INTENTIONAL INTERFERENCE WITH CONTRACTS IN COLORADO

WHAT IS INTENTIONAL INTERFERENCE?

Intentional interference with contractual obligations is a less common (yet still important and powerful) cause of action in Colorado. Usually, at least one party to a lawsuit involving a claim for intentional interference is a business entity, as businesses are commonly involved in contracting services/equipment/labor/goods. This practice area page will cover the elements of liability and damages available for intentional interference in Colorado; for more information, give us a call at 720-770-3457 or complete a consultation request form.

ELEMENTS OF LIABILITY

In order to recover for intentional interference in Colorado, the following elements must be proven by a preponderance of the evidence:

1. The plaintiff had a contract with a third person in which the third person agreed to do something;
2. The defendant knew or reasonably should have known of the contract;
3. The defendant intentionally caused the third person not to perform fully/to terminate his/her contract with the plaintiff OR interfered with the third person’s performance of the contract, thereby causing the third person not to perform fully/to terminate the contract with the plaintiff;
4. The defendant’s interference with the contract was improper; and
5. The defendant’s interference with the contract caused the plaintiff damages/losses.[1]

In addition, Colorado recognizes not only interference with contractual obligations, but also intentional interference with a prospective business advantage.[2] This companion cause of action requires showing that interference with formation of the contract at issue was both intentional and improper, but no underlying contract is necessary.[3] On the other hand, a claim for intentional interference with contractual obligations must be based on valid contracts that existed at the time of the interference.[4]

WHAT IS INTENTIONAL OR IMPROPER CONDUCT?

In Colorado, conduct is intentional if a person acts or speaks for the purpose, in whole or in part, of bringing about a particular result, or if a person knows his or her acts or words are likely to bring about that result.[5] It is not required that a person act or speak with malice or ill will.[6]

On the other hand, improper conduct is not so well defined. Whether conduct is improper must be made by the court in the specific facts and circumstances of the case, and includes weighing public policy interest in protecting the freedom to compete in the marketplace.[7] Potentially relevant factors enumerated by the Restatement (Second) of Torts include:

• The nature of the actor’s conduct;
• The actor’s motive;
• The interest of the other with which the actor’s conduct interferes;
• The interests sought to be advanced by the actor;
• The social 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 relation between the parties.[8]

DEFENSES TO INTENTIONAL INTERFERENCE CLAIMS

A common affirmative defense raised in an intentional interference action is privilege. There are multiple types of privilege acknowledged in Colorado courts, including:

• Litigation privilege (held by attorneys);
• Business competition privilege (held by business competitors);
• Principal/agent privilege (held by agents/corporate officers); and
• Employer/employee privilege (held by employees).

Importantly, these affirmative defenses will not shield a defendant from liability if the plaintiff proves that the defendant abused his/her privilege.[9] For example, a corporate agent abuses his/her privilege when the interference is not done for bona fide organizational purposes but, rather, is motivated solely by a desire to do harm to one of the contracting parties.[10] Similarly, a corporate director has qualified privilege to communicate with other corporate directors about corporate affairs, but that privilege is lost if communications are not made in good faith, or are made with malice or with reckless disregard for their truth.[11]

In addition, the Colorado Governmental Immunity Act immunizes a municipality from liability for the tort of intentional interference.[12]

CONCLUSION

Intentional interference is a complex cause of action in Colorado. At Volpe Law, our attorneys are ready to help you with your potential claim/defense: give us a call at 720-770-3457 or complete a consultation request form for more information on how we can help!

[1] CJI §24:1.

[2] Amoco Oil Co. v. Ervin, 908 P.2d 493 (Colo. 1995).

[3] Dolton v. Capitol Red. Sav. & Loan Ass’n, 642 P.2d 21 (Colo. App. 1981).

[4] Harris Grp., Inc. v. Robinson, 209 P.3d 1188 (Colo. App. 2009).

[5] CJI §24:2.

[6] Id.

[7] Warne v. Hall, 2016 CO 50, ¶25, 373 P.3d 588, 596.

[8] Restatement (Second) of Torts, §767 (Am. Law Inst. 1965).

[9] McCrea & Co. Auctioneers, Inc. v. Dwyer Auto Body, 799 P.2d 394 (Colo. App. 1989).

[10] Trimble v. City & Cty. of Denver, 697 P.2d 716 (Colo. 1985).

[11] Bithell v. W. Care Corp., 762 P.2d 708 (Colo. App. 1988).

[12] Grimm Constr. Co. v. Denver Bd. of Water Comm’rs, 835 P.2d 599 (Colo. App. 1992).

DISCLAIMER

The information contained on this website is provided for informational purposes only. It is not legal advice and should not be construed as providing legal advice on any subject matter.  Laws frequently change and therefore this content is not necessarily up to date, nor comprehensive. Contact us or another attorney with any legal questions specific to your matter. You may request a consultation by completing our consultation request form.