Miramar Truck v. General Motors

Filed 3/14/07 Miramar Truck v. General Motors CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from a judgment of dismissal after demurrers of the Superior Court of San Diego County, Jeffrey B. Barton, Judge. Affirmed as modified.

This appeal by Miramar Truck and Auto Center, Inc. ("MTAC") and James J. Williams, Jr. (collectively Plaintiffs) arises from a judgment entered against them in their lawsuit against General Motors Corporation, its employee Doug Fields (the GM defendants) and several other defendants, including auto dealerships and certain individuals (the non-GM defendants).^[1] In 2001, Plaintiffs unsuccessfully sought to purchase an automobile dealership from the now-dismissed defendant, Miramar Pontiac, and contend in the current version of the complaint (second amended complaint, the operative complaint) that the GM defendants and non-GM defendants caused them damages by interfering with their prospective economic advantage and committing other related torts.

In connection with ruling on the demurrers by both sets of defendants, the trial court took judicial notice of underlying arbitration proceedings that had been compelled in this same lawsuit, and resulting rulings formalized by court orders, that led to the dismissal of former defendant Miramar Pontiac. (Code Civ. Proc.,  1281.2; Evid. Code,  452.) The trial court also took judicial notice of certain administrative proceedings and a resulting judgment involving a company owned by the individual plaintiff Williams before the New Motor Vehicle Board (the Board).

Based on the record before it, the trial court sustained demurrers by the GM defendants and non-GM defendants to all causes of action in the operative complaint, without leave to amend, while simultaneously overruling the demurrer to one additional claim (ninth cause of action, for interference with contractual relations), which has since been voluntarily dismissed by Plaintiffs pursuant to a letter agreement among the parties in anticipation of the outcome of this appeal regarding the remaining claims. A judgment was entered accordingly and this appeal was taken.

On appeal, Plaintiffs assume that this is an appealable judgment and argue the trial court erroneously ruled on the demurrers on all theories, and/or failed to grant Plaintiffs appropriate leave to amend to change their main allegations (i.e., interference with prospective economic advantage and interference with contractual relations); Plaintiffs instead seek to characterize the operative complaint as adequately making an alternative claim for inducement of breach of contract. In response, both sets of defendants likewise assume the judgment is properly appealable and argue that none of Plaintiffs' various theories is supported by the allegations or the record, including the underlying arbitration proceedings, and therefore the trial court acted correctly in entering judgment in their favor.

We have examined the record and conclude this matter is properly before us as an appealable judgment that resolves all the issues with prejudice. As we will explain, the stipulated judgment is sufficiently final and conclusive in nature to allow appellate review of all of Plaintiffs' claims on the merits of all the issues presented. On the merits, the trial court correctly applied principles of res judicata, arising out of the underlying arbitration matter, to find that plaintiff MTAC did not adequately plead and cannot amend to plead successful causes of action for interference with prospective economic advantage or the related business torts discussed. We also conclude that the individual plaintiff has failed to plead sufficient facts to support his related claims for infliction of emotional distress.

Further, Plaintiffs do not, as a matter of law, adequately state their causes of action for libel and false light invasion of privacy, nor can they show an opportunity to amend is required. With respect to the dismissed cause of action, the appropriate course of action is for us to affirm the judgment as modified to reflect that, as a matter of law, the judgment currently represents a full resolution of all of Plaintiffs' claims with respect to both of these sets of defendants. (Morehart v. County of Santa Barbara (1994) 7 Cal.4th 725, 740-743 (Morehart).)

FACTUAL AND PROCEDURAL BACKGROUND

A. Contract and Complaint

For purposes of analyzing the demurrer, the courts will accept as true the facts alleged in the complaint. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The operative complaint alleges in 2001, plaintiff MTAC negotiated with the individual owner of Miramar Pontiac, Charles McLean, to purchase the Miramar Pontiac dealership. MTAC and Miramar Pontiac entered into a contract, the asset sale agreement (or buy-sell agreement), on June 14, 2001. This contract was subject to a condition that Miramar Pontiac could not transfer the dealership without the approval of defendant GM, pursuant to GM's Dealer Sales and Service Agreement with Miramar Pontiac ("Dealer Agreement"). The Dealer Agreement and the Vehicle Code prohibit dealership transfers without the manufacturer's consent, which shall not unreasonably be withheld. (Veh. Code,  11713.3(d)(1), 11713.3(e) [provides that a manufacturer may not withhold its consent to a proposed buy-sell transaction "unreasonably"].)

Miramar Pontiac submitted a proposal to GM seeking to have it issue a new Dealer Agreement to MTAC and to approve Williams as the dealer-operator. Article 12.2 of the Dealer Agreement required GM to "consider . . . and not arbitrarily refuse to approve" this proposal after considering among other things "(a) the personal, business and financial qualifications of the proposed dealer operator and owners [i.e., Williams] and (b) whether the proposed change is likely to result in a successful dealership operation with acceptable management, capitalization, and ownership which will provide satisfactory sales, service, and facilities at an approved location, while promoting and preserving competition and customer satisfaction." Under article 12.2.3 of the Dealer Agreement, GM was required to make a written response to the proposal and "specify its reasons" if it did not approve.

On August 20, 2001, GM disapproved the proposal. In a "Personal and Confidential" letter signed by defendant Fields and sent to Williams and McLean (the turndown letter), GM relied on several listed factors: first, it attached a copy of findings made by the Board in 1996, in which the Board permitted GM to terminate Williams's previous Oldsmobile Dealer Agreement (for his company Coast Motors), due to inadequate sales performance and low customer satisfaction results. Next, the Board found intentional misconduct on Williams's part, in "taking care of" certain San Diego judges financially at the request for an attorney who appeared before them, Patrick Frega, and in providing "false and misleading information" to the Commission on Judicial Performance which investigated those judges.Also, GM stated that the current application was incomplete, because Williams had omitted the information about his previous Oldsmobile dealership in summarizing his previous business experience. The letter had an attachment referring to GM policies on changes in dealership ownership/management (setting for qualification criteria).

This turndown letter did not specifically refer to the federal guilty plea that Williams had entered in connection with a related perjury investigation about information provided to the federal grand jury, again in connection with the judicial investigation. It is undisputed that Williams's guilty plea was eventually withdrawn and no conviction resulted.

The Third District Court of Appeal later upheld the Board's 1996 decision (reversing an intervening superior court ruling), ruling that a fair interpretation of the Dealership Agreement meant that such a guilty plea qualified as grounds for disapproval of a transfer, even though no conviction resulted. (Coast Motors, Inc. v. New Motor Vehicle Board (June 25, 1998, C026482 [nonpub. opn.].) The court did not reach an alternate ground for terminating the dealership, that continued operation by Williams's company Coast Motors would be harmful to the public. The Supreme Court denied review of the Court of Appeal decision.

After the turndown letter was sent, MTAC and Williams sought to challenge GM's turndown decision by requesting Miramar Pontiac's owner, McLean, to go to GM and again seek its consent, as allowed by contract. As later found by the arbitrator, McLean never did so but never clearly refused to do so. Although Williams had also been asked by McLean to manage the dealership, that separate agreement also was terminated. Instead, on December 26, 2001, MTAC assigned the buy-sell agreement to Cornes Motors, Inc. (Cornes).

MTAC and Williams filed their original complaint on August 15, 2002. They alleged that Miramar Pontiac had breached the buy-sell agreement with MTAC (first and second causes of action) and that the GM defendants, as well as Mr. McLean, members of his family and several related dealerships (the "non-GM defendants") had tortiously interfered with plaintiffs' prospective advantage, intentionally and negligently inflicted emotional distress on Williams, and libeled and placed Plaintiffs in a false light (third through eighth causes of action).

Cornes also sued Miramar Pontiac and other defendants, and that action was consolidated with this one. Eventually, as we next explain, both MTAC and Cornes went through contractual arbitration proceedings with Miramar Pontiac.

B. Arbitration Proceedings

Pursuant to a petition filed by Miramar Pontiac, which was sued in the first and second causes of action, the superior court ordered that MTAC go to arbitration on its claims for breach of the buy-sell agreement, which contained an arbitration clause. Those claims were consolidated with other arbitration proceedings that were ongoing between Miramar Pontiac and the assignee of the buy-sell agreement, Cornes.

There was no arbitration provision applicable to the current defendants, GM/Fields or the non-GM defendants, and court proceedings on the tort claims against them were stayed during the other arbitration matters.

Following 16 days of hearings, the arbitrator (retired Superior Court Judge Arthur Jones) issued his decision, determining that there had been no breach of contract by Miramar Pontiac, before plaintiff MTAC assigned away its interest in the buy-sell agreement to Cornes. In the continued arbitration proceedings, Cornes prevailed and obtained specific performance of the asset sale contract and an award of damages against Miramar Pontiac.Our focus is not on Cornes but on the arbitrator's decision that Miramar Pontiac had not breached the contract as to MTAC/Williams, before the assignment was made.

As to MTAC, the arbitrator summarized the evidence and found as follows. MTAC was claiming that Miramar Pontiac, prior to assignment, breached its contract of sale, through McLean's refusal to pursue an action before the Board, as provided by the buy-sell agreement's provision, paragraph 4.2(b). However, "At no time did McLean refuse to proceed to the Board prior to December 26, 2001. Mr. Williams testified that McLean had neither said he would, or would not, go to the Board pursuant to paragraph 4.2(b) and furthermore asserted at paragraph 3 of the Assignment that he has no knowledge of any default on the part of the seller, Miramar Pontiac. After the December 26, 2001 assignment, [MTAC] could have a case against the seller only if the breach was actionable before the assignment." However, the arbitrator stated that the evidence showed that it was McLean who "suggested an assignment as an alternative to the [Board] pursuit, which suggestion was accepted and acted upon, bringing in Cornes Motors as an assignee. Not only was there no breach by refusal, but the suggestion was adopted and consummated by assignment to Cornes on December 26, 2001 without further addressing Mr. McLean or his counsel."

The arbitrator thus concluded that the assignment was honored by Miramar Pontiac, and that McLean on behalf of Miramar Pontiac had the capacity to make the asset sale. (There were family questions about his physical and mental health at the time.) In any case, the arbitrator rejected MTAC's breach of contract claims, on the ground that MTAC had assigned its rights under the buy-sell agreement to Cornes before any alleged breach occurred. The arbitrator ordered that MTAC take nothing from Miramar Pontiac regarding the alleged breach of the asset sale contract of June 14, 2001.

The trial court later confirmed the arbitration award, which is not challenged on appeal. This disposed of the first and second causes of action, which had been asserted solely against Miramar Pontiac.

C. Demurrers and Rulings

Once the arbitration stay was lifted, both sets of defendants brought a succession of demurrers and related motions regarding all of the remaining causes of action (nos. 3-8), on the ground that they failed to state sufficient facts. As to the original complaint, the GM defendants requested judicial notice of previous administrative proceedings involving the individual plaintiff Williams before the Board, along with the Board's decision and the Third District Court of Appeal opinion affirming the administrative findings against him. (Again, we note that those 1996-1998 decisions disposed of his challenge to the loss of his Oldsmobile franchise in 1996, a different dispute than the Pontiac dealership problems involved in this 2001 lawsuit). (Evid. Code, 452, subd. (d).) Judicial notice was granted and the demurrers were sustained with leave to amend, and a first amended complaint was filed.

The first amended complaint again alleged causes of action for intentional and negligent interference with prospective economic advantage against all of the defendants, intentional and negligent infliction of emotional distress against all of the defendants, and false light invasion of privacy and libel against the GM defendants. Plaintiffs were claiming that a "Buick zone manager" tortiously told Miramar Pontiac's owner that his supply of Pontiacand GMCvehicles would be cut off if he agreed to assist Williams in challenging the GM turndown decision.

Along with demurring to the first amended complaint, the GM defendants again requested judicial notice of the Board proceedings, and the non-GM defendants requested judicial notice of the arbitration orders and award. GM argued, in part, that its turndown of Mr. Williams's company was justified by the Dealership Agreement provisions regarding changes in ownership, and was reasonable as a matter of law based on substantial evidence, such as the Board's earlier findings.

Judicial notice was granted and the demurrers by all defendants were sustained without leave to amend. The key rulings were as follows: As to interference with prospective advantage (nos. 3 and 4), the court noted that the arbitrator's award barred Plaintiffs from challenging the factual findings upon which the ruling was based, due to the operation of the doctrine of res judicata. The arbitrator found there had been no breach of the asset sale agreement by Miramar Pontiac as to MTAC, and the present defendants could rely on the arbitrator's findings' preclusive effect. The court ruled that MTAC and its parties in privity were bound by those findings, and res judicata was being asserted against them, which was proper. There was no requirement that these defendants had been party to the arbitration proceedings, in order for them to rely upon res judicata for claims preclusive effect. The trial court ruled on the basis of claims preclusion, and stated this was not an improper use of issue preclusion.

The court additionally found that Plaintiffs had failed to allege an independent wrong by the defendants, such as would be necessary under Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376 (Della Penna),to state a cause of action for interference with prospective economic advantage. Plaintiffs failed to allege essential facts to show that GM's alleged turndown of the proposed buy-sell agreement was independently wrongful. Further, the separate libel cause of action (no. 8) was defective and also could not provide a basis for supporting the third and fourth causes of action (because the statements in the turndown letter were true and there was no known requirement for GM to add additional clarifying facts about later events). The court found, "GM's only interference was exercising a contractually approved right," under the Dealership Agreement.

Also, the court found Plaintiffs had essentially abandoned the emotional distress and invasion of privacy claims (nos. 5, 6 & 7), by failing to file opposition to them. Plaintiffs' request for leave to add an alternative cause of action for "inducing breach of contract" was denied, on the ground that the arbitrator (Judge Jones) had determined there had been no breach by Miramar Pontiac, on which that claim was essentially based. However, Plaintiffs were granted leave to plead a ninth cause of action for "Intentional Interference with Contractual Relations."

Plaintiffs filed their second amended complaint, which mistakenly included all the same causes of action to which demurrers had already been sustained without leave, and they also added MTAC's ninth cause of action for interference with contractual relations, pursuant to the leave granted at the previous hearing (based on the same previous allegations, paras. 1-159). All defendants again demurred, and a motion to strike was brought. The court took judicial notice as requested of the same material as before, and reiterated its previous ruling sustaining the demurrers to the third through eighth causes of action without leave to amend (additionally striking them). However, the court overruled the demurrers to the ninth cause of action (interference with contractual relations, alleged against all defendants). The court noted that there could be factual matters outside the complaint on whether performance on the contract was possible and whether the assignment was only given after the futility of performance.

D. Proceedings: Stipulated Dismissal

Following the rulings on demurrer, the parties entered into a letter agreement under which Plaintiffs agreed to dismiss the ninth cause of action for interference with contractual relations, and not to refile that claim unless they obtained appellate reversal of the trial court's ruling on the demurrer. Defendants agreed that in the event Plaintiffs refiled that claim after any successful appeal, they would not argue for a bar of the claim on technical grounds (the dismissal, statute of limitations, res judicata, collateral estoppel or law of the case). Judgment was then prepared, including, as preliminary recitals, that the parties had reached an agreement pursuant to which Plaintiffs "submitted a request for dismissal of the [cause of action for interference with contractual relations] as to all defendants, thereby eliminating the sole remaining cause of action of the Second Amended Complaint." The judgment itself provides that these Plaintiffs shall take nothing on their second amended complaint. This appeal followed.

This Court reviewed the appellate briefing and ordered the parties to augment the record with the stipulation of dismissal. The parties submitted the letter agreement reflecting the terms of their stipulation as outlined above. The superior court was not, at our request, able to locate in the court file any copy of the dismissal of the cause of action for interference with contractual relations. Some of the court file is missing and the parties were not able to locate a copy of the dismissal in their own files. We then requested that the parties provide supplemental briefing as to whether we should dismiss the appeal for lack of jurisdiction. We received supplemental letter briefs from Plaintiffs and the GM defendants, all of whom oppose dismissal. We then held two sessions of oral argument, regarding both dismissal and the merits.

DISCUSSION

We first address the appealability issues surrounding the judgment, in light of its preliminary recital that a demurrer was overruled to the claim for interference with contractual relations, but pursuant to an agreement among the parties, the Plaintiffs "submitted a request for dismissal of the Ninth Cause of Action as to all defendants, thereby eliminating the sole remaining cause of action of the Second Amended Complaint." The judgment decree is that these Plaintiffs shall take nothing on their second amended complaint. This record requires us to set forth basic principles for determining appellate jurisdiction and then apply them to the particular factual and procedural context of this case.

As we will explain, the judgment in this case does not represent any violation of the one final judgment rule in light of the rules regarding appealability. We first set out those rules, then discuss the merits of the arguments on the demurrer dismissal. Finally, we revisit the appealability issues with respect to the specific terms of this judgment.

I

INTRODUCTION: APPEALABILITY ISSUES

Under Code of Civil Procedure section 904.1, subdivision (a), a party may appeal " '[f]rom a judgment, except . . . an interlocutory judgment,' i.e., from a judgment that is not intermediate or nonfinal but is the one final judgment. [Citation.] Judgments that leave nothing to be decided between one or more parties and their adversaries, or that can be amended to encompass all controverted issues, have the finality required by section 904.1, subdivision (a). A judgment that disposes of fewer than all of the causes of action framed by the pleadings, however, is necessarily 'interlocutory' (Code Civ. Proc.,  904.1, subd. (a)), and not yet final, as to any parties between whom another cause of action remains pending." (Morehart,supra, 7 Cal.4th 725, 740-741.) In that case, the Supreme Court outlined the policies supporting the enforcement of the one final judgment rule, mainly the avoidance of piecemeal dispositions and multiple costly and oppressive appeals. (Id. at p. 741, fn. 9.) The holding was, "an appeal cannot be taken from a judgment that fails to complete the disposition of all the causes of action between the parties even if the causes of action disposed of by the judgment have been ordered to be tried separately, or may be characterized as 'separate and independent' from those remaining." (Id. at p. 743.)

An appellate court will apply these rules in light of the procedural status and context in which the appealability issues arise in a particular case. (See Tudor Ranches, Inc. v. State Comp. Ins. Fund (1998) 65 Cal.App.4th 1422, 1429 (Tudor Ranches).) In that case, the court construed Morehart, supra, 7 Cal.4th 725, as abrogating an earlier rule, as stated in Building Industry Assn. v. City of Camarillo (1986) 41 Cal.3d 810, 817 (Building Industry), which might have allowed an appeal from a stipulated judgment which did not dispose of all claims between the parties. An appellate court faced with this situation must determine whether the judgment before it actually disposed of all of the appellant's claims. (Tudor Ranches,supra, at pp. 1429-1430.)

In preparation for oral argument in this matter, this Court obtained further briefing from the parties explaining their respective positions on the finality of the judgment in this case, in light of the stipulation and the missing document representing the clerical dismissal of the ninth cause of action. We sought to determine whether the judgment represented a conditional or consent judgment that should not be considered to be appealable. (Tudor Ranches, supra, 65 Cal.App.4th at p. 1428.) In Hoveida v. Scripps Health (2005) 125 Cal.App.4th 1466, 1469, this Court dismissed an appeal for lack of jurisdiction, where the judgment was entered into to enable review after adverse rulings to the plaintiff, but was expressly made without prejudice with regard to a particular remaining cause of action being exempted. That judgment was not sufficiently final for appellate jurisdictional purposes, because it did not dispose of all causes of action between the parties.

In other cases, however, the courts have permitted a party to obtain immediate review of an adverse ruling on a critical claim by stipulating to an adverse judgment with prejudice on all of its claims, in order to appeal from that judgment. "In such a case, there would be no claims left unresolved and, hence, no violation of Morehart [v. County of Santa Barbara(1994) 7 Cal.4th 725]." (Tudor Ranches, supra, 65 Cal.App.4th 1422, 1429.) The relevant inquiry should be whether the judgment in this case did dispose of all of plaintiff's claims. (Ibid., citing Edwards v. Centex Real Estate Corp. (1997) 53 Cal.App.4th 15, 26, fn. 6 (Edwards).)

The judgment as entered includes a number of preliminary "whereas" recitals, including the statement that the demurrer to the ninth cause of action was overruled, but that remaining claim was dismissed and eliminated, and the judgment also unequivocally states that Plaintiffs shall take nothing on their second amended complaint. The record also includes the letter agreement between the parties providing for Plaintiffs' counsel to execute a dismissal of the cause of action for interference with contractual relations, to be filed by opposing counsel along with the proposed judgment. The letter agreement further provides that the dismissal would be without prejudice and with a waiver of the statute of limitations bar and other bars to further assertion of the claim. The actual clerical dismissal form is missing, as is one of the volumes of the superior court file.

In the supplemental briefing obtained, both Plaintiffs' counsel and the GM defendants have explained their understanding that the related issues arising out of the arbitration in this matter and the res judicata effect of that ruling would be dispositive of the viability of the dismissed ninth cause of action, whichever way those were resolved on appeal. One option suggested by defendants would be the exercise of our discretion to treat the appeal as a writ of mandamus, in case of insufficient finality; however, we decline to do so. We acknowledge that the judgment did not expressly implement the language of the parties' letter agreement and its reference to the dismissal could be construed as ambiguous. Our initial conclusion is that the judgment language that Plaintiffs shall take nothing overcomes the ambiguity in the "whereas" language. However, reading the judgment in light of the entire record, the issue arises whether Plaintiffs successfully preserved a right to proceed on the ninth cause of action depending on the outcome of this appeal.

We are mindful of the rule that since "an appealable judgment or order is essential to appellate jurisdiction, the parties cannot by any form of consent make a nonappealable order appealable." (9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, 14, pp. 73-74.) To properly analyze this judgment and its finality, regardless of the parties' intentions, we must keep in mind not only the procedural status but also the nature of the legal issues resolved by the judgment. (See Tudor Ranches, supra, 65 Cal.App.4th 1422, 1429.) The main issue presented is the correctness of the rulings on demurrers, particularly the critical res judicata issues arising out of the arbitrator's ruling that there was no breach of the Miramar Pontiac contract, before it was assigned to a third party. Our reading of the entire record and briefing may permit us to construe the dismissal as having been entered with prejudice, subject to our determination of the merits of the issues raised by the demurrers and their relationship to the allegations of the now-dismissed ninth cause of action, with respect to whether it may be revived, as apparently contemplated by the parties.

Although the parties cannot confer jurisdiction by stipulation, we may nevertheless take into account any express concessions or assertions in the briefs, which are "frequently treated as an admission of a legal or factual point, controlling in the disposition of the case. [Citations.]" (9 Witkin, Cal. Procedure, supra,  597, pp. 631-632.) Similarly, " '[W]hile briefs and argument are outside the record, they are reliable indications of a party's position on the facts as well as the law, and a reviewing court may make use of statements therein as admissions against the party.' [Citation.]" (DeRose v. Carswell (1987) 196 Cal.App.3d 1011, 1019, fn. 3, questioned on another point in Sellery v. Cressey (1996) 48 Cal.App.4th 538, 544-547.)

With these principles in mind, we next undertake an examination of the merits of the demurrer rulings on the existing causes of action. We then apply those legal conclusions in a different procedural context, i.e., examining the finality of the judgment and dismissal reached under those circumstances stated above.

II

DEMURRERS

A demurrer tests the legal sufficiency of the complaint. When the trial court has sustained a demurrer without leave to amend, the appellate court will assume as true all facts that may be implied or inferred from those expressly alleged, to determine whether they state a cause of action on any available legal theory. (Grinzi v. San Diego Hospice Corp. (2004) 120 Cal.App.4th 72, 85.) While we accept as true all facts properly pled in the complaint, we do not assume the truth of "contentions, deductions or conclusions of law." (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967 (Aubry).) We also consider all properly judicially noticed matters. (Evid. Code,  452, 459.)

The trial court exercises its discretion in deciding whether to grant leave to amend. (Aubry, supra, 2 Cal.4th at p. 967.) Absent a reasonable possibility that any pleading defects can be cured by amendment, the trial court does not abuse its discretion by denying leave to amend. (Ibid.) Appellant carries the burden of proving an amendment would cure any defect. (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.)

The issues here require us to analyze not only the elements of the respective causes of action pled, but also the res judicata/collateral estoppel effect of the arbitration rulings that may affect our conclusions. We will first discuss the claims for interference with prospective economic advantage, and the related business torts that Plaintiffs also sought to allege through amendment (including, in pt. IIC, the now-dismissed ninth cause of action). We also consider the remaining claims, with respect to the libel and invasion of privacy theories (pt. IIB) and infliction of emotional distress (pt. IID). In part III, we conclude the appealability analysis.

It is necessary to point out that in its rulings, the trial court found Plaintiffs had essentially abandoned the invasion of privacy claims (no. 7), as well as the emotional distress theories (nos. 5 & 6), by failing to file opposition to them. Plaintiffs object that this was not a proper consideration. We need not base our decision on that ground. It is well accepted that "[i]f the decision of the lower court is right, the judgment or order will be affirmed regardless of the correctness of the grounds upon which the court reached its conclusion. Two theories seem to be involved here: First, that the appellate court reviews the action of the lower court and not the reasons for its action; second, that there can be no prejudicial error from erroneous logic or reasoning if the decision itself is correct." (9 Witkin, Cal. Procedure, supra, 340, p. 382.) Likewise, where different grounds are asserted in a demurrer, "it is immaterial that the trial judge sustained it on an untenable ground. [Citations.]" (Id. at  342, p. 384.) We will accordingly address the merits of these questions of law, on a de novo basis.

A

Third and Fourth Causes of Action by MTAC:

Interference with Prospective Economic Advantage

1. Introduction: Pleadings

In Judicial Council of California Civil Jury Instructions (2006), CACI No. 2202 and supporting authority, the elements of a cause of action for intentional interference with prospective economic relations are set out. The elements are "(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant." (Youst v. Longo (1987) 43 Cal.3d 64, 71, fn. 6; italics added.)

The Supreme Court clarified in Della Penna, supra, 11 Cal.4th at page 393, that "a plaintiff seeking to recover for an alleged interference with prospective contractual or economic relations must plead and prove as part of its case-in-chief that the defendant not only knowingly interfered with the plaintiff's expectancy, but engaged in conduct that was wrongful by some legal measure other than the fact of interference itself." (Italics added.)

Case law such as Bed, Bath & Beyond of La Jolla, Inc. v. La Jolla Village Square Venture Partners (1997) 52 Cal.App.4th 867, 881 explains the pleading and proof requirements for such wrongful conduct. "Since the crux of the competition privilege is that one can interfere with a competitor's prospective contractual relationship with a third party as long as the interfering conduct is not independently wrongful (i.e., wrongful apart from the fact of the interference itself), Della Penna's requirement that a plaintiff plead and prove such wrongful conduct in order to recover for intentional interference with prospective economic advantage has resulted in a shift of burden of proof. It is now the plaintiff's burden to prove, as an element of the cause of action itself, that the defendant's conduct was independently wrongful and, therefore, was not privileged rather than the defendant's burden to prove, as an affirmative defense, that it's [sic] conduct was not independently wrongful and therefore was privileged." (Ibid.; original italics.)

In these causes of action alleging intentional and negligent interference with prospective economic advantage, Plaintiffs claimed a "prospective economic advantage" in the form of "the benefit of [MTAC's] bargain pursuant to the Agreement for Sale of Assets." The wrongful conduct alleged is GM's libeling of Williams through the turndown letter, and threatening McLean that his dealership's supply of vehicles would be cut off if he sold it to Williams. As to the non-GM defendants, they are alleged to have "engage[d] in anti-competitive and illegal conduct calculated to kill the deal and to thereby unfairly benefit themselves and the companies in which they had a present or future interest."

The negligence-based claim is similar and alleges defendants had a duty not to ignore the damage that would be caused if the buy-sell agreement did not go through. (CACI No. 2204.) " 'The tort of negligent interference with economic relationship arises only when the defendant owes the plaintiff a duty of care.' " (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 348.)

We address the validity of each of the interference with prospective advantage claims separately as to each set of defendants. First, however, we compare Plaintiffs' alternate proposed theories.

2. Alternate Theories Asserted: Business Torts

The trial court denied Plaintiffs leave to amend to state an alternate theory, which would have been a cause of action for inducing breach of contract. The trial court applied the legal conclusion reached by the arbitrator that there was no breach by Miramar Pontiac, before the assignment to a third party occurred, such that Plaintiffs presently had no contract rights to enforce. The court cited to BAJI 7.80, which is now covered by CACI No. 2200, "Inducing Breach of Contract." As stated in the notes to CACI No. 2200, " '[C]ases have pointed out that while the tort of inducing breach of contract requires proof of a breach, the cause of action for interference with contractual relations is distinct and requires only proof of interference.' (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1129, internal citations omitted.)" (Sources and Authority foll. CACI 2200 (Fall 2006) p. 1029.)

We must also examine, in addition to those claims that were the subjects of the rulings (interference with prospective economic advantage/inducing breach of contract), the language of the now-dismissed ninth cause of action, which pled MTAC's theory of interference with contractual relations. The requirements for this cause of action are set out in CACI No. 2201 and its notes as follows: " 'The elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant's knowledge of this contract; (3) 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.' (Pacific Gas & Electric Co. , supra, 50 Cal.3d 1118, 1126, internal citations omitted.)" (Sources and Authority foll. CACI 2201 (Fall 2006) p. 1032.) The advantages of this latter theory for Plaintiff MTAC are that first, less than an actual breach of contract can be actionable. (LiMandri , supra, 52 Cal.App.4th 326, 348.) Second, under Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 55-56, to claim an interference with an existing contract, "it is not necessary that the defendant's conduct be wrongful apart from the interference with the contract itself." The focus in such a claim is on whether a plaintiff's own performance to a third party was made more difficult, unlike in the alternative claims (where these Plaintiffs are claiming defendants stopped Miramar Pontiac from performing).

3. Trial Court's Ruling: Res Judicata/Collateral Estoppel Principles as Bar

Now that we have set out these different theories that appeared in the pleadings in various forms, we may analyze the trial court's conclusions about the preclusive effect of the arbitrator's decision, that there was no actionable breach by Miramar Pontiac during a time period when MTAC had enforceable contract rights. The principal demurrer ruling was that the arbitrator's award barred Plaintiffs from challenging the factual findings upon which the award was based, due to the operation of the doctrine of res judicata. The present defendants were allowed to rely on the arbitrator's findings because MTAC and its party in privity (Williams) were present at that proceeding and were thus bound by those findings. The court said it was not necessary that the present defendants be involved at arbitration to assert this defense of claims preclusion.

The parties now dispute whether claims preclusion or issue preclusion should properly be found to apply here. According to Plaintiffs and appellants, the holding of Vandenberg v. Superior Court (1999) 21 Cal.4th 815 (Vandenberg), is controlling, that "the policies underlying the doctrine of collateral estoppel must yield to the contractual basis of private arbitration," and "a private arbitration award, even if judicially confirmed, can have no collateral estoppel effect in favor of third persons unless the arbitral parties agreed, in the particular case, that such a consequence should apply." (Id. at pp. 833-834.) There was no such express agreement here.

According to defendants and respondents, however, the relevant portion of Vandenberg is its narrow emphasis on restricting the use of issue preclusion in the arbitration context, while also stating "[n]othing" in the decision "imposes or implies any limitations on the strict res judicata, or 'claim preclusive,' effect of a California law private arbitration award. [Citations.]" (Vandenberg, supra, 21 Cal.4th at p. 825, fn. 2.)

In Brinton v. Bankers Pension Services, Inc. (1999)76 Cal.App.4th 550, 557 (Brinton), the court cited Vandenberg, supra, 21 Cal.4th 815, as recognizing that "a prior judgment confirming an arbitration award may bar a subsequent lawsuit on the same cause of action. [Citations, including Thibodeau v. Crum (1992) 4 Cal.App.4th 749, 755.]"

Defendants argue that since these business tort claims are entirely derivative of the Plaintiffs' contract claims, which failed at arbitration, the arbitrator's conclusion that MTAC had no viable breach of contract claim is fatal to the tort claims as well. They rely on Brinton,supra, 76 Cal.App.4th 550, 556-558, in which the court used the primary rights theory and determined that two successive proceedings brought by the plaintiff actually involved the same injury, even though pled different ways against different defendants. "The existence of a cause of action 'is based upon the harm suffered, as opposed to the particular theory asserted by the litigant.' [Citations.]" (Id. at p. 557.) There, the plaintiff had already made a securities claim and was now pursuing a complaint that sought recovery for the same injury: "The allegations of wrongful conduct contained in the two pleadings are virtually identical. Both the claim and the complaint alleged plaintiff suffered financial losses because of [agent's] purported misrepresentations concerning the character of the investments. Each sought to hold [the principals] liable based on the allegation [the agent] was acting as each entity's agent when he made the purported misrepresentations. Given this similarity in the respective pleadings, both the arbitration and the current lawsuit were based on alleged violations of the same primary right. [Citations.]" (Ibid.)

Therefore, in Brinton,supra, 76 Cal.App.4th 550, even though the current defendant had not been involved in the previous securities arbitration proceeding, its liability was merely derivative of the agent's, who was involved in that arbitration. The defendant in Brinton was allowed to assert a claim preclusion defense arising out of the arbitration ruling, which had involved its agent and the same primary rights.

To analyze claims preclusion principles, we must first reiterate and distinguish among the various types of allegations plaintiff MTAC is making in these claims. MTAC's major allegation is that Miramar Pontiac failed to go to the Board to appeal the GM turndown letter, and this constituted a breach of contract by Miramar Pontiac. The arbitrator said this was not so, and the trial court accepted its finding as having claims preclusive effect on any derivative claims. With respect to the role of the Board as anticipated in the contract (resolving a transfer dispute), it is no longer valid. In Mazda Motor of America, Inc. v. California New Motor Vehicle Bd. (2003) 110 Cal.App.4th 1451, 1456, the appellate court upheld a trial court determination that " '[t]here is no statutory authority permitting the Board to exercise jurisdiction over the matter at issue here: a petition filed by a dealer against a manufacturer/distributor asking the Board to rule that the latter improperly refused its consent to a transfer of ownership.' " Rather, the jurisdiction of the Board to resolve differences under Vehicle Code section 3050, subdivision (c)(2) extends to resolving disputes that involve members of the public, not disputes involving a dealer and distributor. (Mazda Motor, supra, at p. 1461.) Thus, at least after 2003, Williams/MTAC had no right to seek to require Miramar Pontiac to go to the Board to resolve such a dispute, although the 2001 contract included such a provision (seller would seek appropriate relief from the Board or a court if buyer believed the manufacturer had unjustifiably denied permission to transfer the dealership). In the 2004 arbitration proceedings, the arbitrator appropriately evaluated MTAC's claims as of the time of the contract dealings and found them unmeritorious.

Returning to the other types of allegation MTAC is making regarding interference with prospective advantage, it claims the turndown letter by GM itself contained libelous or defamatory material (also emotionally distressing material to Williams). Next, MTAC is claiming that the non-GM defendants interfered with its existing contractual rights from Miramar Pontiac, and/or prevented its own performance of contract. MTAC thus contends it continued to have contractual rights with Miramar Pontiac until it assigned away its rights to Cornes in December 2001, and that it continues to have tort claims today. However, in that assignment document, it is acknowledged that the other contracting party, Miramar Pontiac, was not in default at that time.

Due to the interrelationship of Plaintiffs' various theories, the trial court was correct that the earlier arbitration proceedings must have claims preclusive effect regarding the current claims. We agree with the argument by the GM defendants that the same primary right of plaintiff MTAC was involved at the arbitration proceedings as here, i.e., the alleged right to contractual performance by Miramar Pontiac. MTAC never lost such rights before assigning away its interests in the contract, since Miramar Pontiac did not breach the agreement before that time. Nor could GM or the other defendants have induced any such breach, since no breach ever happened. Those undisputed and established facts, shown by judicially noticeable materials, demonstrate that MTAC's current interference with prospective economic advantage claims are fatally flawed, because there was no such advantage that was lost. Plaintiffs are unable to prove an essential element of the interference claims, that there was a probability of future economic benefit in the relationship. Without the approval of GM, there was no asset sale contract, and GM has pled sufficient material to support a reasonable basis to withhold that approval. Any failure by Miramar Pontiac to appeal the GM turndown letter was not a breach of contract, nor can Plaintiffs show any causation of losses through such failure. This is so whether the focus is on the nonperformance by Miramar Pontiac or plaintiff MTAC's alleged inability to perform.

Our conclusions are similar as to the non-GM Defendants. Initially, however, we disagree with their argument that the original order sending the asset sale dispute to arbitration somehow globally resolved the issue of whether all the current claims against the remaining non-GM defendants ultimately are based on the sales contract. The order compelling arbitration made such an observation, but the order itself was limited to its procedural context and does not amount to "law of the case," as claimed in the respondent's brief by the non-GM defendants.

Instead, the relevant point is that MTAC is attempting to plead a claim against the non-GM defendants that depends on a showing of a probability of future economic benefit to itself from the deal. However, the claims preclusive effect of the arbitration proceedings and ruling destroyed the validity of any such claim. (CACI No. 2202.) MTAC assigned its rights to Cornes in December 2001, and stated that the other contracting party, Miramar Pontiac, was not in default at that time. Accordingly, as to the non-GM defendants, there was admittedly no economic advantage that was lost.

An additional defect in the pleading against the non-GM defendants is the vagueness of the allegations about their wrongful conduct. In Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1159, fn. 11 (Korea Supply), the Supreme Court set out criteria for determining the independent wrongfulness of an act, for purposes of pleading the tort of intentional interference with prospective economic advantage. It is not enough to allege a defendant had an improper motive, but instead, to be actionable, "such an act must be wrongful by some legal measure, rather than merely a product of an improper, but lawful, purpose or motive." Here, there are only general allegations against those defendants, of antitrust violations or other illegal or anti-competitive conduct. The alleged bad motive is not enough to show the necessary wrongful acts. (Ibid.) Mainly, without the essential breach of contract finding on the part of Miramar Pontiac, these general allegations are insufficient to show wrongful or negligent acts of interference with a realistic or lasting prospective economic advantage on the part of MTAC.

Similarly, with regard to Plaintiffs' request to amend to plead a claim of inducing breach of contract, it was properly denied because the trial court could properly rely on the findings of the arbitrator, as applied to all defendants, that there was no breach of an existing valid contract between Plaintiffs and Miramar Pontiac at the relevant times. (CACI No. 2200 " '[C]ases have pointed out that while the tort of inducing breach of contract requires proof of a breach, the cause of action for interference with contractual relations is distinct and requires only proof of interference.' [Citation.]" Based on the primary rights involved, claims preclusion was properly applied here and Plaintiffs have no basis to argue, as they do in their opening brief, that the issue of whether Miramar Pontiac breached its contract is still a remaining issue which can be relitigated in the future, whether in the current context or the proposed context of alleged inducement of breach of contract.

4. Trial Court's Ruling: Insufficient Allegations of Wrongful Conduct/Libel?

In the ruling, the court additionally found Plaintiffs had failed to allege an independent wrong by the defendants, such as would be necessary under Della Penna, supra, 11 Cal.4th 376,to state a cause of action for interference with prospective economic advantage. That is, Plaintiffs did not allege essential facts to show that GM's turndown of the proposed buy-sell agreement was independently wrongful. The court found, "GM's only interference was exercising a contractually approved right," under the Dealership Agreement. This is a pleading requirement that raises a different set of issues from the claims preclusion rule.

To plead these claims against the GM defendants, plaintiff MTAC must claim there were "intentional acts on the part of the defendant designed to disrupt the relationship," and those acts must be wrongful. (CACI No. 2202; Della Penna, supra, 11 Cal.4th at p. 389.) However, under the Dealership Agreement, GM had pre-existing contract rights to disapprove a proposed buyer, as long as the exercise of those rights was reasonable. Defendants provided judicially noticeable material of the Board's findings and the background of those findings. Vehicle Code section 11713.3, subdivision (e) allows a manufacture to decline a dealership transfer application, if a reasonable basis for doing so exists. In Rickel v. Schwinn Bicycle Co. (1983) 144 Cal.App.3d 648, summary judgment was upheld for a manufacturer on a distributor's cause of action for interference with prospective economic advantage, which alleged that a requested approval of transfer of distributorship rights (from the distributor to a potential buyer) had been wrongfully withheld. The court said that the manufacturer had the contractual right to withhold consent, since those rights were personal and nonassignable, and there was unrebutted evidence to support the manufacturer's belief that the potential buyer might not qualify financially to act as a distributor. (Id. at pp. 661-662.)

On a threshold basis, it appears that the GM disapproval of the dealership transfer was within its contractual rights, and was not wrongful as a matter of law. However, since the trial court ruling also found the libel allegations, based on the same materials, were insufficient to support a pleading of the GM defendants' wrongful conduct, we will discuss those related issues together in the next section. Both the libel and invasion of privacy theories will be considered here, due to the similarity in the facts pled in the operative complaint and the grounds raised on these demurrers.

B. Libel/Invasion of Privacy

In its ruling, the trial court made a finding that the separate libel cause of action (no. 8) was defective and could not provide a basis for supporting the third and fourth causes of action (because the statements in the turndown letter were true and there was no known requirement for GM to add additional clarifying facts about later events). It should be noted that both of the plaintiffs are pursuing this claim, but the non-GM defendants are not named in these defamation causes of action.

Libel is generally defined as "a false and unprivileged publication by writing, printing . . . , which exposes any person to hatred, contempt, ridicule, or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure him in his occupation." (Civ. Code,  45; 5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts,  539, p. 793.) As a defense, the defendant must " 'justify,' i.e., show the truth of the statements, in the sense in which the plaintiff's innuendo explains their defamatory character, provided, of course, that they are capable of the meaning imputed by the innuendo. [Citations.] But the defendant need not justify every word of the alleged defamatory matter; it is sufficient if the substance of the charge be proved true, irrespective of slight inaccuracy in the details. [Citations.] 'The concept that it is the gist or sting of the alleged defamatory statements that must be false rather than the specific details of the charge is deeply rooted in our common law.' [Citations.]" (Id. at 557, p. 815.)

As an alternative to a libel cause of action, Plaintiffs plead false light invasion of privacy (seventh cause of action). As explained by Witkin, invasion of privacy can be actionable even without defamation of the plaintiff: " 'It is enough that he is given unreasonable and highly objectionable publicity that attributes to him characteristics, conduct or beliefs that are false, and so is placed before the public in a false position.' [Citation.]" (5 Witkin, Summary of Cal. Law, supra, 673, pp. 987-988.) The elements of the tort of invasion of privacy are set out as follows: " 'One who gives publicity to a matter concerning another that places the other before the public in a false light is subject to liability to the other for invasion of his privacy, if (a) the false light in which the other was placed would be highly offensive to a reasonable person, and (b) the actor had knowledge of or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the other would be placed.' [Citation.]" (Ibid.)

The scope and effect of the 1998 Court of Appeal unpublished opinion upholdi