Suzanne WHITT, Appellant, v. AMERICAN PROPERTY CONSTRUCTION, P.C., et al., Appellees.
No. 15-CV-1199
District of Columbia Court of Appeals.
Argued January 24, 2017, Filed April 4, 2017, Decided April 6, 2017
158 A.3d 196
IV.
For the foregoing reasons, we affirm the judgment of the Superior Court.
So ordered.
Nicholas Andrews, with whom Amy Leete Leone was on the brief, for appellee American Property Construction, P.C.
Troy A. Priest, with whom Jean Marie Sylla, Jr., and Del Wright, Jr., were on the brief, for appellee Washington Gas Light Company.
Before Blackburne-Rigsby, Chief Judge,* Fisher, Associate Judge, and Ferren, Senior Judge.
Fisher, Associate Judge:
Suzanne Whitt appeals from Superior Court judgments rejecting her claims for tortious interference with business relations, intentional infliction of emotional distress (“IIED“), and negligence. She argues that the trial judge erred by omitting a proposed jury instruction, by dismissing her negligence claim after applying the “economic loss doctrine,” by disqualifying one of her attorneys, and by directing verdicts for appellee Washington Gas Light Company (“Washington Gas“) while limiting the scope of her claims against appellee American Property Construction, P.C. (“APC“). We affirm the trial judge‘s disqualification of appellant‘s attorney. However, we reverse the trial court‘s rulings regarding the proposed jury instruction, the economic loss doctrine, one of the directed verdicts for Washington Gas, and the limitation of the factual predicate on which APC‘s liability was determined. We remand for furthеr proceedings on all claims except IIED.
I. Background
From 2011 to 2013, Washington Gas and APC, along with two former defendants in this case—660 Pennsylvania Avenue Associates, LLC (“660 Penn“), and Stanton Development Corporation (“Stan
On July 1, 2011, 660 Penn obtained a permit that allowed it to close a section of the public alley to perform the construction. The permit specified that 660 Penn “[w]ill not block access via C Street or business entrances of 7th Street alley.”
The principal entrance to appellant‘s salon was in the 7th Street alley. Customers could reach the entrance by walking down the alley to a staircase near the back of a townhouse. That staircase led up to appellant‘s salon, which was on the second floor. Although there technically was another entrance via the first floor of the building—which would not require one to enter the alley—appellant was not on good terms with the owners of the store on that floor, and one of the owners testified that he was not aware of any lease terms that would require him to allow appellant to use that entrance.
Viewed in a light favorable to her, the evidence showed that appellant encountered many problems during construction. For instance, the activity of workers and the presence of trash, construction equipment, and other miscellaneous items made it difficult to navigate the alley. At times, construction vehicles were parked directly in front of the salon entrance, filling the narrow alley so as to make access difficult, if not impossible. Road signs warning of construction activity were placed at the alley‘s entrance. During one multi-week stretch, the entire entrance to the alley was blocked off with yellow “caution” tape and red cones, bricks were stacked near the entrance to the alley, and black plastic sheets covered the surface of the alley leading to appellant‘s salon. Witnesses also testified that a port-a-potty emitting noxious odors and leaking a bluish liquid was placed near appellant‘s door.
Appellant complained to Stanton, APC, and her city councilmember‘s office, but the situation did not improve. She alleged that she steadily lost customers due to these problems and incurred approximately $265,000 in losses. She ultimately closed the salon and moved to South Carolina.
Appellant filed suit in the Superior Court against 660 Penn, Stanton, APC, and Washington Gas, alleging tortious interference with business relations, trespass, IIED, and negligence. She later voluntarily dismissed her trespass claim. In preparation for trial, one of appellant‘s attorneys, Ursula Werner, created a summary of appellant‘s 2014 income so that appellant‘s expert could calculate damages. This was necessary because appellant had not yet filed her tax return for 2014. Ms. Werner created the summary from entries in appellant‘s appointment book, which listed the names of customers on the day they visited the salon. Appellant told Ms. Werner the sums she would have received based on her knowledge of the services each customer requested.
On September 28, 2015, the day trial began, Judge Stuart G. Nash ruled on three of the four major issues in this appeal. First, he declined to include appellant‘s proposed jury instruction elaborating on the “intent” element of tortious
Second, Judge Nash disqualified Ms. Werner from serving as appellant‘s co-counsel. He stated that the defense should have “the ability to explore” how appellant‘s expert had arrived at his damages figures, and he noted that Ms. Werner had “unconsciously, without any intention of doing so, ... injected [herself] into the process of [calculating the amount of appellant‘s 2014 income] by going through the books and using [her] discretion to come up with a key piece of evidence in this case.” Judge Nash ruled that the defense could call Ms. Werner as a witness to describe how she had created the summary of income. Because Ms. Werner would be a necessary witness, she could not serve as counsel. See D.C. Rules of Prof‘l Conduct, R. 3.7 (a). Ms. Werner‘s co-counsel, Ryan Spiegel, represented appellant at trial.3
Finally, Judge Nash ruled that the “economic loss doctrine,” as described in Aguilar v. RP MRP Washington Harbour, LLC, 98 A.3d 979 (D.C. 2014), barred appellant‘s claims for economic damages allegedly caused by appellees’ negligence. Having previously ruled that appellant could not recover damages for the emotional distress allegedly caused by the negligence, Judge Nash dismissed the negligence claim.
During trial, appellant testified and called several witnesses, including her expert, former customers, Stanton‘s co-president, and Ms. Werner.4 At the conclusion of appellant‘s case, both Washington Gas and APC moved for directed verdicts on the remaining claims of IIED and tortious interference with business relations.
Judge Nash directed verdicts for Washington Gas, finding that “[e]ven if ... acts committed in pursuit of this trenching project were done intentionally to interfere with Ms. Whitt‘s business or, in the case of the infliction of emotional distress, ... done recklessly,” there was no evidence “from which a reasonable fact finder could determine whether it was Washington Gas that committed those acts ... or whether it was one of their subcontractors[.]” Judge Nash further noted that appellant had failed to show “that the ties between Washington Gas and the subcontractors were sufficiently strong and that Washington Gas retained sufficient direction over the project” so that the subcontractors were agents of Washington Gas. Without proof that Washington Gas or its agents had actually performed the work that led to appellant‘s grievances, Judge Nash found that no “reasonable juror could impose liability on Washington Gas[.]”
Judge Nash found that appellant had offered evidence that APC was responsible for interference caused by four items: (1) a boom-lift crane, (2) a mini-loader, (3)
II. Analysis
A. The Proposed Jury Instruction on Intent
“[W]e review a trial court‘s refusal to grant a request for a particular instruction for abuse of discretion, which may be found if the court‘s charge as a whole does not fairly and accurately state the applicable law.” NCRIC, Inc. v. Columbia Hosp. for Women Med. Ctr., 957 A.2d 890, 898 (D.C. 2008).
A prima facie case of tortious interference with business relations requires: “(1) existence of a valid contractual or other business relationship; (2) [the defendant‘s] knowledge of the relationship; (3) intentional interference with that relationship by [the defendant]; and (4) resulting damages.” Newmyer v. Sidwell Friends Sch., 128 A.3d 1023, 1038 (D.C. 2015) (quoting Havilah Real Prop. Servs., LLC v. VLK, LLC, 108 A.3d 334, 345-46 (D.C. 2015)).
Appellant argues that the trial judge should have given a jury instruction explaining the third element—intent. She relies upon the Restatement (Second) of Torts, § 766 cmt. j (Am. Law. Inst. 1979), which states that the intent required for tortious interference with business or contractual relations can be proven when the actor “knows that the interference is certain or substantially certаin to occur as a result of his action.” That comment refers to, and is reinforced by, Restatement (Second) of Torts § 8A, which clarifies that, as used in the Restatement, the word “intent” refers to both actual intent—in other words, that “the actor desires to cause consequences of his act“—and situations in which the actor “believes that the consequences are substantially certain to result from [his action].”
Appellant asserts that, without further elaboration, the jury would not realize that intent is “broader” than “cases in which the defendant has acted with purpose or desire.” Id. § 766 cmt. j. She argues that the trial judge should have given her proposed jury instruction explaining that “[i]nterference with someone else‘s business relationship is intentional if the actor desirеs to bring the interference about, or if he knows that the interference is certain or substantially certain to occur as a result of his action.”
It does not appear that this court has previously faced this question.5 However,
When аnalyzing the denial of a proposed jury instruction, “we review the record in the light most favorable” to the party that proposed the instruction. Nelson v. McCreary, 694 A.2d 897, 901 (D.C. 1997). Although the instruction requested by appellant may not be necessary in every case, it was critical in this one.
Appellant provided evidence, viewed in a light favorable to her, that the construction activity had blatantly harmful effects on her business. At times, APC‘s boom-lift crane completely blocked the salon‘s entrance, preventing anyone—including customers—from reaching it. Multiple road signs at the mouth of the alley warned of construction activity and deterred members of the public from entering. A port-a-potty next to appellant‘s door emitted noxious odors and leaked a bluish liquid, leading to a situation that one of appellant‘s customers described as “gross.” For “[a]t least three weeks,” the alley was completely closed off with yellow tape, red cones, and stacked bricks, and the surface of the alley appeared to have been removed and replaced with a black plastic coating that would have deterred customers from entering.7
Appellant regularly complained to APC and others about these problems, and there was evidence that those complaints reached Washington Gas. Given the alley‘s disrepair, the obvious obstacles to reaching appellant‘s business, and appellees’ knowledge of the situation, it was particularly important in this case for the trial judge to instruсt the jury that it could find intent if
We emphasize that, even with appellant‘s proposed jury instruction expanding the concept of intent to include conduct that was certain or substantially certain to interfere with her business, appellees may still claim that they were legally privileged or justified in performing the construction. See, e.g., NCRIC, 957 A.2d at 901; Sorrells v. Garfinckel‘s, Brooks Bros., Miller & Rhoads, Inc., 565 A.2d 285, 289-90 (D.C. 1989). Indeed, Judge Nash gave the standard jury instruction explaining this defense.
Finally, we hold that the trial judge‘s error requires reversal. Cf. Dennis v. Jones, 928 A.2d 672, 676 (D.C. 2007) (noting that “an error in denying an instruction can be harmless“). As described above, appellant presented substantial еvidence that the activities of APC and Washington Gas damaged her business. An instruction clarifying that appellant needed only to show that appellees acted with knowledge that interference would be certain or substantially certain, as opposed to actual purpose or desire to interfere, would have eased appellant‘s burden of proof on the intent issue.
Indeed, APC highlighted the importance of the intent issue during its closing argument, stating that it was the “big question” and that appellant had provided “no explanation” for “[w]hy in the world” APC “or anyone else” would “do anything to intentionally hurt Ms. Whitt[.]” Given the importance of the issue, we cannot say “with fair assurance ... that the judgment was not substantially swayed by the error.” Nelson, 694 A.2d at 902 (internal quotation marks omitted). Accоrdingly, we reverse so that appellant may receive a new trial on her tortious interference with business relations claim.
B. The Negligence Claim
Appellant also challenges the dismissal of her negligence claim. The trial judge ruled that this court‘s decision in Aguilar barred appellant‘s claim for economic damages she attributed to appellees’ alleged negligence. We review de novo the trial judge‘s application of the economic loss doctrine. See Aguilar, 98 A.3d at 982 (stating that “whether the plaintiff‘s interests are entitled to legal protection against the defendant‘s conduct is a question of law for us to decide” (internal quotation marks and citation omitted)); see also Washkoviak v. Student Loan Mktg. Ass‘n, 900 A.2d 168, 177 (D.C. 2006) (“We review a dismissal for failure to state a claim de novo.” (internal quotation marks omitted) (quoting Oparaugo v. Watts, 884 A.2d 63, 75 (D.C. 2005))).
In Aguilar, we adopted the “economic loss doctrine, which prohibits claims of negligence where a claimant seeks to recover purely economic losses sustained as a result of an interruption in commerce caused by a third party.” 98 A.3d at 980 (internal quotation marks omitted). In that case, “cooks, servers, bartenders, receptionists, hairstylists, and other employees” of retail establishments in the Washington Harbour complex sought to recover lost wages from the owner and the manager of the property. Id. The plaintiffs alleged that the defendants negligently failed to raise flood walls to block a surge of “ten to twelve feet of water” from the Potomac River that damaged the complex‘s ground-level businesses, basement, and parking lot. Id. at 980-81. The flood forced the plaintiffs’ employers to close their businesses temporarily, leaving the employees “without a source of income for some time.” Id. at 981.
While recognizing these concerns, we did not signal that economic loss is unimportant. Rather, we were grappling with the question of whether the defendants owed a duty of care to the plaintiffs. Id. at 981. We left open the possibility that a plaintiff could recover economic damages if it had a “special relationship” with the defendant. Id. at 985-86. We adapted this limiting principle from Hedgepeth v. Whitman Walker Clinic, 22 A.3d 789 (D.C. 2011) (en banc), in which we examined the duty of care that a doctor might owe to her patient in the context of a claim for negligent infliction of emotional distress. Id. at 792. In Hedgepeth and in Aguilar, we recognized that “whether the plaintiff‘s interests are entitled to legal protection agаinst the defendant‘s conduct’ is a question of law for us to decide.” Aguilar, 98 A.3d at 982 (quoting Hedgepeth, 22 A.3d at 793).
In Aguilar, we did not, of course, suggest that special relationships were limited to interactions such as those between a doctor and a patient. Rather, the nature of the special relationship may depend on the type of damages at issue. This case does not present a situation, as in Hedgepeth, where we inquire whether “the defendant ha[d] an obligation to care for the plaintiff‘s emotional well-being or the plaintiff‘s emotional well-being is necessarily implicated by the nature” of the defendant‘s relationship to the plaintiff, and “serious emotional distress is especially likely to be caused[.]” 22 A.3d at 792 (emphasis added). In Aguilar, we instead analyzed whether the defendants had an “obligation ... to care for [the plaintiffs‘] economic well-being” or an “obligation” that “implicate[d] appellants’ economic expectancies.” 98 A.3d at 985. Holding that the defendants in Aguilar did not, we stressed the lack of direct connection between the commercial landlord and the plaintiffs, who were not tenants but rather employees of tenant businesses located on the property. Id. (noting that the landowner had “no control over [the employees‘] presence on the property“).
Here, however, there was evidence that appellees undertook obligations that would “implicate [appellant‘s] economic expectancies.” See id. First, one of the permits that authorized the construction recognized the impact that appelleеs’ actions would have on appellant‘s business when it required that the construction “not block access” to “business entrances of [the] 7th Street alley.” Counsel for APC assured Judge Nash that “[n]o one is going to argue” that APC “didn‘t know about the public space permits and didn‘t think [it was] obligated to comply with the terms[.]”
Perhaps most importantly, appellant is not claiming damages caused by an isolated and unexpected occurrence, as in Aguilar and the cases cited there. 98 A.3d at 980-81, 983 n.2.
Given this extensive activity over a prolonged period, and the provisions of the permit specifically protecting appellant from the effects of this very conduct, we hold that appellees were in a “special relationship” with appellant for purposes of the economic loss doctrine. See id. at 985 (equating a special relationship with an “obligation” that “implicate[s] appellants’ economic expectancies“); Tolu v. Ayodeji, 945 A.2d 596, 601 (D.C. 2008) (per curiam) (“The question of whether a defendant owes a duty to a plaintiff under a particular set of circumstances is entirely a question of law that must be determined only by the court.” (alteration omitted) (citation omitted)).
Accordingly, we reverse the trial judge‘s ruling that appellant cannot, as a matter of law, recover economic damages if she proves injury caused by appellees’ negligence.9
C. The Attorney Disqualification
Appellant also challenges the disqualification of Ms. Werner. We review the disqualification of an attorney for abuse of discretion. Derrickson v. Derrickson, 541 A.2d 149, 152 (D.C. 1988).
Appellаnt points to two rules of evidence for the proposition that the trial court should have admitted the 2014 income summary without Ms. Werner‘s testimony. However, the trial judge did not rule that
Ms. Werner was the only person who could have testified meaningfully about the preparation of the summary. She created it using appellant‘s appointment book and input from appellant. Appellant‘s exрert played no role in this process. Thus, he would not have been able to explain Ms. Werner‘s methodology. Appellant herself would not likely have been able to explain the summary because Ms. Werner admitted that she used discretion in taking appellant‘s input, along with the entries in the appointment books, and creating an original spreadsheet that purported to summarize hundreds of interactions over the span of eight months.
Given this process and the centrality of the issue, we cannot say that the trial judge abused his discretion in ruling that the defense could call Ms. Werner and that she should be disqualified as a result. See D.C. Rules of Prof‘l Conduct, R. 3.7 (a) (providing that, with limited exceptions not applicable here, a “lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness“). Of course, at a new trial appellant may seek to prove her 2014 income by different means, and disqualification may no longer be necessary.
D. Agents or Independent Contractors?
Appellant also argues that the trial judge erred when directing verdicts for Washington Gas and limiting the factual predicate for appellant‘s claims against APC. Judge Nash found “no evidence” regarding whether Washington Gas or one of its subcontractors had “d[u]g up” the alleyway so as to tortiously interfere with appellant‘s business or intentionally inflict emotional distress on her. Judge Nash acknowledged that appellant could still prevail if she showed that the subcontractors were “agents” of Washington Gas rather than “independent contractors.” However, he found “simply insufficient evidence in the record for [appellant] to meet her burden of proof on that issue as well[.]” He thus found that no “reasonable juror could impose liability on Washington Gas[.]”
The trial judge used similar reasoning for APC. He found evidence that APC had direct responsibility for four items—the boom-lift crane, the mini-loader, the port-a-potty, and the road signs. However, there was not “a basis upon which to lay blame on APC for all the conditions that existed in the alleyway” because there was “no testimony” as to whether the subcontractors involved in the project were “independent contractors of APC or agents of APC.” He therefore limited appellant‘s case against APC to the four items he had identified.
Both of these rulings were error. “Generally, a company is not liable for
Testimony from a Washington Gas representative and from the co-president of Stanton established that Washington Gas had two subcontractors—Fort Myer and D.A. Foster—that worked on excavating and re-paving the alley. When describing the subcontractors’ work, the Washington Gas representative averred that he “manage[s] and [is] responsible for” Fort Myer. He also confirmed that оne of his colleagues “manages D.A. Foster.” That colleague, who was also a Washington Gas corporate designee, explained that Washington Gas has “construction supervisors” that “periodically, if they deem it necessary, prioritize [the subcontractors‘] work[.]” There was further testimony that one of these supervisors visited the site in this case five or six times.
At the very least, this evidence was sufficient for the jury to make a factual determination regarding whether Washington Gas had a right to control Fort Myer and D.A. Foster. The trial judge erred in taking that decision away from the jury and relieving Washington Gas from potential liability.
There also was ample evidence from which a jury could have concluded that APC had a right to control subcontractors at the work site. First, APC was the general contractor. Further, Stanton‘s co-president stated that Patrick McGivern, an APC employee, served as project manager. Mr. McGivern testified that APC employee David King was “the full-time superintendent” for the project. Appellant confirmed that Mr. King “was the head contractor” and that she saw him “[d]aily” over the course of two years. When appellant complained to workers in the alley, they would inform Mr. King, who would meet with appellant to discuss her complaints.
Mr. King later acknowledged that he was “job superintendent,” and he stated that he was “in control of scheduling manpower, getting all the sub[contractor]s out to do what they need to do, things like that.” Following this testimony, Mr. McGivern reiterated that APC‘s role included “mak[ing] sure that [thе subcontractors] did their job[.]”12 Thus, as with Washington Gas, there was sufficient evidence for the jury to make a determination as to whether APC had the right to control subcontractors at the site. The trial judge accordingly erred when he ruled that there
These errors were not harmless. Given the evidence of disruption caused by the excavation and re-paving project, and given our holding that appellant was entitled to her proposed jury instruction regarding intent, we cannot say with “fair assurance” that a jury would not have found that Washington Gas committed tortious interference if it had been allowed to consider whether Washington Gas had an agency relationship with its subcontractors. See R. & G. Orthopedic Appliances & Prosthetics, Inc. v. Curtin, 596 A.2d 530, 539-40 (D.C. 1991) (establishing that, for harmless error analysis in a civil case, this court must examine whether it can say with “fair assurance” that the verdict was not “substantially swayed” by the error).
The issue is closer regarding APC. Judge Nash allowed the jury to consider four of the major obstacles—the boom-lift crane, the mini-loader, the port-a-potty, and the road signs. Appellant only points to miscellaneous debris and construction equipment as added potential sources of liability. However, we need not decide whether the trial judge‘s agency ruling regarding APC was harmless error because we must reverse and remand due to our holding regarding appellant‘s proposed jury instruction. When APC faces a new trial, the jury should be allowed to consider whether there was an agеncy relationship between APC and its subcontractors which would make APC responsible for items other than the four that the trial judge identified.
E. Intentional Infliction of Emotional Distress
Finally, although we remand for further proceedings on appellant‘s tortious interference and negligence claims, we affirm the judgments for both APC and Washington Gas on appellant‘s IIED claims. Appellant has not put forth sufficient evidence to meet the high burden of showing “extreme and outrageous” conduct on behalf of appellees. See, e.g., Newmyer, 128 A.3d at 1041 (noting that “[t]he requirement of outrageousness [for IIED] is not an easy one to meet” because “the conduct must be so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community” (internal quotation marks and citations omitted)).
As the trial judge noted, the two pieces of evidence that arguably best support appellant‘s IIED claims are the port-a-potty and the boom-lift crane. The port-a-potty was placed next to appellant‘s entrance despite the fact that it smelled like “raw sewage” and was leaking “blue-colored liquid.” Appellant also testified that the port-a-potty was moved “a little closer” to her door after she complained. Further, the crane completely blocked appellant‘s entrance at times, making travel to the salon difficult, if not impossible.
Nonetheless, the jury apparently was not persuaded that this сonduct rose to the high level of extreme and outrageous conduct that is required under our case law.13
Further, the evidence indicated that APC had control over the port-a-potty and the boom-lift crane, and there was no evidence that Washington Gas was responsible for them or for other extreme and outrageous conduct. Accordingly, we affirm the judgment (a directed verdict) for Washington Gas on the IIED count.
III. Conclusion
We reverse and remand for further proceedings against both Washington Gas and APC on appellant‘s claims of negligence and tortious interference with business relations. However, we affirm the rulings in favor of Washington Gas and APC on appellant‘s claims for IIED. We also affirm thе trial court‘s ruling that appellant may not collect damages for emotional distress under a negligence theory. Finally, we affirm the trial court‘s disqualification of Ms. Werner.
So ordered.