Filed 2/27/18

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

WAYNE REDFEARN,

Plaintiff and Appellant,

v.

TRADER JOE’S COMPANY,

Defendant and Respondent.

 B270487

 (Los Angeles County

 Super. Ct. No. BC559822)

APPEAL from a judgment of the Superior Court of 

Los Angeles County, 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.

_______________________
2

Wayne 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 reverse.

FACTUAL AND PROCEDURAL BACKGROUND

1. Redfearn’s Complaint for Interference by Trader Joe’s 

with Caliber Sales and Marketing Corporation’s Broker 

Relationship with Two Food Suppliers 

In his 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 

Redfearn. 

Caliber 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. 

Trader 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.

According to Redfearn’s first amended complaint, in a 

meeting with a Seneca representative in January 2014, Trader 
3

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. 

Redfearn 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. 

2. Trader Joe’s’ Demurrer and the Trial Court’s Order 

Sustaining the Demurrer Without Leave To Amend

Trader 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 
4

contracts, Trader Joe’s argued Redfearn had not adequately 

pleaded its conduct was independently wrongful, a necessary 

element for interference with prospective economic advantage.

Redfearn opposed the demurrer to his three interference 

causes of action, but agreed to voluntarily dismiss the unfair 

competition cause of action.

The 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 
5

liability for intentional or negligent interference with prospective 

economic advantage.1

In a 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 alleged.” 

The court entered a judgment of dismissal on January 6, 

2016. Redfearn filed a timely notice of appeal.

 

1 The court in Kasparian v. County of Los Angeles, supra, 

38 Cal.App.4th 242 held the principle that one who is not a 

stranger to a contract cannot be liable in tort for interfering with 

the performance of the contract applied equally to both 

intentional and negligent interference with prospective economic 

advantage. (Id. at p. 266 [“[w]hatever may be the exposure of the 

nonparty interferer, the principles announced in Applied 

Equipment [Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 

503] clearly should apply to bar a tort claim against a party to a 

prospective relationship”].) 
6

DISCUSSION

1. Standard of Review

A 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 the pleading with a view to 

substantial justice between the parties. (Code Civ. Proc., § 452; 

Ivanoff v. Bank of America (2017) 9 Cal.App.5th 719, 726; see 

Schifando, at p. 1081 [complaint must be read in context and 

given a reasonable interpretation].)

“‘Where the complaint is defective, “[i]n the furtherance of 

justice great liberality should be exercised in permitting a 

plaintiff to amend his [or her] complaint.”’” (Aubry v. Tri-City 

Hospital Dist. (1992) 2 Cal.4th 962, 970-971.) We determine 

whether the plaintiff has shown “in what manner he [or she] can 

amend [the] complaint and how that amendment will change the 

legal effect of [the] pleading.” (Goodman v. Kennedy (1976) 

18 Cal.3d 335, 349.) “[L]eave to amend should not be granted 
7

where . . . amendment would be futile.” (Vaillette v. Fireman’s 

Fund Ins. Co. (1993) 18 Cal.App.4th 680, 685; see generally 

Ivanoff v. Bank of America, supra, 9 Cal.App.5th at p. 726.)

2. Redfearn Has Adequately Stated a Cause of Action for 

Intentional Interference with Contractual Relations

a. The elements of the cause of action

“California recognizes a cause of action against 

noncontracting parties who interfere with the performance of a 

contract. ‘It has long been held that a stranger to a contract may 

be liable in tort for intentionally interfering with the performance 

of the contract.’ [Citation.] [¶] However, consistent with its 

underlying policy of protecting the expectations of contracting 

parties against frustration by outsiders who have no legitimate 

social or economic interest in the contractual relationship, the 

tort cause of action for interference with a contract does not lie 

against a party to the contract.” (Applied Equipment Corp. v. 

Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 513-514 

[fn. omitted; italics in original] (Applied Equipment).) 

The elements of a cause of action for intentional 

interference with contractual relations are “(1) the existence of a 

valid contract between the plaintiff and a third party; (2) the 

defendant’s knowledge of that contract; (3) the defendant’s 

intentional acts designed to induce a breach or disruption of the 

contractual relationship; (4) actual breach or disruption of the 

contractual relationship; and (5) resulting damage.” (Reeves v. 

Hanlon (2004) 33 Cal.4th 1140, 1148 (Reeves); accord, Applied 

Equipment, supra, 7 Cal.4th at p. 514, fn. 5; Pacific Gas & 

Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126.) 

It is generally not a requirement that “the defendant’s conduct be 

wrongful apart from the interference with the contract itself.” 
8

(Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 

26, 55.)

b. Applied Equipment and the disagreement over the 

meaning of “a stranger to the contract”

The Supreme Court in Applied Equipment, supra, 7 Cal.4th 

503, held a party to a contract cannot be liable in tort for a 

conspiracy to interfere with its own contract. (Id. at p. 514.) 

Plaintiff in that case (Applied Equipment Corporation) had 

procured spare parts for a military contractor (Litton). Under the 

terms of the subcontract between plaintiff and the contractor, 

plaintiff was entitled to a commission based on the purchase 

price. After plaintiff had issued a purchase order for 11 electron 

tubes to a third party supplier (Varian), the contractor purchased 

six tubes directly from the supplier without paying any 

commission and renegotiated plaintiff’s purchase order, reducing 

the number of tubes in the purchase order from 11 to six, 

resulting in a reduction in the total commission paid to plaintiff. 

(Id. at p. 508.) Following a jury trial, judgment was entered in 

favor of plaintiff and against both the contractor and the supplier 

on causes of action in contract and tort, including conspiracy to 

interfere with contracts (both the subcontract and the purchase 

order). (Id. at pp. 508-509.)

The only issue before the Supreme Court was whether the 

third party supplier could be liable for conspiring with the 

contractor to interfere with its own contract with plaintiff. 

(Applied Equipment, supra, 7 Cal.4th at p. 509.) Reversing the 

court of appeal, which had rejected the supplier’s argument, the 

Supreme Court explained, “One contracting party owes no 

general tort duty to another not to interfere with performance of 

the contract; its duty is simply to perform the contract according 
9

to its terms. The tort duty not to interfere with the contract falls 

only on strangers—interlopers who have no legitimate interest in 

the scope or course of the contract’s performance.” (Id. at p. 514.) 

The Court continued, quoting a law review commentator, “‘While 

the imposition of liability in tort upon the non-party interferer 

may be justified in all cases for his intentional disruption of the 

contractual relation, the party who merely breaches his contract 

should in all cases be exposed only to contractual liability as he 

has not assumed the role of an intentional interferer. To impose 

tort liability upon the contract breaker because of the

involvement of a third person (when liability is limited to 

contract damages when the contract breaker is acting alone) 

undermines the policies which have developed limited 

contractual liability.’” (Id. at p. 517.)

Although the holding of Applied Equipment was limited to 

liability for conspiracy to interfere with a party’s own contract, as 

discussed, in describing the elements of, and policy basis for, the 

tort, the Court stated that liability for intentionally interfering 

with the performance of a contract was properly recognized only 

for an “outsider” or “a stranger to a contract,” which the Court 

appeared to define as one with “no legitimate social or economic 

interest in the contractual relationship.” (Applied Equipment, 

supra, 7 Cal.4th at p. 513; see id. at p. 514.) The Court also 

clarified that nothing in its opinion was intended to suggest the 

contractor could not be liable for direct interference with the 

purchase order between its subcontractor and the third party 

supplier or that the supplier could not be liable for direct 

interference with the subcontract, “provided that each of the 

elements of the tort of interference with contract is satisfied.” 

(Id. at p. 521.)
10

Relying on Applied Equipment’s broad definition of “a 

stranger to a contract,” our colleagues in Division Three of this 

court in PM Group, supra, 154 Cal.App.4th 55 held, if a contract 

expressly contemplated and depended upon a noncontracting 

party’s performance, the noncontracting party had an economic 

interest in that contract and could not be liable for interference

with, or disruption of, its execution. (Id. at pp. 58, 65.)

PM Group involved a lawsuit by a concert promoter doing 

business as PM Group, Inc. and two subpromoters against singer 

Rod Stewart and Stewart’s company, manager, attorney and 

agent. (Id. at p. 57.) Stewart’s agent and the concert promoter

had engaged in extended negotiations for a nine-city concert tour, 

and the promoter entered into subcontracts with parties in each 

of the cites the proposed tour would visit. While negotiations 

continued, plaintiffs advanced $780,000 to Stewart’s

representatives based on various assurances the tour would take 

place. Ultimately no agreement was reached, and Stewart did 

not proceed with the concerts. (Id. at pp. 58-60.) The promoter 

and two of the subpromoters sued for return of the $780,000 on 

counts of unjust enrichment, money had and received and 

negligent misrepresentation. Plaintiffs also alleged causes of 

action for interference with the subpromoter contracts.

A jury found in favor of plaintiffs as to the $780,000 

advance and also found that Stewart’s agent and attorney had 

knowingly and intentionally disrupted the performance of 

six subpromoter contracts involved in the transaction, awarding 

damages of $1.6 million. (PM Group, supra, 154 Cal.App.4th at 

p. 61.) The court of appeal reversed the judgment in favor of 

plaintiffs on the cause of action for intentional interference with 

contract and affirmed the judgment in all other respects. (Id. at 
11

p. 70.) The court held, as a matter of law, Stewart and his agents 

could not have interfered with the performance of the 

subcontracts on two grounds. First, quoting the Supreme Court’s 

language in Applied Equipment that the tort could only be 

committed by “‘strangers—interlopers who have no legitimate 

interest in the scope or course of the contract’s performance’” 

(PM Group, at p. 65), the court held, “[b]ecause the subcontracts 

at issue here provided for Stewart’s performance, neither Stewart 

nor his agents can be liable for the tort of interfering with the 

subcontracts.” (Ibid.) Second, noting that Stewart and the 

concert promoter had not entered into a binding contract for 

Stewart’s performance, the court explained, “[N]one of the 

subcontracts among plaintiffs and the subpromoters could have 

been performed. Accordingly, defendants cannot be said to have 

caused the failure of the subcontracts . . . .” (Ibid.)

Other courts of appeal have not read Applied Equipment as 

broadly as did Division Three in PM Group and, when discussing 

PM Group, have distinguished it based on its particular facts. 

For example, in Asahi, supra, 222 Cal.App.4th 945, the court held 

a corporate defendant that had acquired as a subsidiary an entity 

with an existing license agreement was not immune from suit for 

interference with the agreement on the ground it was not a 

stranger to the agreement: “‘[A] stranger,’ as used in Applied 

Equipment means, one who is not a party to the contract or an 

agent of a party to the contract.” (Id. at pp. 963-964.)2 

 

2 This statement in Asahi is a quotation from the decision in 

Woods v. Fox Broadcasting Sub., Inc. (2005) 129 Cal.App.4th 344

in which the appellate court held persons or entities with an 

ownership interest in a corporation are not immune as a matter 
12

Distinguishing PM Group, the Asahi court explained, “Unlike in 

PM Group, Defendants’ performance was neither contemplated 

nor necessary to the License Agreement.” (Asahi, at p. 965, 

fn. 14.)

Similarly, in Powerhouse, supra, 221 Cal.App.4th 867,

Division Six of our court refused to apply the “stranger to the 

contract” rationale to reverse a jury verdict in favor of plaintiff on 

its cause of action for intentional interference with contractual 

relations, holding, notwithstanding its legitimate economic 

interest in its franchisees’ business activities, a motorcycle 

distributor was not immune to a tort claim based on its 

interference with a contract for the sale of a dealership by a 

franchisee to a third party. (Id. at pp. 883-884.) The court 

declined to “expand[ ] the scope of Applied Equipment” to protect 

a noncontracting party who had “‘some general economic 

interest’” in the contract. (Ibid.)3 

Most recently, in Popescu v. Apple Inc. (2016) 1 Cal.App.5th 

39, 53, decided six months after the trial court’s ruling in the case 

at bar, the court held, “An extension of Applied Equipment’s 

holding to immunize a third party from tortious interference 

claims simply because the third party asserts some economic or 

 

of law from liability for interfering with their corporation’s 

contractual obligations. (Id. at p. 353.)

3 Like the court in Asahi, the Powerhouse court quoted from

Woods v. Fox Broadcasting Sub., Inc., supra, 129 Cal.App.4th at 

pages 352 and 353. Curiously, though, without citing PM Group, 

which was decided after Woods and before Powerhouse, the 

Powerhouse court stated, “No published California case has 

disagreed with Woods or expanded the scope of Applied 

Equipment.” (Powerhouse, supra, 221 Cal.App.4th at p. 884.)
13

other interest in a contract would significantly undercut the tort 

itself and the public policy underlying it.” The Popescu court 

reversed a judgment dismissing plaintiff’s complaint against 

Apple Inc. for intentional interference with contractual relations 

and intentional interference with prospective economic 

advantage based on his claim Apple had taken affirmative steps 

to convince his employer, which had a research and development 

agreement with Apple, to terminate him in retaliation for his 

resistance to Apple’s alleged anticompetitive conduct. Among the 

arguments advanced by Apple and rejected by the court was the 

claim that it was “not a stranger” to plaintiff’s at-will 

employment contract within the meaning of Applied Equipment

because it had a legitimate economic interest in making sure 

individuals staffing its project would not cause Apple any harm. 

(Popescu, at p. 52.) The court concluded that “Apple, even as a 

third party having some interest in the manner in which Popescu 

performed his employment agreement with Constellium, is not 

immune from tort liability for interfering with his contract.” 

(Id. at p. 56.)

c. Trader Joe’s was a “stranger” to Caliber’s contracts 

with Seneca and Sunsweet

Caliber’s brokerage contracts at issue in this lawsuit were 

contingent upon the decision of Trader Joe’s to purchase products 

from Seneca and Sunsweet. Unless that occurred, Caliber’s

contracts could not be performed. As the trial court ruled, 

Caliber’s interference claims thus appear to fall within the 

holding of PM Group, supra, 154 Cal.App.4th 55, which broadly 

stated a noncontracting party is not a stranger-interloper when 

that party’s performance is necessary to the plaintiff’s contract 

performance or prospective economic relationship. (Id. at pp. 57-
14

58, 64-65.) Unlike the trial court, however, which must follow 

controlling precedent from a court of appeal, we are free to 

disregard the reasoning of our Division Three colleagues in 

PM Group, even while agreeing with the outcome of that case. 

Plaintiffs in PM Group failed to prove a cause of action for 

intentional interference with contractual relations, but the court 

misidentified the fundamental defect in the interference claim. 

To be sure, Stewart’s participation in the proposed concert tour 

was contemplated by, and necessary to the success of, the 

contracts between PM Group and the subpromoters, so that 

Stewart and his representatives had a legitimate interest in the 

scope or course of the contracts’ performance. But the cause of 

action failed as a matter of law, not because Stewart was not a 

“stranger” to the contracts between the promoter and its 

subpromoters, but because plaintiffs could not allege Stewart or 

his agents engaged in any intentional acts designed to induce a 

breach or disruption of the promoter-subpromoter contracts, an 

essential element of the tort. (See, e.g., Reeves, supra, 33 Cal.4th 

at p. 1148.) Stewart simply decided not to perform, and the 

subcontracts failed as a result. That decision was not tortious. 

(See Imperial Ice Co. v. Rossier (1941) 18 Cal.2d 33, 37 [“The act 

of inducing the breach must be an intentional one. If the actor 

had no knowledge of the existence of the contract or his actions 

were not intended to induce a breach, he cannot be held liable 

though an actual breach results from his lawful and proper 

acts.”].)4

 

4 The court of appeal’s alternate holding is equally flawed. 

That there was no binding contract between Stewart and the 

concert promoter has no legal significance in evaluating the 

sufficiency of a claim that Stewart interfered with the promoter’s 
15

Here, unlike PM Group’s complaint that Stewart had 

cancelled the proposed concert tour (albeit preceded by 

misrepresentations relating to certain advance payments),

Redfearn did not allege that Trader Joe’s simply stopped 

purchasing from Seneca and Sunsweet, thereby disrupting 

Caliber’s brokerage contracts. Rather, according to Redfearn, 

Trader Joe’s pressured the two suppliers to stop using Caliber as 

a broker, which allowed Trader Joe’s to purchase food products 

directly from Seneca and Sunsweet while eliminating the cost of 

brokerage fees. The situation before the court in PM Group is 

readily distinguishable on this basis.

Attempting to defend the judgment in its favor, Trader 

Joe’s cites Sweeley v. Gordon (1941) 47 Cal.App.2d 385 (Sweeley) 

and Zimmerman v. Bank of America (1961) 191 Cal.App.2d 55 

(Zimmerman) and argues, apart from the holding in PM Group,

the term “stranger” in this context is not narrowly limited to a 

nonparty to the contract at issue, but properly refers to a 

nonparty to the entire transaction. According to Trader Joe’s, 

“[t]hese cases illustrate that a non-contracting defendant is not 

liable for interference where that defendant is part of the 

transaction contemplated by the contracting parties.” 

Sweeley, supra, 47 Cal.App.2d 385, affirmed a judgment of 

dismissal after the trial court sustained the demurrer to a real 

estate broker’s complaint against a buyer for inducing the seller 

to breach his contract with the broker. Sweeley held the seller 

 

contracts with the subpromoters, as PM Group held. (PM Group, 

supra, 154 Cal.App.4th at p. 65.) And it certainly is the case, 

contrary to the court of appeal’s holding, that Stewart’s decision 

not to undertake the concert tour “caused the failure of the 

subcontracts.” (See ibid.) 
16

was entitled to rely on the statute of frauds; and, by inducing the 

seller to assert the statute of frauds, the buyer did not unlawfully 

induce the seller to breach the contract. (Id. at p. 387.) 

Whatever the continued validity of this holding in light of 

developments in the law during the ensuring 75 years (see, e.g., 

Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 

376, 387-391 [reviewing development of economic relations tort in 

California], Sweeley did not suggest, let alone hold, the buyer was 

not liable because he was a party to the transaction.

Zimmerman, supra, 191 Cal.App.2d 55, held a real estate 

broker could maintain a tort cause of action against a bank for 

inducing the parties to a real property exchange to breach their 

oral contract with the broker despite the fact the oral contract 

was voidable under the statute of frauds. (Id. at pp. 56-57.)5 

Zimmerman explained the protection of the statute of frauds 

should not inure to “a stranger who seeks the destruction of the 

transaction and whose status fundamentally differs from that of 

the party whom the statute seeks to protect.” (Id. at p. 61.) 

Zimmerman distinguished Sweeley, supra, 47 Cal.App.2d 385, on 

the ground that, arguably, the protection of the statute of frauds 

should extend to the buyer as “a party to the transaction” who 

 

5 Buckaloo v. Johnson (1975) 14 Cal.3d 815, disapproved on 

another ground in Della Penna v. Toyota Motor Sales, U.S.A., 

Inc., supra, 11 Cal.4th at p. 393, fn. 5, cited Zimmerman, supra, 

191 Cal.App.2d 55, with approval and similarly held a real estate 

broker could maintain a cause of action for interference with 

prospective economic advantage against the buyer who had 

induced the seller to sell the property without paying a 

commission despite the fact the statute of frauds rendered the 

broker’s oral contract with the seller unenforceable. (Buckaloo, 

at p. 827.)
17

would benefit from the nonpayment of the broker’s commission. 

(Zimmerman, at p. 61.) The bank, in contrast, indisputably was 

a “stranger to the transaction.” (Ibid.) Although Zimmerman

distinguished Sweeley on this basis, contrary to Trader Joe’s’

contention, it did not decide the statute of frauds would protect 

the buyer from tort liability as “a party to the transaction.” 

(Zimmerman, at p. 61.) 

In sum, consistent with Popescu, supra, 1 Cal.App.5th 39,

Asahi, supra, 222 Cal.App.4th 945, Powerhouse, supra, 

221 Cal.App.4th 867, and Woods v. Fox Broadcasting Sub., Inc.

(2005) 129 Cal.App.4th 344, we conclude 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.

6 A nonparty to a contract 

that contemplates the nonparty’s performance, by that fact alone,

is not immune from liability for contract interference. Liability is 

properly imposed if each of the elements of the tort are otherwise

satisfied.

 

6 As discussed, relying on the holding of Kasparian v. County 

of Los Angeles, supra, 154 Cal.App.4th 55, the trial court ruled 

Trader Joe’s’ legitimate economic interest in the CaliberSeneca/Sunsweet contracts shielded it from liability not only for 

intentional interference with contract but also for intentional and 

negligent interference with prospective economic advantage. Our 

conclusion Trader Joe’s’ status as a “stranger” to those contracts 

exposes it to liability for intentional interference with contract 

applies equally to its potential liability for the closely related 

prospective economic advantage torts.
18

d. Redfearn need not allege an independently wrongful 

act to state his cause of action for interference with 

contract

Inducing termination of an at-will contract is actionable 

interference with the contractual relationship. (Pacific Gas & 

Electric Co. v. Bear Stearns & Co., supra, 50 Cal.3d at p. 1127; 

Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1053.) And, as 

discussed, a defendant’s wrongful conduct apart from 

interference with the contract itself generally is not an element of 

the tort of intentional interference with contract. (Korea Supply 

Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1158

(Korea Supply) [“intentionally interfering with an existing 

contract is ‘a wrong in and of itself’”]; Quelimane Co. v. Stewart 

Title Guaranty Co., supra, 19 Cal.4th at p. 56 [same].) 

Notwithstanding these principles, citing Reeves, supra, 

33 Cal.4th 1140, Trader Joe’s argues, because the brokerage 

contracts with Caliber were terminable at will, Redfearn must 

allege an independently wrongful act to plead a viable cause of 

action. The requirement that plaintiff plead and prove an 

independently wrongful act to establish liability for interference 

with certain at-will employment agreements, recognized in 

Reeves, does not apply in the commercial brokerage setting at 

issue here.

Reeves, supra, 33 Cal.4th 1140, involved a dispute between 

the former employer of several at-will employees and their 

current employer. The current employer (a law firm) had induced 

the employees to quit their jobs (with another law firm) and come 

to work for it. (Id. at pp. 1145-1146.) The Supreme Court held 

under these circumstances the former employer could recover 

damages for intentional interference with its at-will employment 
19

agreements with its former employees only if the current 

employer had engaged in an independently wrongful act. (Id. at 

pp. 1152-1153.) The Court explained that public policy supports 

competition in the workplace, including the hiring away of an atwill employee, as long as the methods used are lawful and that 

interference with a contract terminable at will is primarily an 

interference with the expectancy of future relations between the 

parties. (Id. at pp. 1151, 1154.) “Under this analysis, an 

interference with an at-will contract properly is viewed as an 

interference with a prospective economic advantage, a tort that 

similarly compensates for the loss of an advantageous economic 

relationship but does not require the existence of a legally 

binding contract.” (Id. at p. 1152.) By requiring a plaintiff to 

plead and prove the defendant’s conduct was independently 

wrongful, “we respect both the right of at-will employees to 

pursue opportunities for economic betterment and the right of 

employers to compete for talented workers, and in doing so strike 

the proper balance between society’s interest in fostering robust 

competition in the job market and its interest in protecting 

against unlawful methods of competition.” (Id. at p. 1154.)

The holding in Reeves is properly limited to the situation 

the Supreme Court actually considered: an employer inducing 

at-will employees to leave their current positions to come to work 

for it. As the court explained in Popescu, supra, 1 Cal.App.5th 

39, which involved an action by a former employee against a 

third party that had allegedly induced his employer to terminate 

his at-will employment, “[T]he Supreme Court based its 

conclusion that interference with an at-will employment 

relationship was not actionable without an independent wrongful 

act upon the dual public policy considerations of employee 
20

freedom of movement and a business’s right to legitimately 

compete in the marketplace.” (Id. at p. 62.) Those policy 

considerations apply when a former employer sues the current 

employer for inducing its employee to terminate his or her at-will 

employment, as occurred in Reeves. However, when a third party 

induces the breach of an at-will employment agreement not to 

hire the employee but to further a different economic interest, 

neither of those public policies is furthered. (Popescu, at p. 62.) 

Accordingly, the court held, no independent wrongful act needed 

to be alleged to state a cause of action for interference with the 

at-will contract.

Redfearn’s cause of action for interference with contract is 

even further removed from the core situation presented by Reeves

than was the claim at issue in Popescu. The present action does 

not involve an at-will employment agreement, and neither the 

rights of at-will employees to pursue economic opportunities nor

the rights of employers to compete for talented workers are at 

issue. The general rule that wrongful conduct apart from 

interference with the contract itself need not be pleaded or proved

governs this case. 

Trader Joe’s’ argument based on Reeves fails for two 

additional reasons. First, Redfearn’s complaint does not allege 

the Caliber contracts with Seneca and Sunsweet were terminable 

at will, and the contracts’ at-will status is not reasonably 

inferable from the facts pleaded. (See Evans v. City of Berkeley, 

supra, 38 Cal.4th at p. 20.) Second, as discussed in the following 

section of this opinion, even if an allegation of independently 

wrongful conduct were necessary, Redfearn’s allegation that a 

Trader Joe’s executive falsely accused him of unethical business

practices to induce Seneca and Sunsweet to terminate their 
21

contracts with Caliber adequately pleaded an independently

actionable wrong.

3. Redfearn Has Adequately Stated Causes of Action for

Intentional and Negligent Interference with Prospective

Economic Advantage

a. The elements of the two causes of action

The elements of intentional interference with prospective 

economic advantage are “(1) the existence, between the plaintiff 

and some third party, of an economic relationship that contains 

the probability of future economic benefit to the plaintiff; (2) the 

defendant’s knowledge of the relationship; (3) intentionally 

wrongful acts designed to disrupt the relationship; (4) actual 

disruption of the relationship; and (5) economic harm proximately 

caused by the defendant’s action.” (Roy Allan Slurry Seal, Inc. v. 

American Asphalt South, Inc. (2017) 2 Cal.5th 505, 512; accord, 

Crown Imports, LLC v. Superior Court (2014) 223 Cal.App.4th 

1395, 1404; see Korea Supply, supra, 29 Cal.4th at pp. 1158-1159

[interfering with the plaintiff’s economic relationship with a third 

party is wrongful only if “the defendant engaged in an 

independently wrongful act”].)

The elements of negligent interference with prospective 

economic advantage are (1) the existence of an economic 

relationship between the plaintiff and a third party containing 

the probability of future economic benefit to the plaintiff; (2) the 

defendant’s knowledge of the relationship; (3) the defendant’s 

knowledge (actual or construed) that the relationship would be 

disrupted if the defendant failed to act with reasonable care; 

(4) the defendant’s failure to act with reasonable care; (5) actual 

disruption of the relationship; (6) and economic harm proximately 

caused by the defendant’s negligence. (Venhaus v. Shultz (2007) 
22

155 Cal.App.4th 1072, 1077-1078; North American Chemical Co. 

v. Superior Court (1997) 59 Cal.App.4th 764, 786.)

“The difference between intentional interference and 

negligent interference with prospective economic advantage 

relates to the defendant’s intent.” (Crown Imports, LLC v. 

Superior Court, supra, 223 Cal.App.4th at p. 1404, fn. 10.) 

Trader Joe’s’ demurrer did not challenge the sufficiency of 

Redfearn’s allegations of intent with respect to either variant of 

the interference with prospective economic advantage tort. 

b. Redfearn adequately alleged an independently

wrongful act

A plaintiff alleging a claim for intentional or negligent

interference with prospective economic advantage has the burden

to plead and prove as an element not only that the defendant

interfered with an economic relationship, but also “that the

defendant’s interference was wrongful ‘by some measure beyond

the fact of the interference itself.’” (Della Penna v. Toyota Motor

Sales, U.S.A., Inc., supra, 11 Cal.4th at p. 393; accord, Korea 

Supply, supra, 29 Cal.4th at p. 1159; Crown Imports, LLC v.

Superior Court, supra, 223 Cal.App.4th at pp. 1404-1405.) “‘[A]n

act is independently wrongful if it is unlawful, that is, if it is

proscribed by some constitutional, statutory, regulatory, common

law, or other determinable legal standard’” (Edwards v. Arthur

Andersen LLP (2008) 44 Cal.4th 937, 944), not merely the

product of an improper, but lawful, purpose or motive. (Korea

Supply, at p. 1159 & fn. 11; San Jose Construction, Inc. v.

S.B.C.C., Inc. (2007) 155 Cal.App.4th 1528, 1545.) Such conduct

must also be independently actionable (Korea Supply, at

p. 1159; Popescu, supra, 1 Cal.App.5th at p. 63), meaning the

legal standards must “provide for, or give rise to, a sanction or
23

means of enforcement for a violation of the particular rule or

standard that allegedly makes the defendant’s conduct wrongful.” 

(Stevenson Real Estate Services, Inc. v. CB Richard Ellis Real

Estate Services, Inc. (2006) 138 Cal.App.4th 1215, 1223.)

The fact that the defendant’s conduct was independently

wrongful is an element of the interference cause of action itself. 

(Crown Imports, LLC v. Superior Court, supra, 223 Cal.App.4th

at pp. 1404-1405; Bed, Bath & Beyond of La Jolla, Inc. v. La Jolla

Village Square Venture Partners (1997) 52 Cal.App.4th 867,881.) 

In addition, the wrongful interfering act can be independently

tortious only as to a third party; it need not be independently

wrongful as to the plaintiff. (Korea Supply, supra, 29 Cal.4th at

p. 1163; Crown Imports, at p. 1405.) Accordingly, contrary to

Trader Joe’s’ argument on appeal, to state a cause of action for

intentional or negligent interference with prospective economic

advantage, it is not necessary to also plead a separate, standalone tort cause of action. Here, within his causes of action for

interference with prospective economic advantage, Redfearn has

adequately alleged defamation as an independently wrongful act.

“The tort of defamation ‘involves (a) a publication that is

(b) false, (c) defamatory, and (d) unprivileged, and that (e) has a 

natural tendency to injure or that causes special damage.’” (Taus 

v. Loftus (2007) 40 Cal.4th 683, 720.) The publication must be an 

intentional publication of a statement of fact. 

(J-M Manufacturing Co., Inc. v. Phillips & Cohen LLP (2016) 

247 Cal.App.4th 87, 97.) “The defamatory statement must 

specifically refer to, or be “‘of and concerning,’” the plaintiff.” 

(John Doe 2 v. Superior Court (2016) 1 Cal.App.5th 1300, 1312.) 

The existence of a privilege is an affirmative defense that may be 

raised by demurrer only if the facts alleged in the complaint 
24

demonstrate the existence of a privilege. (Smith v. 

Commonwealth Land Title Ins. Co. (1986) 177 Cal.App.3d 625, 

630; Green v. Cortez (1984) 151 Cal.App.3d 1068, 1072; Pavlovsky 

v. Board of Trade (1959) 171 Cal.App.2d 110, 113; see generally 

Holiday Matinee, Inc. v. Rambus, Inc. (2004) 118 Cal.App.4th 

1413, 1420 [“[a]lthough privilege is typically asserted as an 

affirmative defense, it may be raised by general demurrer where 

the existence of the privilege appears”].)

Redfearn alleged that in a meeting with a Seneca 

representative Jon Basalone, a Trader Joe’s executive, falsely

accused Redfearn of spreading rumors that Trader Joe’s 

employees were soliciting bribes and the only way to do business 

with them was to pay the bribes demanded. He also alleged 

similar false statements had been made in meetings with 

Sunsweet. These allegedly false statements by a Trader Joe’s 

executive, intended to induce Seneca and Sunsweet to terminate 

their brokerage contracts with Caliber, charged Redfearn with

unethical behavior, false statements that would have a natural 

tendency to injure him in his trade or business. (See Civ. Code, 

§ 46, subd. 3 [defining slander to include a false oral 

communication that “[t]ends directly to injure [a person] in 

respect to his office, profession, trade or business . . .”]; Savage v. 

Pacific Gas & Electric Co. (1993) 21 Cal.App.4th 434, 445-446.) 

“Subdivision 1 (crime) and 3 (occupation) of Civil Code section 46 

‘have been held to include almost any language which, upon its 

face, has a natural tendency to injure a person’s reputation, 

either generally, or with respect to his occupation [citations]; and 

words clearly conveying a meaning within one of the statutory 

categories are actionable per se.’” (Regalia v. The Nethercutt 

Collection (2009) 172 Cal.App.4th 361, 368.) “Most of the cases 
25

that fit within that category [Civil Code section 46, 

subdivision (3)] involve statements that reflect on the integrity 

and competence of the plaintiff, the clearest being allegations of 

unethical activity or incompetence.” (Id. at p. 369; 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”].) 

Redfearn adequately pleaded all other necessary elements 

of his causes of action for interference with prospective economic 

advantage. The demurrer to these causes of action, as well as the 

demurrer to the cause of action for intentional interference with 

contract, should have been overruled. 

DISPOSITION

The judgment of dismissal is reversed, and the matter 

remanded to the trial court with directions to vacate its order 

sustaining Trader Joe’s’ demurrer to the first amended complaint 

without leave to amend and to enter a new order overruling the 

demurrer to the causes of action for intentional interference with 

contractual relations and intentional and negligent interference 

with prospective economic advantage and confirming Redfearn’s 

dismissal of the cause of action for unfair competition. Redfearn 

is to recover his costs on appeal.

PERLUSS, P. J.

We concur:

ZELON, J. SEGAL, J.