California Court Allows Subcontractor to Pursue Project Owner for Tortious Interference
Highlights
A California appellate court recently held that an owner on a construction project could be liable to a subcontractor for the tort of intentional interference with the subcontractor’s contract with the general contractor
The decision further eroded an apparent exception under California law that immunized parties from tortious interference claims who were technically strangers to a contract, but had an “economic interest”
While the decision is not limited to the construction context, it could have broad implications for owners and contractors on California construction projects
In a case of first impression in the district, California’s Fourth District Court of Appeal found in Caliber Paving Co., Inc. v. Rexford Industrial Realty & Management, Inc. that an owner on a construction project could be liable to a subcontractor for the tort of intentional interference with the subcontractor’s contract with the general contractor. The court held that even though the owner may have had an “economic interest” in the subcontractor’s contract with the general contractor, the owner was still a “stranger” to the contract and could be liable for intentional interference.
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