Recently, a judge in North Carolina awarded a $750,000 judgment to a man that sued the “homewrecker” of his marriage. Here is a link. While the case is borderline ridiculous, it actually highlights a broader issue in civil litigation about interference with civil contracts.
The “Homewrecker” Case
Kevin Howard and his wife were married for 12 years. She began cheating on him with a co-worker, Greg Jernigan. Howard's wife apparently confessed to the affair. Howard was upset, so he divorced his wife and sued Jernigan for causing the divorce.
North Carolina is a rare state with a “homewrecker” law, which is formally called “alienation of affection”. The law is aimed at keeping marriages together and preventing marital affairs. But oddly, the homewrecker law does not require a sexual relationship with the third person. It could be any third person that takes an action to drive the spouses apart. Mother-in-laws BEWARE!
To win his homewrecker claim in North Carolina, Howard had to prove:
- he was married and there was genuine love and affection,
- the love and affection was alienated and destroyed, and
- that the wrongful and malicious acts of the defendant produced and brought about the loss and alienation.
Litchfield v. Cox, 146 S.E.2d 641, 641 (N.C. 1966).
Apparently, a defendant could defend himself or herself by arguing that the marriage was going to end anyway, or that the plaintiff-spouse was cheating as well.
Howard's case went to trial in North Carolina and he proved his claim. A judge awarded him $750,000 from Jernigan! Howard may never collect on the huge judgment, but he certainly made his point to his ex-wife, Jernigan, and the public.
This crazy case centers on a marriage contract. Minnesota does not have a homewrecker law. But the case highlights a broader point: if you interfere with a civil contract, you or your company could get sued.
Broader Litigation Issue of Contract Interference
If you have a contract, you expect the other party to perform. But what if some third person tries to break it up and sign his own contract with the other party? Minnesota law protects you and allows you to sue the third person for damages, as well as suing the other party to the contract for a breach. There are two claims in Minnesota: (1) tortious interference with contract, and (2) tortious interference with prospective business advantage.
Tortious Interference with Contract
To state a claim for tortious interference with a contract, a party must prove:
- the existence of a contract,
- the accused's knowledge of the contract,
- intentional procurement of its breach,
- the absence of justification, and
Kallok v. Medtronic, Inc., 573 N.W.2d 356, 362 (Minn. 1998).
This claim is for a situation where there is an existing contract in place. The third person takes some wrongful act to cause a breach of the contract. This situation may arise when:
- You hire an employee from competitor, knowing that employee is under a non-compete agreement or other employment contract.
- You give one of the contracting parties false information in order to persuade one of them to cancel the contract and sign with you.
- You threaten or coerce one of the contracting parties to cancel the contract.
- You make it impossible for a contracting party to perform under the contract, such as a supplier refusing to deliver inputs to a manufacturer to cause a breach in a manufacturer-customer contract.
- Other situations where you maliciously break up a contract.
Tortious Interference with Business Opportunities
To state a claim for tortious interference with “prospective business advantage”, a party must prove:
- the existence of a reasonable expectation of economic advantage,
- defendant's knowledge of that expectation,
- defendant's intentional interference with the plaintiff's expectation, such that the interference was either independently tortious or in violation of a state or federal statute or regulation,
- a reasonable probability that the plaintiff would have realized the economic advantage or benefit in the absence of the defendant's wrongful act, and
Gieseke ex rel. Diversified Water Diversion, Inc. v. IDCA, Inc., 844 N.W.2d 210, 219 (Minn. 2014).
This comes up when you do not yet a formal contract in place, but you expect a contract soon or an ongoing business relationship. You, as the plaintiff, generally must name the party to which you will have a contract or continuing expectation of business. This often comes up between competitors, but it may also come up when creditors try to collect on a business loan or on property.
This claim can be harder to prove because the contract is not yet in place and the damages are unclear. Generally, there needs to be a wrongful act by the defendant. A judge may look to these factors:
- the nature of the actor's conduct,
- the actor's motive,
- the interests of the other with which the actor's conduct interferes,
- the interests sought to be advanced by the actor,
- the societal interests in protecting the freedom of action of the actor and the contractual interests of the other,
- the proximity or remoteness of the actor's conduct to the interference, and
- the relations between the parties.
Restatement (Second) of Torts § 767.
This claim may come up when:
- You interrupt negotiations for a contract that is about to be completed so you can be the person to sign the contract.
- You interfere with a relationship that is informal in nature and has no formal contract.
- Your competitor has a certain customer, but there is no formal contract in place. You make false statements to poison the competitor's reputation, with hopes that the customer will sign with you.
- You take other wrongful action to stop a business relationship from continuing.
Note that there is a difference between telling a potential customer to “keep me in mind” versus telling them to “breach your contract with my competitor and sign with me.” Courts give competitors some latitude to compete for business and contracts. Not all actions will be wrongful, and not all cases will be worth suing in court. But if someone has clearly crossed the line and ended a contract that is valuable, then you can sue to hold the person accountable.
The “homewrecker” case is a rare case surrounded by a media circus. Minnesota does not have this type of law.
But the case raises an important point: be careful not to interfere with an existing contract or existing business relationship. You could get sued and it could be costly for you or your business.