Lowell v. Mother's Cake & Cookie Co.

79 Cal. App. 3d 13, 144 Cal. Rptr. 664 (1978)

 

RULE:

While one whose business or property has been injured solely because of the restrictions in trade carried out by a trust organized and maintained for that purpose may maintain an action under the provisions of the anti-trust law for double the damages he has actually suffered from the injury so inflicted, yet he could not maintain an action based upon said law if the injury, although directly the result of the wrongful acts of the trust or the constituent members thereof, did not arise by reason of the restrictions in trade or commerce carried out by such trust or combination.

FACTS:

A complaint for interference with prospective economic advantage, and for violations of the Cartwright Act and the California Unfair Practices Act alleged that plaintiff owned a trucking firm that derived 40 percent of its business from an oral contract with defendant. Upon plaintiff's attempt to sell the firm, defendant had informed prospective buyers that the contract would be terminated upon sale, that defendant had acted for the purpose of depressing the firm's market value. As a result plaintiff had sold to defendant for a price substantially below true value. Plaintiff filed an action against defendant alleging interference with prospective economic advantage and violations of the Cartwright Act and the California Unfair Practices Act. The trial court sustained general demurrers to the complaint and amended complaint and dismissed the action.

ISSUE:

Did the complaint fail to state a claim?

ANSWER:

No

CONCLUSION:

The court reversed the dismissal of plaintiff's action for interference with prospective economic advantage since the complaint alleged sufficient facts to state a cause of action, and the requisite justification of defendant failed to appear upon the face of the complaint. The purpose of the alleged interference was to discourage potential buyers from purchasing the company of plaintiff and thereby depress its purchase price substantially below its market value. The court affirmed, however, the dismissal of plaintiff's statutory claims of unfair business practices since the complaint failed to establish the existence of a monopoly. The complaint failed to claim the existence of a combination or trust for the purpose of restricting the flow of trade or commerce.

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