of Pennsylvania
DecidedSeptember 22, 2009
DocketDOCKET NO. A-5501-06T2
StatusPublished
Cited by56 cases

This text of 982 A.2d 94 (Walnut Street Associates, Inc. v. Brokerage Concepts, Inc.) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Walnut Street Associates, Inc. v. Brokerage Concepts, Inc., 982 A.2d 94, 2009 Pa. Super. 191, 2009 Pa. Super. LEXIS 3289, 2009 WL 2998927 (Pa. Ct. App. 2009).

Opinion

OPINION BY

DONOHUE, J.:

¶ 1 Appellant, Brokerage Concepts, Inc. (“BCI”), appeals from the October 31, 2007 order denying its post-trial motions for judgment notwithstanding the verdict or a new trial and entering judgment in favor of Appellee, Walnut Street Associates, Inc. (“Walnut Street”). After careful review, *96 we conclude that in accordance with the Restatement (Second) of Torts § 772(a), true statements may not be the basis for a claim of intentional interference with contractual relationships. Accordingly, we reverse and remand for entry of judgment notwithstanding the verdict in favor of BCI.

¶ 2 The relevant facts and procedural history of this case are as follows. Walnut Street provides insurance brokerage services and assists employers in obtaining health insurance benefits for their employees. In the 1980’s, Walnut Street was appointed broker of record for Procacci Brothers Sales Corp. (“Procacci”), a self-funded insurer with separate plans for its union and non-union employees. In 1994, at the recommendation of Walnut Street, Procacci retained BCI, a third-party administrator (“TPA”) of self-funded employee benefit plans, as TPA for its two self-funded plans. BCI, in turn, paid Walnut Street commissions based on the premiums paid by the Procacci plans.

¶ 3 On March 1, 2005, after BCI refused to meet a proposal to lower its costs, Pro-cacci notified BCI that as of March 16, 2005, it was moving its union plan from BCI to a new and less costly TPA, Loomis Company (“Loomis”). On March 2, 2005, Kimberly Macrone (“Macrone”), a sales representative employed by BCI, wrote a letter to Procacci asking that it reconsider its decision. Among other things, Ma-crone’s letter informed Procacci of the amount of commission Walnut Street earned on the nonunion plan. Shortly thereafter, Procacci terminated Walnut Street as its broker of record. On March 10, 2005, BCI stopped payment on a commission check to Walnut Street.

¶ 4 In August 2005, Walnut Street commenced the action underlying this appeal against BCI and Macrone. The complaint contained four counts. The first three sought recovery from BCI for unpaid commissions, while the fourth alleged tortious interference with contractual relations. In November 2006, after BCI paid the disputed commissions, plus interest, the trial court granted summary judgment on Counts I, II and III. Summary judgment on Count IV was denied. The parties proceeded to a jury trial on the tortious interference claim. At the close of evidence, Walnut Street entered a voluntary non-suit with respect to Macrone. On June 29, 2007, the jury entered a verdict in favor of Walnut Street and awarded it $330,000 in compensatory damages. BCI filed post-trial motions for judgment notwithstanding the verdict (“JNOV”) or in the alternative, a new trial. The trial court denied both motions, and entered judgment in favor of Walnut Street and against BCI.

¶ 5 On appeal, BCI raises the following two issues and sub-issues:

I. Whether the trial court should have directed a judgment in [BCI’s] favor because:
A. the statements in BCI’s letter to Procacci causing [Walnut Street’s] termination were true, and therefore could not serve as the basis for a tortious interference claim under Pennsylvania law, or, in the alternative, under the law of New Jersey, which has the most significant relationship to this issue; 1
B. the imposition of tortious interference liability for the making of *97 truthful statements is unconstitutional under the First Amendment and the Pennsylvania Constitution, where no countervailing state interests have been identified;
C. BCI’s conduct was privileged either under the competition privilege or under the business interest privilege; or
D. [Walnut Street] provided no evidence of lost profits but only of lost revenues, and the revenue evidence itself was so insufficient as to render the damages claim purely speculative, with the result that [Walnut Street] failed to prove an essential element of his claim?
II. Whether the trial court should have granted BCI’s motion for a new trial because of prejudicial error with respect to one or more of six jury instructions, as follows:
A. the failure to give a charge that a plaintiff cannot ground his cause of action upon his own fraud;
B. the failure to instruct the jury on the meaning of “wrongful means,” an essential element of BCI’s competition privilege defense;
C. the similar failure to define the term “proper means,” essential to BCI’s business interest privilege defense;
D. the giving of an erroneous charge to the jury defining lost profits as consisting solely of lost revenues, without regard to the need to subtract out the costs of producing those revenues;
E. the failure to instruct the jury that damages for lost profits must be proved to a reasonable certainty and cannot be speculative; or
F.the failure to instruct the jury that truthful statements cannot be the basis for tortious interference liability?

Appellant’s Brief at 3-4.

¶ 6 Under our applicable standard of review, we will reverse a trial court’s denial of a motion for JNOV or a new trial only if we find an abuse of discretion or an error of law that controlled the outcome of the case. Hutchinson v. Penske Truck Leasing Co., 876 A.2d 978, 984 (Pa.Super.2005), affirmed, 592 Pa. 38, 922 A.2d 890 (2007). When, as here, the issue raised on appeal presents a question of law, our standard of review is de novo and our scope of review is plenary. See Dooner v. DiDonato, — Pa. -, 971 A.2d 1187, 1193 (2009).

¶ 7 In its first claim on appeal, BCI argues that the trial court erred in denying its post-trial motion for JNOV because the allegedly interfering statements made to Procacci were truthful and thus may not serve as a basis for a claim for tortious interference with contractual relationships. Appellant’s Brief at 19. For the reasons that follow, we agree and reverse the trial court’s order.

¶ 8 The tort of intentional interference with existing contractual relationships is governed by section 766 of the Restatement (Second) of Torts, which our Supreme Court adopted in Adler, Barish, Daniels, Levin & Creskoff v. Epstein, 482 Pa. 416, 393 A.2d 1175 (1978), appeal dismissed and cert. denied, 442 U.S. 907, 99 S.Ct. 2817, 61 L.Ed.2d 272 (1979). 2 Section 766 provides as follows:

*98

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982 A.2d 94, 2009 Pa. Super. 191, 2009 Pa. Super. LEXIS 3289, 2009 WL 2998927, Counsel Stack Legal Research, https://law.counselstack.com/opinion/walnut-street-associates-inc-v-brokerage-concepts-inc-pasuperct-2009.