754 S.E.2d 313
Va.2014Background
- Dunlap operated two AAMCO franchise repair facilities under long-term franchise agreements; a change in control led to closures and alleged efforts to convert Cottman franchises to AAMCO, harming Dunlap's businesses.
- Dunlap sued Cottman for tortious interference with contract, tortious interference with business expectancy, and business conspiracy under Va. Code §§ 18.2-499 and -500.
- The federal district court dismissed the conspiracy claim for failure to allege an "unlawful act or unlawful purpose," relying on Station #2, and dismissed the tort claims as time-barred under a two-year limitations period.
- The Fourth Circuit certified two questions to the Virginia Supreme Court: (1) whether tortious interference claims can be the predicate "unlawful act" for a statutory business conspiracy, and (2) whether a two- or five-year statute of limitations applies to those torts under Va. Code § 8.01-243.
- The Virginia Supreme Court held both tortious interference with contract and with business expectancy qualify as the requisite unlawful act for §§ 18.2-499 and -500 because the duty not to interfere is an independent common-law duty arising outside the contract.
- The Court also held the five-year limitations period in § 8.01-243(B) applies, reasoning that interference injures property rights (the right to contract performance and to reap contract profits).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether tortious interference (contract and business expectancy) may serve as the "unlawful act" predicate for a statutory business conspiracy claim | Tortious interference is an independent common-law tort and therefore an unlawful act supporting a conspiracy claim | Station #2 bars using mere breach-of-contract as an "unlawful act"; tortious interference depends on contract obligations and is not independent | Held: Yes — tortious interference is an intentional tort grounded in a common-law duty independent of the contract and qualifies as the unlawful act |
| Whether a 2-year or 5-year statute of limitations applies to tortious interference claims under Va. Code § 8.01-243 | The injury is to property (right to contract performance and expected profits), so the 5-year limitations period applies | The claims reflect disappointed economic expectations / are personal actions subject to a 2-year period | Held: 5-year statute (§ 8.01-243(B)) applies because the torts allege injury to property rights |
Key Cases Cited
- Crump v. Commonwealth, 84 Va. 927 (1888) (early recognition that conspiracy to injure trade/occupation is indictable)
- Werth v. Fire Companies' Adjustment Bureau, 160 Va. 845 (1933) (definition and civil remedy for conspiracy causing damage)
- Gallop v. Sharp, 179 Va. 335 (1942) (the gist of civil conspiracy is the resulting damage from acts in furtherance of the conspiracy)
- Worrie v. Boze, 198 Va. 533 (1956) (right to contract performance and profits are property rights; conspiracy to breach was injury to property)
- Chaves v. Johnson, 230 Va. 112 (1985) (elements of tortious interference with contract/business expectancy)
- Station #2, LLC v. Lynch, 280 Va. 166 (2010) (a mere conspiracy to breach a contract that does not implicate independent duties is insufficient for statutory business conspiracy)
- CaterCorp, Inc. v. Catering Concepts, Inc., 246 Va. 22 (1993) (civil conspiracy requires damages from an unlawful act)
- Dunn, McCormack & McPherson v. Connolly, 281 Va. 553 (2011) (discusses improper methods and elements for interference claims)
- Willard v. Moneta Building Supply, 262 Va. 473 (2001) (statute of limitations determined by type of injury alleged)