There are probably not too many college football fans who don’t remember the 2003 double-overtime Fiesta Bowl — OSU 31, Miami 24 for the National Title. Arguably the key play involved an interference call — and our topic today is contractual (tortious) interference in regard to the auction industry.
Contractual (or tortious) interference involves generally a third party (a tortfeasor) interfering with some other parties’ contractual relationship. For example, Auctioneer A has signed a contract with a Seller A, and Auctioneer B contacts Seller A encouraging him to break that contract with Auctioneer A and sign with him instead.
Generally, interference in some other contractual relationship is only actionable if there is some wrongful conduct such as fraud, deceit, unethical practices, or a violation of an industry standard. In other words, not all contractual interferences are illegal nor actionable. Certainly, too, not all represent cases worth pursuing.
Say Auctioneer C has worked for Attorney A for over 10 years and Auctioneer D approaches Attorney A and suggests he’s a better auctioneer and can service her needs more “professionally.” Probably okay. Say Auctioneer C has a contract to conduct an auction for Attorney A and Auctioneer D approaches suggesting Attorney A breach that contract … probably not okay.
For a valid claim of interference in a current contractual relationship, it’s likely the interference would have to involve knowledge of a current contract, intentional improper conduct, resulting in harm caused by the interference. The specific requirements for a claim vary a bit around the United States.
Another type of tortious (or contractual) interference might involve a tortfeasor trying to damage an auction event — say a contract between Auctioneer A and Seller A with a third party (family member, neighbor, etc.) causing harm to the auction with noise, parking restrictions, bad press or even technology interruptions; encouraging or causing others not to bid might even rise to a violation of the Sherman Antitrust Act.
An interesting tortious interference (not auction-related) case was heard at the U.S. District Court for the Eastern District of Texas in 2003 in Zayler v. United States, 279 F. Supp. 2d 805 (E.D. Tex. 2003). The plaintiff was Stephen Zayler, Trustee of the Estate of Supreme Beef Processors, Inc. who sued for (1) tortious interference with prospective business relations; (2) tortious interference with existing contracts; (3) slander; (4) business disparagement; (5) breach of duty to perform proper inspection.
Are there tortious interferences going on in the auction business? It would seem so as I hear about such cases once or twice a year — auctioneers maybe jealous of other auctioneers’ good fortune mostly, with family disputes making up the balance. None of this is good behavior and should certainly be avoided.
I would say there’s plenty of auction business for all auctioneers and our competition isn’t each other, and rather other ways sellers find to sell their properties. So far as familial disputes, it’s generally not the auctioneer’s fault, and rather a matter — typically — of poor estate or succession planning.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.
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