20 Cal. App. 5th 989
Cal. Ct. App. 5th2018Background
- Plaintiff Wayne Redfearn (assignee of Caliber Sales & Marketing) sued Trader Joe's for intentional interference with contractual relations and intentional and negligent interference with prospective economic advantage after two supplier clients (Seneca Foods and Sunsweet) stopped using Caliber as broker for sales to Trader Joe's.
- Redfearn alleges Trader Joe's executives met with Seneca and Sunsweet and falsely accused Redfearn of soliciting bribes and spreading rumors that Trader Joe's employees required bribes, pressuring the suppliers to drop Caliber so Trader Joe's could purchase directly and avoid broker fees.
- Trader Joe's demurred, arguing it was not a "stranger" to the Caliber–supplier brokerage contracts because those contracts depended on Trader Joe's purchasing decisions; it also argued Redfearn failed to plead independently wrongful conduct required for interference claims involving at‑will contracts.
- The trial court sustained the demurrer without leave to amend, relying on PM Group and Kasparian to hold Trader Joe's could not be liable as a non‑stranger whose performance was necessary to the contracts, and noting no pleaded defamation claim.
- The Court of Appeal reversed: it held Trader Joe's was a stranger for interference tort purposes (a nonparty or non‑agent), Redfearn need not plead an independently wrongful act for intentional interference with contract, and his allegations of false statements satisfy the independently wrongful conduct element for the prospective‑advantage claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Trader Joe's a "stranger" to Caliber's contracts such that it can be liable for intentional interference with contract? | Redfearn: Trader Joe's is a nonparty (stranger) and induced suppliers to terminate Caliber by making false accusations. | Trader Joe's: It is not a stranger because the brokerage contracts depended on Trader Joe's purchasing decisions; therefore immunity under Applied Equipment/PM Group. | Court: Trader Joe's is a stranger (nonparty/ non‑agent) and may be liable if tort elements are met; a nonparty whose performance was contemplated is not per se immune. |
| Must plaintiff plead an independently wrongful act to state intentional interference with contract when the contracts may be terminable at will? | Redfearn: No; the general rule applies that wrongful conduct apart from the interference need not be alleged for intentional interference with contract. | Trader Joe's: Under Reeves, inducement of termination of at‑will contracts requires independent wrongful act. | Court: Reeves is limited to at‑will employment hiring context; here, plaintiff did not plead contracts were at‑will and, generally, independent wrongdoing is not required for intentional interference with contract. |
| For interference with prospective economic advantage, must defendant's conduct be independently wrongful? | Redfearn: Yes, and he pleaded independently wrongful conduct (defamatory false statements) within those causes of action. | Trader Joe's: Plaintiff failed to allege an independently actionable wrong (no stand‑alone defamation pleaded). | Court: Yes, independent wrongfulness is required for prospective‑advantage claims, and Redfearn adequately pleaded defamatory false statements as the independently wrongful act. |
| Was sustaining the demurrer without leave to amend proper? | Redfearn: Demurrer should be overruled; pleadings suffice. | Trader Joe's: Demurrer properly sustained based on PM Group/Kasparian and lack of independently wrongful conduct. | Court: Demurrer should have been overruled; dismissal reversed and remanded with directions to overrule demurrer as to the three interference causes (unfair competition previously dismissed). |
Key Cases Cited
- Applied Equipment Corp. v. Litton Saudi Arabia Ltd., 7 Cal.4th 503 (Cal. 1994) (party to a contract generally cannot be liable for tortious interference with its own contract; tort targets strangers/interlopers)
- PM Group, Inc. v. Stewart, 154 Cal.App.4th 55 (Cal. Ct. App. 2007) (held noncontracting party whose performance was contemplated by the contract may be immune from interference liability on the facts before that court)
- Asahi Kasei Pharma Corp. v. Actelion Ltd., 222 Cal.App.4th 945 (Cal. Ct. App. 2013) (third party with legitimate economic interest is not automatically immune; a "stranger" is a nonparty or non‑agent)
- Powerhouse Motorsports Group, Inc. v. Yamaha Motor Corp., U.S.A., 221 Cal.App.4th 867 (Cal. Ct. App. 2013) (declined to expand Applied Equipment to immunize nonparties with general economic interests)
- Reeves v. Hanlon, 33 Cal.4th 1140 (Cal. 2004) (in the at‑will employment hiring context, plaintiff must show defendant engaged in independently wrongful conduct)
- Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134 (Cal. 2003) (interference with prospective economic advantage requires independently wrongful acts measured by external legal standards)
- Popescu v. Apple Inc., 1 Cal.App.5th 39 (Cal. Ct. App. 2016) (refused to immunize third parties who have an interest in how another performs; distinguished Reeves when different public‑policy considerations apply)
- Quelimane Co. v. Stewart Title Guaranty Co., 19 Cal.4th 26 (Cal. 1998) (refusal to insure pursuant to an unlawful conspiracy stated interference with existing contracts)