Allen Family Foods, Inc. v. Capitol Carbonic Corp., C.A. No. N10C-10-313 JRS-CCLD (Del. Super. March 31, 2011), read this Delaware Superior Court opinion here.

This case summary highlights the court’s the adoption of Restatement (Second) of Torts § 766A, which recognizes a claim for “intentional interference with another’s performance of his own contract.” (Pictured at right is the new Kent County Courthouse).

Procedural Setting

Allen Family Foods, Inc., operators of poultry processing facilities in Delaware and Maryland, brought suit against Capitol Carbonic Corporation, a Maryland dry ice supplier.  The complaint alleged tortious interference with a contract between Allen and Praxair, a non-party dry ice supplier.  Capitol filed a motion to dismiss the claim on the grounds that Delaware law does not recognize tortious interference with another’s performance of his own contract. Typically, a claim is made for tortious interference of a third-party’s performance of a contract, but in this case, Allen was claiming that Capitol interfered with Allen’s own performance of its contract.

Delaware Law Regarding Tortious Interference with Contract (Prior to Decision)

The court stated that “Delaware generally follows the Restatement with respect to tortious interference,” including the recognition of § 766 and § 766B. Section 766 deals with the tortious interference with a third party’s performance of a contract, whereas § 766B deals with tortious interference with prospective contractual relations.

No Delaware state court had previously addressed § 766A, which involves the intentional interference with another’s performance of his own contract.  However, in Anderson v. Wachovia Mort. Corp., the District of Delaware predicted that the Delaware Supreme Court would reject § 766A, stating that the element of proving that the performance of a contract would become more costly and is too speculative.

Adoption of § 766A

After examining relevant state and federal case law, the court found the views of those in support of § 766A to be most persuasive, reasoning that “not all claims under § 766A will present speculative damages and those that do can be dealt with under our Rules of Civil Procedure in the same manner as any claim that rests upon inherently speculative damages.”

The court stated that it was satisfied that § 768, which explains proper versus improper interference and is incorporated into the § 766A analysis, “adequately addresses the concern that § 766A somehow chills proper ‘commercial activity’ or ‘undermines the integrity of contract remedies,’”  and concluded that Delaware would not reject § 766A.

The court, however, held that Allen failed to state a claim under § 766A, explaining that “Allen’s fear of what Praxair might have done . . . is precisely the sort of speculation about which those who criticize § 766A have commented,” and speculative claims of this nature in this case were simply not-yet-ripe for adjudication.