Judge Armen Tamzarian, Case Number: 23STCV22536, Date: 2024-01-08 Tentative Ruling

Judge: Armen Tamzarian, Case: 23STCV22536, Date: 2024-01-08 Tentative Ruling

Please notify Department 52 via email at smcdept52@lacourt.org and indicate that the parties are submitting on the tentative ruling. Please provide the attorney's name and represented party. Please notify the opposing side via email if submitting on the Court's tentative ruling.

Case Number: 23STCV22536 Hearing Date: January 8, 2024 Dept: 52

Defendant Jara Blash’s Demurrer to Complaint

Defendant Jara Blash demurs to the first and second causes of action alleged in the complaint by plaintiff Peter Alexan Enterprises Inc. dba RA Consulting.

1. Intentional Interference with Contract

Plaintiff does not allege sufficient facts for this cause of action against Blash. “Tortious interference with contractual relations requires ‘(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.’ ” (Ixchel Pharma, LLC v. Biogen, Inc. (2020) 9 Cal.5th 1130, 1141.) “An essential element of a contract interference claim is proof that the defendant’s conduct actually disrupted or breached the plaintiff’s contract.” (Woods v. Fox Broadcasting Sub., Inc. (2005) 129 Cal.App.4th 344, 356.)

Plaintiff neither alleges actual breach or disruption of any contractual relationship nor any damages resulting from Blash’s conduct. The complaint alleges defendants are “intentionally trying to induce Plaintiff’s clients and vendors to breach their contracts with Plaintiff as outlined above for the sole purpose of stealing these clients from Plaintiff.” (Comp., ¶ 26.) It does not, however, allege Blash succeeded in stealing any clients from plaintiff or otherwise caused any actual damages. Plaintiff instead alleges, “[T]he business relationship between Plaintiff and its clients has been disrupted and possibly damaged to the point that Plaintiff’s clients may cease using its services.” (¶ 27.)

That plaintiff has been “possibly damaged” is speculative. It does not suffice to constitute a cause of action. “ ‘[D]amages may not be based upon sheer speculation or surmise, and the mere possibility or even probability that damage will result from wrongful conduct does not render it actionable.’ ” (Ferguson v. Lieff, Cabraser, Heimann & Bernstein (2003) 30 Cal.4th 1037, 1048.) “ ‘Damage to be subject to a proper award must be such as follows the act complained of as a legal certainty.’ ” (Ibid.)

Plaintiff also alleges Blash disrupted COO Candace “Homer’s ability to perform her duties at Comic-Con in San Diego, ultimately damaging Plaintiff’s provision of services for its client Comic-Con.” (¶ 12.) But it does not allege that doing so prohibited plaintiff from earning the compensation owed under any existing contract related to Comic-Con. “[I]nterference with an existing contract is analytically distinct from interference with prospective economic advantage, as the torts protect different interests.” (Little v. Amber Hotel Co. (2011) 202 Cal.App.4th 280, 303–304.) That any disruption may “possibly damage[]” plaintiff “to the point that Plaintiff’s clients may cease using its services” (¶ 27) is not interference with an existing contract.

2. Negligent Interference with Prospective Economic Advantage

Plaintiff does not allege sufficient facts for this cause of action against Blash. “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; and (6) economic harm proximately caused by the defendant’s negligence.” (Redfearn v. Trader Joe's Co. (2018) 20 Cal.App.5th 989, 1005 (Redfearn).)

Plaintiff “must allege the existence of an economic relationship with some third party that contains the probability of future economic benefit to the plaintiff. This tort therefore ‘protects the expectation that the relationship eventually will yield the desired benefit, not necessarily the more speculative expectation that a potentially beneficial relationship will arise.’ ” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1164 (Korea Supply).) “Only plaintiffs that can demonstrate an economic relationship with a probable future economic benefit will be able to state a cause of action for this tort.” (Ibid.) “Without an existing relationship with an identifiable” third party, plaintiff’s “expectation of a future [transaction] was ‘at most a hope for an economic relationship and a desire for future benefit.’ ” (Westside Center Associates v. Safeway Stores 23, Inc. (1996) 42 Cal.App.4th 507, 527 (Westside).)

The complaint alleges only one specific economic relationship: plaintiff’s relationship with “San Diego Comic Convention.” (¶ 34.) But plaintiff does not allege Blash’s conduct resulted in any actual damages related to that relationship. Plaintiff only alleges its “long-standing business relationship with San Diego Comic Convention has become strained, and Plaintiff is in a situation where it may no longer conduct any more business with those entities due to the outrageous conduct of Defendants.” (Ibid.) A strained relationship is not an “economic harm.” (Redfearn, supra, 20 Cal.App.5th at p. 1005.) And, as discussed with respect to the first cause of action, that plaintiff “may no longer conduct any more business” with San Diego Comic Convention is too speculative to satisfy the element of damages.

As for relationships with other third parties, plaintiff generally alleges Blash caused harm to its relationships with “other similar event organizations, Plaintiff’s vendors, Plaintiff’s contractors, and other businesses in the event security industry.” (¶ 34.) This allegation is so vague and conclusory as to be unintelligible. It does not apprise Blash which existing economic relationships she allegedly disrupted. The opposition argues “Defendant Blash’s additional exclusive knowledge of her actions, especially after her termination … , should not be used against” plaintiff. (Opp., p. 12.) Plaintiff, however, is uniquely positioned to know which “vendors,” “contractors,” and “other businesses” it had economic relationships with and which of those existing relationships have been damaged.

Plaintiff also broadly alleges its “business relationships and reputation in the event security industry have been damaged and the probability of conducting business within the industry has been impacted by the false allegations of Defendants.” (Ibid.) Unlike, for example, defamation, which permits recovery for “injury to business reputation” (Regalia v. The Nethercutt Collection (2009) 172 Cal.App.4th 361, 369), plaintiff provides no authority that harm to one’s general business reputation suffices for intentional interference with prospective economic advantage. Such a rule would permit recovery for damaging relationships with the entire industry and all potential clients, thereby eliminating the requirement of the current “existence of an economic relationship with some third party.” (Korea Supply, supra, 29 Cal.4th at p. 1164.) Alleging harm to one’s reputation in the industry at large—without identifying the existing relationships harmed—constitutes interference only with “ ‘a hope for an economic relationship and a desire for future benefit.’ ” (Westside, supra, 42 Cal.App.4th at p. 527.)

Disposition

Defendant Jara Blash’s demurrer to the first and second causes of action by plaintiff Peter Alexan Enterprises Inc. dba RA Consulting is sustained with 20 days’ leave to amend.