Procedural Posture

Defendant rival developers appealed the judgment of Superior Court of the City and County of San Francisco (California) that they intentionally interfered with plaintiff developer’s prospective economic relationship with defendant trade association. Plaintiff cross-appealed the dismissal of its causes of action against defendant trade association for breach of contract and against defendant rival developers for interference with contract.

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Overview

Plaintiff developer sought to build an apparel mart and courted defendant trade association as a potential lessor. When defendant rival developers ultimately won defendant trade association’s business, plaintiff filed suit for breach of contract, interference with contract, and negligent and intentional interference with economic advantage. Defendant rival developers were found to have intentionally interfered with plaintiff’s economic advantage and they appealed. The trial court nonsuited the breach of contract and interference with contract claims and plaintiff cross-appealed. The court affirmed the nonsuit of the breach and interference with contract claims because the alleged contract failed due to unsatisfied conditions precedent. The judgment that defendant rival developers interfered with plaintiff’s economic advantage and the order denying defendants’ motion for judgment notwithstanding the verdict were reversed because defendants raised the competition privilege as an affirmative defense and plaintiff failed to defeat the privilege as plaintiff could not prove that defendants committed an unlawful or illegitimate act which was independently actionable.

Outcome

The court reversed the judgment against defendant rival developers that they interfered with plaintiff developer’s prospective economic advantage because the competition privilege was an affirmative defense, and reversed the order denying defendants’ motion for judgment notwithstanding the verdict. The court affirmed the nonsuit of plaintiff’s causes of action for breach of contract and interference with contract because no contract existed.