Wasalco, Inc. v. El Paso County
689 P.2d 730, 1984 Colo. App. LEXIS 1207 (1984)
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Rule of Law:
To sustain a claim for tortious interference with a contractual relationship, a plaintiff must prove the existence of an underlying contract. For a claim of tortious interference with a prospective business advantage, a plaintiff must demonstrate that the defendant engaged in intentional and improper interference that prevented the formation of a contract.
Facts:
- Wasalco, Inc. (Wasalco) was a company engaged in the business of mining and selling gravel.
- Woodmoor Development Fund (Woodmoor) was created to complete public improvements in a bankrupt development and purchased gravel from multiple suppliers, including Wasalco.
- Woodmoor did not have an exclusive oral or written contract with Wasalco for the purchase of gravel.
- In 1980, El Paso County (the county) began mining and selling gravel from a pit owned by a third party.
- A trustee for Woodmoor, Thomas B. Doherty, initiated contact with the county to inquire about purchasing gravel.
- In 1981, the county entered into an agreement to sell gravel to Woodmoor.
Procedural Posture:
- Wasalco, Inc. sued El Paso County in the trial court for damages, alleging tortious interference with contractual relations and prospective business advantage.
- The county moved for summary judgment.
- The trial court found no genuine issues of material fact and no evidence of improper conduct by the county.
- The trial court granted the county's motion for summary judgment and dismissed Wasalco's complaint.
- Wasalco, Inc., as appellant, appealed the summary judgment to the Colorado Court of Appeals.
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Issue:
Does a business competitor's act of selling goods to a third party, at that third party's request, constitute tortious interference with an existing or prospective contractual relationship when there is no evidence of an existing contract or improper interference by the competitor?
Opinions:
Majority - Van Cise, J.
No. A competitor's sale of goods to a third party does not constitute tortious interference where no underlying contract exists and no improper interference is shown. To prevail on a claim for tortious interference with a contractual relationship, the plaintiff must first establish the existence of a contract. Here, Wasalco failed to present any evidence of a contract with Woodmoor; in fact, affidavits from a Woodmoor trustee and a county official negated the existence of any such contract. For the claim of tortious interference with a prospective contractual relationship, the plaintiff must show intentional and improper interference. The undisputed evidence showed that Woodmoor initiated contact with the county, not the other way around, which negates any claim of improper inducement by the county. Wasalco's only counter-evidence was a conclusory affidavit from its manager, which lacked specific facts and therefore held no probative value in a summary judgment proceeding.
Analysis:
This decision reinforces the distinction between lawful competition and tortious interference. It clarifies that merely entering into a business relationship with a competitor's customer is not, by itself, improper. The case underscores the evidentiary burden on plaintiffs at the summary judgment stage, requiring them to present specific facts rather than conclusory allegations to demonstrate a genuine issue for trial. This precedent makes it more difficult for plaintiffs to use tortious interference claims to stifle legitimate business competition.
