J.A04038/13
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
RX HOME CARE, INC. AND RX HOME
HEALTH SERVICES, INC.,
Appellants
v.
JERRY DUBIN,
Appellee
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IN THE SUPERIOR COURT OF
PENNSYLVANIA
No. 1926 EDA 2012
Appeal from the Order Entered June 11, 2012
In the Court of Common Pleas of Lehigh County
Civil Division No(s).: 2010-C-2694
BEFORE: FORD ELLIOTT, P.J.E., MUNDY, and FITZGERALD,* JJ.
MEMORANDUM BY FITZGERALD, J.:
FILED JULY 29, 2013
Appellants, RX Home Care, Inc. and RX Home Health Services, Inc.
appeal from the order entered in the Lehigh County Court of Common Pleas
granting the motion of Appellee, Jerry Dubin, for summary judgment.
Appellants argue that there is a jury question as to whether they possessed
a reasonable likelihood of receiving additional business, but for Appellee’s
intentional interference with prospective contractual relations (“IIPCR”). We
affirm.
The trial court summarized the facts of this case as follows:
*
Former Justice specially assigned to the Superior Court.
J. A04038/13
[Appellee] was the Waiver Case Manager Supervisor for
the Northampton County Area Agency on Aging Division
from 1995-2010. In that capacity, he administered the
“Waiver Program,” which provides home─based services to
persons 60 and over who require a level of nursing facility
services, but who can appropriately be served in their own
home.
[Appellants] are contracted providers of services
pursuant to the “Waiver Program” as well as an additional
program in the Northampton County Area Agency on
Aging, the “Options Program.” . . .
[Appellants] have instituted a claim in Lehigh County,
where [Appellee] resides, alleging that he interfered with
existing and prospective contracts that [Appellants] held.
The existing/prospective contracts were with two different
parties, the Commonwealth (which funded the Waiver
Program), and the County of Northampton (which funded
the Options Program).
*
*
*
. . . [Appellants] entered into annual “Purchase of Service
Contracts” with Northampton County during the period
from July 1, 2005 through June 30, 2011.
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It is uncontested that [Appellants] continued to receive
annual purchase of service contracts.
But it is
[Appellants’] contention that in two specific years, and
over a period of time, [Appellants’] share of the
contractual “pie” decreased, while their competitor Max
Care’s share increased. [Appellee’s wife is the owner of
Max Care.] It is the concomitant decrease/increase which
is the basis for [Appellants’] claim of loss of prospective
contract.
[Appellants’] evidence relies on two sources to provide
evidence that prospective contracts were lost. One is the
so-called “Barron Report.”
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This “report,” prepared by the Northampton County
Controller, [Stephen J. Barron, Jr.,] is a collection of
observations, among which is an assertion that in 20062007, among the providers engaged in the Northampton
County Area Agency on Aging programs, Max Care had the
largest increase in business at 4.58%, and [Appellants]
had the largest decrease in business at 4.2%. Also in
2006-2007, the number of entities providing care went
from 16 to 21.
There were also increases/decreases in business for the
two specific entities in question in 2007-2008.
The
“Barron Report” suggests that the reasons for the change
were due to preferential treatment by [Appellee] for Max
Care, but the “report” contains no evidence that
[Appellants were] entitled to increases in their share of the
home-care work.
The second source upon which [Appellants] rely is a
report from Bederson & Company, LLP, dated November
30, 2011, authored by Sean Raquet. Mr. Raquet calculates
damages as “lost profits” on two theories. One theory,
“Average Historical Growth Rate Alternative,” assumes
continued contract growth for [Appellants] at historical
rates of growth. The other theory is “Maximum Care
Growth Rate Alternative.” This theory would apply the
growth rates of their successful competitor, Max Care,
essentially claiming all Max Care’s profits for [Appellants].
*
*
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[Appellants] present evidence that assignments to a
particular home care program are through selection of the
consumer. Where a consumer does not elect, the Agency
caseworker selects the lowest cost provider that most
meets the needs of the consumer, at the lowest possible
cost. . . .
*
*
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[Appellants]
allege
“Intentional
Interference
With
Prospective Contractual Relations With the Provider
Agreement/Commonwealth of Pennsylvania.”
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The evidence that [Appellants] present is identical to
that which [Appellants] argue [with respect to the Options
Program Contracts], with the exception that the
contracting agency is the Commonwealth of Pennsylvania .
...
Trial Ct. Op., 6/11/12, at 1-2, 5-7, 9 (citations to record omitted).
On June 11, 2012, the trial court granted Appellee’s motion for
summary judgment, issuing an opinion.
This timely appeal followed.
Appellants were not ordered to file a Pa.R.A.P. 1925(b) statement of errors
complained of on appeal. The trial court relied upon its June 11th opinion as
its Pa.R.A.P. 1925(a) opinion.
Appellants raise the following issue for our review:
Did [Appellants] demonstrate a jury question on the
issue of whether they possessed a “reasonable likelihood
or probability” of receiving additional business, but for
[Appellee’s] interference, by presenting evidence including
an expert report showing that they historically received a
certain amount of business before the interference, and
that projected that they would have received additional
business but for the interference, such that summary
judgment was not appropriate?
Appellants’ Brief at 3 (footnote omitted). 1
1
Appellants aver that the instant
appeal is limited to its challenge of the lower court’s entry
of summary judgment in so far as it dismissed [their]
claims against [Appellee] for intentional interference with
prospective contractual relations (Counts III-V of the
Amended Complaint).
For purposes of this appeal
[Appellants do] not challenge the lower court's dismissal of
Counts I and II of the Amended Complaint based on its
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Appellants argue that the trial court erred in granting summary
judgment in Appellee’s favor and dismissing their claims for intentional
interference with prospective business relations, based upon Thompson
Coal Co. v. Pike Coal Co., 412 A.2d 466 (Pa. 1979), and Strickland v.
Univ. of Scranton, 700 A.2d 979 (Pa. Super. 1997). Appellants’ Brief at
19.
Appellants contend that the court’s overly broad interpretation of
Thompson Coal Co. and Strickland, the basis of the grant of summary
judgment, was erroneous.
Id.
Appellants aver that the court erred in
finding that “the longevity of a relationship, and the fact that someone else
received additional work while [Appellants] did not, is simply not enough to
establish the necessary, objective element of ‘reasonable likelihood or
probability’ of a prospective contract.” Id. (quoting Trial Ct. Op. at 9).2
conclusions that [Appellants’] claims are for interference
with prospective, not existing, business relations.
Appellants’ Brief at 3 n.2. Furthermore, Appellants “submit that the June
11, 2012 Order of the Court of Common Pleas of Lehigh County should be
reversed as to Counts III and IV of the Amended Complaint.” Id. at 27. We
note that Appellants do not seek relief from the grant of summary judgment
as to Count V-Intentional Interference with Prospective Contractual Relations
with Consumers.
2
We note Appellants state:
The lower court entered summary judgment for [Appellee]
and dismissed Appellants’ claims for IIPCR based on its
conclusion that [Appellants] did not present sufficient
evidence to establish a “reasonable likelihood or
probability” that, but for [Appellee’s] conduct, it would
have received the prospective business at issue. As the
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Appellants argue that the determination whether a prospective
business relation was reasonably probable is based upon an examination of
the facts of each case, rather than “a universal rule applicable to all claims
for IIPCR.”
Appellants’ Brief at 21.
In support, Appellants claim the
following: Barron, the Northampton County Controller, reported that in 2005
to 2006, before Appellee’s alleged interference, Appellants received 20.55%
of all Waiver and Options Program business in the county.
Furthermore,
several years prior thereto, Appellants received an average of 24.4%
increase in business each year. After Appellee’s interference, however, their
share of the business decreased 4.2%, whereas Max Care’s business
increased during the same period 4.58%. Id. at 26.
Our scope of review of a trial court’s grant of summary judgment is
well-established.
As has been oft declared by this Court, “summary
judgment is appropriate only in those cases where the
record clearly demonstrates that there is no genuine issue
of material fact and that the moving party is entitled to
judgment as a matter of law.” When considering a motion
for summary judgment, the trial court must take all facts
of record and reasonable inferences therefrom in a light
most favorable to the non-moving party. In so doing, the
trial court must resolve all doubts as to the existence of a
genuine issue of material fact against the moving party,
and, thus, may only grant summary judgment “where the
court’s decision did not turn on considerations respecting
the other necessary elements for IIPCR, [Appellants do]
not specifically address them on appeal.
Appellants’ Brief at 20 n.4.
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right to such judgment is clear and free from all doubt.”
On appellate review, then,
an appellate court may reverse a grant of summary
judgment if there has been an error of law or an
abuse of discretion. But the issue as to whether
there are no genuine issues as to any material fact
presents a question of law, and therefore, on that
question our standard of review is de novo. This
means we need not defer to the determinations
made by the lower tribunals.
To the extent that this Court must resolve a question of
law, we shall review the grant of summary judgment in the
context of the entire record.
Summers v. Certainteed Corp., 997 A.2d 1152, 1159 (Pa. 2010)
(citations omitted).
The elements of a cause of action for intentional
interference with a contractual relation, whether existing
or prospective, are as follows:
(1) the existence of a contractual, or prospective
contractual relation between the complainant and a
third party;
(2) purposeful action on the part of the defendant,
specifically intended to harm the existing relation, or
to prevent a prospective relation from occurring;
(3) the absence of privilege or justification on the
part of the defendant; and
(4) the occasioning of actual legal damage as a
result of the defendant's conduct.
Pelagatti v. Cohen, 370 Pa. Super. 422, 434, 536 A.2d
1337, 1343 (1987) (citations omitted). See also Small v.
Juniata College, 452 Pa. Super. 410, 417, 682 A.2d 350,
354 (1996) (same).
Strickland, 700 A.2d at 985.
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It is clear that the “interference must induce or cause a third person not to
enter into the prospective relationship.” Haun v. Community Health Sys
Inc., 14 A.3d 120, 124 (Pa. Super. 2011).
The plaintiff also must plead and prove “a reasonable
likelihood or probability that the anticipated business
relationship will be consummated.” Behrend [v. Bell Tel.
Co., 363 A.2d 1152, 1159 (Pa. Super. 1976)].14
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In the closely related context, in Behrend we elaborated
on the nature of prospective relationships:
The tort of intentional interference with business
requires, as a basis, that a business relationship be
proved with some degree of specificity, at least to
the point that future profit be a realistic expectation
and not merely wishful thinking. It is true that
where a prospective advantage is alleged, the
plaintiff need not demonstrate a guaranteed
relationship because anything that is prospective in
nature is necessarily uncertain. We are not here
dealing with certainties, but with reasonable
likelihood or probability. This must be something
more than a mere hope or the innate optimism of
the salesman. As defined by the courts in this
Commonwealth,
the
tort
contemplates
a
relationship, prospective or existing, of some
substance,
some
particularity,
before
an
inference can arise as to its value to the plaintiff and
the defendant's responsibility for its loss.
363 A.2d at 1160 (internal quotation marks and citations
omitted).
Int’l Diamond Importers, Ltd. v. Singularity Clark, L.P., 40 A.3d 1261,
1275 (Pa. Super. 2012) (emphasis added).
In Int’l Diamond Importers, Ltd., this Court found that the plaintiffs
had “explicitly pleaded these elements in their Complaint” and the parties
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had “negotiated the principal terms of the transaction to the point of a
commitment in principle.”
Int’l Diamond Importers, Ltd., 40 A.3d at
1275.
In Thompson Coal Co., our Supreme Court found no reasonable
probability that the plaintiff lessees of a year to year lease would continue or
that they would eventually own the outstanding rights to the tract of land.
Thompson Coal Co., 412 A.2d at 471-72. The Court found:
Certainly, as lessees of a year-to-year lease, [the
plaintiffs] arguably may have had some expectation that
the lease would be renewed; nevertheless, the fact that
the parties agreed to extend this year-to-year lease only
until the specifically mentioned date of March 1, 1975
would provide no reasonable basis for either party to
expect a perpetuation of the leasehold beyond that point
or the acquisition of title to the property interests therein.
Id.
In Strickland, the widow of a faculty member of the University of
Scranton loaned money to the appellant, a former university administrator.
Strickland, 700 A.2d at 982. A dispute arose as to whether the loan was
repaid. Id. She instituted a civil suit and criminal proceedings against the
former administrator. Id. at 982, 984. The former administrator sued the
university and the widow for, inter alia, intentional interference with a
prospective contractual relationship because the university did not renew his
contract. Id. at 982-83. On appeal, this Court reasoned:
The fact that [the widow] pursued or initiated actions, both
civil and criminal, in an attempt to recover the monies that
she had loaned to [the administrator], resulting in
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unfavorable publicity to [him] and adversely affecting his
position at the University, does not create a genuine issue
of material fact as to [the widow’s] intent to interfere with
[the administrator’s] continued employment at the
University. While [the widow], in her attempts to recoup
the funds loaned to [the administrator], did contact the
University’s president on one occasion, [the administrator]
has not demonstrated a genuine issue of material fact on
the question of whether it was reasonably probable that
his contract with the University would have been renewed
in the absence of this one contact. See Glenn v. Point
Park College, 441 Pa. 474, 480-81, 272 A.2d 895, 89899 (1971). As to [the widow’s] alleged interference with
potential contractual relationships with other universities,
we cannot conclude that [the administrator] has raised a
genuine issue of material fact. In the newspaper article
relied upon by [the administrator, the widow] merely
commented on her dissatisfaction with the district
attorney’s failure to pursue the criminal charges lodged
against [the administrator]. The newspaper’s decision to
publish that article and interview [the widow] in the
process, as well as the resultant publicity, does not raise a
genuine issue of material fact as to the intent on the part
of [the widow] to interfere with any potential contractual
relationships being pursued by [the administrator].
Id. at 985-86.
In Milicic v. Basketball Marketing Co., Inc., 857 A.2d 689 (Pa.
Super. 2004), a company “in the business of the marketing, distribution and
sale of basketball apparel and related products” sent letters to its
competitors indicating it had a contract with Darko Milicic, a basketball
player. Id. at 691.
[A] prospective contractual relationship between [Milicic]
and Adidas was actively being pursued, which appears to
be exactly why [the marketing company] sent Adidas the
letter. [The marketing company], without privilege or
justification, engaged in conduct which deliberately
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attempted to harm the negotiations and which, in fact, did
stop Adidas from entering into a contract with [Milicic].
Id. at 697. This Court concluded that the marketing company’s “conduct in
sending out the letters to its competitors [supported] a valid potential claim
for intentional interference with prospective contractual relations.” Id.
Instantly, the trial court opined:
. . . In the case before us, the data of increases or
decreases do not tend to prove that there was a
reasonable probability that [Appellants] would have
entered into an increase in the size of their contracts in
any given year. All the numbers show is that they did not
enter into an increase in the size of their contracts, and
that someone else did.
The percentage of decrease in contractual amounts can
only show a failed expectation if it is first established that
[Appellants] reasonably expected an increase, and on what
basis. If the implied argument advanced is that contract
providers of home care automatically receive annual
increases, it is a theory unsupported in law. Even the
argument that additional business was available which was
allocated to a different entity to the detriment of
[Appellants] is not evidence that [Appellants] itself had a
reasonable expectation of being allocated the services.
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Therefore, the longevity of the relationship, and the fact
that someone else received additional work while
[Appellants] did not, is simply not enough to establish the
necessary, objective element of “reasonable likelihood or
probability” of a prospective contract.
Trial Ct. Op. at 7-9. We agree.
In the case sub judice, Appellants’ amended complaint provided, in
pertinent part as follows:
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COUNT III─INTENTIONAL INTERFERENCE WITH
PROSPECTIVE CONTRACTUAL RELATIONS─OPTIONS
PROGRAM CONTRACTS
92. The budget that [Appellants] are provided under the
Options Contracts is based upon the level of allocation
during the previous years.
93. After [Appellee] began to funnel business away from
[Appellants] and toward the Max Care Entities, the level of
allocation to [Appellants] decreased and is not currently at
the level it would otherwise have been at.
94. [Appellee’s] actions caused Northampton County to
improperly reduce the budget available to [Appellants] for
each year after he began funneling referrals to the Max
Care Entities and away from [Appellants].
95. At all times relevant hereto, [Appellee] acted
intentionally and willfully to harm [Appellants] by
preventing the prospective contractual relations from
occurring.
*
*
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COUNT IV─INTENTIONAL INTERFERENCE WITH
PROSPECTIVE CONTRACTUAL RELATIONS WITH THE
PROVIDER
AGREEMENT/COMMONWEALTH
OF
PENNSYLVANIA
102. After [Appellee] began to funnel business away from
[Appellants] and toward the Max Care Entities, the level of
allocation to [Appellants] decreased and is not currently at
the level it would otherwise have been at.
103. [Appellee’s] actions caused the Commonwealth of
Pennsylvania to improperly reduce allocations to
[Appellants] for each year after he began funneling
referrals to the Max Care Entities and away from
[Appellants].
104. At all times relevant hereto, [Appellee] acted
intentionally and willfully to harm [Appellants] by
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preventing the prospective contractual relations from
occurring.
Appellant’s Am. Compl., 8/9/10, at 19-21.3
Appellants did not plead and
prove that there was a reasonable likelihood or probability that a prospective
contract would be consummated.
See Thompson Coal Co., supra;
International Diamond Importers, Ltd., supra; Strickland, supra.
Therefore, we discern no error by the trial court. See Summers, supra.
Order affirmed.
Judgment Entered.
Prothonotary
Date: 7/29/2013
3
As the trial court noted with respect to Count IV, “[t]he evidence that
[Appellants] present is identical to that which [they] argue in Count III, . . .
with the exception that the contracting agency is the Commonwealth of
Pennsylvania, rather than Northampton County.” Trial Ct. Op. at 9-10.
Therefore, the trial court concluded: “Our analysis remains the same. . . .”
Id. at 10.
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