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Conte v. Emmons

United States Court of Appeals for the Second Circuit · Civil Procedure

Civil ProcedureJudgment as a Matter of LawTortious Interference with ContractRule 50JMOLinsufficient evidencetortious interference with contractintent

Facts

Conte founded I Media to produce and distribute TV Time and contracted with route distributors, printers, and potential advertisers. After numerous route distributors complained to the Nassau County District Attorney's Office that Conte may have defrauded them, Emmons, Wallace, and Falzarno investigated by issuing grand jury document subpoenas and contacting distributors, printers, and advertisers. No criminal charges were filed, but I Media later failed, and Conte claimed the investigators tortiously interfered with his contracts. At trial, Conte relied on evidence that Falzarno acted aggressively and called him a fraud, and that Wallace told some counterparties Conte was under investigation for fraud and may have used the term "Ponzi scheme."

Issue

Whether the evidence at trial was sufficient to allow a reasonable jury to find that the defendants intentionally induced breaches of Conte's contracts and that, but for their conduct, those contracts would not have been breached. More specifically, the question was whether the jury's findings on intent and causation could stand under Rule 50.

Rule

To recover for tortious interference with contract under New York law, a plaintiff must prove: (i) the existence of a contract; (ii) the defendant's knowledge of that contract; (iii) the defendant's intentional inducement of a breach of that contract; (iv) a breach; (v) that but for the defendant's actions the contract would not have been breached; and (vi) damages. The intent element requires proof that the defendant acted with the purpose of inducing a breach of a particular contract, and the claim cannot rest on conduct merely incidental to some other lawful purpose.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Phoenix, Desert Ledger LLC sued two county fraud investigators for tortious interference with contract after a jury returned a verdict for the company. At trial, the company showed the investigators had contacted several vendors during a legitimate fraud inquiry and had spoken harshly about the owner, but no vendor testified that it stopped performing because of the investigators' statements.

If the investigators renew a Rule 50 motion after the verdict, how should the court rule?

Explanation. Judgment as a matter of law is proper when, viewing the evidence most favorably to the non-movant, no reasonable juror could find for that party and the verdict could only result from sheer surmise and conjecture. Under the majority's reasoning, evidence of aggressive investigative conduct without proof of purposeful inducement of breach and without admissible proof that counterparties breached because of defendants' actions is insufficient.