Intentional Interference with Contract and with Prospective Economic Advantage

Intentional Interference with Contract and with Prospective Economic Advantage

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Redfearn v. Trader Joe’s Co., B270487 (2nd Dist., 2/27/18)

Wayne Redfearn was the largest shareholder of Caliper, a food broker that successfully introduced clients to Trader Joe’s. A Trader Joe’s executive allegedly smeared Redfearn to his clients by, among other things, falsely accusing Redfearn of spreading rumors that Trader Joe’s solicits and pays bribes in order to generate business. The clients terminated their contracts with Caliper and dealt directly with Trader Joe’s. Trader Joe’s successfully challenged the complaint, asserting that it was not a stranger to the contracts because performance depended on Trader Joe’s purchase of the client’s products. Trader Joe’s also argued that its conduct was not independently wrongful, a necessary element for interference with prospective economic advantage (IPEA).

The Court of Appeal disagreed, and reversed. The Court followed a number of decisions holding that one, like Trader Joe’s here, who is not a party to the contract or an agent of a party to the contract is a “stranger” for purpose of the tort of intentional interference with contract. The Court rejected the notion that one is not a stranger-interloper when that party’s performance is necessary to the contract performance. See PM Group, Inc. v. Stewart (2007) 154 Cal.App.4th 55, 57-58. Further, within his causes of action for IPEA, Redfearn adequately alleged defamation as an independently wrongful act. The statements accused Redfearn of unethical behavior which would have a natural tendency to injure him in his trade or business. (See Civ. Code, § 46, subd. 3; see 5 Witkin, Summary of Cal. Law (11th ed. 2017) Torts, § 651, p. 892 [“an attack on the honesty of an employee or business person endangers his or her position, and is actionable per se”].)

 

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