§37.1 Generally

The Case: Givens v. Mullikin ex rel McElwaney , 75 S.W.3d 383 (Tenn. 2002).

The Basic Facts: Plaintiff, an automobile accident victim, sued defendant driver and its insured for its conduct in the underlying litigation. Included in the potential causes of action was an inducement to breach contract claim.

The Bottom Line :

• "Tennessee recognizes both a statutory and common law action for inducement to breach a contract, see Tenn. Code Ann. § 47‑50‑109 (2001);Polk & Sullivan, Inc. v. United Cities Gas Co., 783 S.W.2d 538, 543 (Tenn. 1989), and both forms of the action protect 'contracts implied in fact, as well as formal, expressed contracts,' Mefford v. City of Dupontonia, [354 S.W.2d 823, 826 (Tenn. Ct. App. 1961)]. Importantly, the elements for both forms of the action are identical, except that a plaintiff asserting a common law action may recover punitive damages, instead of the treble damages mandated by the statute. See Buddy Lee Attractions, Inc. v. William Morris Agency, Inc., 13 S.W.3d 343, 360-61 (Tenn. Ct. App. 1999). In order to recover on a theory of inducement to breach a contract, a plaintiff must allege and prove seven elements: (1) that a legal contract existed; (2) that the defendant was aware of the contract; (3) that the defendant intended to induce a breach of that contract; (4) that the defendant acted with malice; (5) that a breach of the contract occurred; (6) that the breach was a proximate result of the defendant's conduct; and (7) that the breach injured the plaintiff. See Quality Auto Parts Co. v. Bluff City Buick Co., 876 S.W.2d 818, 822 (Tenn. 1994); Baker v. Hooper, 50 S.W.3d 463, 468 (Tenn. Ct. App. 2001)." 75 S.W.3d at 405.

Other Sources of Note : Cambio Health Solutions, LLC v. Reardon, 213 S.W.3d 785, 789 (Tenn. 2006) (parent corporation may induce breach of contract between non-wholly owned subsidiary and another company); Waste Conversion Systems, Inc. v. Greenstone Industries, Inc. 33 S.W.3d 779, 782 (Tenn. 2000) (parent corporation may not induce breach of contract between wholly owned subsidiary and another company); Ladd v. Roane Hosiery, Inc. 556 S.W.2d 758, 760 (Tenn. 1977) (parties to a contract cannot be held liable for inducing breach of the contract); Buddy Lee Attractions, Inc. v. William Morris Agency, Inc., 13 S.W.3d 343 (Tenn. Ct. App. 1999) (extensive discussion of common law and statutory causes of action, election of remedies, and other issues, and includes a concurring and dissenting opinion by Judge (now Justice) William C. Koch, Jr.); Myers v. Pickering Firm,Inc., 959 S.W.2d 152 (Tenn. Ct. App. 1997) (discusses circumstances under which inducement to breach contract may be privileged).

Recent Cases: Columbus Medical Services, LLC v. Thomas , No. W2008-00345-COA-R3-CV, 2009 WL 2462428 (Tenn. Ct. App. Aug. 13, 2009) (reversing judgment against defendant staffing agency in tortious inducement to breach covenants not to compete in employment agreement finding covenants not enforceable); Sykes v. Chattanooga Housing Authority, No. E2008-00525-COA-R3-CV, 2009 WL 2365705 (Tenn. Ct. App. July 31, 2009) (upholding summary judgment on interference with at-will employment contract); Jones v. Lemoyne-Owen College, No. W2008-00141-COA-R3-CV, 2009 WL 1941515 (Tenn. Ct. App. Jul. 8, 2009) (upholding summary judgment on intentional interference with contract claim finding no underlying employment contract and further finding that plaintiff failed to argue that defendant interfered with his at-will employment); Sanford v. Waugh, No. M2007-02528-COA-R3-CV, 2009 WL 1910957 (Tenn. Ct. App. June 30, 2009) (holding plaintiff had a cognizable cause of action for interference with contract); Fitzgerald v. Abbott, No. M2008-00920-COA-R3-CV, 2009 WL 304421 (Tenn. Ct. App. Feb. 5, 2009) (upholding summary judgment for defendant on intentional interference with employment claim finding district manager of defendant company did not cause plaintiff to be terminated).