*1 83 84 84 HEATING, INC. v HENDERSON & NORTHERN PLUMBING BROTHERS, INC. 6, 1977, Rapids. Grand at Submitted December Docket No. 77-201. appeal applied May 8, for. 1978. Leave to Decided Brothers, general planned to as a contractor bid Henderson Inc. prospective requested to subcontractors sealed bids from and City the with its for construction contracts use in bid plant. Cheboygan water treatment additions the waste on Inc., prospec- Plumbing Heating, listed as a was Northern city city. bid to The tive in Henderson’s subcontractor contractor, general signed contract Henderson as the Contractors, Inc., as the sub- contract Phoenix but that listed contractor, place then commenced an of Northern. Northern alleging it had and Phoenix action Henderson and that on custom in trade with Henderson based contract (1) three distinct torts: Phoenix committed Henderson, (2) tor- Northern and breach a contract between (3) contract, existing tortious an tious interference with relationship. advantageous De- business with an summary judgment, granted Kent Circuit fendant was Phoenix Cook, Court, George appeals. R. J. Held: Plaintiff Summary judgment that there was no issue on the basis depositions opposing parties improper fact was where the by the should be decided issue of fact which raised material is not a bar to actions trier of fact. The statute of frauds and tortious interference with an tortious interference with Reversed and remanded. J.,C. dissented: grounds grant summary judgment trial court’s [4] [1-3] [7] [9, [5, [12] [11] 6, 8, 45 Am Jur 73 Am Jur 13, 73 Am Jur 15] Am Jur Am 10, 14] Jur Am Jur 2d, 2d, 2d, 2d, References 2d, Am Summary Interference §§ Statute of Frauds § Statute of Frauds § Summary 2d, Jur Interference §§ 2d, Judgment foe Points in Headnotes Interference Judgment 7, 27. 518. 606. § 5. 1, 7, § 26. 9.§ 11, 12, 50. that, assuming the existence of a Phoenix had not taken action which amounted to tortious interference was proper inducing wrongfully because actions for a breach of contract are barred where there is an absence of an enforceable *2 plaintiffs allegations contract and because the failed to show any that Phoenix took action which amounts to tortious inter- advantageous ference with an
Opinion op the Court Judgment—Summary Judgment—Issues op 1. Fact—Tort Cases— Court Rules. summary judgment except
A motion for which states that as to damages genuine amount the there is no issue of material granted only fact should be where it is obvious that nonmoving party’s subject deficiency case is to some which trial; finding cannot be overcome at courts are liberal in genuine exist, especially issues of material fact do in tort cases (GCR 1963, 117.2[3]). Judgment—Summary Judgment—Issues by op 2. Af- Fact—Trial fidavit—Jury Trial—Court Rules. court, granting summary judgment
A trial because no issue of exists, substituting fact should be careful to avoid a trial (GCR deposition 1963, by jury 117.2[3]). affidavit and for a trial Judgment—Summary Judgment—Issues Fact—Jury 3. Submis- sible Case. presented by summary judgment
The issue a motion for based on genuine no issue of fact is not a determination of whether plaintiff case, jury-submissible simply has a but whether a genuine issue of fact has been raised. Judgment—Summary Judgment—Depositions—Inferences— 4.
Contract— Subcontractors—Interference with Contract— Court Rules. Summary judgment in favor of a in a defendant-subcontractor by plaintiff alleging suit who was the existence of a contract plaintiff defendant-contractor, between the and a plaintiff between the defendants to breach the contract between defendant-contractor, and that the defendant-subcontractor tortiously existing had interfered with that was im- contract proper depositions agents where the of the of the two defend- ants raised an inference that the defendant-contractor had changing deposi- acted on its own in its subcontractors and the plaintiff’s president opposite tion raised an inference (GCR 1963,117.2[3]). 83 Mich 5. Torts—Contracts—Interference with Contract—Interfer- Relationship—Statute of Frauds—Stat- ence with Business utes. may claimed a bar in a suit not be as
The statute of frauds existing with an contract or wherein tortious an business relation- tortious interference 26.922). (MCL 566.132; alleged ship MSA Contract—Conspiracy 6. Torts—Contracts—Breach of Frauds. Breach Contract—Statute contracting party alleging and a stran- that a A who is conspired ger of that to cause a breach to the contract have writing satisfy the statute of must show a sufficient contracting frauds; enforceable contract is not if the wrong party no in not party, have committed would contract, stranger performing to the and neither would wrong. have committed contractor with Contract—Elements. 7. Torts—Contracts—Interference prevail theory tortious interference with To (2) (1) existed, party it show that a contract must *3 (3) instigated breached, stranger to the contract was (4) breach, stranger justification. did so without and of with Contract—Statute 8. Torts—-Contracts—Interference Frauds—Statutes. interfering party may not raise the statute of A claimed third alleging interference with an to a suit tortious frauds as a bar dependent existing on the this tort is not contract because stranger’s per enforceability but on the of the contract se 26.922). (MCL566.132; MSA interference with the contract Relationship— 9. Torts—Tortious Interference with Business Elements. prima inter- facie tortious The basic elements which establish a relationship of a are: the existence ference with a business (not by necessarily an enforce- evidenced valid business relation contract) relationship expectancy, knowledge or of the or able interferer, expectancy part intentional inter- of the inducing causing of the or termination ference or a breach party damage relationship expectancy, to or and resultant disrupted; relationship expectancy one is has been whose interferes with business for commission of this tort who liable inducing another, by prospective, of both relations person relation into or continue a business third not to enter preventing person continuing with another or third from business relation with another. Advantageous 10. Torts—Tortious Interference with Business Relationship—Contracts—Statute of Frauds. advantageous Tortious interference with an business therefore, necessarily contract; is not based on the statute of frauds is no bar to such a cause of action. by Danhof, Contract—Conspiracy
11. Torts—Contracts—Breach to Breach Contract—Statute Frauds—Statutes. legal conspired There is no basis for a claim that a defendant applies breach a contract where statute of frauds there (MCL 566.132; writing satisfy is no sufficient to the statute 26.922). MSA 12. Contracts—Statute of Frauds—Memorandum—Parol Evi- dence. satisfy To the statute of frauds a memorandum must contain the expressed substantial elements of a contract with such cer- may parol tainty they be understood without resort
evidence. 13. Torts—Contracts—Tortious Interference with Contract— Binding Absence of Contract. binding The absence of a contract is a bar to a claim of tortious
interference with a contract. Advantageous Business Relation- Torts—Interference 14. ship—Contracts—Statute Frauds—Summary Judgment. advantageous tort of interference with an business relation- ship depend does not of an enforceable contact existence and, therefore, the statute of not available as a frauds is however, defense; grant summary judgment the trial court’s proper allege for a defendant was where the failed to tortious actions the defendant which amounted to interference with an Relationship— 15. Torts—Tortious Interference with Business *4 Justification—Improper or Il- Contracts—Actions Without legal Means. bring nonperformance of a Not all actions which about advantageous development contract or busi- hinder the interference; only relationship for ness is liable are tortious one justiñcation; inter- actions taken without to constitute tortious Opinion the Court ference with an means "improper illegal’’. of interference must be School, Richard H. plaintiff. for H. Warner, & Judd Robert Skilton Norcross (by Scoville), Joseph G. for defendant Phoenix and Contractors, Inc. Kelly J., M. J. and T. M.
Before: C. and Burns, JJ. Burns, Plumbing and
T. M. J. Plaintiff Northern Inc., from the trial Heating, appeals by right court’s to defendant grant summary judgment Contractors, Inc., 1963, under GCR Phoenix 117.2(3). disposition of Northern’s claims Summary Phoenix was and is reversed. improper
I of this arose underlying controversy facts contracts bidding out of for construction plant waste water treatment additions for the City Brothers, Defendant Henderson Cheboygan. Inc., for planned general to bid as the contractor this me- project solicited bids from various subcontractors, including chanical Northern In Phoenix. its bid Henderson listed city, subcontractor, Northern as a and this was done on the belief that Northern was the low bidder the mechanical work. subcontracting happened
What from the time of the submission as a listing of the bid by Henderson until the contract signed subcontractor Henderson subcontractor, city with the with Phoenix as the *5 Opinion of the Court of this sub- forms basis action and should be jury to a for factual mitted determination.
II Northern filed this suit Henderson and claiming Phoenix, it had contract with subcontracting Henderson to do the mechanical alleg- based on the custom in the trade and work ing between Henderson and Phoenix by tortious to breach alternatively, contract, and, if Phoenix with the no by found, was tortious interference Phoe- nix of an with appeal, only In this Henderson. Northern’s claims against Phoenix are involved. response complaint,
In to the Phoenix filed mo- 116.1(5), judgment, 1963, tions for accelerated GCR frauds, 566.132; MCL MSA based statute summary judgment, 1963, 26.922, and GCR 117.2(3), claiming genuine there were no issues of happening regard to the of acts material fact with of interference employees causation, or Phoenix i.e., did that Henderson not contract with North- ern, its contract or that Henderson breached with solely reasons, Northern, existed, if one for its own rather than act Phoenix. depositions parties
After the had taken some granted affidavits, trial court and submitted doing summary judgment. In Phoenix’ motion for so, of a contract the court assumed the existence showing but held that there was no that Phoenix had Henderson to breach interfered with caused effect, that it was that contract. In the court ruled proceed solely Henderson’s decision not Cheboygan as the Northern project. subcontractor doing so, In the court erred. Opinion of the Court
III
finding
genuine
The courts are
liberal
especially
exist,
issues of material fact do
in tort
117.2(3)
cases, and a motion under rule
should be
granted only where it is obvious that the nonmov-
ing party’s
subject
deficiency
to some
case
which
*6
Kretschmer,
cannot
overcome at trial. Rizzo v
be
(1973).
363;
389 Mich
207
316
NW2d
ruling
exists,
In
no issue of fact
the court
substituting
must be careful
to avoid
a trial
deposition
by jury.
affidavit and
for trial
Freeman
Co,
v Massachusetts Mutual Life Insurance
27
(1970).
App 572;
Mich
183
832
NW2d
The court is
findings
weigh
not allowed to make
of fact or to
credibility
deponents.
of affiants or
Bilicki v
(1969),
Co,
319;
382
W T Grant
Mich
170
30
NW2d
App
Detroit,
67;
Baker
v
Mich
IV Since trial court assumed the existence of a question it reached never of the frauds, statute of and the effect it would have on alleged by plaintiff against the tortious conduct Phoenix. alleged three torts distinct (1)
Phoenix; to breach a contract (2) Henderson, between Phoenix and tortious inter- by Phoenix, ference with an (3) tortious interference with an The statute frauds is not to the a bar second third actions. *7 Conspiracy
A.
allegation
contracting
Where there is an
a
that
party
stranger
and a
to the
have con
contract
spired
contract,
to cause a breach of that
the
plaintiff
writing
satisfy
must show
sufficient to
Jaques
App
Smith,
the statute of
62
frauds.
v
Mich
(1975),
719;
den,
92
op
Opinion
the Court
not enforceable
(1976).2
contract
is
If the
have committed
he would
contracting
party,
the
contract,
the
wrong
performing
in not
no
16 Am
to the contract.
stranger
neither would
Different considerations
50.
2d, Conspiracy,
Jur
§
case.
in this
allegations
to the other
apply
contract
with
B. Tortious
show
must
theory, plaintiff
on this
prevail
To
breached,
that
existed,
it was
that
a contract
that
it did
so
the breach and
instigated
Phoenix
Nienhuis,
v
Dassance
justification.
without
(1975).
422;
C. Tortious interference with relationships business "The basic prima elements which facie establish tortious with relationship interference a business are (not the existence of valid business relation necessar- contract) ily knowledge expectancy; evidenced or enforceable part relationship expectancy or interferer; inducing an intentional interference causing relationship or or breach termination of the or expectancy; damage and resultant party to the whose expectancy disrupted. or has been One is liable for commission this tort who interferes with another, business both prospec- relations of tive, by inducing person a third not to enter into or pre- continue relation with another or venting person continuing a third from a business 2d, Interference, relation another.” 45 Am Jur 50, p 322. § necessarily
Since this tort is not con- based on tract, the statute of frauds would be no bar.
V genuine The heart of this case is whether issues relating of material exist fact to contract forma- engaged tion, whether Phoenix acts existed, with the contract if one *9 Danhof, J. Dissent C. if no acts existed, those induced contract Henderson to end its It summary judgment and whether relationship with Northern. questions fact, there are held that the matter is is reversed and alleged by type trial. The of actions remanded for developed state, are not well this and Northern plaintiff proceed to trial. should be allowed supra. Hutchings Co, v Demarest & Whether Dave depends ultimately prevail on the Northern will present trial, at it able to on facts that will be affidavits and depositions. proceedings not in-
Reversed and remanded for opinion. appellant. consistent with this Costs to Kelly, J., M. J. concurred. (dissenting). controversy This
Danhof, project. Defendant, arose out of the construction (Henderson) general Brothers, is a Inc. Henderson through publication, which, contractor requested ing ing, a trade subcontractors, includ- sealed bids from plaintiff, Plumbing both and Heat- Northern (Northern), defendant, Phoenix Con- Inc. and (Phoenix). submitting tractors, In its own bid Inc. city, as a subcon- to the Henderson listed Northern the low tractor in the belief that Northern was testimony point bidder. From this allegations are in conflict. Buday, Northern,
Mr. stated President fill out office to when he arrived at Henderson’s equipment questionnaires, of Hen- Mr. Robinson had him that men from Phoenix derson’s told two asking why not chosen been in Henderson had capa- might stating Phoenix, not be Northern "badmouthing” doing job, generally ble of meeting, Buday, was Mr. Also at Northern. questioned get per- ability about Northern’s 1978] C.J. Although
formance bond. this was never men- before, tioned Henderson claimed that Northern get per- must be bonded if Henderson was to required by formance bond which was the con- tract. Buday
Mr. also testified he later asked Mr. knocking your if Henderson "someone was back door” and that he answered that Phoenix was. Mr. says might Henderson that he have made this *10 August 4, 1976, statement. lunch, Around over attempted get some men from Henderson to agree to to withdraw its bid in return project. agreement other work on the No was day attempted later, reached. A so Henderson get Buday sign agree- to ment, Mr. to a hold harmless 16, 1976,
but he refused to do so. On October signed city the general the contract with Henderson as listing
contractor, Phoenix as a subcon- placed purchase tractor. Henderson then order subcontracting with Phoenix for work. Plaintiff judge granted then filed suit. The trial Phoenix’s summary judgment stating motion for if that even he assumed there was a contract between Hender- allegations Northern, son and he could find tortiously which would indicate that defendant plaintiff’s with interfered contract. complaint plaintiff alleges
In his Phoenix that (1) committed three distinct to torts: breach a contract between Northern and Hender- (2) son, tortious interference with an con- (3) tract, and tortious advan- tageous relationship. judge The trial granted judgment summary defendant’s motion for grounds assuming that, the existence any contract, Phoenix had not taken actions which amounted tortious I hold interference. would proper summary judgment order of was App 84 inducing wrongfully a breach of since actions for of an the absence enforcea- contract are barred allegations plaintiffs because ble contract and took action which that Phoenix failed to show advanta- interference with an tortious amounts to geous business
I majority agree that one must show an I with the prerequisite to establish enforceable contract as ing conspiracy to breach a contract. a claim for frauds, 566.132; MSA MCL When the statute of 26.922, satisfy writing applies is no sufficient and there legal statute, no basis for a there is conspired to breach claim that defendant contract, Jaques Smith, 719; 233 62 Mich v (1976). (1975), den 395 Mich lv NW2d applicable construction time since the statute is days sub with mechanical estimated at was per being jobs contracting last to be one of the satisfy principle that to settled formed. The is well con memorandum must the statute of frauds the tain the substantial elements pressed ex of a contract they may certainty be with such *11 parol evidence, Mess to understood without resort Cunningham, 623; NW more v 78 Mich (1889), v The Jew Teachers Association Hebrew App 54; Federation, 62 Mich ish Welfare (1975). re the Plaintiff contends NW2d quirements satisfied the of the statute of frauds were city proposal by to the Henderson submitted as the subcontractor which listed Northern computing by notes made Henderson certain writings the for are not sufficient the bids. These they all contain do not statute of frauds because elements of the contract. the substantial by proposal plaintiff asserts, submitted As may incorporate city’s Henderson required specifica- which lists the materials though provide tions. Even this would substantial issues, details some it does not cover all the purport spell any It terms. many possible does not out of the govern alternatives that could relationship, contractor-subcontractor manner of such as payment provisions. penalty In a very Washington Supreme case, similar Court essentials, "[s]uch also concluded that as manner payment, completion of portion time for of the mechanical penalty provisions, bonding, work,
of the
normally
any
etc., are
critical to
construction con-
Plumbing Shop,
tract”. The
Pitts,
Inc v
67 Wash
(1965).
514, 518;
2d
II agree majority However, I cannot with the binding the absence of a contract is not a bar to a claim of tortious interference with a contract. This holding holding is not consistent with the conspiracy Jaques claim or the ratio decidendi of v supra. Smith, Since the claim of requires contract, breach a contract an enforceable Jaques supra, Smith, v so does the claim for though claims, tortious interference. These even they essentially sound in are tort both p Conspiracy, claims, 2d, § 56, 16 Am Jur 154. As *12 83 98 Mich 84 Blair, the Court stated in Roche v Mich 608, NW2d (1943), 613-614; "The that in a law is well established civil action for wrongful damages resulting alleged from acts to have pursuance conspiracy, gist of a been committed the gravamen conspiracy of the action not is the but is wrongful causing damages. conspiracy the acts the The standing causing alone without the commissionof acts damage would not be actionable. The cause of action conspiracy does not result from the done.” but from the acts Corp, Fenestra, See also 377 Mich Inc v Gulf American Land Spra- 141 NW2d Bush v 565; (1966), gue, major 51 16 NW 222 (1883). 41; conspiracy difference between the claim and the conspiracy tortious interference claim is that agree- claim contains an additional element of an nonperforming party ment stranger. between and the (nonconspiracy) The tort of require agreement. with a contract does not The this gravamen of the claim is that damages nonperform- suffered from the person ance of an enforceable contract. If a does damages nonper- not suffer recoverable formance of a nonenforceable from the
contract, or from an agreement party between the other and the stran- ger perform a nonenforceable damages likewise he should not recover from nonperformance of a nonenforceable contract by stranger. which is induced
III The tort of interference depend does not on the exis- tence of an enforceable statute of contract and therefore
frauds not available as a defense *13 v Henderson Bros Danhof, by C. J. Dissent However, I would affirm the these claims. order of given by summary judgment reasons for the specifically, court, trial because failed to allege by defendant which amounted actions advantageous busi- interference with an to tortious relationship. To establish tortious interfer- ness relationship advantageous an business ence with competitor, of im- one must show use illegal proper means, Torts, or Restatement p p 2d, Interference, § 31, § 768, 71; 45 Am Jur alleged improper the use of 308. Plaintiff has illegal or means. bring nonper- actions which about
Not all development contract or hinder the formance of a advantageous are tor- of an business only is for tious interference. One liable actions justification, Torts, 4 Restatement taken without p p 49, 2d, Interference, § 27, § 766, 45 Am Jur (4th ed), p § 130, 304; Prosser, 949. Public Torts weigh heavily determining policy in considerations tortious interference and when what constitutes imposed liability because the actions are is not determining justifiable. the standard of conduct In relating policy interference, to tortious the law distinguishes interference reasons between tortious contract and tortious interference with an with a advantageous relationship. ac- business Certain tions which constitute tortious interference with contract are not tortious in reference to interfer- advantageous ence with an In other business justifying words, interference the reasons advantageous relationship may business justify it the same action if will not be sufficient to binding interfere with a contract. requirement primary of "im- reason for the illegal”
proper in a claim for tortious means advantageous business rela- with an 83 Mich [May- tionship, rather than the used standard contract stifling unnecessarily competi- cases, avoid desirability encouraging compe- tion. The social justify tition actions in an will some relationship case which would be tortious represents if A a contract existed. contract product competition final and when public policy finally concluded, favors the is ity stabil- planning possible by it. made Conse- goals competition quently, since most of the already imposes achieved, the law have been liabil- performance ity on one who interferes with the agreement However, the contract. if a final has *14 legitimate competition reached, not been is still impose desirable. The courts are more reluctant liability in for actions taken the furtherance of competition stage. at this The law does not want to unnecessarily restrict the available means of com- petition. only reason, It is for this that one is interfering tortiously with an advanta- liable geous relationship improper business if he uses or illegal means. advantageous in
To use the same standard busi- relationship cases as is in ness used contract cases unnecessarily competition ways. would restrict two apply advantageous To this standard to all busi- relationship unnecessarily ness cases would limit competition the of in available means all advanta- geous relationship Also, business cases. because of uncertainty determining the when an advanta- geous relationship application exists, business the compe- of this standard of conduct could also chill fringe advantageous in on of an tition all cases the relationship. reasonably The courts are business exists, but certain of when an enforceable contract advantageous perimeters of an business rela- yet. precisely tionship have not been established liability Therefore, the fear of tort the uncer- knowing tainty advantageous whether an busi- relationship unnecessarily exists, ness competition could chill
even cases where an exist, not if the business does stan- dard used in interference with contract cases is applied. allege any
Plaintiff has failed to actions "illegal-or-impropér defendant which meet requirement.1 questioning plaintiffs means” ability performance secure bond is not an improper competition. means of Plaintiff has not alleged improper part motive on the of defend- taking allegation ant in this action. Also the mere "badmouthing” is not sufficient. Plaintiff does allege any fraud, defamation, or bad motive on part of defendant or even that the statements Regal untrue, Distributors, made were Home Inc v (1949). accept- Gordon, ing 49; 66 45 Del A2d 754 Even allegations realizing true, as that such practice questionable ethics, is of it does not improper illegal compe- amount to an or method of p tition, 2d, Interference, 31, § 45 Am Jur 308. Consequently, summary judgment proper was plaintiffs claim of interference with an advanta- geous means, interpreting "illegal improper” For cases see Show *15 Inc,
Management
Publishing
App
606;
v Hearst
Co
196 Cal
2d
16 Cal
(1961),
Rptr
Pisciotta,
App
656;
731
Coleman & Morris v
Div
(1951),
Supp
Terry
494;
Dairymen’s League Cooperative
NY
2d 715
v
Association, App
(1956),
Supp
Div 2d
157 NY
2d
Brause v
Trust,
624;
Supp
First National Real Estate
Div 2d
267 NY
2d
(1966), Regal
Distributors,
Gordon,
49;
876
754
Home
Inc v
45 Del
66 A2d
(1949),
Co,
(Tex
Phillips
Martin v
Petroleum