7:5 Intentional Interference with Contract

• Jurisdiction: Arizona

§ 7:5 Intentional Interference with Contract

Under very limited circumstances, an opposing party may sue opposing counsel for intentional interference with contract.

Intentional interference with contract requires: (1) a valid contract; (2) the defendant had knowledge of the contract; (3) the defendant intentionally interfered, causing breach; (4) this interference damaged the plaintiff; and 5) improper action by the defendant.^[321]

In Safeway Insurance Co. v. Guerrero,^[322] Botma ran into Castano in traffic, causing massive damages to her.^[323] Castano’s mother and guardian (Himes) sued Botma on Castano’s behalf. Botma had policy limits of $15,000.^[324]

For purposes of determining whether summary judgment was appropriate, the Arizona Court of Appeals assumed the following facts were true: (1) Himes’ counsel demanded policy limits; (2) Botma’s insurer, Safeway, agreed to pay policy limits; (3) Himes’ counsel then refused to go through with the agreement and withdrew the offer; and (4) Himes’ counsel entered into a Damron agreement with Botma, in order to sue Safeway for $12,000,000, alleging bad faith failure to settle.^[325]

Safeway sued Himes’ counsel for...