CROSKEY, J.
Crown Imports, LLC (Crown), is the national importer of Corona beer and other beer brands. Two of its local distributors are Haralambos Beverage Company (HBC) and Classic Distributing & Beverage Group, Inc. (Classic). Classic and HBC allegedly entered into an oral agreement for HBC to sell its Crown distributorship to Classic. Crown, which had the contractual right to do so, disapproved the sale to Classic. HBC ultimately sold the distributorship to another entity, and has no dispute with Crown. Classic, however, as the disappointed buyer of HBC's Crown distributorship, brought the instant action against Crown for intentional and negligent interference with prospective economic advantage. Crown moved for summary judgment. Its motion was denied and Crown now seeks relief by petition for writ of mandate.
The operative complaint is the second amended complaint.
By 2010, Classic's performance had improved by any objective measure,
In any event, Rowley, who was responsible for Crown's Southern California division, met with Classic's representatives in June 2010 in order to discuss Classic's possible acquisition of HBC's Crown distributorship. Rowley, on behalf of Crown, denied approval. According to the allegations of the complaint, Crown denied approval based on pretextual factors, and simply refused to consent because Classic was not Crown's preferred distributor.
Ultimately, HBC sold its distributorship to Anheuser-Busch Sales Pomona (AB Pomona) in December 2010. Classic alleged that this sale was orchestrated by Crown. Classic does not allege, and concedes that it had no evidence, that the sale from HBC to AB Pomona was for less than the fair market value of HBC's Crown distributorship.
Classic alleged causes of action for intentional interference with prospective economic advantage and negligent interference with prospective economic advantage. As the torts of interference with prospective economic advantage require the act of interference to have been "independently wrongful," Classic specifically identified two statutes which it contends Crown
Crown sought summary judgment on several bases, including that Classic could not prove that its alleged interference constituted an "independently wrongful act." Crown argued that Classic could not allege a wrongful act based on Business and Professions Code section 25000.9, as that statute was meant to protect disappointed sellers, not disappointed buyers. Crown also argued that Classic could not allege a wrongful act based on Business and Professions Code section 23300 because Crown did not perform any unauthorized act.
In opposition to Crown's summary judgment motion, Classic disputed most of Crown's purportedly undisputed facts, and attempted to establish the
As to the legal issues, Classic argued that even though it could not independently bring a cause of action against Crown for violating Business and Professions Code section 25000.9, it could rely on the statutory violation as an independently wrongful act to establish a basis for its causes of action for interference with prospective economic advantage. As to Business and Professions Code section 23300, Classic relied on a February 2010 Attorney General (AG) "Advisory to CA Beer Manufacturers and Importers," which identified certain provisions in distributorship agreements which the AG believed to constitute unlawful exercises of control by manufacturers over independently licensed wholesalers. Those provisions included, "Manufacturers having the right to control or approve a wholesaler's acquisitions or divestitures of businesses or product lines, or a change in control of a wholesaler or a wholesaler's business, in either case including, but not limited to, a manufacturer's right of first refusal to purchase or right to appoint a designee purchaser." Additionally, for the first time, Classic also argued that Crown's interference was independently wrongful as the culmination of an act of fraudulent concealment, specifically, Crown's concealment of the real reasons why Classic had not been approved to purchase HBC's Crown distributorship in 2008.
The trial court, after a hearing, denied the motion for summary judgment. The court concluded that Classic could pursue its argument that the interference with its proposed agreement with Crown was independently wrongful under Business and Professions Code section 25000.9 even though that statute gives a remedy only to a disappointed seller. The trial court relied on authority holding that the fact that the plaintiff is an indirect victim of the wrongful act does not preclude a cause of action for interference with the plaintiff's prospective economic advantage. The court also concluded that triable issues of fact existed as to whether, among other things, there was actually an agreement between Classic and HBC in 2010, and Crown unreasonably denied approval.
Both Crown and Rowley filed petitions for writ of mandate. We consolidated the petitions and issued an order to show cause.
Crown argues that it was entitled to summary judgment on the ground that Classic cannot establish that Crown's alleged interference with the 2010 alleged agreement between HBC and Classic was "independently wrongful" on any of the grounds relied upon by Classic: (1) application of Business and Professions Code section 25000.9; application of Business and Professions Code section 23300; and (3) Crown's alleged fraudulent concealment. Classic disagrees.
"`A defendant is entitled to summary judgment if the record establishes as a matter of law that none of the plaintiff's asserted causes of action can prevail.' (Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107 [252 Cal.Rptr. 122, 762 P.2d 46].) The pleadings define the issues to be considered on a motion for summary judgment. (Sadlier v. Superior Court (1986) 184 Cal.App.3d 1050, 1055 [229 Cal.Rptr. 374].) As to each claim as framed by the complaint, the defendant must present facts to negate an essential element or to establish a defense. Only then will the burden shift to the plaintiff to demonstrate the existence of a triable, material issue of fact. (AARTS Productions, Inc. v. Crocker National Bank (1986) 179 Cal.App.3d 1061, 1064-1065 [225 Cal.Rptr. 203].)" (Ferrari v. Grand Canyon Dories (1995) 32 Cal.App.4th 248, 252 [38 Cal.Rptr.2d 65].) "There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 [107 Cal.Rptr.2d 841, 24 P.3d 493].) We review orders granting or denying a summary judgment motion de novo. (FSR Brokerage, Inc. v. Superior Court (1995) 35 Cal.App.4th 69, 72 [41 Cal.Rptr.2d 404]; Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 579 [37 Cal.Rptr.2d 653].) We exercise "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." (Iverson v. Muroc Unified School Dist. (1995) 32 Cal.App.4th 218, 222 [38 Cal.Rptr.2d 35].)
In this case, we are concerned largely with legal issues. As such, we assume the disputed factual issues are resolved in favor of Classic.
The independently wrongful act must be the act of interference itself, but such act must itself be independently wrongful. That is, "[a] plaintiff need not allege the interference and a second act independent of the interference. Instead, a plaintiff must plead and prove that the conduct alleged to constitute the interference was independently wrongful, i.e., unlawful for reasons other than that it interfered with a prospective economic advantage. [Citations.]" (Stevenson Real Estate Services, Inc. v. CB Richard Ellis Real Estate Services, Inc. (2006) 138 Cal.App.4th 1215, 1224 [42 Cal.Rptr.3d 235].)
It is the plaintiff's burden to plead and prove that the defendant's conduct is independently wrongful in order to recover. The fact that the defendant's
With this background in the law, we now turn to the three bases on which Classic argues that Crown's refusal to approve it as a buyer of HBC's Crown distributorship constituted an independently wrongful act sufficient to support its claim for interference with prospective economic advantage: (1) Business and Professions Code section 25000.9; (2) Business and Professions Code section 23300; and (3) fraudulent concealment.
As this provision provides only for damages to the disappointed seller, rather than the disappointed buyer, Crown argues that it cannot provide a legal basis for Crown's denial of approval to constitute an independently wrongful act as to Classic. We disagree. As discussed above, an act may be
That Business and Professions Code section 25000.9 is so limited can be seen when we consider the facts of the instant case. Classic alleges that the denial of approval was independently wrongful because it violated this statute's "prohibition against a beer manufacturer ... unreasonably withholding its consent or unreasonably denying approval of a sale, transfer, or assignment of any ownership interest in a licensed beer wholesaler's business with respect to that manufacturer's brand or brands." But Business and Professions Code section 25000.9 contains no such "prohibition." As long as the seller receives adequate compensation, either from a successor purchaser or the manufacturer itself, there is no violation of the statute. Indeed, Classic does not claim or assert that it could prove that HBC did not receive adequate compensation.
Solid policy reasons exist for a legislative choice that a beer manufacturer may decline to approve a transfer of a beer distributorship for an "unreasonable" reason, as long as it makes the disappointed seller whole. The sale of
The sole authority on which Classic relies for this proposition is the AG's advisory letter on the topic, which sets forth the AG's position that certain provisions in beer distributorship contracts grant the manufacturers excessive control over the business decisions of their distributors. The advisory stated that the AG found problematic, "Manufacturers having the right to control or approve a wholesaler's acquisitions or divestitures of businesses or product lines, or a change in control of a wholesaler or a wholesaler's business, in either case including, but not limited to, a manufacturer's right of first refusal to purchase or right to appoint a designee purchaser."
Finally, Classic argues that Crown's denial of approval was independently wrongful as it was the culmination of Crown's act of fraudulent concealment; specifically, Crown fraudulently concealed in 2008 that it had other plans for HBC's distributorship and would never approve Classic, no matter how much Classic's performance improved.
Preliminarily, Classic raised this argument for the first time in opposition to the motion for summary judgment. The independently wrongful act is an element which must be pleaded and proved by a plaintiff. Classic failed to plead fraudulent concealment as an independently wrongful act, even when filing its second amended complaint after Crown had moved for summary judgment. Classic cannot raise fraudulent concealment as a new basis for the independent wrongfulness of Crown's act after Crown had moved for summary judgment arguing against the two bases actually pleaded in Classic's complaint.
Even if, however, we overlook this procedural default, Classic cannot prevail with this argument. Classic takes the position that the denial of approval in 2010 was part of an act of fraudulent concealment that began in 2008. Specifically, Classic argues that it was told in 2008 that if it improved its performance, Crown would "leave the door open" to it being considered to purchase HBC's Crown distributorship later. Classic argues that this was fraudulent, in that Crown always intended that HBC's distributorship be conveyed to a distributor related to Anheuser-Busch, and that Crown concealed those plans from it. But any such fraudulent concealment would have necessarily occurred in 2008. There is no claim of a fraudulent concealment in 2010; Crown openly denied approval to Classic at that time. Classic is attempting to argue that the fraudulent concealment in 2008 rendered the denial of approval in 2010 independently wrongful. This is incorrect; the denial of approval in 2010 itself must be independently wrongful. Classic's argument regarding fraudulent concealment is insufficient.
The petition for writ of mandate is granted. Let a writ of mandate issue directing the trial court to vacate its order denying Crown's motion for summary judgment and enter a new and different order granting the motion. The parties shall bear their own costs in connection with this writ proceeding.
Klein, P. J., and Kitching, J., concurred.