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Induced Breach of Contract Tortious Interference

Induced Breach of Contract Tortious Interference

The Supreme Court of New York County recently issued a decision in the case of Giglietti v. Bottalico. This somewhat unusual and complex case takes place in the context of a railway employee (the plaintiff) engaged in a dispute with his employer Metro-North Railroad (one of the defendants). Bottalico is the chairman of ACRE, another named defendant, which is the Union that the plaintiff belongs to.

Background of the Case

Plaintiff alleged that he was fired from his job as a conductor because his employer, Metro-North, accused him of stealing three train tickets (value: $43) because, on separate occasions, he failed to issue receipts for these tickets. The evidence for these accusations was the visual observation of ‘spotters’ employed by the railroad. Plaintiff stated that the new ticket issuing machines were faulty and did not issue receipts, and that he did not intentionally steal.

For the above stated grounds, Giglietti appealed his job dismissal. Bottalico, as head of the union, represented Giglietti during the course of his appeals. Giglietti lost all of his appeals and filed this present lawsuit. He alleges that Metro-North improperly exerted influence over Bottalico, preventing Bottalico’s representation from being effective (in essence a theory similar to conflict of interest and/or malpractice). Plaintiff’s evidence for this allegation is the fact that Metro-North paid Bottalico’s salary, thus, as he alleges, Bottalico had an incentive to keep Metro-North happy by doing what it wanted. One form the plaintiff’s allegations take is tortious interference with a contract.

Analysis

The court discussed the legal standard for tortious interference. A plaintiff making this allegation must demonstrate that the defendant intentionally, unjustifiably, and successfully caused or induced a third party to breach the contract between the third party and the plaintiff. The legal standard in New York also adds this interesting tidbit: “There is no tortious interference absent fraud, collusion, malice, or bad faith,” citing Halevi v. Fisher. Implicit in this standard is the idea that contracts become breached all the time – but it is rare that their breach rises to the level of a tort. Remember from previous posts that the trend of decisions handed down in 2013 very strongly supports the idea that breach of contract is never a tort absent bad acts. This case, although about tortious interference and not about e.g. negligence for breach, echoes the reasoning and reinforces the trend. Even causing someone else to breach their contract is not ordinarily subject to tort liability unless the injured party can prove that some form of bad act occurred.

Under plaintiff’s theory, the contract at issue is his collective bargaining agreement with ACRE (the union) and Metro-North is the party tortiously interfering with the contract, causing ACRE to breach its obligations of fair representation, etc.

The court doesn’t buy any of plaintiff’s theories. The fact that Bottalico’s salary was paid by Metro-North is not, in and of itself, sufficient evidence of the kind of malicious collusion or other bad acts to establish the theory. The court dismissed the complaint in its entirety.

Tortious interference is an unfortunate and unusual situation that does occur when dealing with contracts. Please don’t hesitate to contact our office for a consultation if you have any questions.

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