Shafir v. Steele
2000 Mass. LEXIS 236, 431 Mass. 365, 727 N.E.2d 1140 (2000)
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Rule of Law:
A person is liable for intentional interference with a contract if they intentionally and improperly interfere, making it more burdensome or preventing one of the contracting parties from performing their own obligations under the contract.
Facts:
- The defendant, Shafran, whose company was in default on loans from Shawmut Bank, arranged a restructuring agreement where the bank would foreclose on his property and his children would buy it back at the foreclosure sale for at least $175,000.
- The agreement stipulated that if a third party outbid the children's trust, the restructuring deal would be void.
- At the foreclosure sale, the plaintiff, Sharrow, outbid Shafran's children with a bid of $240,000.
- Sharrow paid a $10,000 deposit and signed a purchase and sale agreement with Shawmut Bank to buy the property.
- Following the sale, Shafran confronted Sharrow in a menacing way, published a critical editorial about her in his newspaper, and insisted in a meeting that the building was his.
- Shafran then had an unfiled legal complaint, which accused Sharrow and her real estate agent of fraud, extortion, and malicious interference, delivered to them.
- Feeling terrorized and harassed by Shafran's actions, Sharrow decided she could not proceed with the purchase and sent a letter to Shawmut Bank declaring her intention not to close the sale.
Procedural Posture:
- The plaintiff sued the defendant in a Massachusetts trial court for defamation and intentional interference with contractual relations.
- A jury returned a verdict in favor of the plaintiff, finding the defendant liable on both counts.
- The defendant moved for a directed verdict and later for a judgment notwithstanding the verdict (JNOV), both of which the trial court denied.
- The defendant (appellant) appealed the denial of his post-trial motions to the Supreme Judicial Court of Massachusetts.
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Issue:
Does Massachusetts law recognize a cause of action for intentional interference with a contract where the defendant's conduct prevents the plaintiff from performing their own contractual obligations, rather than inducing a third party to breach?
Opinions:
Majority - Lynch, J.
Yes, Massachusetts law recognizes the tort of intentional interference with another's performance of his own contract. This tort holds a party liable who intentionally and improperly interferes with the performance of a contract between a plaintiff and a third person by preventing the plaintiff from performing or causing their performance to be more expensive or burdensome. The court officially adopts the principles of Restatement (Second) of Torts § 766A, noting that a majority of other jurisdictions have already done so. The court saw no compelling reason to reject this cause of action, observing that its prior case law had come close to recognizing it. The court rejected the defendant's public policy arguments against adoption and his request to apply the new rule prospectively only, holding that it would apply to the current case.
Analysis:
This decision is significant because it formally expands the tort of intentional interference with contractual relations in Massachusetts. Prior to this case, liability was generally limited to situations where a defendant induced a third party to breach a contract with the plaintiff. By adopting Restatement § 766A, the court created a new, independent cause of action for when a defendant's wrongful acts are aimed directly at the plaintiff, making it difficult or impossible for the plaintiff to fulfill their own contractual duties. This aligns Massachusetts with the majority of jurisdictions and provides a remedy for parties who are effectively bullied out of their contracts by an interfering party.
