A Not So Strange Stranger In A Strange Land: Holder Of An Economic Interest May Be Liable For Tortious Interference
Out of Exodus?
The California Supreme Court has held that a contracting party cannot be held liable in tort for conspiracy to interfere with its own contract. Applied Equipment Corp. v. Litton Saudi Arabia Ltd., 7 Cal. 4th 503 (1994). At the same time, the Court observed that "noncontracting parties" or "a stranger to a contract" can be liable in tort for intentionally interfering with the performance of a contract.
Does this mean that a landowner that hires a contractor cannot be liable for interfering with the contractor's contract with a subcontractor? Yesterday, the Fourth District Court of Appeal answered "no". Caliber Paving Company, Inc. v. Rexford Industrial Realty & Management, Inc. (Cal. Ct. Appeal Case No. G058406, Aug. 31, 2020). Writing for the panel, Justice Richard D. Fybel found that a claimed economic or social interest in the contract does not confer immunity:
"A contractual relationship is no less disrupted, and the contracting party’s interest in receiving performance of the contract no less impaired, when the noncontracting stranger claims a social or economic interest in the contractual relationship"
The Court of Appeal's opinion mentions two other decisions that I've written about previously: Asahi Kasei Pharma Corp. v. Actelion Ltd. 222 Cal.App.4th 945 (2013) and Redfearn v. Trader Joe’s Co. 20 Cal.App.5th 989 (2018). See Asahi's Morning Sun - Court Holds Parent And Its Managers May Be Liable For Interfering With Subsidiary's Contract and Court Finds Trader Joe's To Be A Stranger.