On May 9, 2023, the First Department issued a decision in Arena Invs., L.P. v. DCK Worldwide Holding Inc., 2023 NY Slip Op. 02476, holding that a party to a contract can still be liable for tortious interference with that contract if it had no contractual duties to the plaintiff, explaining:
We are asked to decide whether a party to multilateral contracts may be sued by its contracting counterparty for inducing a breach of those contracts. Here, we answer that question in the affirmative. The rights and duties of defendants are separate from those of the breaching party. Plaintiffs also lack a contractual remedy against defendants. Under this narrow set of circumstances, plaintiffs should be permitted to assert a cause of action for tortious interference with contract, despite defendants being signatories to the multilateral agreements.
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On this record, Arena should not be precluded from stating a claim against Capstone for tortiously interfering with its loan agreements with DCK International, even though Capstone was a party to those contracts. The loan agreements were multilateral contracts, under which Capstone’s rights and duties as a lender were entirely separate from those of DCK International as a borrower. As we have previously acknowledged, federal courts have permitted such claims.
The general principle that only a nonparty to a contract can be liable for tortious interference derives from cases involving either bilateral contracts or contracts under which all defendants had the same or similar contractual obligations. In those cases, plaintiff had an adequate remedy for breach of contract because defendant was alleged to have breached its own duties to plaintiff under the contract.
This reasoning does not apply, however, if the inducing party is subject to duties that are different from those it allegedly encouraged another party to the contract to breach. Given such facts, the plaintiff cannot assert that the offending defendant breached a contractual obligation to it. The fact that one may derive rights under the same agreement as two other contracting parties does not excuse interference with their contractual rights. When breaching and inducing parties have different rights and duties, if the plaintiff is unable to recover fully from the breaching party, a tortious interference claim against the inducing party may be necessary for the plaintiff to be made whole.
Kassover v Prism Venture Partners, LLC (53 AD3d 444 [1st Dept 2008]), relied upon by Capstone, is not to the contrary. In Kassover, third-party beneficiaries under a merger agreement sued the parties to those agreements and the entities that owned or controlled them, alleging that they had prevented plaintiffs from receiving the money they were owed. Thus, the parties to the merger agreement owed the same obligation to plaintiffs: to ensure that they were properly paid for their shares. The defendants who were not party to the merger agreement, as the owners to the parties, were not truly strangers to the contract.
(Internal quotations and citations omitted).