California Court of Appeals, Second District, Seventh Division
from a judgment of the Superior Court of Los Angeles County
No. BC559822, Gail Ruderman Feuer, Judge. Reversed and
remanded with directions.
Outwater & Pinckes, David E. Outwater and Randi E.
Pinckes for Plaintiff and Appellant.
O'Melveny & Myers, Dawn Sestito and R. Collins
Kilgore for Defendant and Respondent.
PERLUSS, P. J.
Redfearn appeals from the judgment of dismissal entered after
the trial court sustained without leave to amend the demurrer
of Trader Joe's Company to Redfearn's first amended
complaint for intentional interference with contractual
relations, intentional and negligent interference with
prospective economic advantage and unfair competition. We
AND PROCEDURAL BACKGROUND
Redfearn's Complaint for Interference by Trader
Joe's with Caliber Sales and Marketing Corporation's
Broker Relationship with Two Food Suppliers
first amended complaint, filed September 3, 2015, Redfearn
alleged he purchased Caliber Sales and Marketing Corporation,
a food brokerage business, in 2001 and remained its largest
shareholder until leaving the company in late 2014. At the
time Redfearn severed his relationship with the company,
Caliber assigned its legal claims against Trader Joe's to
represents manufacturers of food products and assists them in
marketing their products, operating like an outside sales
team in placing products in retail outlets and processing
order flow once the relationship is established. Caliber
began acting as a broker for Seneca Foods Corporation in 2003
and Sunsweet Growers Inc. in 2006 and successfully introduced
their products into Trader Joe's stores.
Joe's changed its policy toward food brokers in 2010 and
stopped working with brokers in finding new products for its
stores. However, Trader Joe's generally continued to deal
with food brokers on existing accounts.
to Redfearn's first amended complaint, in a meeting with
a Seneca representative in January 2014, Trader Joe's
executive Jon Basalone falsely accused Redfearn of spreading
rumors that Trader Joe's employees were soliciting bribes
and that paying a bribe was the only way to do business with
them. Redfearn alleged Basalone made these false statements
to encourage Seneca to stop using Caliber as a broker in
Seneca's sales to Trader Joe's and further alleged
that Basalone had stated, although he was aware Seneca might
have a contract with Caliber, Seneca must terminate its
relationship with Caliber or Trader Joe's would replace
Seneca as a supplier. As a result of this conversation,
Seneca terminated its contract with Caliber with respect to
supplying its products to Trader Joe's.
also alleged Trader Joe's exerted pressure on Sunsweet
and made similar false statements to Sunsweet designed to
tarnish Redfearn's professional reputation, causing
Sunsweet to terminate its contract with Caliber to supply
food products to Trader Joe's.
Trader Joe's' Demurrer and the Trial Court's
Order Sustaining the Demurrer Without Leave To Amend
Joe's demurred to the first amended complaint, asserting
only a stranger to a contract can be liable for interference
with contractual relations and arguing it was not a stranger
to Caliber's contracts with Seneca and Sunsweet because
the performance of those contracts depended on Trader
Joe's' purchase of Seneca's and Sunsweet's
products. Trader Joe's contended it could not be liable
for interference with prospective economic advantage for the
same reason, that is, Trader Joe's could not be liable
for disrupting a potential relationship that was dependent on
its own performance. In addition to arguments focusing on its
close relationship to the Caliber-supplier contracts, Trader
Joe's argued Redfearn had not adequately pleaded its
conduct was independently wrongful, a necessary element for
interference with prospective economic advantage.
opposed the demurrer to his three interference causes of
action, but agreed to voluntarily dismiss the unfair
competition cause of action.
trial court sustained Trader Joe's' demurrer without
leave to amend. Relying on the holding and analysis in PM
Group, Inc. v. Stewart (2007) 154 Cal.App.4th 55 (PM
Group) and distinguishing Asahi Kasei Pharma Corp.
v. Actelion Ltd. (2013) 222 Cal.App.4th 945
(Asahi) and Powerhouse Motorsports Group, Inc.
v. Yamaha Motor Corp., U.S.A. (2013) 221 Cal.App.4th 867
(Powerhouse) in its eight-page ruling, the court
found Trader Joe's was not a “stranger” to
Caliber's contracts with Seneca and Sunsweet because the
performance of those contracts depended on Trader Joe's
purchasing products from the two suppliers: “Trader
Joe's had the absolute right not to purchase food from
the suppliers going forward. Indeed, given its contract with
Seneca and Sunsweet, Trader Joe's had the power to
control that agreement by taking steps to ensure that its
suppliers did not use brokers by terminating any suppliers
that used brokers in their transactions.” Accordingly,
the court ruled, Trader Joe's was not liable for
intentional interference with Caliber's contracts by
refusing to purchase Seneca's and Sunsweet's products
if they continued to use Caliber as a broker,
“regardless of the nature of Trader Joe's
conduct.” Similarly, because Trader Joe's was not a
stranger to the contracts at issue, applying the holding of
Kasparian v. County of Los Angeles (1995) 38
Cal.App.4th 242, 266, the court concluded Trader Joe's
had no liability for intentional or negligent interference
with prospective economic advantage.
footnote the court explained it did not need to reach Trader
Joe's' alternative argument that it was not liable
for intentional interference with contractual relations
because the contracts between Caliber and the food processors
were terminable at will. In another footnote the court
identified as an independent ground for sustaining the
demurrer to the causes of action for interference with
prospective economic advantage the failure of Redfearn to
allege any independently actionable conduct by Trader
Joe's. The court stated Redfearn “has not pleaded
an independent tort of defamation, nor does he make an offer
of proof as to how a defamation claim could be
court entered a judgment of dismissal on January 6, 2016.
Redfearn filed a timely notice of appeal.
Standard of Review
demurrer tests the legal sufficiency of the factual
allegations in a complaint. We independently review the
superior court's ruling on a demurrer and determine de
novo whether the complaint alleges facts sufficient to state
a cause of action or discloses a complete defense.
(Loeffler v. Target Corp. (2014) 58 Cal.4th 1081,
1100; Committee for Green Foothills v. Santa Clara County
Bd. of Supervisors (2010) 48 Cal.4th 32, 42.) We assume
the truth of the properly pleaded factual allegations, facts
that reasonably can be inferred from those expressly pleaded
and matters of which judicial notice has been taken.
(Evans v. City of Berkeley (2006) 38 Cal.4th 1, 20;
Schifando v. City of Los Angeles (2003) 31 Cal.4th
1074, 1081.) However, we are not required to accept the truth
of the legal conclusions pleaded in the complaint. (Zelig
v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126;
Tepper v. Wilkins (2017) 10 Cal.App.5th 1198, 1203.)
We liberally construe ...