Seaman's Direct Buying Service, Inc. v. Standard Oil Co.

This case, which arises out of a complex factual setting, presents three issues for decision. (1) Was the letter agreement signed by Seaman’s Direct Buying Service, Inc. and Standard Oil of California, Inc. sufficient to satisfy the statute of frauds? (2) Is “intent” an element of a cause of action for intentional interference with contractual relations? (3) May a plaintiff recover in"' tort for breach of an implied covenant of good faith and fair dealing in [a noninsurance, commercial contract?

*759 I.

Plaintiff, Seaman’s Direct Buying Service, Inc. (Seaman’s), is a close corporation composed of three shareholders. During the late 1960’s and early 1970’s, Seaman’s operated as a ship chandler, i.e., a dealer in ship supplies and equipment, in the City of Eureka (City). By 1970, Seaman’s business encompassed a number of activities including acting as a “general contractor” for incoming vessels, i.e., refurbishing their supplies, selling tax-free goods for offshore use, and managing a small marine fueling station as the consignee of Mobil Oil Company (Mobil).

Around this time, the City decided to condemn the decrepit waterfront area where Seaman’s was located for…

I concur in sections I, II and III of the court’s opinion. However, I dissent in part from section IV. A contracting party should not *775 be able to deny the existence of a valid contract in order to shield itself from liability for breach of that contract. Today, the court holds that an action will lie in tort against such conduct. However, it refuses to acknowledge that its holding is compelled by this court’s past decisions analyzing the scope of the implied covenant of good faith and fair dealing. This court should not continue to retreat from its own decisional authority in this area.

I also write separately because I believe that this court should forthrightly recognize the principle that, under certain circumstances, a breach of contract may support a tort cause of action for breach of implied covenant.

Over 25 years ago, this court held that a breach of the implied covenant of good faith and fair dealing may give rise to a tort cause of action. (Majority opn., ante, at p. 768; Comunale v. Traders General Ins. Co. (1958) 50 Cal.2d 654 [ 328 P.2d 198 , 68 A.L.R.2d 883 ]; Crisci v. Security Ins. Co. (1967) 66 Cal.2d 425, 432 [ 58 Cal.Rptr. 13 , 426 P.2d 173 ].) Since that…

THE COURT. [*]

This case, which arises out of a complex factual setting, presents three issues for decision. (1) Was the letter agreement signed by Seaman's Direct Buying Service, Inc. and Standard Oil of California, Inc. sufficient to satisfy the statute of frauds? (2) Is "intent" an element of a cause of action for intentional interference with contractual relations? (3) May a plaintiff recover in tort for breach of an implied covenant of good faith and fair dealing in a noninsurance, commercial contract?

Plaintiff, Seaman's Direct Buying Service, Inc. (Seaman's), is a close corporation composed of three shareholders. During the late 1960's and early 1970's, Seaman's operated as a ship chandler, i.e., a dealer in ship supplies and equipment, in the City of Eureka (City). By 1970, Seaman's business encompassed a number of activities including acting as a "general contractor" for incoming vessels, i.e., refurbishing their supplies, selling tax-free goods for offshore use, and managing a small marine fueling station as the consignee of Mobil Oil Company (Mobil).

Around this time, the City decided to condemn the decrepit waterfront area where Seaman's was located for…