820 S.E.2d 607
Va.2018Background
- Read Properties (successor to Forehand) acquired rights to a lease commission (monthly $810) when it purchased Forehand’s commercial real estate division in 2010.
- Creekside leased property to Delta under a lease requiring payment of a leasing fee to Forehand/Read Properties; Creekside later sold the property to Francis Hospitality, subject to the lease.
- After the sale and assignment to Francis Hospitality, Francis Hospitality and Delta executed a third amendment eliminating the leasing-fee provision; Read Properties stopped receiving payments after March 2014.
- Read Properties sued in circuit court asserting: (1) breach of contract (as intended third-party beneficiary), (2) intentional interference with contract, and (3) statutory business conspiracy under Va. Code §§ 18.2-499, -500 seeking treble damages and attorney’s fees.
- The circuit court found for Read Properties on all counts, awarded $34,020 in unpaid leasing fees, and trebled damages plus fees under the conspiracy statute.
- On appeal, the Virginia Supreme Court affirmed liability for breach of contract (awarding $34,020) but reversed the tortious-interference and statutory-conspiracy judgments, holding parties cannot tortiously interfere with their own contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Francis Hospitality and Delta can be liable for tortious interference with the lease | Read Properties: the amendment terminating fee payments tortiously interfered with its right as third-party beneficiary | Francis Hospitality/Delta: a party cannot interfere with its own contract; they are parties to the lease | Held: No — a party cannot be liable for tortiously interfering with its own contract; Count II reversed |
| Whether tortious interference can serve as the unlawful act supporting a statutory business conspiracy claim | Read Properties: the interference was an unlawful act enabling treble damages under §§ 18.2-499,-500 | Defendants: because interference claim fails (they are parties), conspiracy claim lacks the required unlawful act | Held: No — conspiracy claim fails without a valid underlying unlawful act; Count III reversed |
| Whether Read Properties is entitled to recover unpaid leasing fees as an intended third-party beneficiary | Read Properties: succeeded Forehand and is an intended beneficiary entitled to the fee through lease term | Defendants: contested but not accepted on appeal | Held: Yes — Read Properties entitled to $34,020 in unpaid leasing fees (affirmed) |
| Whether treble damages and attorney’s fees under Va. Code § 18.2-500 are recoverable | Read Properties: seeks treble damages and fees based on conspiracy conviction | Defendants: argue no predicate unlawful act, so treble damages not available | Held: No — treble damages and fees vacated because conspiracy finding reversed |
Key Cases Cited
- Chaves v. Johnson, 230 Va. 112 (1985) (recognizing tortious interference cause of action and requiring the interferor be a stranger to the contract)
- Fox v. Deese, 234 Va. 412 (1987) (a person cannot intentionally interfere with his own contract)
- Dunlap v. Cottman Transmission Sys., 287 Va. 207 (2014) (tortious interference may serve as the unlawful act supporting a statutory business-conspiracy claim)
- Allen Realty Corp. v. Holbert, 227 Va. 441 (1984) (elements required for civil conspiracy under Va. law)