MBI is a New York corporation which creates and licenses artistic
designs incorporating images from famous works of art, including
works by Pablo Picasso.
Paloma Picasso is the daughter and one of the heirs of Pablo Picasso.
In 1976, After Picassos death, the heirs and SPANDEM entered into an
agreement to grant SPADEM the right to admitters, manager and
exploit the Picasso name.
In 1989, a French court appointed Claude Picasso Administrator of the
Indivision in order to facilitate the management of the
In 1980, MBI
Allegedly acquired exclusive licenses
Immediate subject of dispute.
10 years of dispute, threatened litigation, and negotiated settlements
in connection with the exploitation of reproductive rights.
Count Seven claims the defendants
tortuously interfered with MBI's contractual relations
and is the only count which
contains claims against Paloma in her personal capacity.
Had vlid license agreements with the Japanese companies Mitsukoshi
To sell MBI derivative works and reproductions of Picasso works of art.
Df - falsely advised Mitsukoshi and INFAS
MBI also claims that SPADEM, Claude and Paloma Picasso had actual
knowledge of these agreements.
The Df - falsely advised
Mitsukoshi and INFAS that MBI had no
right to license or sell MBI derivative works of art
in order to induce a breach
of the licensing agreements.
Paloma to have falsely advised
Mitsukoshi and INFAS that they had
acquired rights from MBI "who actually has no power to grant
them," and that Paloma
"continued to make such statements up until MBI was coerced and
induced into terminating [its contracts with Mitsukoshi
and INFAS] in 1993.
This made performance
more difficult and lessened each partys enjoyment of the
As a result, Mitsukoshi and INFAS lost faith and sought continuous
that Claude and Paloma drove MBI to seek the Global Licensing
Which subsequently cause MBI to terminate its contracts with Mitsukoshi
Failure to State A claim for tortious interference
To state a claim for tortious interference with contract, a
plaintiff must allege four elements:
Existence of a valid contract between the plaintiff and a third
Defendant's knowledge of the contract;
Defendant's intentional inducement of the third party to
breach the contract or
otherwise render performance impossible; and
Clearly alleges, but intentional inducement is less clear
MBI's proposed Count Seven clearly alleges the existence of valid
contracts, and damages to MBI.
However, it is less clear if the third element [intentional inducement]
was sufficiently established.
MBI does not allege breach
MBI does not allege that
Paloma induced either Mitsukoshi or INFAS to breach their
respective contracts with MBI.
Rather, MBI terminated the contracts with Mitsukoshi and INFAS after
Paloma's statements to Mitsukoshi and INFAS made the performance
of the contracts "more
difficult and lessened each party's enjoyment of the contract."
Since Paloma did not allege a breach, she has not stated a claim!!!
The Pl does not have to allege a breach
Pl does not have to allege a breach of the underlying contract
in order to state a claim for tortious interference with
In order to make out a claim for tortious interference with contract, a
plaintiff must prove defendant interfered with the performance
of the contract without justification.
Heart of the Rule)
New York Court of Appeals Recent Pronouncement
The "tort of inducement of breach of contract, now more broadly known
as interference with contractual relations,"
requires a plaintiff to prove
that the defendant intentionally induced the third party to
breach or otherwise render performance impossible.
An allegation of breach is not an
absolute prerequisite for the tort, in most cases
"improper intentional interference [will] generally [be]
evidenced by a tortfeasor inducinga third
party not to perform
his contractual obligations to plaintiff."
If the third party has not breached the
contract, however, a
plaintiff must allege that defendant's actions induced
the third party to somehow render
lessening each partys enjoyment
Lessening each party's enjoyment
is not an allegation
that Mitsukoshi or INFAS rendered performance impossible or even
that the contracts became commercially impracticable.
The fact that Mitsukoshi and INFAS "lost faith in MBI and
sought continuous reassurance" and "Mitsukoshi was
forced to fly two million dollars of its prototypes to New York
for a product review" is not
burdensome enough to constitute improper interference.