Edifecs, Inc. v. Welltok, Inc. ( 2021 )

FILED
NOT FOR PUBLICATION
MAR 16 2021
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
EDIFECS, INC., a Washington No. 20-35102
corporation,
D.C. No. 2:18-cv-01086-JLR
Plaintiff-Appellant,
v. MEMORANDUM*
WELLTOK, INC., a Delaware
corporation,
Defendant-Appellee.
Appeal from the United States District Court
for the Western District of Washington
James L. Robart, District Judge, Presiding
Submitted March 5, 2021**
Seattle, Washington
Before: RAWLINSON and BYBEE, Circuit Judges, and ENGLAND,*** Senior
District Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Morrison C. England, Jr., Senior United States District
Judge for the Eastern District of California, sitting by designation.
Edifecs, Inc. (Edifecs) appeals the district court’s grant of summary
judgment in favor of Welltok, Inc., (Welltok) and its sanctions order, in a diversity
action alleging tortious interference with contractual relations. Edifecs alleged that
Welltok wrongfully induced and assisted former Edifecs Senior Vice President
David Profant to recruit five Edifecs sales executives to join Welltok, in violation
of Profant’s contractual obligations. Reviewing de novo, we affirm. See Bravo v.
City of Santa Maria, 665 F.3d 1076, 1083 (9th Cir. 2011).
Under Washington, State law:
To prove tortious interference, the plaintiff must produce
evidence sufficient to support all the following findings:
(1) the existence of a valid contractual relationship or
business expectancy; (2) the defendant's knowledge of
and intentional interference with that relationship or
expectancy; (3) a breach or termination of that
relationship or expectancy induced or caused by the
interference; (4) an improper purpose or the use of
improper means by the defendant that caused the
interference; and (5) resultant damage.
Tamosaitis v. Bechtel Nat’l, Inc., 327 P.3d 1309, 1313 (Wash. Ct. App. 2014)
(citation omitted).
The only issue on appeal involves the damages element. The existence of
pecuniary loss is a “threshold element for recovery under the tort of interference
with a business relationship just as it is for the tort of interference with a contract.”
2
Tamosaitis, 327 P.3d at 1314. And “a party must prove a claim of damages with
reasonable certainty.” Greensun Grp., LLC v. City of Bellevue, 436 P.3d 397, 409
(Wash. Ct. App. 2019) (citation omitted). “Evidence of damage is sufficient if it
affords a reasonable basis for estimating loss and does not subject the trier of fact
to mere speculation or conjecture. . . .” Clayton v. Wilson, 227 P.3d 278, 285
(Wash. 2010) (en banc) (citation omitted).
Edifecs first asserts that it produced evidence of damages based on the
notion that there is pecuniary value in employee relationships. It is true that “[a]
valid business expectancy includes any prospective contractual or business
relationship that would be of pecuniary value.” Newton Ins. Agency & Brokerage,
Inc. v. Caledonian Ins. Grp., Inc., 52 P.3d 30, 33 (Wash. Ct. App. 2002), as
amended (footnote reference omitted). However, Edifecs failed to produce any
evidence that the relationships cultivated by Profant or by the departed employees
were harmed by their departure. Rather, Edifecs contends that the pecuniary value
was in the employees themselves. However, Edifecs cites no case authority to
support this proposition.
Next, Edifecs points to its CEO’s deposition testimony that “once the Dave
Profant crisis happened, we lowered our expectations because we were in a crisis
mode to rebuild everything.” Edifecs contends that this testimony alone is
3
sufficient to create a triable issue on the fact of damages. Not so. “Where
inferences from the facts are remote or unreasonable, as here, factual causation is
not established as a matter of law.” Walters v. Hampton, 543 P.2d 648, 652
(Wash. Ct. App. 1975). Without evidence showing a causal link between the
employees’ departures and lost revenues or profits, Edifecs’ theory of pecuniary
loss amounts to nothing more than speculation and wishful thinking. See Sea-Pac
Co. v. United Food & Com. Workers Loc. Union 44, 699 P.2d 217, 220 (Wash.
1985) (en banc) (“The plaintiff must show that the future opportunities and profits
are a reasonable expectation and not based on merely wishful thinking.”) (citation
omitted).
In sum, Edifecs failed to produce evidence of damages sufficient for a trier
of fact to estimate loss without speculation or conjecture. See Clayton, 227 P.3d at
285. Therefore, Edifecs failed to carry its burden of showing a genuine dispute of
material fact that it suffered pecuniary loss caused by Welltok’s alleged tortious
interference. See Wenzler & Ward Plumbing & Heating Co. v. Sellen, 330 P.2d
1068, 1070 (Wash. 1958) (articulating that uncertainty as to the amount or
4
quantum of damages is not fatal to a plaintiff’s claim, but uncertainty as to the fact
of damage is fatal).1
AFFIRMED.
1
Having determined that Edifecs failed to carry its burden of showing a
genuine dispute of material fact that it suffered pecuniary loss caused by Welltok’s
alleged tortious interference, we need not address any remaining issues. Smith v.
Noonan, 992 F.2d 987, 989 (9th Cir. 1993).
5