There are genuine issues of material fact as to whether Duke Realty, involved in a dispute over a land agreement with a Parr Richey Obremskey & Morton partner, intentionally induced the firm to terminate Carol Sparks Drake’s partnership agreement and whether that interference was justified, the Indiana Court of Appeals ruled Wednesday.
Drake owned land in Boone County next to the Anson Project development Duke Realty was constructing in 2003. She declined to sell her land, and the two later entered into a land-use agreement that limited how Duke Realty could develop the property near Drake’s land. During this time, Parr Richey suspended its representation of Duke Realty on the project until the land-use agreement was executed in 2004.
But a dispute over the agreement caused Duke Realty to inform the partners at Parr Richey that it was in the firm’s best interest to resolve the issue between Drake and the company. If Drake filed anything against Duke Realty regarding the land-use agreement, then whatever relationship Duke Realty had with the firm would be ended, Duke Realty told Parr Richey.
Shortly thereafter, the other partners agreed to remove Drake as a partner at the end of 2006. She sued Duke Realty for tortious interference with her partnership. The trial court granted the company’s motion for summary judgment.
At issue in Carol Sparks Drake v. Thomas A. Dickey, Craig Anderson, Charles E. Podell, and Duke Realty Corporation, 29A02-1302-CT-152, are the tortious interference elements of the defendant’s intentional inducement of breach of the contract and the absence of justification. The Court of Appeals found genuine issues of material fact regarding both these elements.
“The question remains whether, when Duke Realty demanded of Parr Richey that Drake cease and desist from enforcing her rights under the Land Use Agreement, Duke Realty intentionally induced Parr Richey to remove Drake as a partner without legal justification,” Judge Edward Najam wrote.
The judges also found it is not necessary for Duke Realty to have specifically intended only that Drake be terminated as a partner for the company to have tortiously interfered with the partnership agreement.
Duke Realty pointed to Indiana Professional Conduct Rule 1.7(a)(2) to say that even if it did interfere with the partnership agreement, it had a legitimate business reason to do so.
“But our Rules of Professional Conduct do not justify a client’s tortious behavior toward an attorney. While Duke Realty has an unfettered right to terminate its attorney-client relationship with Parr Richey, Duke Realty could have exercised that right without issuing a threat or ultimatum regarding Drake,” Najam wrote.
“Again, Duke Realty’s argument ignores the fact that it did not simply terminate its attorney-client relationship but, rather, used its status as a Parr Richey client as leverage in its dispute with Drake.”
A jury should decide Duke Realty’s intent and whether its threat to withdraw all of its business from Parr Richey was merely an expression of a client’s legitimate concern about a conflict of interest.