Herron v. State Farm Mut. Ins. Co.

1 Analyses of this case by attorneys

  1. Liability of Agent(s) of Buyer of Bloodstock for Taking Undisclosed Kickbacks from Sellers or Consignors

    Frost Brown Todd LLCJoel B. TurnerOctober 12, 2005

    ctor and the contractual interests of the other, (f) the proximity or remoteness of the actor’s conduct to the interference, and (g) the relations between the parties.B. Kentucky Case LawIn Walt Peabody Advertising Service, Inc. v. Pecora, 393 F. Supp. 328, 330 (W.D. Ky. 1974), the court discussed the history of Kentucky law with respect to the tort of interference of contractual relations. Although Kentucky had once rejected the notion that a party could assert a cause of action against a party inducing or otherwise causing the other party to the contract to not perform, the court indicated that Kentucky law was now in accord with the majority rule of Alpha Distributing Company of California v. Jack Daniel Distillery, 454 F.2d 442 (9th Cir. 1972), which states thatAn action will lie for the intentional interference by a third person with a contractual relationship either by unlawful means or by means otherwise lawful when there is a lack of sufficient justification.Id.at 331 (quoting Herron v. State Farm Mutual Ins. Co., 363 P.2d 310 (Cal. 1962)). The court also indicated that the majority rule contains the following elements:(1) an existing contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) an intentional unjustified inducement to breach the contract; (4) a subsequent breach by the third party; (5) resulting damage to the plaintiff.Id.In Carmichael-Lynch-Nolan Advertising Agency, Inc. v. Bennett & Associates, Inc., 561 S.W.2d 99 (Ky. Ct. App. 1977), the Kentucky Court of Appeals adopted the original Restatement of Torts’ definition of the tort of interference with a contract. According to the court, “one who, without a privilege to do so, induces or otherwise cause a third person not to (a) perform a contract with another, or (b) enter into or continue a business relation with another is liable to the other for harm caused thereby.”