MIAMI BUSINESS LITIGATION: TORTIOUS INTERFERENCE AND IDENTIFIABLE CUSTOMERS

Tortious interference claims are frequently pled in business litigation against competitors, and generally assert a type of “unfair competition” that interferes with a business relationship. Under Florida law, the elements of tortious interference with a business relationship are: (1) the existence of a business relationship that affords the plaintiff existing or prospective legal rights; (2) the defendant’s knowledge of the business relationship; (3) the defendant’s intentional and unjustified interference with the relationship; and (4) damage to the plaintiff. Precedent from the Supreme Court of Florida in Ethan Allen, Inc. v. Georgetown Manor, Inc., 647 So.2d 812 (Fla. 1994), explained that a business relationship need not be evidenced by a contract, but it generally requires “an understanding between the parties [that] would have been completed had the defendant not interfered.” Peter Mavrick a Miami business litigation attorney, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

The Ethan Allen case addressed a dispute between Ethan Allen, a furniture manufacturer, and its former dealer, Georgetown Manor. Georgetown decided to convert its Ethan Allen galleries to other furniture outlets. Ethan Allen responded by placing an advertisement in several newspapers that announced its split with Georgetown and asked customers who had unfilled orders with Georgetown to contact the new Ethan Allen outlets. Georgetown then sued Ethan Allen for tortious interference with its alleged business relationship with past Georgetown customers. The Supreme Court rejected Georgetown’s claim, holding that Georgetown’s relationship with its 89,000 past customers was not one upon which a tortious interference claim could be established because Georgetown’s optimism that some of its past customers would continue to purchase from Georgetown was mere “speculation.” The court concluded that “Georgetown had no identifiable agreement with its past customers that they would return to Georgetown to purchase furniture in the future.”

In finding no business relationship between Georgetown and its past customers, the Supreme Court distinguished a prior appellate decision, Insurance Field Services, Inc. v. White & White Inspection & Audit Service, Inc., 384 So.2d 203 (Fla. 5th DCA 1980). In Insurance Field Services, the appellate court held that the plaintiff, who had regularly been performing underwriting inspections, premium audits, and loss control work for sixteen insurance company clients, could establish a business relationship with these companies even though the plaintiff and his clients did not have written agreements. The Supreme Court in Ethan Allen noted that the relationship in the Insurance Field Services case was “ongoing” and “far different that the one maintained by a retail furniture dealer with 89,000 past customers.”

Two years after its Ethan Allen decision, the Supreme Court of Florida decided another case asserting tortious interference in Ferguson Transportation, Inc. v. North American Van Lines, Inc., 687 So.2d 821 (Fla. 1996). Ferguson contracted with North American to be its exclusive agent in Broward County. Thereafter, North American appointed another company, Advance Relocation, as its agent in West Palm Beach. After Advance Relocation intruded into Ferguson’s territory in Broward County, Ferguson sued, alleging that North American and Advance Relocation tortiously interfered with Ferguson’s relationships with its Broward County customers. Ferguson held that the plaintiff’s “relationship” with Broward County’s general population did not constitute a legally sufficient “business relationship” to sue for tortious interference. In other words, there was no unfair competition. The Supreme Court instead agreed with the Fourth District Court of Appeal’s decision considered in the appeal, which explained in pertinent part: “At trial Ferguson was unable to bring forth a single customer who would have patronized Ferguson but for the interference with North American. Ferguson presented no one who booked a move with North American through Advance Relocation who had been a customer of Ferguson or was even a prospective customer of Ferguson.” The Supreme Court held that Ferguson was required to show a business relationship with an identifiable person.

Peter Mavrick is a Miami business litigation lawyer, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.