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Conduct does not support tortious interference claims

Virginia Lawyers Weekly//May 14, 2020

Conduct does not support tortious interference claims

Virginia Lawyers Weekly//May 14, 2020

Where a member of a joint venture did not induce third-parties to breach their contracts with the other JV member, and where there was no prohibition against third parties becoming members of the JV, the tortious interference with contract claims were dismissed.


At issue in this dispute between two former joint venture partners are the parties’ cross-motions for summary judgment. In essence, plaintiff and defendant entered into a memorandum of understanding to form a Virginia limited liability company, Raptor Training Services LLC, or RTS, in order to bid on a multimillion-dollar indefinite duration, indefinite quantity government contract with the United States Army.

Although the parties formed a JV, won the government contract and began executing task orders under the government contract, they never reached agreement on a written operating agreement for the JV. In the end, defendant, ProActive Technologies Inc., terminated plaintiff, Advanced Training Group Worldwide Inc., from the JV. ATG now sues ProActive, alleging six claims.

Tortious interference

Counts Two-Four, asserting claims for tortious interference with contract, fail because the summary judgment record establishes that ProActive did not induce the third-party entities to breach or terminate ATG’s contracts with them. Simply put, the master subcontract agreements between ATG and the third-party entities do not contain any provision that prohibits the third-party entities from becoming members of the JV or from entering subcontracts with the JV or with ProActive.

It is undisputed that ATG and ProActive were considering the addition of Class B members to the RTS JV. The summary judgment record establishes that ATG and ProActive discussed adding class B members to the JV for eight months before those discussions ultimately fell apart. During this same time period, ATG offered several third-party entities the opportunity to become exclusive affiliates of ATG. The third-party entities turned down ATG’s exclusive affiliate offers, and two of the third-party entities ultimately joined the JV as class B members after ProActive terminated ATG from the JV.

These business decisions made by the third-party entities in no way improperly interfered with ATG’s contractual relationship with ProActive and the RTS JV. Accordingly, judgment must be entered in favor of defendant and against plaintiff on Counts Two-Four.

With respect to Count Five, tortious interference with business expectancy, ATG’s claim fails because the summary judgment record contains no evidence that ProActive used improper means or methods to interfere with ATG’s expectancy in future task order awards to the MSAs via the JV.

Unjust enrichment

Defendant has also moved for summary judgment on plaintiff’s unjust enrichment claim, Count Six. Here, ATG alleges that it conferred a benefit on ProActive through ATG’s participation in the creation of RTS and the award of the government contract to RTS and that ProActive has continued to receive substantial profits based on the benefits conferred to ProActive by ATG. Because the existence of an express contract covering the same subject matter precludes a claim for unjust enrichment, summary judgment must be entered in favor of defendant and against plaintiff on Count Six.

Breach of contract

Finally, the parties have filed cross-motions for summary judgment with respect to plaintiff’s breach of contract claim (Count One). On this record, neither party is entitled to judgment as a matter of law on Count One.

Plaintiff’s motion for partial summary judgment on Count One denied; Defendant’s motion for summary judgment on all claims granted in part, denied in part.

Advanced Training Group Worldwide Inc. v. ProActive Technologies Inc., Case No. 19-cv-505, April 17, 2020. EDVA at Alexandria (Ellis). VLW 020-3-219. 15 pp.

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