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AMI 714 Issues—Civil Conspiracy

Arkansas Supreme Court Committee On Jury Instructions-Civil

Ark. Model Jury Instr., Civil AMI 714
Arkansas Model Jury Instructions-Civil
November 2021 Update
Arkansas Supreme Court Committee On Jury Instructions-Civil
Chapter 7. Agency—Employment—Partnership—Joint Enterprise—Imputed Liability
AMI 714 Issues—Civil Conspiracy
(Plaintiff) claims damages from (defendant) for conspiracy. A “conspiracy” is an agreement to accomplish a purpose that is unlawful, oppressive or immoral or to accomplish, by unlawful, oppressive, or immoral means, a purpose that is not in itself unlawful, oppressive, or immoral.
In order to recover damages from (defendant) for conspiracy, (plaintiff) has the burden of proving each of four essential propositions:
First, that (defendant) and (co-conspirator(s)) knowingly entered into a conspiracy.
Second, that (plaintiff) has proved all of the essential elements necessary to obtain a verdict against (party/person against whom the underlying intentional tort is asserted) on the underlying claim of (state the underlying intentional tort);
Third, that one or more of the co-conspirators committed one or more overt acts in furtherance of the alleged conspiracy;
And fourth, that the conspiracy proximately caused damages to (plaintiff).
[If you find from the evidence in this case that each of these propositions has been proved, then your verdict should be for (plaintiff); but if, on the other hand, you find from the evidence that any of these propositions has not been proved, then your verdict should be for (defendant).]
NOTE ON USE
This instruction should be used only in cases that are not governed by the Civil Justice Reform Act of 2003, Ark. Code Ann. § 16-55-205. In cases governed by the Civil Justice Reform Act of 2003, use AMI 713.
Insert the underlying intentional tort (e.g., fraud, breach of fiduciary duty, interference with contract, etc.) in the second essential element. This instruction must be accompanied by a separate instruction which states the essential elements of the underlying tort. For example, if the underlying tort is deceit, use AMI 402 with this instruction.
Do not use the final bracketed paragraph when the case is submitted on interrogatories.
COMMENT
This instruction is based upon the elements of civil conspiracy stated in Wilson v. Davis, 138 Ark. 111, 211 S.W. 152 (1919); Mason v. Funderburk, 247 Ark. 521, 446 S.W.2d 543 (1969); and Dodson v. Allstate Insurance Co., 345 Ark. 430, 47 S.W.3d 866 (2001), appeal after remand, 365 Ark. 458, 231 S.W.3d 711 (2006), subsequent appeal after remand, 2011 Ark. 19.
While it is clear that civil conspiracy is a derivative tort that is not actionable in and of itself, the Committee believes there are at least four questions left unanswered by Arkansas case law. First, the Texas Supreme Court has held in at least one case that a claim for civil conspiracy cannot be asserted unless the plaintiff is also seeking judgment against another party in the suit for the underlying tort. Tilton v. Marshall, 925 S.W.2d 672 (Tex. 1996). A federal district court in Pennsylvania has reached the same conclusion. Wolk v. Teledyne Indus., Inc., 475 F.Supp.2d 491 (E.D.Pa. 2007). The Committee has not found any reported Arkansas case that addresses that issue expressly. However, the instruction, as drafted, is not intended to preclude such a legal argument to the trial court.
Second, related to the foregoing issue is the question whether, in a case where the alleged tortfeasor is also a defendant, the jury must return a verdict on the underlying tort before an alleged conspirator can be found liable for the derivative tort of civil conspiracy. Again, the Committee has not discovered a reported Arkansas case expressly on point. The Committee notes, however, that the Eighth Circuit Court of Appeals affirmed the dismissal of a claim for conspiracy in Lane v. Chowning, 610 F.2d 1385, 1391 (8th Cir. 1979), with the following statement:
We have already determined that Lane has failed to establish either a factual or a legal basis for recovery on any of his several allegations. It follows, then, that no overt act has been established which is a necessary element in establishing the existence of a civil conspiracy.
Therefore, the Committee believes that, at a minimum, the elements of the underlying tort must be established before there can be liability for conspiracy, but it remains unclear whether an actual verdict on the underlying claim is required. If the trial court believes that is a legal requirement, the second element of this instruction should be modified. As with the first question noted in the preceding paragraph, the Committee does not intend to preclude that argument by its statement of the second element in the instruction, but, without more specific authority, has drafted the instruction to require only that there be proof of the elements of the underlying tort.
Third, it is not clear from Arkansas case law whether the conspiracy must proximately cause the damages to the plaintiff for which a conspirator is liable or whether the damages must be proximately caused by the commission of the underlying tort. While this distinction may not make a difference in most cases, there could be a substantial issue related to causation of damages. The Committee has drafted the element of causation to comport with the following language in Wilson v. Davis, supra: “If such an unlawful agreement exists, the parties thereto become liable as joint tortfeasors and to the extent of the damage done as a result of the conspiracy ….” 211 S.W. at 154.
Fourth, even though a person may not be liable as a direct actor in interfering with a contract, he may be liable as a participant in a conspiracy which results in one or more overt acts constituting actionable interference. Lane v. Chowning, 610 F.2d at 1390. However, while there is no Arkansas case determining whether a person whose acts are privileged and therefore cannot constitute interference with contract can nevertheless be liable for conspiracy to interfere with the contract, cases in other states have so held when there was no issue regarding the application of the privilege. See, e.g., Watson's Carpet & Floor Covering, Inc. v. McCormick, 2007 Tenn. App. LEXIS 27 (January 18, 2007) (competitor's privilege precluded interference claim and conspiracy claim); Gott v. First Midwest Bank of Dexter, 963 S.W.2d 432 (Mo. App. 1998) (justification of bank and board member to protect economic interest also precluded conspiracy claim); Scanlon v. Gordon F. Stofer & Bro. Co., 1989 Ohio App. LEXIS 2528 (1989) (corporate officer entitled to privilege and therefore no conspiracy liability where there was no evidence he acted beyond the scope of his authority); Langer v. Becker, 176 Ill. App. 3d 745, 531 N.E.2d 830 (Ill. App. 1988) (plaintiff did not sufficiently plead malice to overcome qualified privilege and, therefore, claims for interference and conspiracy dismissed).
Since a corporate entity cannot conspire with itself, a civil conspiracy is not legally possible where a corporation and its alleged coconspirators are not separate entities, but, rather, stand in either a principal-agent or employer-employee relationship. Dodson v. Allstate Ins. Co., supra. Corporate agents may not be held liable for civil conspiracy in the absence of evidence showing that they were acting for their own personal benefit rather than for the benefit of the corporation. Id. If a claim of civil conspiracy is asserted against a corporate agent, this instruction should be modified to add an element related to the agent's acting for his personal benefit.
The Arkansas Supreme Court has held that there can generally be no civil conspiracy between an attorney and his client for actions undertaken in the furtherance of the legal representation. Born v. Hosto & Buchan, PLLC, 2010 Ark. 292.
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