San Francisco Design Center Associates v. Portman Companies

The competition privilege is an affirmative defense to the tort of interference with prospective economic advantage. We hold that to defeat the privilege plaintiff must prove defendants committed an unlawful or illegitimate act which is independently actionable.

Facts and Procedural History

In December of 1985, plaintiff San Francisco Design Center Associates purchased real property at 555 Ninth Street, San Francisco (the Greyhound site), from Greyhound Corporation, intending to develop it as a wholesale furniture mart. Plaintiff’s principals Robert Fippinger and Michael Oettinger, acting through Affiliated Capital Corporation, bought the property in plaintiff’s name for $6.3 million. They borrowed $4.5 million from WestAmerica Bank, $3.1 million of which was paid to Greyhound. That loan was secured by a first deed of trust. Greyhound took back a note for $3.2 million which was secured by a second deed of trust. Both notes were due in one year.

Golden Gate Apparel Association (Association) is a nonprofit corporation whose members are independent apparel sales representatives. The main function of the Association is to conduct trade shows. In the 1980’s the Association…