1.1.3 Development in Arizona

• Jurisdiction: Arizona

Arizona has a well developed body of law in the area of interference with contractual relations. The Supreme Court has applied the tort to a number of contractual, commercial and employment situations. In Meason v. Ralston Purina,[fn7] the Supreme Court in 1940 recognized a cause of action for wrongful interference with a sales contract; in Tipton v. Burson,[fn8] the tort was applied to an interference with a lease agreement; in Craviolini v. Scholer & Fuller Assoc. Architects,[fn9] the Court applied the tort to interference with a construction contract; in Banner Realty, Inc. v. Turek,[fn10] the tort was applied to a real estate purchase contract; in McNutt Oil & Refining Co. v. D'Ascoli,[fn11] the tort was applied to a breach of a restrictive covenant; in State Farm Mutual Ins. Company v. St. Joseph's Hosp.,[fn12] the Court applied the tort to interference with the attorney-client relationship and to the expectancy of payment for services; in Chanay v. Chittenden,[fn13] the tort was applied to interference with an agency contract, and in Antwerp Diamond Exchange of America, Inc. v. Better Business Bureau of Maricopa County, Inc.,[fn14] it was applied to interference with potential customers. Early Arizona cases required a showing of legal malice, that is, that the defendant acted intentionally, wrongfully, and without privilege or justification.[fn15]

The formulation involving proof of legal malice as part of plaintiff's prima facie case was difficult to sustain. The concepts of wrongfulness, lack of justification, and privilege were not clearly formulated and failed to give a defendant a clear indication of "what was forbidden and what was permitted."[fn16] The burden of proof with respect to privilege and lack of justification was in confusion. It was unclear whether the plaintiff had to prove malice which carried within it the proof of intent, wrongfulness and lack of justification, or whether the plaintiff was responsible for proving intent and wrongfulness and the defendant was charged with proving any justification or privilege.

In the midst of uncertainty, certain privileges evolved. The litigation privilege immunized the defendant against a claim for interference with contract;[fn17] competitor's privilege protected the rights of competitors to compete for business:[fn18] and the privilege of protecting one's own equal or superior right protected a defendant who interfered in order to protect his own rights.[fn19]

In 1985, the Supreme Court offered to clarify the uncertainty with...