Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of San Diego County, No. 37-2008-00085400-CU-BT-CTL, Jay Bloom, Judge.
AARON, J.
I.
INTRODUCTION
Steve Kelley, a former editorial cartoonist for the San Diego Union-Tribune (Union-Tribune) who was terminated by the newspaper in 2001, and Steve Breen, Kelley's successor at the Union-Tribune, entered into a contract with Universal Press Syndicate (UPS) to produce a comic strip called "Dustin" (the Dustin Project). After Breen withdrew from the Dustin Project and UPS terminated the contract, Kelley filed this action against The Copley Press, Inc. (Copley Press) and the Union-Tribune Publishing Company, the owners of the Union-Tribune, alleging intentional interference with contractual relations (first cause of action), intentional interference with prospective economic advantage (second cause of action), and unfair competition in violation of Business and Professions Code, section 17200 (third cause of action). Respondents filed a motion for summary judgment and/or adjudication, and the trial court granted summary judgment in respondents' favor.
After Copley Press sold the Union-Tribune to the San Diego Union-Tribune LLC, Kelley amended his second amended complaint to name the San Diego Union-Tribune LLC as an additional defendant. There are slight variations in the names of the defendants on various documents in the record. We refer to the entities as they are named in the judgment, and refer to these entities collectively as respondents.
On appeal, Kelley claims that the trial court erred in granting judgment as a matter of law for respondents on each of his three claims. We conclude that the trial court erred in granting judgment as a matter of law on Kelley's claim of intentional interference with contractual relations, but that the trial court properly granted judgment as a matter of law on Kelley's claims of intentional interference with prospective economic advantage and unfair competition. Accordingly, we affirm in part, reverse in part, and remand for further proceedings.
II.
FACTUAL AND PROCEDURAL BACKGROUND
In December 2006, Kelley and Breen entered into a contract with UPS (the UPS Contract) for the purpose of developing and syndicating the Dustin comic strip. The UPS Contract provided for a "development period" during which Breen and Kelley would provide UPS with approximately 30 "roughs" of the comic strip each month, and UPS would pay Breen and Kelley a monthly flat fee. The UPS Contract further provided that UPS would notify Breen and Kelley no later than October 31, 2007, of its intent to syndicate the comic strip. The contract provided that UPS would pay Breen and Kelley a "kill" fee and release all further rights in the comic strip if UPS failed to provide timely notice of its intent to syndicate the comic strip. The contract also contained detailed provisions that would take effect if UPS exercised its option to syndicate. Breen, Kelley, and UPS performed pursuant to the UPS Contract until approximately August 2007, when Breen withdrew from the Dustin Project. UPS terminated the UPS Contract shortly thereafter.
In March 2009, Kelley filed a second amended complaint alleging intentional interference with contractual relations (first cause of action), intentional interference with prospective economic advantage (second cause of action), and unfair competition in violation of Business and Professions Code, section 17200 (third cause of action). With respect to his claim of intentional interference with contractual relations, Kelley alleged that Breen's supervisors at the Union-Tribune had coerced Breen into withdrawing from the Dustin Project, which in turn caused UPS to terminate the UPS Contract. Kelley also claimed that Breen's supervisors had made defamatory statements about Kelley to Breen, and thereby committed wrongful acts apart from their interference with the UPS Contract sufficient to support Kelley's claim for intentional interference with prospective economic advantage. Finally, Kelley alleged that the supervisors' conduct constituted acts of unfair competition.
Respondents filed a motion for summary judgment and/or adjudication. In their brief in support of their motion, respondents contended that Kelley could not prove his claims for intentional interference with contractual relations or prospective economic advantage because respondents were not aware of the UPS Contract and did not act to induce a breach of the contract. Respondents also claimed that both of Kelley's interference claims failed because Kelley could not prove an independent legal wrong, causation, or damages. Respondents further maintained that Kelley's interference claims were barred by the affirmative defenses of justification and the competitor's privilege. Finally, respondents contended that Kelley was not entitled to any relief on his unfair competition claim.
Kelley filed an opposition in which he argued that there were triable issues of material fact as to all three causes of action. Among other arguments, Kelley contended that there was a triable issue of fact as to whether respondents were aware of the UPS Contract and induced a breach thereof, and whether respondents had defamed Kelley in inducing such a breach.
After receiving further briefing and hearing oral argument, the trial court granted respondents' motion for summary judgment. The court concluded that Kelley's claim of intentional interference with contractual relations failed because there was no evidence from which a jury could find that respondents committed an intentional act to disrupt the UPS Contract. The trial court also concluded that Kelley's claim of intentional interference with prospective economic advantage failed because there was no evidence from which a jury could find that respondents committed independently wrongful conduct. The court further concluded that Kelley's claim of unfair competition failed, since the claim was premised on the intentional interference causes of action. Kelley filed a motion for reconsideration. The trial court granted Kelley's motion for reconsideration, but upon reconsideration, reaffirmed its order granting summary judgment.
The court entered judgment in favor of respondents. Kelley timely appeals.
III.
DISCUSSION
The trial court erred in granting respondents' motion for summary judgment
Kelley claims that the trial court erred in granting respondents' motion for summary judgment.
A. The law governing motions for summary judgment and/or adjudication
A moving party is entitled to summary judgment when the party establishes that it is entitled to the entry of judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) A defendant may make this showing by establishing that the plaintiff cannot establish one or more elements of all of his causes of action, or that the defendant has a complete defense to each cause of action. (Towns v. Davidson (2007) 147 Cal.App.4th 461, 466.) "A party is entitled to summary adjudication of a cause of action if there is no triable issue of material fact and the matter can be adjudicated as a question of law. (Code Civ. Proc., § 437c, subds. (c), (f)(1).)" (London Market Insurers v. Superior Court (2007) 146 Cal.App.4th 648, 655.)
In reviewing a trial court's ruling on a motion for summary judgment or summary adjudication, this court makes " 'an independent assessment of the correctness of the trial court's ruling, applying the same legal standard as the trial court in determining whether there are any genuine issues of material fact or whether the moving party is entitled to judgment as a matter of law. [Citations.]' " (Trop v. Sony Pictures Entertainment Inc. (2005) 129 Cal.App.4th 1133, 1143, quoting Iverson v. Muroc Unified School Dist. (1995) 32 Cal.App.4th 218, 222-223; see Everett v. State Farm General Ins. Co. (2008) 162 Cal.App.4th 649, 655 ["On appeal from a motion for summary judgment or summary adjudication of issues we conduct a de novo review of the record"].)
As discussed in part III.B.3.b.ii. post, we apply the abuse of discretion standard of review to the trial court's evidentiary rulings on a motion for summary judgment.
B. The trial court erred in granting judgment as a matter of law in favor of respondents on Kelley's cause of action for intentional interference with contractual relations
In its order granting summary judgment, the trial court concluded, "The claim for intentional interference with contract fails because plaintiff has not shown by admissible evidence any intentional act by defendant designed to purposely disrupt the contractual relationship." We conclude that the trial court erred in granting judgment as a matter of law in favor of respondents on this ground, and we reject all of the alternative arguments for affirming the trial court's ruling on this cause of action that respondents raise in their briefing on appeal.
1. Governing law
"To prevail on a cause of action for intentional interference with contractual relations, a plaintiff must plead and prove (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. [Citation.] To establish the claim, the plaintiff need not prove that a defendant acted with the primary purpose of disrupting the contract, but must show the defendant's knowledge that the interference was certain or substantially certain to occur as a result of his or her action. [Citation.]" (Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148.)
2. The record contains evidence that Breen's supervisors had knowledge of the contract
At the outset, we reject respondents' contention that Kelley cannot establish that respondents intended to interfere with the UPS Contract because there is no evidence that Breen's supervisors had knowledge of the UPS Contract. During his deposition, Breen testified as follows:
"[Plaintiff's counsel]: Did you inform the newspaper at some point in time that you had signed a contract?
"[Breen]: Yeah. But it wasn't right around this time. I waited a little while. Maybe a month or two.
"[Plaintiff's counsel]: Who did you inform?
"[Breen]: Couple months maybe. And I informed Osborne.
It is undisputed that William Osborne was one of Breen's supervisors at the Union-Tribune.
"[Plaintiff's counsel]: How did you do that?
"[Breen]: I just—I just—I just went into his office and I said, to my recollection, Bill [Osborne], Steve [Kelley] and I are still moving forward with the comic strip. In fact, we just signed a contract with Universal Press Syndicate. And—yeah, that's what I said to him."
Breen's deposition testimony constitutes evidence that his supervisors had knowledge of the UPS Contract. We reject respondents' contention to the contrary. Respondents note that shortly after Breen provided the testimony quoted above, he testified concerning his discussions about the "comic strip deal" with the editor of the Union-Tribune, Karin Winner, as follows:
"[Breen]: So I guess—I guess I didn't tell [Osborne], you know, we signed this in when, December. And I didn't tell [Osborne] then for a while, I guess. 'Cuz—cuz when I told him the second time that we had signed the comic strip deal, I think that's when that lunch was set up with Karin [Winner]. And I know for a fact that that was in the summer because it was right around the time of Comic-Con."
Respondents contend that this testimony demonstrates that "Breen immediately attempted to correct his misstatement" about having informed his supervisors about the UPS Contract, and argue that there is thus no evidence that Breen's supervisors were aware of the UPS Contract. The basis for respondents' contention is unclear. Rather than stating that he never told his supervisors about the UPS Contract, the testimony that respondents cite demonstrates that Breen testified that he told Osborne about the contract on two occasions.
On appeal, this is the sole basis on which respondents contend that Breen's deposition testimony does not constitute evidence that his supervisors were aware of the UPS Contract. Therefore, we do not address the legal effect of respondents' other attempts in the trial court to "correct" Breen's "misstatement" in his deposition, including defense counsel's August 5, 2009 letter to plaintiff's counsel in which defense counsel attempted to change Breen's deposition testimony.
3. The trial court did not abuse its discretion in admitting two emails pertaining to Breen's withdrawal from the Dustin Project
Before we examine whether the trial court erred in concluding that there was no evidence that respondents engaged in any intentional acts designed to induce a breach or disruption of the UPS Contract, we must address whether the trial court properly considered two pieces of evidence that Kelley offered in opposition to respondents' motion for summary judgment. Specifically, we review respondents' contention that the trial court abused its discretion in overruling their hearsay objections to two emails that Kelley lodged in opposition to respondents' motion for summary judgment.
a. Factual and procedural background
In opposing the motion for summary judgment, Kelley lodged two emails pertaining to Breen's withdrawal from the Dustin Project. The first email is dated
August 29, 2007 and is from Breen to John Glynn, vice-president of Rights and Acquisitions at UPS. The email states, "John, [¶] I'm afraid I've got some bad news on my involvement with the strip. My paper is essentially telling me they don't want me working with Steve Kelley. I'm sick to my stomach over it. Let's talk today (Wed) if possible."
The second email is from Glynn to his colleague at UPS, John Vivona, dated September 12, 2007. That email states in relevant part:
"FYI our super-duo of creators on Dustin has disbanded. Steve Breen was given a nicely worded ultimatum by the San Diego Union Tribune NOT to do the Dustin strip with Steve Kelley.... Initially Breen had told the U-T that he was doing it and U-T management responded with a we'd prefer if you didn't. Breen continued. The U-T thought he stopped. The U-T recently got wind that Breen had NOT stopped and they sat him down and made it clear that they DID NOT want him doing it."
Respondents objected to the admission of the emails on various grounds, including that both emails constituted inadmissible hearsay. Kelley filed a response to the objections in which he claimed that the emails were admissible under various exceptions to the hearsay rule, including that Breen's email to Glynn was admissible as an inconsistent statement (Evid. Code, § 1235), and that Glynn's email to Vivona was admissible as a past recollection recorded (Evid. Code, § 1237). After taking Glynn's deposition, Kelley filed a supplemental opposition to the motion for summary judgment in which Kelley argued that all of the hearsay exceptions that applied to Breen's email to Glynn applied to Glynn's email to Vivona, as well.
The hearsay objection is the only objection that respondents discuss on appeal.
Glynn testified at his deposition that he believed he sent the email to Vivona after having spoken to both Breen and Kelley about Breen's withdrawal. Plaintiff's counsel asked Glynn, "Were you attempting to communicate to Mr. Vivona the facts as you understood them at the time when you wrote this email?" Glynn responded, "This was my nutshell of the situation to John [Vivona] as I understood it." Plaintiff's counsel asked Glynn how Glynn had learned that Breen had received an ultimatum. Glynn testified, "I don't know if I made the assumption with what Steve Breen told me or he had actually said those exact words, but I had surmised that that was the case."
Plaintiff's counsel also asked Glynn how he had learned that the Union-Tribune had made it clear to Breen that it did not want him working on the comic strip. Glynn responded, "Again, information I gleaned from the conversation with Steve. I can't recall him directly saying any of that, but—." Plaintiff's counsel interjected, asking, "Which Steve?" Glynn continued, "Steve Breen, sorry, and could have even involved Steve Kelley conversations. I can't recall exactly how I pieced that all together."
Respondents filed a response to Kelley's supplemental opposition in which they argued that both emails constituted inadmissible hearsay, and that none of the hearsay exceptions that Kelley cited applied. In its order granting summary judgment, the trial court overruled respondents' objections to the emails.
The trial court did not articulate the reasons for its ruling.
b. Governing law and standard of review
i. Evidentiary law
Evidence Code section 1200 codifies the hearsay rule:
"(a) 'Hearsay evidence' is evidence of a statement that was made other than by a witness while testifying at the hearing and that is offered to prove the truth of the matter stated.
"(b) Except as provided by law, hearsay evidence is inadmissible.
"(c) This section shall be known and may be cited as the hearsay rule."
Evidence Code section 1220, which pertains to statements made by a party, provides, "Evidence of a statement is not made inadmissible by the hearsay rule when offered against the declarant in an action to which he is a party in either his individual or representative capacity, regardless of whether the statement was made in his individual or representative capacity."
Evidence Code section 1235, which pertains to inconsistent statements, provides, "Evidence of a statement made by a witness is not made inadmissible by the hearsay rule if the statement is inconsistent with his testimony at the hearing and is offered in compliance with Section 770." In People v. Cowan (2010) 50 Cal.4th 401 (Cowan), the Supreme Court summarized the admissibility of inconsistent statements pursuant to Evidence Code sections 1235 and 770:
Evidence Code section 770 provides: "Unless the interests of justice otherwise require, extrinsic evidence of a statement made by a witness that is inconsistent with any part of his testimony at the hearing shall be excluded unless:
" 'A statement by a witness that is inconsistent with his or her trial testimony is admissible to establish the truth of the matter asserted in the statement under the conditions set forth in Evidence Code sections 1235 and 770.' [Footnote and citation omitted.] 'The "fundamental requirement" of section 1235 is that the statement in fact be inconsistent with the witness's trial testimony.' (Ibid.)
' "Inconsistency in effect, rather than contradiction in express terms, is the test for admitting a witness' prior statement...." ' [Citation.]" (Cowan, supra, at p. 462.)
Evidence Code section 1237, which pertains to past recollections recorded, states in relevant part:
"(a) Evidence of a statement previously made by a witness is not made inadmissible by the hearsay rule if the statement would have been admissible if made by him while testifying, the statement concerns a matter as to which the witness has insufficient present recollection to enable him to testify fully and accurately, and the statement is contained in a writing which:
"(1) Was made at a time when the fact recorded in the writing actually occurred or was fresh in the witness' memory;
"(2) Was made (i) by the witness himself or under his direction or (ii) by some other person for the purpose of recording the witness' statement at the time it was made;
"(3) Is offered after the witness testifies that the statement he made was a true statement of such fact; and
"(4) Is offered after the writing is authenticated as an accurate record of the statement.
"(b) The writing may be read into evidence, but the writing itself may not be received in evidence unless offered by an adverse party."
ii. Standard of review
"On a summary judgment appeal, we review the trial court's evidentiary ruling for abuse of discretion. [Citations.] ' "Discretion is abused whenever, in its exercise, the court exceeds the bounds of reason, all of the circumstances before it being considered." ' [Citation.]" (Jennifer C. v. Los Angeles Unified School Dist. (2008)168 Cal.App.4th 1320, 1332.)
Respondents state in their brief that the abuse of discretion standard of review applies to their evidentiary claims. In light of that statement, and the case law cited in the text, we apply the abuse of discretion standard of review to respondents' claims. We are aware that in Reid v. Google, Inc. (2010) 50 Cal.4th 512, at page 535 the Supreme Court stated, "[W]e need not decide generally whether a trial court's rulings on evidentiary objections based on papers alone in summary judgment proceedings are reviewed for abuse of discretion or reviewed de novo."
c. Application
At his deposition, Breen testified that Winner told him that he could do the Dustin Project. However, the sole reason that Breen offered in his email to Glynn for his decision to withdraw from the UPS Contract was that his supervisors at the newspaper were "telling [Breen] they don't want me working with Steve Kelley." In light of Breen's deposition testimony that Winner told him that he could do the Dustin Project, the trial court would not have abused its discretion in concluding that Breen's email was admissible as an inconsistent statement. (Evid. Code, § 1235; Cowan, supra, 50 Cal.4th at p. 462 ([" ' "Inconsistency in effect, rather than contradiction in express terms, is the test" ' "].)
Specifically, Breen testified, "I was told I could do it by Karin [Winner]."
Since Breen "has not been excused from giving further testimony in the action" (Evid. Code, § 770, subd. (b)), Evidence Code section 770 does not preclude admission of the email.
With respect to Glynn's email to Vivona, respondents contend that the email is "triple hearsay not subject to any exception." We agree that the email contains three layers of hearsay, but conclude that the trial court did not abuse its discretion in implicitly finding a hearsay exception applicable to each layer. Reduced to its essence, Glynn's email to Vivona states that Breen informed Glynn that he had received an "ultimatum" from his supervisors at the newspaper not to perform the UPS Contract. The supervisor's ultimatum to Breen is admissible as the statement of a party. (Evid. Code, § 1220.) Breen's statement to Glynn that he had received an ultimatum is admissible as an inconsistent statement, in light of Breen's testimony that Winner had told him that he could work on the comic strip. (Evid. Code, §§ 1235, 770.) Finally, for the reasons stated below, Glynn's statement to Vivona is admissible as a past recollection recorded (Evid. Code, § 1237.)
The trial court could have reasonably determined that Glynn's deposition testimony established that his email to Vivona "concern[ed] a matter as to which [Glynn] ha[d] insufficient present recollection to enable him to testify fully and accurately." (Evid. Code, § 1237, subd. (a).) In light of Glynn's testimony that he wrote the email near the time of his conversation with Breen concerning Breen's withdrawal from the UPS Contract, the trial court could also have reasonably determined that the writing "[w]as made... by [Glynn] himself, " at a time when "the fact... was fresh in [Glynn's] memory, " and that the email was "an accurate record of the statement." (Evid. Code, § 1237, subd. (a), criteria (1), (2) and (4).) Further, in light of Glynn's testimony that in his email, he was attempting to provide Vivona with a "nutshell of the situation, " based on what Glynn had "gleaned" from Glynn's conversation with Breen, the trial court could have reasonably concluded "that the statement [Glynn] made was a true statement of... fact." (Evid. Code, § 1237, subd. (a), criterion (3).) Thus, the trial court did not abuse its discretion in concluding that it could consider the content of Glynn's email in ruling on respondents' motion for summary judgment.
The email could "be read into evidence" (as it was at Glynn's deposition), but the email itself would not be received in evidence unless offered by respondents. (Evid. Code, § 1237, subd. (b).)
4. The record contains evidence from which a jury could find that respondents committed an intentional act designed to induce a breach or disruption of the UPS Contract
Kelley contends that the trial court erred in concluding that there is no evidence in the record from which a jury could find that respondents committed an intentional act designed to induce a disruption of the UPS Contract. (Reeves v. Hanlon, supra, 33 Cal.4th at p. 1148.) We agree. To begin with, Glynn's email to Vivona constitutes evidence that Breen's supervisors issued Breen an "ultimatum... NOT to do the Dustin strip with Steve Kelley, " and that Breen's supervisors "sat [Breen] down and made it clear that they DID NOT want him doing it." A jury could reasonably find that evidence that an employer has given an employee an "ultimatum" not to undertake certain specified conduct constitutes evidence of an intentional act intended to disrupt performance of that conduct. We therefore reject respondents' contention that "[t]here is no evidence of any act by the Union-Tribune to pressure Breen to quit the strip." In light of the fact that it is undisputed that respondents knew that Breen and Kelley were collaborating on a comic strip, if a jury were to conclude that respondents pressured Breen to withdraw from the UPS Contract, it could clearly infer that such pressure was "substantially certain" to result in interference with Kelley's contract with UPS. (Reeves v. Hanlon, supra, 33 Cal.4th at p. 1148.)
Glynn's email to Vivona was not the only relevant evidence that tends to demonstrate that respondents committed an intentional act designed to induce a disruption of the UPS Contract. Breen's email to Glynn constitutes evidence that Breen's supervisors told him that they did not want him working on the comic strip with Kelley. A jury could reasonably find that an employer's statement directed to an employee to the effect that the employer does not want the employee to undertake certain specified conduct constitutes evidence of an intentional act on the part of the employer to disrupt performance of that conduct.
There also was considerable evidence that Breen feared that he would be fired from his job at the Union-Tribune if he were to continue to work on the comic strip with Kelley. Breen testified that he felt that his job might be in jeopardy if he continued working on the comic strip. Evidence of Breen's fear of being fired for working on the comic strip would also be relevant in determining whether Breen quit the comic strip voluntarily or instead, was pressured to do so.
In addition, it is undisputed, as respondents state in their brief, that "Breen's supervisors... [were] unhappy with Breen's collaboration with Kelley" and that Breen's supervisors felt that Kelley had left his employment with the newspaper "under very disagreeable circumstances." Kelley presented evidence that Breen's supervisors continued to harbor negative feelings toward Kelley in 2006, based on the circumstances that led to Kelley's termination from the Union-Tribune. For example, Osborne wrote in an email to Winner in April 2006 that Breen was "very naive" in thinking that "since it's been five years since Kelley left that everybody would have moved on and not care about this possible deal." Winner testified that she found it "strange" that Breen and Kelley would be working on a comic strip together in light of the fact that Kelley had been terminated five years earlier.
In light of this evidence, we conclude that the trial court erred in determining that there is no triable issue of fact as to whether respondents committed an intentional act designed to induce a disruption of the UPS Contract.
In light of our conclusion, we need not consider whether the trial court erred in sustaining respondents' evidentiary objection to a June 4, 2007 email from Breen to Kelley indicating that Breen had finished his work on a children's book he had been writing and was ready to focus his energies on the Dustin Project. Kelley claims that this email was admissible for the limited purpose of discrediting Breen's deposition testimony in which Breen stated that one of the reasons that he withdrew from the Dustin Project was that he was "getting busier with his children's book output."
5. Respondents' alternative grounds for affirming are without merit
a. Respondents did not establish as a matter of law that the affirmative defense of justification applied to any threat by respondents to terminate Breen for his participation in the Dustin Project
Respondents claim that we may affirm the trial court's summary adjudication of Kelley's claim of intentional interference with contractual relations on the ground that the affirmative defense of justification applies, as a matter of law.
Respondents contend, "defendants who interfere [with a contract] to protect their interests are entitled to assert the defense of justification." We assume for purposes of this opinion that respondents' broad formulation of the affirmative defense of justification is correct. We further assume that, in light of the newspaper's Conflict of Interest Policy (which respondents lodged in support of their motion for summary judgment and/or adjudication), respondents are correct that the Union-Tribune has the right to prohibit Breen from "working on outside projects that detract from his job, benefit competitors or could reflect negatively on the company."
Even given these assumptions, respondents did not establish as a matter of law that Breen's work with Kelley would be in conflict with these principles. As to the first point, respondents' contention that the comic strip project with Kelley was a "time-consuming process, " and that Breen's supervisors were concerned that he would become "oversubscribed, " does not establish as a matter of law that Breen's work on the project would detract from his job. It is undisputed that Breen had worked on several other significant outside projects while he was employed by the Union-Tribune, including producing another comic strip and writing several children's books, and respondents offered no evidence that such activities, or the Dustin Project, impinged on Breen's job performance.
We also reject the contention that respondents' alleged actions were justified as a matter of law because the Dustin Project would "benefit competitors" for the reasons set forth in the following section, in which we address respondents' affirmative defense of competition. (See pt. III.B.5.b., post.) Finally, respondents have not argued that Breen's participation in the Dustin Project would "reflect negatively on the company." Accordingly, we conclude that respondents failed to demonstrate, as a matter of law, the factual predicate for their assertion of the affirmative defense of justification. Therefore, we cannot affirm the trial court's summary adjudication of Kelley's intentional interference with contractual relations claim on this ground.
b. Respondents did not establish as a matter of law that the defense of competition bars Kelley's action
Respondents claim that we may affirm the trial court's summary adjudication of Kelley's claim for intentional interference with contractual relations on the ground that the affirmative defense of competition applies, as a matter of law.
We assume for purposes of this opinion that the privilege of competition is an affirmative defense to a claim of intentional interference with contractual relations where the contract at issue is an at-will contract. (BAJI No. 7.86 ["The privilege of competition is an affirmative defense to a claim of [inducing breach of a contract terminable at will] [interference with contractual relations where the contract was terminable at will]; Rest. 2d. Torts, § 768.) We further assume, strictly for purposes of this opinion only, that the UPS Contract was an at-will contract. "Whether [the privilege of competition] constitutes an affirmative defense in a particular action is a factual issue to be decided upon all the circumstances in the case." (San Francisco Design Center Associates v. Portman Companies (1995) 41 Cal.App.4th 29, 40-41.)
Respondents acknowledge that in order to establish this affirmative defense, they were required to establish several elements, including that the matter involved competition between the Copley Press and the entities from which Kelley sought syndication. (See, e.g., A-Mark Coin Co. v. General Mills, Inc. (1983) 148 Cal.App.3d 312, 323 [listing elements].) Respondents contend that they established that the Copley Press was a competitor of the syndicates at issue, based on the fact that it is undisputed that the Copley Press was syndicating comic strips during the relevant time period. However, as respondents acknowledge, the Copley Press was not accepting new submissions for syndication at the time Kelley and Breen were seeking syndication of their strip. In addition, there is undisputed evidence that Breen syndicated another comic strip with an entity other than the Copley Press during the relevant time period. In light of this sparse record of competition, and the factual nature of the defense (San Francisco Design Center Associates v. Portman Companies, supra, 41 Cal.App.4th at pp. 40-41), we conclude that respondents have failed to establish that the affirmative defense of competition applies as a matter of law to bar Kelley's claim.
Respondents note that, as of April 2006, Winner was apparently unaware that the Copley Press was no longer accepting new submissions for syndication. However, respondents offer no legal argument as to how such a subjective mental state is relevant to the affirmative defense of competition. Accordingly, we reject respondents' suggestion that Breen's supervisor's mental state established the affirmative defense of competition.
c. Respondents did not establish as a matter of law that Kelley will be unable to prove damages
Respondents contend that we may affirm the trial court's summary adjudication of Kelley's claim of intentional interference with contractual relations on the ground that Kelley cannot prove that he suffered damages.
i. Factual and procedural background
In their motion for summary judgment, respondents contended that Kelley would be unable to establish damages, which is an element of the tort of intentional interference with contractual relations. Respondents claimed that Kelley had been "paid in full" under provisions of the UPS Contract providing for payments during the development period, and that any damages attributable to the fact that UPS did not syndicate the comic strip were speculative. In their statement of undisputed facts in support of the contention that Kelley was paid in full for the development period, respondents cited to an excerpt of Kelley's deposition in which he was questioned about payments he received from UPS during the development period. Kelley testified that he was uncertain whether UPS had made all payments that were due during the development period. Respondents also lodged the UPS Contract, checks from UPS showing payments made for work completed during the development period through August 25, 2007, and an October 19, 2007 letter from UPS terminating the UPS Contract.
The UPS Contract provides in relevant part:
"During the development period which will begin November 1, 2006, ending October 31, 2007 [UPS] will pay you $600 per month for each month during which we receive at least... (30) daily roughs and one (1) Sunday rough....
"UPS will notify you in writing no later than October 31, 2007 of its intention to syndicate the Feature by a mutually agreed upon date in April or May 2008. If UPS does not so notify you in writing it will have, in fact, passed on the right to syndicate the Feature. Should UPS[] fail to give notice to you of its intention to syndicate the feature as outlined above, it will pay you a "kill" fee of $5,000...."
In his statement of undisputed facts, Kelley disputed whether he had been "paid in full" for the development period. Kelley stated that in his deposition testimony, he indicated that he did not recall whether he had been paid in full, and noted that the UPS checks that respondents offered did not establish that he had been paid in full. Because the trial court ruled that Kelley could not establish that respondents committed an intentional act designed to disrupt the UPS Contract, the court did not address in its order granting the motion for summary judgment whether respondents had established that Kelley would be unable to establish damages.
On appeal, respondents argue that we should affirm the trial court's order on the ground that Kelley cannot establish damages, because any damages that Kelley might have suffered in connection with UPS's potential syndication of the comic strip are speculative. Respondents do not address whether they have established that Kelley would be unable to establish damages in connection with payments due during the development period of the UPS Contract. In his reply brief, Kelley claims, "[I]f Respondents had not coerced Breen to quit the comic strip, UPS at a minimum would have been required to pay Kelley and Breen a 'kill fee'...."
ii. Application
Respondents failed to demonstrate as a matter of law that UPS's termination did not cause Kelley to suffer any damages for payments that would otherwise have been due during the development period. Specifically, respondents failed to establish as a matter of law that Kelley did not suffer any damages for work performed after August 25, 2007. Respondents also did not establish as a matter of law that Kelley will be unable to prove that he suffered the loss of the "kill fee" under the UPS Contract. Accordingly, we conclude that respondents are not entitled to summary judgment on the alternative ground that Kelley will be unable to establish damages.
In light of our conclusion, we need not address the parties' contentions pertaining to whether Kelley can establish damages stemming from UPS's potential syndication of the comic strip. Specifically, we need not consider whether the trial court erred in sustaining respondents' objections to various exhibits attached to the declarations of Kelley's experts, which Kelley offered in opposition to the motion for summary judgment.
d. Respondents did not establish as a matter of law that Kelley will be unable to prove that respondents' actions caused a disruption of the UPS Contract
Respondents contend that we should affirm the trial court's summary adjudication of Kelley's claim of intentional interference with contractual relations on the ground that Kelley will be unable to establish that respondents caused UPS to terminate the UPS Contract. Specifically, respondents claim that Kelley will be unable to establish either that respondents caused Breen to quit the Dustin Project, or that respondents caused UPS to refuse to exercise its option to syndicate the comic strip.
With respect to the first contention, respondents argue, "The undisputed evidence is that Breen quit the comic strip for reasons that had nothing to do with pressure from the Union-Tribune." We disagree. To begin with, respondents point to no evidence in the record showing that, prior to Kelley's filing this lawsuit, Breen provided any reason for quitting the Dustin Project other than pressure from the Union-Tribune. In addition, Breen testified that he withdrew from the Dustin Project in part because he knew that "the newspaper was not happy that I was working with Steve Kelley, " and that Breen "didn't want to rock the boat." Further, we concluded in part III.B.4, ante, that there is a triable issue of material fact with respect to whether respondents committed an intentional act designed to induce a disruption of the UPS Contract. In light of this evidence, we conclude that respondents have not established as a matter of law that Kelley will be unable to establish that respondents caused Breen to quit the Dustin Project.
With respect to respondents' contention that Kelley will be unable to establish that respondents caused UPS to refuse to exercise its option to syndicate the comic strip, the sole reason that UPS gave for terminating the UPS Contract was "the change in personnel" occasioned by Breen's withdrawal. Accordingly, we conclude that respondents have not established as a matter of law that Kelley will be unable to prove that respondents caused UPS to terminate the UPS Contract.
Respondents' claim fails for the additional reason that there is a triable issue of fact as to whether Kelley suffered damages that were not dependent on whether UPS exercised its option to syndicate. (See pt. III.B.5.c, ante.)
Kelley claims that his motion for reconsideration demonstrated that there is "a triable issue as to whether respondents' actions caused Breen to withdraw from the project." In light of our reversal of the trial court's ruling granting judgment as a matter of law in favor of respondents on Kelley's claim of intentional interference with contractual relations, we need not consider this contention. Kelley does not raise any contention on appeal that his motion for reconsideration demonstrated that the trial court erred in granting judgment as a matter of law in favor of respondents on his claims for intentional interference with prospective economic advantage and unfair competition. (See pt. III.C. & D., post)
C. The trial court properly granted judgment as a matter of law in favor of respondents on Kelley's cause of action for intentional interference with prospective economic advantage
Kelley claims that the trial court erred in granting judgment as a matter of law in favor of respondents on his claim of intentional interference with prospective economic advantage. The trial court concluded that there was no evidence that respondents engaged in any "independently wrongful act, " which is an element of this tort. We conclude the trial court properly granted summary adjudication of Kelley's claim.
1. Governing law
a. Intentional interference with prospective economic advantage
In Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 944, the Supreme Court outlined the elements of the tort of intentional interference with prospective economic advantage:
"In order to prove a claim for intentional interference with prospective economic advantage, a plaintiff has the burden of proving five elements: (1) an economic relationship between plaintiff and a third party, with the probability of future economic benefit to the plaintiff; (2) defendant's knowledge of the relationship; (3) an intentional act by the defendant, designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the defendant's wrongful act, including an intentional act by the defendant that is designed to disrupt the relationship between the plaintiff and a third party. [Citation.] The plaintiff must also prove that the interference was wrongful, independent of its interfering character. [Citation.]"
An important distinction between the tort of intentional interference with contractual relations and the tort of intentional interference with prospective economic advantage is that the latter requires proof that the "the defendant's conduct was 'wrongful by some legal measure other than the fact of interference itself.' [Citation.]" (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153.) "[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." (Id. at p. 1159, fn. omitted.)
b. Defamation
Defamation is proscribed by the common law. We assume for purposes of this decision that a defamatory statement is therefore sufficiently wrongful to support a claim of intentional interference with prospective economic advantage. (See Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 410-411 [citing defamation as among the acts sufficient to support the wrongfulness element of the tort of intentional interference with prospective economic relations] (conc. opn. of Mosk, J.).)
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.) In Seelig v. Infinity Broadcasting Corp. (2002) 97 Cal.App.4th 798 (Seelig), the court explained that a statement must imply a provably false factual assertion in order to serve as the basis of a defamation action:
" 'Statements do not imply a provably false factual assertion and thus cannot form the basis of a defamation action if they cannot " 'reasonably [be] interpreted as stating actual facts' about an individual." [Citations.] Thus, "rhetorical hyperbole, " "vigorous epithet[s], " "lusty and imaginative expression[s] of... contempt, " and language used "in a loose, figurative sense" have all been accorded constitutional protection. [Citations.]' [Citation.] The dispositive question... is whether a reasonable trier of fact could conclude that the published statements imply a provably false factual assertion. [Citation.]" (Id. at p. 809.)
The Seelig court outlined the process that courts use in determining whether a statement implies a provably false factual assertion:
"To ascertain whether the statements in question are provably false factual assertions, courts consider the ' "totality of the circumstances." ' [Citation.] ' "First, the language of the statement is examined. For words to be defamatory, they must be understood in a defamatory sense.... [¶] Next, the context in which the statement was made must be considered.... [¶] This contextual analysis demands that the courts look at the nature and full content of the communication and to the knowledge and understanding of the audience to whom the publication was directed." ' [Citations.] This crucial question of whether challenged statements convey the requisite factual imputation is ordinarily a question of law for the court." (Seelig, supra, 97 Cal.App.4th at pp. 809-810.)
"[A] subjective judgment of the person making the statement, " is not one that implies a provably false factual assertion. (Gallagher v. Connell (2004) 123 Cal.App.4th 1260, 1270, fn. omitted; Carver v. Bonds (2005) 135 Cal.App.4th 328, 348 [concluding statements were not defamatory because they were based on "entirely subjective matters rather than provably false factual assertions"].) For example, in Copp v. Paxton (1996) 45 Cal.App.4th 829, at page 837, the court noted that other courts have regarded as nondefamatory any " 'broad, unfocused and wholly subjective comment, ' [citation] such as that the plaintiff was a 'shady practitioner' [citation], 'crook' [citation], or 'crooked politician' [citation]."
2. Application
Kelley claims that the trial court erred in concluding that he cannot establish that respondents committed any wrongful conduct apart from their alleged interference with the UPS Contract. Specifically, Kelley argues that the record contains evidence that Breen's supervisors made various remarks to Breen about Kelley that were defamatory.
In the alternative, Kelley claims that there is a triable issue of fact as to whether respondents committed independently wrongful acts by violating a provision in a settlement agreement between Kelley and "the owner of the San Diego Union Tribune to avoid making derogatory or disparaging remarks to a third party." (Emphasis omitted.) Specifically, Kelley claims that Breen's supervisors' statements violated the settlement agreement. This claim fails because Kelley did not lodge the settlement agreement in evidence in the trial court. The settlement agreement is thus not in the record. (See Hearn v. Howard (2009) 177 Cal.App.4th 1193, 1200 ["it is the appellant's burden to furnish a record adequate for review"].)
Kelley cites four statements that he claims are defamatory. In referring to Breen's decision to work with Kelley on the Dustin Project, Kelley claims that one of Breen's supervisors asked Breen, "[A]re you crazy?" In addition, Kelley claims that Breen's supervisors told Breen that Kelley "was not loyal." Kelley also claims that Breen's supervisors told Breen that he had the supervisors "over a barrel." Kelley also points to evidence he presented that Osborne told Breen that if Breen were to work with Kelley, "[Breen would] end up doing all the work and still have to split the money with Kelley." We assume for purposes of this decision that there is sufficient admissible evidence that respondents in fact made all of these statements. Even assuming that this is so, we agree with the trial court that none of the statements is actionable.
The trial court ruled that Kelley had failed to show "by admissible evidence that these statements were actually made."
In considering the " ' "totality of the circumstances, " ' " we first consider " ' "the language of the statement[s]." ' " (Seelig, supra, 97 Cal.App.4th at p. 809.) The statement that "[Breen would] end up doing all of the work and still have to split the money with Kelley" is not defamatory because it constitutes an opinion about a future event rather than an "opinion [that] implies a false assertion of fact." (Wong v. Tai Jing (2010) 189 Cal.App.4th 1354, 1370.) Because the statement constitutes Osborne's prediction as to the occurrence of a future event, it is inherently incapable of being proven true or false at the time it was made. (See South Middlesex Opportunity Council, Inc. v. Town of Framingham (D. Mass. 2010) 752 F.Supp.2d 85, 120 ["Because Orr's statement is unambiguously an expression of opinion about a future event, he cannot be held liable for defamation as to this statement"].) The "are you crazy?" and "over a barrel" statements are classic "rhetorical hyperbole" (Seelig, supra, 97 Cal.App.4th at p. 809), and clearly cannot reasonably be construed as implying a provably false factual assertion. The statement that Kelley was "not loyal" constitutes a "lusty and imaginative expression[] of... contempt" (id. at p. 809), and does not imply a provably false assertion of fact. (See McGarry v. University of San Diego (2007) 154 Cal.App.4th 97, 117 [concluding implicit charge that plaintiff had committed "unspecified immoral behavior" was not defamatory because "[b]ehavior that might qualify as immoral to one person, although being perfectly acceptable to another person, demonstrates that an amorphous assertion of immoral behavior is within the range of statements of opinion that are not actionable"].) Kelley does not make any persuasive argument that " ' "the nature and full content of the communication, " ' " and " ' "the audience to whom the publication was directed" ' " (Seelig, supra, 97 Cal.App.4th at pp. 809-810) support a different conclusion.
Accordingly, we conclude that the trial court properly determined that the record does not contain evidence that Breen's supervisors made defamatory statements concerning Kelley. We further conclude that the trial court properly granted judgment as a matter of law in favor of respondents on Kelley's claim of intentional interference with prospective economic advantage on the ground that Kelley cannot establish that respondents committed any wrongful conduct apart from their alleged interference with the UPS Contract.
In light of our conclusion that none of the statements that Kelley cites is defamatory, we need not consider respondents' contentions with respect to the common interest privilege, and malice.
D. The trial court properly granted judgment as a matter of law in favor of respondents on Kelley's claim of unfair competition
Kelley claims that the trial court erred in granting judgment as a matter of law in favor of respondents on his unfair competition claim (Bus & Prof. Code, § 17200).
In order to prove a violation of the Unfair Competition Law (UCL) (Bus. & Prof. Code, § 17200), a plaintiff must establish that the defendant committed a business act that is either fraudulent, unlawful, or unfair. (See Buller v. Sutter Health (2008) 160 Cal.App.4th 981, 986 (Buller).) Kelley has not demonstrated on appeal that he will be able to establish that respondents committed such an act.
Kelley does not argue on appeal that he presented evidence that respondents engaged in a fraudulent practice. Kelley's contention that "respondents engaged in conduct that is unlawful, " is based entirely on arguments that we rejected in part III.C., ante, in concluding that Kelley cannot establish that respondents committed any wrongful conduct apart from their alleged interference with the UPS Contract.
With respect to the " 'unfair' prong" of the UCL, this court has applied the so-called "Cel-Tech test" for establishing unfairness. (See Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1366.) Under that test, a plaintiff must prove that the defendant's "conduct is tethered to an[] underlying constitutional, statutory or regulatory provision, or that it threatens an incipient violation of an antitrust law, or violates the policy or spirit of an antitrust law." (Ibid.) Kelley does not contend on appeal that there is evidence in the record that would allow him to make such a showing. As in Durrell, Kelley "does not address Cel-Tech, supra, 20 Cal.4th 163, and its affect on the definition of 'unfair' " (id. at p. 1366), or this court's case law in the wake of Cel-Tech.
Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.
Under these circumstances, Kelley is not entitled to reversal of the trial court's summary adjudication of his unfair competition claim (Bus & Prof. Code, § 17200).
In light of our conclusion, we need not consider respondents' arguments that we may affirm the summary adjudication on this claim on the ground that Kelley lacks standing to bring a UCL claim, and that there is no appropriate remedy available to Kelley under the UCL.
IV.
DISPOSITION
The judgment and the trial court's order granting summary judgment are reversed. The matter is remanded to the trial court with directions to grant respondents' motion for summary adjudication of Kelley's causes of action for intentional interference with prospective economic advantage (second cause of action) and unfair competition (third cause of action). The trial court is further directed to deny respondents' motion for summary adjudication of Kelley's cause of action for intentional interference with contractual relations (first cause of action) and to conduct further proceedings. The parties are to bear their own costs on appeal.
WE CONCUR: McCONNELL, P. J., IRION, J.
"(a) The witness was so examined while testifying as to give him an opportunity to explain or to deny the statement; or
"(b) The witness has not been excused from giving further testimony in the action."
We reject Kelley's suggestion that the fact that his counsel orally offered to provide the trial court with the agreement at the hearing on the motion for summary judgment, and that "[t]he [t]rial [c]ourt never asked to see the agreement, " sufficiently preserved this claim for appellate review. It was Kelley's burden to create an adequate record for review on this point, and he failed to do so. While this appeal was pending, Kelley filed an "Application to file Additional Records Under Seal, " in which he requested that this court receive the relevant portions of the settlement agreement into the record on appeal. Respondents opposed the application on several grounds, including that the settlement agreement was never lodged with the trial court. This court denied Kelley's application.