10 Civil Conspiracy

• Library: Elements of Civil Causes of Action (SCBar) (2015 Ed.)

10 Civil Conspiracy¹

A. Definition

Civil conspiracy is a combination of two or more persons for the purpose of injuring another.² Civil conspiracy, in contrast with a criminal conspiracy, is actionable only if overt acts pursuant to the conspiracy proximately cause damage to the plaintiff.³ "The gravamen of the tort is the damage resulting to the plaintiff from the overt act done pursuant to the combination, not the agreement or combination per se."⁴ Thus, conduct which would not be tortious if done by an individual, may be so in combination.⁵ Secrecy is not an element of the cause of action.⁶

An unexecuted civil conspiracy is not actionable, rather, a conspiracy becomes actionable once overt acts occur that proximately cause damage to the plaintiff. A claim for civil conspiracy must allege additional acts in furtherance of a conspiracy instead of merely realleging other claims within the complaint.⁷

A party may plead alternative theories in a case involving civil conspiracy, but it is required by the rules of procedure when asserting multiple causes of action, including civil conspiracy, to allege acts in furtherance of the conspiracy and special damages separate and independent of the other acts and damages that underlie any other causes of action in the same complaint⁸

B. Elements

(1) a combination of two or more persons

(2) for the purpose of injuring the plaintiff

(3) which causes special damages.⁹

C. Elements Defined

1. A Combination of Two or More Persons

A conspiracy requires two or more persons or legal entities.¹⁰ A complaint that alleges agents of a corporation conspired to injure the plaintiff meets the element. While a corporation cannot conspire with itself, or its wholly owned subsidiary,¹¹ its agents as individuals are legally capable of conspiring among themselves.¹² However, in McMillanv. Oconee Mem'l Hosp., Inc.,¹³ the court held that there can be no conspiracy if the conduct challenged is the single act of a single corporation acting exclusively through its own directors, officers, and employees, each of whom is acting within the scope of his or her employment. In a subsequent case, a property owner whose development plan was not approved brought a civil conspiracy claim against two members of a County Council. The plaintiff alleged the defendant elected officials conspired with county staff and each other outside a public forum to obstruct the plaintiff's development plans. The Council members argued the alleged conspiracy concerned actions within an "official capacity setting" and therefore arose in the "context of a principal-agent relationship, preventing the combination of two or more persons necessary to prove a conspiracy." The Court of Appeals did not agree. It said the complaint asserted a civil conspiracy claim against the Council members in their individual capacities. It could be reasonably inferred from the complaint, concluded the court, that the plaintiff was alleging the Council members had a personal stake in preventing the plaintiff from moving forward with its development plans and, therefore, the intra-corporate conspiracy doctrine did not apply.¹⁴ On the other hand, the "personal stake" exception to the doctrine did apply where the plaintiff produced no evidence to show defendants were acting in their individual capacities as competitors of the plaintiff.¹⁵

Conspiracy may be inferred from the nature of the acts, the relationship of the parties, the interests of the alleged conspirators, and other circumstances.¹⁶ Evidence must be produced from which joint assent of the minds of two or more parties may be inferred. Proof showing concert of action "from which the natural or reasonable inferences arise that the acts were in furtherance of the common design of the alleged conspirators, is sufficient; at least to establish a prima facie case of conspiracy."¹⁷

2. For the Purpose of Injuring the Plaintiff

While the second element of civil conspiracy requires that the combination be for the purpose of injuring the plaintiff,¹⁸ the means of accomplishing the injury need not be unlawful.¹⁹ It is not necessary therefore to allege an unlawful act, although an unlawful act may further a civil conspiracy.²⁰ "An action for conspiracy may lie even though no unlawful means are used and no independently unlawful acts are committed."²¹ Lawful acts may be the basis of civil conspiracy when the "object is to ruin or damage the business of another."²² For example, while an at-will employee cannot maintain an action against a former employer for civil conspiracy that resulted in termination,²³ he or she may be able to maintain such an action against a third party on the theory that the third-party's conspiracy caused the former employer to fire the employee.²⁴ However, the South Carolina Supreme Court has decided that an at-will public official cannot maintain an action for conspiracy to terminate even against third parties because in a "democratic society, a public official is answerable to the public" and "members of the public are not third-party interlopers."²⁵That, of course, implies that an action may still be maintained in the private employment setting.²⁶

The injury to the plaintiff in a civil conspiracy claim need not be the only purpose behind the conduct of the tortfeasor. Because many conspiracies will be at least partially motivated by the desire to protect or benefit the tortfeasor, to be actionable, the primary purpose or object of an alleged a conspiracy must be to injure the plaintiff.²⁷

A federal court explored the degree to which it must be alleged that the defendants' specific purpose was to cause injury to someone.²⁸ The court noted cases seeming to indicate that if the injury is a by-product of some other motivation there can be no claim for conspiracy.²⁹ The court questioned whether it would be sufficient to allege that the intentional injury was not the ultimate object of the conspiracy, but a means to achieving the ultimate object, a question the court characterized as being in a gray area in the law of civil conspiracy. Harm befalling a plaintiff that is incidental, as a result of legitimate business competition, may not be actionable noted the court, however, where the plaintiff alleged conduct that went well beyond "legitimate business competition" and included specific planning for at least some of the alleged types of harm to occur and the injury was foreseen, even though it may not have been the ultimate object of the alleged conspiracy, the court held that plaintiff satisfied the pleading requirement.

3. Which Causes Special Damages

The requirement that the plaintiff plead special damages means essentially this -that the complaint must describe damages that occurred as a result of the conspiracy in addition to any alleged as a result of other claims. The damages allegedly resulting from the conspiracy must not overlap with or be subsumed by those resulting from the other claims.³⁰ Under the Rules of Civil Procedure,³¹ special damages must be specifically stated and are not implied by law. ³²

A conspiracy action was barred for lack of special damages where an employee sued for breach of an employment contract and for conspiracy. The damages sought in the latter action were the same as those sought in the former, therefore no special damages were alleged aside from those of breach of contract.³³ A cause of action was, however, stated when the allegation was that the defendant issued an incorrect tax opinion and the plaintiff's investment was lost without any tax benefits being realized.³⁴ The required damages were also shown in an action against picketers of an abortion clinic where the defendant's literature was claimed to have damaged the plaintiff by causing a dramatic decrease in the number of abortions performed.³⁵ Costs and attorney's fees may constitute special damages.³⁶

D. Defenses³⁷

A unique feature of the tort of civil conspiracy is that it will not lie if a plaintiff obtains relief through other avenues. Thus, a plaintiff who merely realleges prior acts complained of in another cause of action but fails to plead additional acts in furtherance of the conspiracy is not entitled to maintain the conspiracy cause of action.³⁸

The applicable statute of limitations is six years for actions arising prior to April 15, 1988, and three years for those arising on or after that date.³⁹ Actions initiated under the provision must be commenced within three years after the plaintiff knew, or by the exercise of reasonable diligence should have known, that a cause of action existed.⁴⁰

The South Carolina Tort Claims Act⁴¹ waives the immunity of the State, its agencies, political subdivisions, and governmental entities from liability in tort. It contains, however, many limitations on liability and damages which may preclude or restrict a plaintiffs cause of action.⁴² One limitation is that governmental entities⁴³ are not liable for a loss resulting from "employee conduct outside the scope of ... official duties or which constitutes actual fraud, actual malice, intent to harm, or a crime involving moral turpitude."⁴⁴ The Act is the exclusive and sole remedy for any tort committed by an employee of a governmental entity while acting within the scope of his or her official duty and must be liberally construed in favor of limiting the liability of the governmental entity.⁴⁵

While attorneys are generally immune from liability to third parties arising from performance of their professional activities on behalf, and with the knowledge, of their client, the South Carolina Supreme Court has held that attorneys may be held liable for conspiracy when, in addition to representing their client, they breach an independent duty to a third person or act in their own personal interest, outside the scope of representation of the client.⁴⁶

E. Remedies

Damages may include specific items of loss,⁴⁷ injury inflicted through the destruction of a business, and even lost profits for permanent...