There are two types of nuisance: public and private. Public nuisance involves infringement on public rights.[1] With a public nuisance, an entire community or large group of people may be affected by the tortfeasor’s actions. Examples of public nuisance may include polluting the local lake or operating a drug house. Most states only allow public officials or entities to bring public nuisance cases to avoid numerous lawsuits being brought for the same act. To succeed in a public nuisance claim, the plaintiff (usually a government agency) must prove that the condition affected a substantial number of people at the same time, that any social usefulness of the offending conduct is outweighed by the seriousness of the harm and that the harm suffered by the plaintiffs was different from harm suffered by the general public.[2]
State or local government agencies may seek civil nuisance remedies in response to a public nuisance. For example, New York City’s Nuisance Abatement Law was established to provide a process for the City to quickly shut down residential and commercial establishments classified as public nuisances.[3] The state of Connecticut,[4] as well as the cities of Seattle[5] and Los Angeles,[6] also maintain nuisance abatement policies.
Private nuisance is the infringement on a private party’s property rights. The New York State Court of Appeals, in Copart Industries v Consolidated Edison Company, explained the elements necessary to prove private nuisance.[7] The court stated that “one is subject to liability for a private nuisance if his conduct is a legal cause of the invasion of the interest in the private use and enjoyment of land and such invasion is (1) intentional and unreasonable, (2) negligent or reckless or (3) actionable under the rules governing liability for abnormally dangerous conditions or activities.”
When deciding nuisance cases, there are numerous factors that courts must consider. First, the location and applicable zoning restrictions of the alleged nuisance may be considered. For instance, a 24-hour gas station in a commercially-zoned area may be examined with less scrutiny than one located in a mixed use residential and commercial area. Secondly, complaints concerning pure aesthetic concerns, such as complaints about the appearance of a convenience store in a residential area, are rarely successful. Lastly, the “moving to the nuisance” doctrine may apply to situations where the plaintiff moved into an area with knowledge that the nuisance was already there.[8] For example, if someone purchases a home next to a pet shelter, she likely will not be successful in suing based on the noise of dogs barking outside. Several states maintain statutes that protect farmers from nuisance claims when the plaintiff moves into the area with knowledge that the farm already exists. The Illinois Supreme Court, in Toftoy vs. Rosenwinkel, ruled that the state’s Farm Nuisance Suit Act prevented recovery for a family that moved across the street from a cattle farm.[9]
Nuisance per se applies when an action, in and of itself, is considered a nuisance.[10] Generally, acts or uses of property that are illegal constitute a nuisance per se.[11] This classification may also apply to an activity that is inherently dangerous to human life or property. For example, a junkyard that is not properly licensed and maintained may be classified as a nuisance per se, particularly if it houses hazardous materials.
Interference with Contract
Business torts arose out of the evolution of business arrangements and the disputes that commonly arise from them. Two of the most common business torts are tortious interference with contract and tortious misrepresentation.
Tortious interference with a business contract is used to compensate parties to a contract for harms resulting from interference with the contract by a third party.[12] Usually, it occurs when one party induces or encourages another to breach a contract with someone else. The inducement may happen in a variety of ways, including blackmail, force, inducement, fraud or unethical business practices. For example, a retailer who blocks a supplier from supplying a competitor despite an existing agreement between the supplier and competitor (whether, for example, by paying off or threatening the supplier) may be liable under this tort.
When the interference occurs, both the person harmed by the broken contract and the party who was forced or tricked into the breaking the contract may have grounds to bring a tortious interference claim.
The elements for interference with a business contract are the existence of a legal contractual relationship, the third party’s knowledge of the contract, the goal of interfering with the contractual relationship, an actual interference and resulting damages.[13] Proving that the third party had knowledge of the relationship and intent to interfere with it can prove challenging, requiring testimony and relevant evidence. In determining whether a contractual relationship existed, the courts may also consider whether the contract was valid and legal. An illegal business relationship, in violation of public policy, is not an appropriate basis for interference claims.
Webb Builders v. Jones involved a home-builder and several of the company’s clients.[14] Having become dissatisfied with the performance of the builder, the clients expressed their displeasure to the plaintiff’s other clients resulting in their decisions to terminate their contracts. Holding in favor of the plaintiff, the court opined that the tort of interference does not require acts of force, threat or intimidation. The opinion stated, “Prior to the nineteenth century, courts often required a showing that the defendant’s actions that caused the preclusion of economic advantage took the form of a recognized intentional tort–i.e., those torts involving physical force, threats and intimidation. Modem case law evaluates tortious interference claims more broadly. Rather than comprising a ‘critical element’ of the cause of action, the presence of physical force, threats and intimidation is treated as one aspect of a multi-factor analysis. Courts now recognize that an actor’s predatory behavior can take a variety of forms other than traditional intentional torts. Such behavior can be equally effective at producing the desired result of frustrating the performance of contractual obligations, or other economic expectancy.”
Even if interference is proven, sometimes that interference does not rise to the necessary level for tortious interference. For example, legitimate business practices may not amount to tortious interference of contract. The Mississippi Supreme Court case of PDN, Inc.v. Loring involved an interference claim against a worker’s compensation insurance adjuster.[15] The plaintiff asserted that the defendant interfered with an oral contract by refusing to authorize payment for services rendered. Holding in favor of the defendant, the court found that the adjuster’s actions fell under the classification of a standard business practice, and therefore, was not tortious interference.
Misrepresentation
Tortious misrepresentation is a business-related tort that requires a false statement or misrepresentation of facts material to the agreement made for the purpose of inducing a party into entering into a business agreement. The misrepresentation can take various forms, including the telling of half-truths and even silence in some cases.
Fraudulent misrepresentation is the most serious type of misrepresentation because it is based in a fraudulent intent. This type of misrepresentation requires false representations or lies by the defendant that are material to the business transaction. It also must be made with knowledge of falsity or disregard for the truth. It also requires intent to induce the other party to enter into a contract, the other party’s reasonable reliance on the misrepresentation and proof that the misrepresentation proximately caused injury or harm to the plaintiff.[16]
Krysa v. Payne involved the sale of a used truck.[17] The plaintiffs alleged that the defendant car dealer made fraudulent misrepresentations about the vehicle’s condition, hiding the fact that the truck was actually two vehicles that had been welded together. The Missouri court ruled in favor of the plaintiff, stating that “[w]hile the damage actually sustained by plaintiffs was relatively small and was economic in nature, the record clearly supports a finding that defendants acted indifferently to or in reckless disregard of the safety of the plaintiffs, selling them a vehicle that they knew or should have known was not safe to drive and that the potential harm was much greater than the harm that was actually incurred.”
Misrepresentation may also be available as a cause of action without an outright lie or fraudulent statement. Here we must distinguish between mere “nondisclosure” of important information, which is usually not actionable, and “concealment” of material facts, which modern courts generally consider tantamount to misrepresentation. Active concealment occurs when a party takes affirmative action to keep the interested party from learning about an essential fact.[18] These types of disputes are often at issue in cases involving the sale of real estate.
The California case of Furla vs. Jon Douglas Company involved a dispute over the inaccurate communication of a property’s square footage to a seller.[19] Upon finding that the agent provided him with the wrong square footage calculation, the plaintiff filed suit for intentional misrepresentation and concealment. In reversing the trial court’s decision to grant summary judgement, the Superior Court of Los Angeles ruled that “a statement couched as an opinion, by one having special knowledge of the subject, may be treated as an actionable misstatement of fact.”
Many states today require disclosure of certain defects in many cases, such as real estate transactions, this making nondisclosure also actionable in such cases.[20]
Malicious Prosecution
Malicious prosecution means bringing or participating in a baseless and bad-faith criminal prosecution. The elements include: (1) prosecution for a criminal offense; (2) instigated without probable cause; (3) with malice; (4) under a warrant, accusation or summons; (5) which has terminated favorably to the plaintiff; and (6) has damaged the plaintiff.[21]
When determining whether there has been “malice,” the court must consider various factors. As stated in Strickland v. University of Scranton, the court must determine whether there is “a reasonable ground of suspicion supported by circumstances sufficient to warrant an ordinary prudent man in the same situation” to conclude that a party has committed an offense.[22] If there are reasonable grounds for suspicion, the prosecution cannot be said to have been groundless and in bad faith.
Typically, courts find a judicial officer’s determination that there is enough probable cause to arrest an adequate defense to a malicious prosecution claim.[23] Many state legislatures provide statutory protections from malicious prosecution for certain classes of people. Under Colorado law, “a merchant, a merchant’s employee, or a police officer, who reasonably suspects that a theft has occurred, may detain and question the suspect without fear of liability for… malicious prosecution.”[24]
Malicious prosecution cases may also involve an underlying civil matter, though not all states recognize this cause of action or may have a different name for it, such as “abuse of process.” Arizona recognized civil malicious prosecution in the 1932 case of Ackerman v. Kaufman, which involved the bringing of a civil case based on false representations.[25] Under Arizona common law, a successful claim requires proof that the defendant: (1) instituted a civil action (2) without probable cause (3) that was motivated by malice, (4) terminated in the plaintiff’s favor and (5) damaged the plaintiff.[26]
Damages granted in malicious prosecution cases may include compensation for:
- Loss of reputation
- Humiliation
- Mental suffering
- Loss of time
- Physical injury
- Deprivation of family in cases rising from a criminal prosecution; and
- Attorney fees and court costs in the underlying case and in bringing the malicious prosecution claim.[27]
Due to the malevolent nature of malicious prosecutions, punitive damages are often imposed in these actions. These damages punish the wrongdoer for their misconduct and deter them from the same behaviors in the future. Still, there must be malicious intent for punitive damages to be appropriate. In Giant of Virginia v. Pigg, the Virginia court examined the awarding of punitive damages under Virginia’s malicious prosecution statute.[28] This plaintiff was awarded $5,000 in compensatory damages and $50,000 punitive damages at trial. On appeal, the court determined that the case was not proper for punitive damages, stating that “there must be proof of actual or express malice. Actual malice is an essential and controlling factor for the recovery of punitive damages. Evil intent cannot be presumed or inferred from mere mistake.”
Vicarious Liability
Vicarious liability is also an important aspect of business torts. It is a legal doctrine that creates liability for an individual or entity other than the person who caused the injury or harm. It states that, when certain relationships exist, one party may be responsible for the tortious actions of another party.[29] Employment vicarious liability arises when a worker commits a tortious act while in performance of her job. The business is said to be “vicariously” liable under the legal theory of respondent superior, which means “let the superior (employer, in this case) answer.”
The 1909 case of New York Central & Hudson River Railroad Co. v. United States discussed criminal liability of a corporation, but the opinion also discussed the theory of respondent superior and when it applies.[30] The court stated, “It is now well established that, in actions for tort, the corporation may be held responsible for damages for the acts of its agent within the scope of his employment.” In laying out the application of respondent superior to specific circumstances, the court further stated, “And this is the rule when the act is done by the agent in the course of his employment, although done wantonly or recklessly or against the express orders of the principal. In such cases the liability is not imputed because the principal actually participates in the malice or fraud, but because the act is done for the benefit of the principal, while the agent is acting within the scope of his employment in the business of the principal, and justice requires that the latter shall be held responsible for damages to the individual who has suffered by such conduct.” To summarize the court’s opinion, if an employee commits a tort while acting on behalf of the employer, or within the scope of normal employment duties, the employer may be found liable for the employee’s wrongdoings. The theory of respondent superior also applies to agency relationships, where the wrongdoer is not technically an employee but is authorized to act as an agent on behalf of the employer.[31]
[1] Restatement (Second) of Torts § 821B(Am. Law Inst. 1965).
[2] Revard v. Hunt, 119 P. 589 (Okla. 1911).
[3] NYC Code §§ 7-701 to 7-704 (2017).
[4] Conn. Gen. Stat. §§ 19a-343 to 19a-343h (2016).
[5] Seattle, WA Municipal Code § 10.09 (2009).
[6] Los Angeles, CA Municipal Code § 12.27.1 (1988).
[7] Copart Industries v.Consolidated Edison Co.., 362 N.E.2d 968 (N.Y. 1977).
[8] Toftoy v. Rosenwinkel, 983 N.E.2d 463 (2012).
[9] Id.
[10] https://thelawdictionary.org/nuisance-per-se.
[11] State ex rel. Bradford v. Stubblefield, 220 P.2d 305 (Wash. 1950).
[12] Restatement (Second) of Torts:Intentional Interference with Performance of Contract by Third Person § 766(1979).
[13] Prudential Insurance Company of America v. Financial Review Services, Inc., 29 S.W.3d 74, 77 (Tex. 2000).
[14] Webb Builders, LLC v. Jones, January 24, 2002 (Tennille)(unpublished), https://www.ncbusinesslitigationreport.com/wp-content/uploads/sites/71/Add%20–%20Webb.pdf.
[15] PDN, Inc. v. Loring, 843 So. 2d 685 (Miss. 2003).
[16] Restatement (Second) of Torts § 526 (Am. Law Ins. 1965).
[17] Krysa v. Payne, 176 S.W.3d 150 (2005).
[18] Restatement (Second) of Torts § 550 (Am. Law Inst. 1965).
[19] Furla v. Jon Douglas Co., 65 Cal. App. 4th 1069 (Cal. Ct. App. 1998).
[20] See, e.g., Property Condition Disclosure Statement, NYS Department of State Division of Licensing Services, https://www.dos.ny.gov/forms/licensing/1614-a.pdf.
[21] 42 U.S.C. § 1983 (2012).
[22] Strickland v. Univ. of Scranton, 700 A.2d 979, 984 (Pa. Super. Ct. 1997).
[23] Snell v. Duffy, 306 F. Supp. 2d 506 (E.D. Pa. 2004).
[24] Colo. Rev. Stat. Ann. § 18-4-407 (West 1996).
[25] Ackerman v. Kaufman, 15 P.2d 966, 967 (1932).
[26] Carroll v. Kalar, , 545 P.2d 411, 412 (1976).
[27] Restatement (Second) of Torts §§ 670-671 (Am. Law Inst. 1965).
[28] Giant of Virginia, Inc. v. Pigg, 152 S.E.2d 271 (Va. 1967).
[29] Restatement (Third) of Torts:Apportionment Liability § 13 (Am. Law Inst. 2000).
[30] New York Central & Hudson RiverRailroad Co. v. U.S., 212 U.S. 481 (1909).
[31] Washington Gaslight Co. v. Lansden, 172 U.S. 534 (1899).