JERICO CONSTRUCTION INC V QUADRANT INC
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STATE OF MICHIGAN
COURT OF APPEALS
JERICO CONSTRUCTION, INC.,
UNPUBLISHED
March 26, 1999
Plaintiff-Counterdefendant-Appellant,
v
No. 206026
Oakland Circuit Court
LC No. 95-510679 NZ
QUADRANT, INC.,
Defendant-Counterplaintiff-Appellee,
and
D & R COMPANY, L.L.C.,
Defendant-Appellee.
Before: Markman, P.J., and Jansen and J. B. Sullivan*, JJ.
PER CURIAM.
Plaintiff appeals as of right from the trial court’s orders granting summary disposition in favor of
defendants pursuant to MCR 2.116(C)(8) and denying plaintiffs’ motion to amend the complaint. We
reverse and remand for further proceedings.
Jerico Construction, Inc. is in the steel construction business. In 1995, Quadrant, Inc., as the
general contractor, and Jerico, the subcontractor, entered into several contracts relating to the
construction business. In September 1995, Quadrant offered higher wages (apparently far above
union-scale wages) to four of plaintiff’s ironworkers, thus enticing them away from plaintiff’s employ.
At about the same time, the shareholders of Quadrant created a new company called D & R Company,
LLC and instructed the four former employees of plaintiff to work for D & R. According to plaintiff’s
allegations, plaintiff and Quadrant had entered into several oral contracts in September and October of
1995 where plaintiff would be the subcontractor on different projects and Quadrant was also the
general contractor. However, because plaintiff lost four of its most highly trained and specialized
employees, plaintiff claims that it could not meet the future projects that it had agreed to undertake with
* Former Court of Appeals judge, sitting on the Court of Appeals by assignment.
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Quadrant. Plaintiff then filed suit, alleging, among other allegations,1 a claim of tortious interference with
a business relationship. The trial court granted defendants’ motion for summary disposition under MCR
2.116(C)(8) on this claim, and later denied plaintiff’s motion to amend its complaint (as a second
amended complaint), ruling that the allegations were too conclusory and, thus, amendment would be
futile.
A trial court’s ruling on a motion for summary disposition is reviewed de novo. Spiek v Dep’t
of Transportation, 456 Mich 331, 337; 572 NW2d 201 (1998). MCR 2.116(C)(8) tests the legal
sufficiency of the claim on the pleadings alone to determine whether the plaintiff has stated a claim on
which relief may be granted. Speik, supra, p 337. All well-pleaded allegations are accepted as true
and construed most favorably to the nonmoving party. Wade v Dep’t of Corrections, 439 Mich 158,
162-163; 483 NW2d 26 (1992). The motion must be granted if no factual development could justify
the plaintiff’s claim for relief. Spiek, supra, p 337.
A trial court’s ruling on a motion to amend a complaint is reviewed for an abuse of discretion.
Weymers v Khera, 454 Mich 639, 654; 563 NW2d 647 (1997). The relevant court rule here, MCR
2.118(A)(2), provides that leave to amend a pleading shall be freely given when justice so requires. A
motion to amend should ordinarily be granted, and should be denied only for the following particularized
reasons: (1) undue delay, (2) bad faith or dilatory motive on the part of the movant, (3) repeated failure
to cure deficiencies by amendments previously allowed, (4) undue prejudice to the opposing party by
virtue of allowance of the amendment, and (5) futility. Weymers, supra, p 658. An amendment is futile
where, ignoring the substantive merits of the claim, the claim is legally insufficient on its face. McNees v
Cedar Springs Stamping Co, 184 Mich App 101, 103; 457 NW2d 68 (1990).
We hold that the trial court abused its discretion in denying plaintiff’s motion to amend because
plaintiff has properly pleaded the elements of tortious interference with a business relationship in the
second amended complaint. Whether plaintiff can factually support its allegations is a matter not now
before this Court and may be addressed by the parties below. We emphasize that this case is before us
on the pleadings alone and that we must accept plaintiff’s allegations as being true.
The elements of tortious interference with a business relationship are (1) the existence of a valid
business relationship or expectancy, (2) knowledge of the relationship or expectancy on the part of
defendant, (3) an intentional interference by the defendant inducing or causing a breach or termination of
the relationship or expectancy, and (4) resultant damage to the plaintiff. BPS Clinical Labs v Blue
Cross and Blue Shield of Michigan (On Remand), 217 Mich App 687, 698-699; 552 NW2d 919
(1996). One who alleges tortious interference with a business relationship must allege the intentional
doing of a per se wrongful act or the doing of a lawful act with malice and unjustified in law for the
purpose of invading the contractual rights or business relationship of another. Feldman v Green, 138
Mich App 360, 369; 360 NW2d 881 (1984). To establish that a lawful act was done with malice and
without justification, the plaintiff must demonstrate, with specificity, affirmative acts by the defendant that
corroborate the improper motive of the interference. Id., pp 369-370. Improper means illegal,
unethical, or fraudulent. Weitting v McFetters, 104 Mich App 188, 197; 304 NW2d 525 (1981).
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Plaintiff’s allegations in the second amended complaint in support of these elements are: plaintiff
and Quadrant had worked together on several projects before October 1995; they were engaged in a
project (the Alvan Terminal project) when the alleged tortious acts occurred; Quadrant hired
ironworkers Michael Rosier, Jeffrey Rosier, Andreas Thiele, and Harold Good, plaintiff’s core work
force, in September and October 1995 by offering wages far in excess of the union pay scale or market
rate2; Quadrant, having worked with plaintiff, was well aware that the four employees constituted
plaintiff’s core workforce and that such employees were highly trained and of a very limited pool of
employees; at the same time that Quadrant hired away plaintiff’s four employees, Quadrant orally
promised that plaintiff would be the subcontractor on two future projects (The Wayne Aquatics and
Taylor Turning projects); Quadrant’s shareholders formed D & R Company on October 11, 1995 and
directed that the four employees work for D & R on the Wayne Aquatics and Taylor Turning projects
that had been promised to plaintiff; and that it was Quadrant’s intent to drive plaintiff out of business and
appropriate plaintiff’s future profits for itself.
We find that plaintiff’s allegations, as accepted as true, are sufficient to set forth the elements of
tortious interference with a business relationship. Further, we reject Quadrant’s contention that its act of
hiring away plaintiff’s four employees is lawful and can never be considered to be done with malice and
without justification. This Court has held that there can be interference with an employment contract
that is terminable at will. Prysak v R L Polk Co, 193 Mich App 1, 12; 483 NW2d 629 (1992);
Feaheny v Caldwell, 175 Mich App 291, 302-303; 437 NW2d 358 (1989). Moreover, plaintiff has
alleged more than Quadrant’s mere hiring away of plaintiff’s former employees at higher wages. Plaintiff
also alleges that Quadrant enticed the employees while the two companies were working on a project
together, that Quadrant offered wages far in excess of the market rate, that Quadrant’s officers formed
D & R and had the employees work for D & R on projects that had originally been promised to
plaintiff, and that plaintiff was incapable of competing with Quadrant and completing future projects
because Quadrant stripped plaintiff of its veteran workers. These allegations evidence something more
than a mere act in furtherance of legitimate business interests and are sufficient to allege that Quadrant
acted lawfully but with malice and without justification for the purpose of invading the business
relationship of another. See, e.g., Wilkinson v Powe, 300 Mich 275, 283; 1 NW2d 539 (1942) (“No
categorical answer can be made to the question of what will constitute justification, and it is usually held
that this question is one for the jury.”); Hutton v Roberts, 182 Mich App 153, 158-159; 451 NW2d
536 (1989); Jim-Bob, Inc v Mehling, 178 Mich App 71, 96-97; 443 NW2d 451 (1989); Tata
Consultancy Services v Systems Int’l, Inc, 31 F3d 416, 422-427 (CA 6, 1994).
Accordingly, the trial court abused its discretion in denying plaintiff’s motion for a second
amended complaint because the allegations in that complaint are sufficient to set forth the elements of
tortious interference with a business relationship.
Reversed and remanded for further proceedings.
/s/ Kathleen Jansen
/s/ Joseph B. Sullivan
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1
In its first amended complaint, plaintiff alleged claims of tortious interference with business
relationships, two counts of breach of contract, and promissory estoppel. Apparently, the claim of
promissory estoppel has been settled and the other claims were dismissed with prejudice.
2
Although not alleged in the second amended complaint, but stated in plaintiff’s appellate brief, the four
workers were never actually paid the wages offered by Quadrant. This allegation would greatly
strengthen plaintiff’s allegation that Quadrant acted with malice and without justification when it hired
away plaintiff’s four former employees.
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