Opinion
April 8, 1988
Appeal from the Supreme Court, Monroe County, Tillman, J.
Present — Denman, J.P., Boomer, Green, Lawton and Davis, JJ.
Order reversed on the law with costs and motion granted. Memorandum: Defendant, Rochester Gas and Electric Corporation (RGE), notified construction contractors in the area that it would not permit employment of plaintiffs on property owned by RGE. Plaintiffs, members of labor unions, brought this action against RGE alleging that RGE intentionally interfered with their rights to employment under the union contracts. RGE moved for summary judgment and Special Term denied the motion. On appeal, RGE contends that plaintiffs have no cause of action for intentional interference with contract. Such a cause of action must allege: (1) a valid contract; (2) defendant's knowledge of the contract; (3) defendant's intentional interference with the contract and a resulting breach; and (4) damages (Burba v Rochester Gas Elec. Corp., 90 A.D.2d 984, 985). RGE points out that the union contracts do not guarantee plaintiffs the right to employment and that plaintiffs have no other contracts of employment. Thus, RGE contends, there was no breach of contract caused by the actions of RGE.
RGE has submitted sufficient proof to show that plaintiffs do not have a cause of action for intentional interference with contract. The union agreements do not contain provisions entitling plaintiffs to employment, and plaintiffs had no contract of employment with any contractor or subcontractor that was breached because of the notice given by RGE. The contracts between the unions and the contractors gave plaintiffs the right only to be considered for employment by the contractors.
We cannot agree with the dissent's finding that plaintiffs may have a cause of action for tortious interference with economic advantage. This cause of action was neither pleaded by plaintiffs nor raised in response to defendant's summary judgment motion or on appeal. Further, the record does not establish that plaintiffs would be entitled to relief under this legal theory. RGE by its actions only barred plaintiffs from working on its property. It did not deprive plaintiffs of consideration or employment by contractors for projects other than at its facilities. In so doing, RGE was exercising its own rights rather than interfering with plaintiffs' business relations with third parties (see, e.g., Florida Tel. Corp. v. Essig, 468 So.2d 543 [Fla]).
All concur, except Boomer and Green, JJ., who dissent and vote to affirm in the following memorandum.
We respectfully dissent and vote to affirm. Rochester Gas and Electric Corporation (RGE) has submitted sufficient proof in support of its motion for summary judgment to show that plaintiffs do not have a cause of action for intentional interference with contract. Nevertheless, RGE is not entitled to summary judgment because it has not shown that plaintiffs have no cause of action at all. Under the facts pleaded and submitted on the motion for summary judgment, plaintiffs may have a cause of action for tortious interference with prospective economic advantage (see, Restatement [Second] of Torts § 766B). The elements of that cause of action are the interference with business relations existing between the plaintiff and a third party, either with the sole purpose of harming the plaintiff or by means that are dishonest, unfair, or in any other way improper. "Interference with a plaintiff's business relations with a third party can be found if the plaintiff had a `reasonable expectancy of a contract' with the third party, which can result from `mere negotiations.'" (Strapex Corp. v. Metaverpa N.V., 607 F. Supp. 1047, 1050; see also, Guard-Life Corp. v Parker Hardware Mfg. Corp., 50 N.Y.2d 183; Williams Co. v Collins Tuttle Co., 6 A.D.2d 302, 306-307, lv denied 5 N.Y.2d 710.) Interference with precontractual relations is actionable where a contract would have been entered into if it had not been for the malicious conduct of a third person (A.S. Rampell, Inc. v. Hyster Co., 3 N.Y.2d 369, 376; see also, Pino v. Protection Mar. Ins. Co., 599 F.2d 10; Pino v. Trans-Atlantic Mar., 358 Mass. 498, 265 N.E.2d 583). To prove such a cause of action, plaintiffs need not show an existing contract of employment. They need show only that a contract of employment would have been entered into had it not been for improper conduct of RGE.
On this motion for summary judgment, is is immaterial that the cause of action asserted by plaintiffs was characterized in the complaint as "intentional interference with contract" and not tortious interference with economic advantage or with prospective employment. The complaint pleads all the essential elements of the latter cause of action. Plaintiffs have alleged that RGE issued the blacklist maliciously and with the intent to damage plaintiffs in their ability to earn a living and for the purpose of forestalling other members of a labor union from seeking recovery against RGE for exposure to radiation at RGE's plant; that plaintiffs were members of labor unions, thus giving them an expectancy of employment with contractors who were parties to the union contracts; and that since the publication of the blacklist, plaintiffs have sought employment working on property of RGE but have been denied such employment as a direct result of the blacklist.
In support of its motion for summary judgment, defendant RGE did not submit proof negating these allegations, relying instead on the fact that the union contract did not guarantee plaintiffs' employment. Nevertheless, those contracts did give plaintiffs a reasonable expectation of employment.
Moreover, even if the complaint is deemed insufficient to state a cause of action for tortious interference with prospective economic advantage or prospective employment, that failure to state a cause of action would not permit an unconditional judgment in favor of defendant. As stated by the Court of Appeals in Alvord Swift v. Muller Constr. Co. ( 46 N.Y.2d 276, 281): "Long before enactment of the CPLR, on motion for summary judgment courts looked beyond the pleadings to discover the nature of the case (see, e.g., Curry v. Mackenzie, 239 N.Y. 267, 272). Even when deficiencies in the plaintiff's complaint have induced courts to grant summary judgment in favor of defendant, amendment of the complaint has frequently been permitted or directed, even by appellate courts (see, e.g., Potolski Int. v. Hall's Boat Corp., 282 App. Div. 44, 48 [BERGAN, J.]; Elsfelder v. Cournand, 270 App. Div. 162, 165; cf. Babtkis Assoc. v. Tarazi Realty Corp., 34 A.D.2d 754, 755). It has only been the dead hand of a criticized case that influenced courts to grant summary judgment for defendant when a plaintiff's submissions, but not its pleadings, made out a cause of action (see Cohen v. City Co. of N.Y., 283 N.Y. 112, 117; but see, in criticism, Shientag, Summary Judgment, pp 67-73; see, also, Diemer v. Diemer, 8 N.Y.2d 206, 211-212 [FULD, J.]). With the advent of the modern principles underlying the CPLR, application of the archaic rule is no longer merited."