Youst v. Longo

• Decision Date: 27 June 1985
• Citation: 185 Cal.App.3d 50,215 Cal.Rptr. 577
• Court: California Court of Appeals Court of Appeals
• Parties: Previously published at 185 Cal.App.3d 50 185 Cal.App.3d 50 Harlan YOUST, Plaintiff and Appellant, v. Gerald LONGO, Defendant and Respondent. Civ. 69902.

Page 577

215 Cal.Rptr. 577

Previously published at 185 Cal.App.3d 50

185 Cal.App.3d 50

Harlan YOUST, Plaintiff and Appellant, v. Gerald LONGO, Defendant and Respondent.

Civ. 69902.

Court of Appeal, Second District, Division 7, California.

June 27, 1985.

Review Granted Oct. 3, 1985.

Freidberg Law Corp., R. Parker White and Rex-Ann S. Gualco, Sacramento, for plaintiff and appellant.

Sheryll Layne Myrdall, Los Angeles, for defendant and respondent.

John K. Van de Kamp, Atty. Gen., and N. Eugene Hill, Asst. Atty. Gen., and Talmadge R. Jones, Deputy Atty. Gen., as amicus curiae.

Jackson & Nash and Roger D. Smith and Christopher S. Rooney, New York City, as amicus curiae.

JOHNSON, Associate Justice.

This case raises fundamental issues about the ability of a race horse owner to obtain compensation when a competing jockey intentionally or negligently prevents his horse from winning a cash prize in the race. We conclude the third count of the owner's complaint, which in effect alleges a conspiracy to fix a horse race, does make out a valid cause of action for intentional interference with prospective economic advantage. However, we also conclude the Horse Racing Board now offers an administrative remedy of compensation for this sort of economic loss and has jurisdiction to enforce that remedy against non-licensed as well as licensed defendants. Accordingly, we affirm the demurrer for failure to allege exhaustion of administrative remedies and remand with instructions the horse owner be given an opportunity to seek compensation before the Horse Racing Board.

FACTS AND PROCEEDINGS BELOW

Because respondent has failed to file a reply brief, we will "accept as true the statement of facts in the appellant's opening brief." (Cal. Rules of Court, rule 17(b).) Appellant's opening brief sets forth the statement of facts as follows:

On October 24, 1982, appellant's horse, Bat Champ, a standardbred trotter, participated in the eighth race at Hollywood Park in Inglewood, California. Also entered in the race was The Thilly Brudder driven by defendant-respondent, Gerald Longo (Longo). During the race, Longo drove The Thilly Brudder into Bat Champ's path and struck Bat Champ with his whip, thereby causing Bat Champ to break stride. Bat Champ finished the race in fifth place. Thereafter, the Horse Racing Board, by and through the track steward, reviewed the events of the race and disqualified The Thilly Brudder.

On December 3, 1982, plaintiff-appellant filed a complaint for damages against Longo in which he asserted three causes of action: (1) that Longo negligently interfered with Bat Champ, (2) that Longo intentionally interfered with Bat Champ, and (3) that Longo and unidentified individuals (Does I through X) conspired to interfere with Bat Champ's progress in the race.

Thereafter, the complaint was served and Longo demurred, alleging the Los Angeles Superior Court had no subject matter jurisdiction of the causes of action based upon Business and Professions Code section 19440, and that each and every cause of action failed to state facts sufficient to constitute a cause of action. Longo's demurrer was sustained without leave to amend on the latter grounds.

Plaintiff then appealed from the order of dismissal, arguing the complaint does state facts sufficient to constitute a cause of action, or could be pled to set forth facts sufficient to constitute a cause of action. On October 25, 1984, this court filed a majority opinion and a concurring and dissenting opinion in this appeal. We granted a rehearing and vacated these opinions on November 16, 1984. Subsequently, we invited Both in its brief and during oral argument, the Horse Racing Board conceded that as of the time the court sustained the demurrer in this case the Board did not grant compensation to horse owners whose horses were improperly--or even intentionally--prevented from winning prizes in a race. However, the Board did indicate it was willing to grant this form of relief in appropriate cases in the future pursuant to the interpretation of its powers set forth in this court's vacated original majority opinion. (We reiterate this interpretation in the instant opinion.)

amicus curiae briefs from organizations interested in horse racing regulation. Two such briefs were filed--one from the Horse Racing Board and the other from the Jockey's Guild.

DISCUSSION

In this opinion, we first consider whether Youst's complaint alleges facts constituting a cause of action cognizable in the courts. We then determine whether the Horse Racing Board offers an administrative remedy for that loss which Youst must exhaust before seeking relief in the judicial forum.

I. OF THE THREE COUNTS IN PLAINTIFF'S COMPLAINT, ONLY COUNT THREE STATES A CAUSE OF ACTION COGNIZABLE IN THE COURTS EVEN IF PLAINTIFF WERE NOT REQUIRED TO EXHAUST HIS ADMINISTRATIVE REMEDIES OR DOES EXHAUST THOSE REMEDIES IN THE FUTURE

None of the three counts in this complaint states a damage claim for physical injuries suffered by the plaintiff, his jockey or his horse. Nor do they seek recovery for direct damage to plaintiff's property. Instead, although not expressly so labeled, all three counts attempt to allege defendants deprived plaintiff of a prospective economic advantage--the opportunity to win one of the substantial financial prizes awarded the win, place and show horses. We hold counts one and two fail to state a viable cause of action for interference with prospective economic advantage, although the third one does.

A. The Tort of Interference with Prospective Economic Advantage in the Context of a Contest

The tort of intentional interference with prospective advantage generally requires the tortfeasors act either with an improper motive or through unlawful means, or both, to deprive plaintiff of a reasonably probable economic expectancy. (Prosser and Keeton, Torts (5th ed. 1984) § 130, pp. 1005-1010.) " '(T)he cases have turned almost entirely upon the defendant's motive or purpose, and the means by which he has sought to accomplish it.... (A)ny manner of intentional invasion of the plaintiff's interests may be sufficient if the purpose is not a privileged one. Apart from this, however, the means adopted may be unlawful in themselves; ....' " (A.F. Arnold & Co. v. Pacific Professional Ins., Inc. (1972) 27 Cal.App.3d 710, 716, 104 Cal.Rptr. 96.) However, "(t)here can be no recovery unless the plaintiff shows that, except for the tortious interference, there was a reasonable probability that the ... profit would have been obtained. (Citations omitted.)" (4 Witkin, Summary of Cal.Law (8th ed. 1974) § 394, p. 2647, italics added.)

A serious threshold question arises whether plaintiff was deprived of a reasonably probable prospective advantage. To put it another way, can it really be said that Bat Champ would have won this horse race--or ended up in another prize winning position--if defendant had not interfered. Prosser and Keeton summarize the prevailing rule and the rationale in sports contests as follows:

"When the attempt has been made to carry liability ... into such areas as ... deprivation of the chance of winning a contest, ... recovery has been denied; and it is significant that the reason usually given is that there is no sufficient degree of certainty that the plaintiff ever would have received the anticipated This passage does not accurately capture California law on this subject, however. In contrast to many other jurisdictions, the only California court to confront this issue applied the tort of intentional interference with prospective advantage to contests. In Gold v. Los Angeles Democratic League (1975) 49 Cal.App.3d 365, 122 Cal.Rptr. 732, a candidate for Los Angeles City Controller claimed the defendants had interfered with his opportunity to win the race for that political office. The defendants included several political supporters of his opponent who had sent out a false and misleading mailing to voters stating their candidate, not plaintiff, was the officially endorsed candidate of the Democratic Party.

benefits." (Prosser and Keeton, Torts, (5th ed. 1984) § 130, p. 1006.)

The trial court granted defendants' demurrer. However, in a two-to-one decision Division Five of this court reversed, specifically holding these alleged acts stated a cause of action. In that case, the prospective economic advantage was deemed to be the salary plaintiff would have earned had he won the election. Moreover, the majority was not concerned about what some might call the "speculative nature" of plaintiff's injury. Actually plaintiff had lost the election by a four-to-one margin. ¹ Had our Court of Appeal embraced the prevailing rationale summarized in Prosser and Keeton this would have been an easy case to disapprove plaintiff's cause of action. It seems most unlikely plaintiff would have won election and the economic advantage of serving in that office even if defendants had refrained from sending out this one misleading brochure. But this factor did not bother the California court. It upheld the cause of action for interfering with a contestant's opportunity to win a contest with the following language:

"(D)efendants, with knowledge of plaintiff's candidacy, mailed to prospective voters a pamphlet which falsely gave the impression that Charles Navarro, rather than plaintiff, was the candidate for city controller officially endorsed by the Democratic Party; defendants knew the representation was false and made such misrepresentation with the intent to interfere with plaintiff's opportunity for election to the office of city controller; as a result of the misrepresentation and interference, plaintiff was not elected, and thereby suffered damage.... By analogy to the elements of a cause of action for inducing a breach of contract, the foregoing allegations state a cause of action for defendants' intentional interference with plaintiff's opportunity to be elected to the office of city...