Charles C. Chapman Building Co. v. California Mart

• Decision Date: 18 December 1969
• Citation: 82 Cal.Rptr. 830,2 Cal.App.3d 846
• Parties: CHARLES C. CHAPMAN BUILDING COMPANY, a California corporation, Plaintiff and Appellant, v. CALIFORNIA MART, a copartnership, etc., et al., Defedants and Respondents. Civ. 34036.
• Court: California Court of Appeals Court of Appeals

Page 830

82 Cal.Rptr. 830

2 Cal.App.3d 846

CHARLES C. CHAPMAN BUILDING COMPANY, a California corporation, Plaintiff and Appellant, v. CALIFORNIA MART, a copartnership, etc., et al., Defedants and Respondents.

Civ. 34036.

Court of Appeal, Second District, Division 4, California.

Dec. 18, 1969.

Rehearing Denied Jan. 5, 1970.

Hearing Denied Feb. 13, 1970.

Monta W. Shirley, George W. Nilsson and Mark G. Ancel, Los Angeles, for plaintiff and appellant.

Katz, Hoyt & Blum, Charles J. Katz and Louis C. Hoyt, Los Angeles, for defendants and respondents.

DUNN, Associate Justice.

Appellant owns and operates an office and commercial building known as the 'Chapman Building, ' located at 756 South Broadway, Los Angeles. Prior to 1955, the Chapman Building was occupied mainly by professional tenants, such as doctors, dentists, attorneys and accountants. In 1955 a number of sales representatives of wholesalers and manufacturers of children's wear approached the owners of the Chapman Building and requested office space. Pursuant to such request, the owners moved the sixth floor tenants to other floors in order to house children's wear representatives on that floor. This removal was necessary as it was not possible to house these two types of tenants on the same floor because of the physical differences between the types of offices required by the professions and by the apparel representatives. In order to meet the needs of the children's wear tenants, the premises were altered by such means as removing walls, changing doorways and lighting, and installing asphalt tile flooring. Gradually, as more representatives of the children's wear industry requested to move into the Chapman Building, the process of emptying floors of professional tenants and making alterations continued until eight of the twelve floors of the Chapman Building were occupied exclusively by childern's wear representatives. The total cost to appellant of making the necessary alterations was approximately $300,000. By 1963 a substantial number of children's wear representatives in Los Angeles had offices in the Chapman Building. All of these tenants had executed written leases for terms varying from two to five years. Most of the leases were renewed at least once, and some as many as three times.

In January 1964 respondents completed a building known as the 'California Mart,' located at the southeast corner of Main and East Ninth Streets in Los Angeles. This building was constructed for the primary purpose of catering to, and housing offices and showrooms for, manufacturers, wholesalers and distributors engaged in various branches of the apparel industry and trades. The California Mart was a modern building with central air-conditioning, inside parking and many conveniences attractive to tenants and their customers. The Chapman Building, approximately fifty years old in 1964, had no automatic elevators, central air-conditioning or inside parking, and lacked other modern conveniences.

Respondents competed with appellant for tenants, and solicited persons occupying space in the Chapman Building to enter into leases for space in the California Mart. In soliciting appellant's tenants, respondents were aware that most of them occupied space in the Chapman Building either as month-to-month tenants or under leases, many of which had unexpired terms. Respondents granted to these tenants, including some of the recognized leaders in the children's wear industry, various allowances and concessions as an inducement to lease space in the California Mart. Such allowances and concessions included: (1) credits for a part or all of the rent which the tenant was obligated to pay for the remaining term of his lease with appellant; (2) allowances for improvements to be made by the tenant in the space leased to him in the California Mart; (3) cash refunds if the tenant fulfilled the obligations under his lease agreement with respondents; (4) contributions to lump sum payments to be made by the tenant to pay appellant in full all of the remaining rent due under the tenant's lease with appellant; (5) allowances and credits of fixed amounts for defined periods against the rent payable under the tenant's lease with respondents; or (6) assumption by respondents of payment of all or part of the rent due appellant under its lease with the tenant.

In December 1963 appellant received notice from some of its children's wear tenants that they intended to move. Thereafter, a large number of such tenants moved to the California Mart. At the time of their removal, some of these tenants had been occupying space in the Chapman Building as month-to-month tenants, and others had been occupying under written leases. Some of the latter group moved at or about the time their leases expired, and some moved before their leases expired. By 1968 practically all of the children's wear representatives who had been tenants of the Chapman Building in 1963 and 1964 had moved to the California Mart.

Appellant commenced this action for declaratory relief, for damages based upon contract interference and for an injunction. The cause was tried without a jury. At the conclusion of appellant's case, respondents moved for judgment pursuant to Code Civ.Proc. § 631.8. ¹ The motion was granted. Findings of fact and conclusions of law were signed and judgment entered for respondents. This appeal is from the judgment.

I. Did Respondents Cause The Children's Wear Tenants To Breach Their Respective Leases With Appellant?

In order that a plaintiff may recover against a defendant for having caused a breach of contract, the plaintiff must show (1) that he had a valid and existing contract, (2) that the defendant had knowledge of the contract and intended to induce its breach, (3) that the contract was in fact breached by the other contracting party, (4) that the breach was caused by the defendant's unjustified and wrongful conduct, and (5) that plaintiff has suffered damage. Springer v. Singleton, 256 Cal.App.2d 184, 187--188, 63 Cal.Rptr. 770 (1967); Freed v. Manchester Service, Inc., 165 Cal.App.2d 186, 189, 331 P.2d 689 (1958). One of the essential elements of a cause of action for inducing a breach of contract is that the defendant had knowledge of the contract and intended to induce its breach. Springer v. Singleton, Supra, 256 Cal.App.2d at page 188, 63 Cal.Rptr. 770.

The findings of a trial court made after granting a motion for judgment pursuant to Code Civ.Proc. § 631.8 are entitled to the same respect on appeal as are any other findings of a trial court, and are not erroneous if supported by substantial evidence. Trigg v. Smith, 246 Cal.App.2d 510, 515, 54 Cal.Rptr. 858 (1966); Estate of Pack, 233 Cal.App.2d 74, 77, 43 Cal.Rptr. 361 (1965); Greening v. General Air-Conditioning Corp., 233 Cal.App.2d 545, 550, 43 Cal.Rptr. 662 (1965). Where two or more inferences reasonably can be drawn from the facts, an appellate court is without power to substitute its deductions for those of the trial court. Trigg v. Smith, Supra, 246 Cal.App.2d 510, 515, 54 Cal.Rptr. 858; Leiter v. Eltinge, 246 Cal.App.2d 306, 313, 54 Cal.Rptr. 703 (1966); Woolliscroft v. Starr, 225 Cal.App.2d 667, 669, 37 Cal.Rptr. 570 (1964). The rules applying to appellate review of a nonsuit granted in a jury trial are not applicable. Columbia Engineering Co. v. Joiner, 231 Cal.App.2d 837, 842, 42 Cal.Rptr. 241 (1965). We treat the court's findings made pursuant to granting a motion under Code Civ.Proc. § 631.8 as though made after a trial in which evidence was produced by both sides; thus the evidence is viewed in the light most favorable to respondents. Weinstock v. L. A. Carpet, Inc., 234 Cal.App.2d 809, 811, 44 Cal.Rptr. 852 (1965).

The trial court found among other things that respondents 'did not seek to, did not intend, and did not induce or cause any tenant occupying space in the Chapman Building to violate or breach his lease or contract' with appellant. We examine the record to ascertain if the finding is supported by the evidence. Eight of appellant's children's wear tenants who had moved to the California Mart testified in substance as follows: Before completion of the California Mart, each was approached by a representative of the California Mart who pointed out the advantages which that building would offer to persons in the apparel industry. In some cases, the representative showed the tenant a brochure illustrating such advantages. At the time they were so contacted, some of these tenants had unexpired leases with the Chapman Building. In some instances these leases were discussed with the California Mart representative who offered various incentives for moving to the California Mart, such as: payment of all or a part of the rent due for the remainder of the tenant's lease with appellant, several months' free rent under the lease with respondents, or reimbursement for improvements which the tenant would make in space leased in the California Mart. In some cases, these offers were refused. Four of these witnesses testified that no one associated with the California Mart ever told him to breach his lease with appellant, or that he should not pay the rent due for the remaining term of such lease. Each month appellant's former tenants who had moved to the California Mart were sent statements for the rent due under their unexpired leases. Each of the witnesses who was questioned on the subject testified that he paid the entire rental due the Chapman Building under his lease. All testified that it is important for manufacturers' representatives in the apparel industry to be located in the same building, because it is more convenient for prospective buyers to contact all representatives at the same place. Some of the witnesses stated this was the reason they moved to the California Mart.

From the foregoing summary it is apparent that substantial evidence supports the finding that respondents did not intend to induce any...