Delaware Business Litigation Report

Superior Court Dismisses Tortious Interference with Contract Claim against Corporate Officer

American Bottling Co. v. Repole, C.A. No. N19C-03-048 AML CCLD (Del. Super. Dec. 30, 2020)

This case illustrates that a Delaware court will dismiss a claim against an officer for tortious interference with a contract to which his or her company is a party unless a plaintiff can assert non-conclusory allegations that the officer acted outside the scope of his or her agency. In this case, the plaintiff and defendant-company were parties to a distribution agreement. The plaintiff brought a claim for tortious interference with contract against the CEO and chairman of the defendant-company claiming that the CEO terminated the agreement to enrich himself and his management team to the detriment of the plaintiff. 

The Court held, “an officer of a Delaware limited liability company cannot be held liable for tortiously interfering with his own company's contract unless he ‘acted beyond the scope of [his] agency.’” To state a claim, the plaintiff must plead that an officer (1) “was not pursuing legitimate profit-seeking activities of the affiliated enterprise in good faith,” or (2) “was motivated by some malicious or other bad faith purpose to injure the plaintiff.” The Court found that the plaintiff had not sufficiently alleged that the CEO acted beyond the scope of his authority because the plaintiff had not made non-conclusory allegations concerning the CEO’s personal motives. The Court, therefore, dismissed the claim for tortious interference.

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