Filed 4/28/20 Mistras Group, Inc. v. Peterson CA2/1

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

MISTRAS GROUP, INC.,

Plaintiff and Respondent,

v.

DANIEL PETERSON et al.,

Defendants and Appellants.

B293556

(Los Angeles County

Super. Ct. No. BC625805)

APPEAL from a judgment of the Superior Court of Los Angeles County, David Sotelo, Judge. Affirmed.

Ropers, Majeski, Kohn & Bentley, Terry Anastassiou, Ernest E. Price and Arnold E. Sklar for Defendants and Appellants.

The ByrneLaw Office and John P. Byrne for Plaintiff and Respondent.

________________________

 

Mistras Group, Inc. (Mistras) provides nondestructive pipeline examination and testing (NDT) services to energy companies and other entities. While working at Mistras, Daniel Peterson incorporated a new business called Prime Compliance Solutions (Prime), which engaged in the same line of business as Mistras. Peter Baird and Alfred Medina, who also worked at Mistras and were long-time friends of Peterson, helped to establish Prime. Prime began competing against Mistras and eventually secured a valuable contract from one of Mistras’s customers. Mistras alleged that contract was obtained through wrongful conduct, including misappropriation of Mistras’s confidential proprietary information and rigging Mistras’s bid for the same work so that it was less competitive than Prime’s bid.

Mistras sued Prime, Peterson, Baird and Medina, and the matter proceeded to a jury trial. The jury found in favor of Mistras on claims for breach of contract, breach of the duty of loyalty, and intentional interference with present and prospective economic advantage. The trial court entered judgment against defendants for actual damages of $1,150,000. This appeal followed.

Defendants ask this court to reverse the judgment on the grounds that insufficient evidence supports the award of damages, as well as the findings of breach of contract and intentional interference with present and prospective economic advantage. We find substantial evidence to support the jury’s verdict, and no prejudicial error. We therefore affirm the judgment in its entirety.

FACTUAL BACKGROUND

A. The Business of Mistras

Mistras provides NDT services nationwide through numerous “business units,” including one in Signal Hill, California. The purpose of NDT is to record data on the metallic integrity of piping and other vessels by examining for conditions such as internal erosion. Magnetic testing, liquid penetrant testing, and radiographic testing are some of the more common forms of NDT.

Radiographic testing, which consists of using an x-ray source to scan pipelines in a matter similar to dental x-rays, is the category of testing most relevant to this appeal. Radiographic testing is potentially dangerous because it uses a camera containing radioactive isotopes. This requires the radiographic testing technician to take precautions to avoid excessive exposure to radioactive material. NDT firms that offer radiographic testing are highly regulated by the Federal Nuclear Regulatory Commission and the State of California, and are required to retain a full-time radiation safety officer.

In order to perform NDT, workers must achieve the status of “technician” by taking classes, passing exams, and demonstrating hands-on proficiency. The process can take years. There are multiple testing disciplines, each with its own separate testing and evaluation protocols. Through an industry trade association, the American Society of Nondestructive Testing (ASNT), NDT firms such as Mistras certify successful applicants as, for example, “ASNT Level II” or “Level II” technicians in one or more of the various disciplines. Mistras invests generously in training its employees to achieve and adhere to Level II and higher technical status.

Mistras’s Signal Hill office was responsible for stewarding contracts procured by Mistras, staffing the work, and administering daily operations under those contracts. The Signal Hill office typically had 100 or so employees, overseen by a general manager who ran the office. The general manager had full responsibility for the business unit, which included financial performance, operations, and sales. The general manager was also entrusted with the evaluation and professional development of promising NDT and oversight technicians, and maintaining business relationships administered by the Signal Hill office.

Oversight of the NDT process is generally conducted by a wholly separate entity to ensure that the testing and documentation are done in compliance with applicable regulations. Oversight is unique, highly technical work. As part of the oversight process, radiographic testing technicians rated Level II or higher review testing data collected by field technicians in an office setting.

B. Mistras Hires Peterson, Baird, and Medina

In 2014, Mistras hired Peterson as its field compliance manager, and Baird as the general manager of the Signal Hill office. Mistras hired Medina as its radiation safety officer. The radiation safety officer was the lead technical expert on Mistras’s radiation safety team and acted as the principal technical resource on that subject.

At the time of their hiring, the individual defendants each signed an acknowledgment that he “received the [Mistras] Employee Handbook and the [Mistras] Code of Conduct and that it is my responsibility to read [them]. I understand that the Handbook outlines the terms and conditions of my employment with the Company and, together with the Code of Conduct, my duties, responsibilities and obligations of employment with the Company. I agree to abide by and be bound by the rules, policies and standards set forth in the Handbook and the Code of Conduct.”

The employee handbook and code of conduct collectively provide guidance on, among other things: (1) prohibitions on working with a competitor or competing with Mistras; (2) rules against using Mistras’s property for personal gain; (3) confidentiality; (4) limitations on outside employment; (5) duties to exercise good judgment and uphold the standards of the company; and (6) avoiding and reporting conflicts of interest. The manual further provided that, “some employees are required to sign a confidentiality agreement as a condition of employment.”

Lastly, the manual expressly provided that it was “designed to acquaint employees with [Mistras] . . . and provide [them] with information about working conditions, employee benefits and Company policies that affect employment at [Mistras]. . . . [¶] . . . ¶] . . . This Handbook is not a contract for continued employment.”

At trial, the parties’ testimony about whether the individuals were actually given the handbook and code of conduct conflicted. Each individual denied receiving the documents, while Mistras’s human resources representative stated she gave a prepared package containing the handbook and code of conduct to each of them. The individuals and a member of Mistras’s human resources department all testified at trial that none of the individuals was asked to sign a separate confidentiality agreement.

C. SoCalGas Hires Mistras

In 2014, the utility Southern California Gas Company (SoCalGas) hired a new contract administrator named Kyle Lee. Lee was long-time friends with Peterson and Medina. Following a deadly natural gas explosion in San Bruno, California, which prompted a demand that utilities better assess the safety of their pipes, SoCalGas hired Mistras in January 2015 under a three-year oversight contract. The individual defendants managed Mistras’s work for SoCalGas.

D. Peterson Incorporates Prime

In 2015, Peterson decided it was the “right time” in his life and he “had enough contacts in the industry” to get “some Level III consulting work.” Around this time, Peterson informed Lee of his intention to start Prime.

In June 2015, the individual defendants began seeking out payroll services for Prime. On August 27, 2017, while on a business trip for Mistras, Peterson, Baird, and Medina met for several hours to discuss the new business, and used a LegalZoom web portal during the meeting. Medina testified that the individuals’ only task during that meeting was to check whether the name “Prime Compliance Services” was available for use. Significant evidence at trial suggested this explanation of what was discussed was not credible.

Three days later, Medina downloaded Mistras’s technical manuals and emailed them to his private email account. These Mistras proprietary technical manuals were marked for “Internal Use Only” and “may not be copied.” On September 15, 2015, during business hours, Medina emailed himself another Mistras technical manual. From late August through late September, Medina converted the technical manuals into manuals for use by Prime. Baird also emailed Prime a copy of the contract between Mistras and SoCalGas, including rate information.

Peterson incorporated Prime on September 4, 2015. Shortly thereafter he filed a statutory statement of information listing himself, Medina and Baird as officers of Prime. Defendants assert that, after Baird and Medina “objected” to being listed as officers, Peterson filed an amended statement listing himself as president, secretary, and chief financial officer of Prime and removing any reference to Baird or Medina.

Mistras, however, contended that the amended statement was a ruse designed to conceal the actual ownership of Prime. At trial, Mistras presented a detailed questionnaire from LegalZoom filled out by Peterson in August 2015 that identified Peterson as an intended 49 percent shareholder in Prime, Baird’s wife as a 45 percent shareholder, and Medina as a 6 percent shareholder in Prime. Mistras also proffered evidence of four separate bank deposits made into Prime’s corporate account on October 19, 2015, i.e., after the amended statement had been filed, that echoed the 51 to 49 percent split between Peterson and Baird/Medina.

E. Peterson Leaves Mistras

Peterson established Prime’s website on October 10, 2015. A week later, Peterson gave Mistras verbal notice he was leaving his employment at the company. Peterson planned to leave Mistras by the end of October but, at Mistras’s request, he stayed at the company until November 6, 2015, devoting an extra week to training his replacement.

After Peterson gave notice, but while he was still working at Mistras, Peterson submitted a vendor application to SoCalGas for Prime to perform certain “discretionary” (i.e., non-bid) work that was then being performed by Mistras. SoCalGas documents showed that Lee was the “requestor” for the services. SoCalGas approved Prime’s application on October 27, 2015, at which time Peterson was still employed by Mistras. SoCalGas entered into a contract with Prime effective November 1, 2015, for a portion of oversight work previously being performed by Mistras.

That same month, Medina (who was still employed by Mistras), sent specialized questionnaires to Prime designed by Mistras to test and certify employees in radiographic testing. Medina also sent the general answer keys to Prime, but explained in an email he was having trouble pasting Prime’s logo on the test. He testified that he did so in order to “help” Prime.

For several months, Mistras and Prime coexisted peacefully. Prime sent work it could not take on to Mistras for performance, and Mistras hired Prime as a vendor to teach weld quality. In January 2016, Mistras referred oversight work it could not staff to Peterson for performance, and in February and April of that year Mistras hired and paid Prime to provide training seminars to Mistras employees.

F. SoCalGas Awards Prime a Competitively-bid Contract for Which Mistras Also Bid

In early 2016, SoCalGas created a four-person committee to develop a competitive bidding process for a long-term oversight contract. The committee included Lee and Genevi Dewberry, two people familiar with the work quality of Peterson, Baird and Medina.

In March 2016, SoCalGas informed Mistras, which had been performing the oversight work and which had billed the maximum amount permitted under its 2014 contract, that SoCalGas was going to open competitive bidding on a new oversight contract. SoCalGas’s intent was to identify a long-term vendor solution for testing oversight requirements. The work required at least eight to 17 radiographic technicians and would span from central California to the Mexican border. SoCalGas identified three companies qualified to bid, including Mistras and Prime.

SoCalGas solicited bids for the new oversight contract on April 18, 2016. Peterson submitted Prime’s bid on April 25, 2016. At the time, he had 18 years of pipeline inspection experience and specific knowledge of rates and operations in the industry. Nonetheless, Peterson was the only person working for Prime at the time, a fact which Lee disregarded and failed to convey to his own employer, SoCalGas. SoCalGas was also unaware that Prime was a start-up company and that Lee was friends with the individuals. Dewberry, Lee’s colleague at SoCalGas, testified Lee should have disclosed his personal relationship with Peterson.

SoCalGas vetted the bids through an online portal with questions including how many certified radiographic testing technicians the bidder employed. In Prime’s written response to that inquiry, Prime stated, “[w]e . . . have 8 qualified applicants that would directly fill the requirements of this proposal. All are readily available. Prime . . . has a quick staff-up plan in place that will be executed should demand require.”

Meanwhile, Baird, who was still working for Mistras at the time, assisted in the preparation of Mistras’s bid. Mistras presented evidence that, during the bidding process, there were 11 hours of telephone calls between Baird’s personal cell phone and Peterson’s number. At the last moment prior to the bidding deadline, Baird raised the rates Mistras charged SoCalGas over the previous year. Simultaneously, Prime lowered the rates it had been charging for several months. As a result, Prime’s rates were symmetrically lower than those of Mistras over three categories. Mistras submitted its bid to SoCalGas one week after Prime’s bid was submitted.

In analyzing the three competitive bids, SoCalGas evaluated two dozen criteria and rated the bidders on an ascending scale of one to five. Prime’s ratings in almost all categories equaled or exceeded Mistras’s ratings, and Prime’s overall rating substantially exceeded Mistras’s. Mistras’s bid was higher than Prime’sin various categories of costs Prime’s bid was 8 percent lower.

On May 20, 2016, SoCalGas informed Peterson that Prime won the bid. Hours later, Baird resigned without notice, citing his grandparents’ hospitalization and the change in management at Mistras as contributing factors. Five days later, Baird accepted an offer of full-time employment from Prime.

G. Prime Hires Technicians From Mistras

Around June 20, 2016, Mistras’s radiographic testing technicians abruptly quit with little or no notice. All of the technicians sent memos to Mistras announcing their resignations, but none mentioned Prime. According to Prime, it solicited none of these hires and this mass exodus was accomplished without a single email or text message. However, these technicians (along with Baird) made up the “eight qualified applicant” radiographic technicians identified in the “quick staff-up” plan Prime had previously presented to SoCalGas as part of its bid—indicating the potential hires were arranged in advance.

A few days later, SoCalGas sent notice to Mistras that its existing oversight contract was completed. Mistras claims the lost revenue from the SoCalGas oversight work was significant and led to layoffs of employees.

H. Prime Submits Technical Materials to SoCalGas Prior to Starting Oversight Work

The contract awarded by SoCalGas to Prime required Prime to present the utility with a highly technical ASNT manual known as an SNT-TC-1A that addressed Prime’s written practices, its quality controls, and its protocol for certifying technicians. Every NDT provider establishes its own practices and quality manuals. While the ASNT procedures are publicly available, and many procedures are incorporated verbatim into providers’ manuals, each provider must adapt the guidelines to its own unique needs. Prime could not start working with SoCalGas without such a manual. Mistras asserts the evidence and testimony demonstrate Prime’s SNT-TC-1A manual was plagiarized from Mistras’s manual.

In addition to providing the manual, before any provider can place a technician with a third party, the provider must attest to the individual technician’s certifications and work experience. Mistras elicited testimony at trial that Baird falsified one or more of the attestation documents.

I. Mistras Fires Medina

After Mistras lost the oversight contract to Prime, it began to take a closer look at Prime and its history. Mistras learned for the first time that Prime had been formed in September 2015, while Peterson and Baird were still employed at Mistras, and that the original statement of information filed with the Secretary of State identified the individuals as Prime’s executive officers.

Mistras confronted Medina with its findings in June 2016. When Medina was unable to offer an explanation for his actions, Mistras fired him.

PROCEDURAL HISTORY

On July 1, 2016, Mistras filed and served its complaint against Prime, Peterson, Baird, and Medina. Simultaneously, Mistras served a demand that defendants preserve all evidence related to Mistras’s claims. Mistras contends defendants ignored the demand, and all of Prime’s witnesses and radiographic testing technicians deleted their text messages.

The matter proceeded to trial on Mistras’s first amended complaint, which included claims for breach of contract, breach of the duty of loyalty, and intentional interference with present and prospective economic advantage and business relationships. The jury rendered a verdict in favor of Mistras. The jury found that each of the individuals breached their employment contracts with Mistras and awarded damages of $287,000 against Peterson, $285,000 against Baird, and $65,000 against Medina. The jury found that each of the individuals breached their respective duties of loyalty to Mistras, and interfered with Mistras’s bidding with SoCalGas, but awarded no additional damages against the individuals for these findings. However, the jury awarded $513,000 in damages against Prime for the interference claim. The total damages awarded were $1,150,000.

Notably, the mathematical proportions of the damages among the individuals match their ownership percentages as reflected on the original statement of information: 49 percent to Peterson, 45 percent to Baird, and 6 percent to Medina.

The trial court entered judgment on July 12, 2018, and denied defendants’ subsequent motion for new trial or judgment notwithstanding the verdict. This timely appeal followed.

DISCUSSION

Defendants raise three claims of error, all of which concern the sufficiency of certain evidence. First, defendants assert no substantial evidence supports the jury’s damages award, because Mistras was in fact benefited—not harmed—by losing the oversight contract. Second, they argue there was insufficient evidence for the jury to find the individual defendants breached an employment contract with Mistras. Finally, defendants assert there was no evidence of wrongful conduct independent of ordinary acts of competition to support the jury’s verdict on the intentional interference with prospective economic advantage claim.

A. Defendants Have Waived Their Substantial Evidence Claims

1. Standard of Review

When a party challenges the sufficiency of the evidence supporting a jury verdict, we apply the substantial evidence standard of review. (Wilson v. County of Orange (2009) 169 Cal.App.4th 1185, 1188.) Under this standard, “[a]ll conflicts in the evidence are resolved in favor of the prevailing party, and all reasonable inferences are drawn in a manner that upholds the verdict. [Citations.]” (Holmes v. Lerner (1999) 74 Cal.App.4th 442, 445.) “[W]e do not evaluate the credibility of the witnesses or otherwise reweigh the evidence. [Citation.] Rather, ‘we defer to the trier of fact on issues of credibility. [Citation.]’ [Citation.]” (Escamilla v. Department of Corrections & Rehabilitation (2006) 141 Cal.App.4th 498, 514-515.) “ ‘[S]ubstantial’ ” evidence is that which is of “ ‘ “ponderable legal significance,” ’ ‘ “reasonable in nature, credible, and of solid value . . . .” ’ [Citations.]” (Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 631.) The testimony of a single witness may constitute substantial evidence. (In re Marriage of Mix (1975) 14 Cal.3d 604, 614.)

Under the substantial evidence standard of review, when the jury’s or the trial court’s “factual determination is attacked on the ground that there is no substantial evidence to sustain it, the power of an appellate court begins and ends with the determination as to whether, on the entire record, there is substantial evidence, contradicted or uncontradicted, which will support the determination, and when two or more inferences can reasonably be deduced from the facts, a reviewing court is without power to substitute its deductions for those of the trial court. If such substantial evidence be found, it is of no consequence that the trial court believing other evidence, or drawing other reasonable inferences, might have reached a contrary conclusion.” (Bowers v. Bernards (1984) 150 Cal.App.3d 870, 873-874.)

2. Waiver

As a corollary to the rule requiring review of the entire record, “ ‘[w]hen appellants challenge the sufficiency of the evidence, all material evidence on the point must be set forth and not merely their own evidence. [Citation.] Failure to do so amounts to waiver of the alleged error and we may presume that the record contains evidence to sustain every finding of fact. [Citation.]’ [Citations.]” (Toigo v. Town of Ross (1998) 70 Cal.App.4th 309, 317.)

As Mistras points out, defendants’ opening brief omits a substantial amount of evidence relevant to the jury’s verdict. Instead of setting forth all material facts, defendants present a bowdlerized version that leaves out incriminating testimony and documents troublesome to their arguments. Nor do defendants address or explain these omissions on reply. Defendants have thus waived their substantial evidence challenges.

Even if we did not treat defendants’ claims as waived, we would nevertheless conclude that the assertions of error are without merit for the following reasons.

B. Substantial Evidence Supports the Jury’s Damages Award

Defendants argue the judgment must be reversed because it “cannot be reconciled” with the purported fact that Mistras suffered no damage. Defendants assert that Mistras ultimately procured a more lucrative contract with SoCalGas for which it would not have been eligible if Mistras had secured the 2016 oversight contract it lost to Prime. Specifically, after SoCalGas awarded the oversight contract to Prime in June 2016, SoCalGas awarded an NDT contract to Mistras in 2017.

Defendants’ argument rests upon the “special benefit” doctrine. That rule states as follows: “ ‘When the defendant’s tortious conduct has caused harm to the plaintiff or to his property and in so doing has conferred a special benefit to the interest of the plaintiff that was harmed, the value of the benefit conferred is considered in mitigation of damages, to the extent that this is equitable.’ [Citations.]” (Heckert v. MacDonald (1989) 208 Cal.App.3d 832, 839.) “Further, the ‘special benefit’ doctrine reflects the basic compensatory theory underlying tort damages by restricting recovery to the harm actually incurred. [Citations.]” (Ibid.)

According to defendants, the evidence was undisputed that SoCalGas will not retain the same company to provide both testing and oversight of that testing; thus, if SoCalGas had awarded the oversight contract to Mistras, it could not have also awarded the subsequent testing contract to Mistras. The value of the NDT contract ($4.75 million) outweighed that of the oversight contract (approximately $3.9 million). In other words, even crediting all findings of their wrongdoing, defendants claim “the jury compensated Mistras for a pecuniary loss it did not suffer.”

Mistras disputes defendants’ contention that it could not have been awarded the 2017 NDT contract if it had secured the 2016 oversight contract. Mistras notes that SoCalGas, itself, stated NDT work was available to the firm winning the oversight contract. Further, Lee testified that the fact Mistras had an existing contract for testing work did not preclude the company from bidding on the oversight contract. Evidence also showed that Mistras had previously performed both testing and oversight work for SoCalGas at the same time. Although defendants argue the circumstances here were different because of the nature of the oversight work, the jury was entitled to reject that position and resolve that factual dispute in favor of Mistras.

At trial, Mistras offered the expert opinion testimony of certified public accountant Ronald Greene. Greene applied a gross profit margin of 25.19 percent (a number to which defendants’ expert, discussed below, stipulated) to the record of payments made by SoCalGas to Prime under the oversight contract. Greene also reviewed a redacted version of Prime’s general ledger. In calculating Mistras’s damages, Greene did not identify any Prime revenues from sources other than the oversight contract because, according to Greene, there were no other contracts. He also considered mitigation but rejected defendants’ theories. Replacement work was unavailable because the high-tech employees were gone. Greene also reviewed the revenues Mistras historically earned performing NDT for SoCalGas and rejected the idea that the new 2017 contract was a special benefit. Greene’s analysis led to his conclusion that Mistras suffered $1,391,697 in damages.

Defendants presented expert testimony from economist George Miller, who did not credit Mistras’s claim that it had been unable to replace the revenue it would have earned from the long term oversight contract. Miller also rejected Mistras’s contention that SoCalGas would have awarded Mistras both the oversight contract and the subsequent 2017 NDT testing contract. Miller concluded that, since the benefit Mistras did receive through procurement of the 2017 contract (i.e., $4.75 million) outweighed the $3.9 million value of the oversight contract, Mistras actually received more as a result of defendants’ conduct.

Defendants contend the trial court properly instructed the jury to consider the value of the benefit conferred “in mitigation of damages to the extent that this is equitable,” but the jury failed to do so. We disagree. Given the evidence that SoCalGas would not necessarily preclude Mistras from securing future testing contracts even if it was awarded oversight work, along with the testimony from Mistras’s expert, there was substantial evidence to support the jury’s damages award along with its presumed rejection of the theory that Mistras could not have secured both the oversight contract and the subsequent testing contract.

C. Defendants Fail to Demonstrate Prejudicial Error with Regard to the Breach of Contract Claim

The individual defendants contend the judgment against them on Mistras’s breach of contract claim should be reversed because there was insufficient evidence that the handbook and code of conduct were contracts. Defendants distinguish the handbook and code of conduct, on which the breach of contract claim was based, as “informational” and “[not] contractual,” and assert the jury’s conclusion that these documents supported a judgment for breach of contract was “erroneous as a matter of law.”

Even if we assume the jury’s breach of contract verdict was in error, defendants fail to identify any prejudice caused by that error. The jury awarded damages on the breach of the duty of loyalty claim identical to what it awarded on the breach of contract claim, and defendants do not challenge the duty of loyalty claim on appeal. Only prejudicial error results in reversal of a judgment. Error is prejudicial when it is probable that the party against whom it was made would have achieved a better result but for the error. (Cal. Const., art. VI, § 13; Code Civ. Proc., § 475; Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 576.)

Mistras’s claims for breach of contract and breach of the duty of loyalty relied on nearly identical misconduct, which included that the individuals: (a) worked for Prime while still employed at Mistras; (b) solicited and recruited clients for Prime while still employed at Mistras; (c) misappropriated Mistras’s confidential business information; (d) disclosed Mistras’s confidential information to Prime while still employed at Mistras; (e) failed to disclose their positions at Prime to Mistras; (f) conspired to take Mistras’s businesses away; and (g) recruited Mistras’s technicians for Prime. The jury found that the individuals each breached “an established duty of loyalty owed to Mistras causing Mistras harm,” but awarded no “additional damages for breach of this duty of loyalty . . . to the extent not already awarded.” In other words, the jury viewed the individuals’ conduct as constituting a breach of contract and a breach of their duty of loyalty, leading to the same damages award. Since defendants do not challenge the propriety of the judgment against them for breach of the duty of loyalty, and thereby concede it, they have failed to establish prejudicial error requiring reversal of the judgment for breach of contract.

D. Substantial Evidence Supported the Intentional Interference with Prospective Economic Advantage Verdict

Defendants claim the jury’s finding of tortious interference with Mistras’s relationship with SoCalGas “is unsupported by any evidence of wrongful conduct, independent of the effort by Prime to begin business and contract with SoCalGas” which was not unlawful. The tort of intentional interference with prospective economic advantage requires a plaintiff to show intentional acts designed to disrupt an economic relationship, meaning “that the defendant engaged in an independently wrongful act.” (San Jose Construction, Inc. v. S.B.C.C., Inc. (2007) 155 Cal.App.4th 1528, 1544.) “ ‘[A]n act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.’ [Citations.] ‘[A]n act must be wrongful by some legal measure, rather than merely a product of an improper, but lawful, purpose or motive.’ [Citation.]” (Id. at p. 1545.)

Defendants initially assert that the trial court failed to determine the conduct alleged by Mistras qualified as wrongful as a matter of law before permitting the jury to make factual findings regarding the alleged wrongful conduct. (See CACI No. 2202, Directions for Use [“Whether the conduct alleged qualifies as wrongful if proven or falls within the privilege of fair competition is resolved by the court as a matter of law”].) Defendants fail to show that they made any such request of the trial court; in any event, the court did not err when instructing the jury that defendants “soliciting Mistras’s customers, misappropriat[ing] Mistras’s confidential documents, and corrupting the bidding process for the oversight contract, or any of these, while still employed with Mistras” would, if proven, constitute wrongful conduct. Each of these is proscribed by determinable legal standards, and none fall within the privilege of fair competition for purposes of an interference claim. (E.g., Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1154-1155 [misappropriation of confidential information and improper solicitation of plaintiff’s customer]; Tri-Growth Centre City, Ltd. v. Silldorf, Burdman, Duignan & Eisenberg (1989) 216 Cal.App.3d 1139, 1153-1154 [use of confidential information to corrupt bidding process].)

Defendants’ claim of insufficient evidence fares no better. There is substantial evidence in the record that defendants misappropriated confidential documents from Mistras in order to meet technical requirements for the SoCalGas contract Prime otherwise could not have met, and that defendants corrupted the bidding process by coordinating with Baird to raise Mistras’s proposed rates while Prime lowered its proposed rates. Prime’s lower bid was then accepted, after which Baird left to go work for Prime. We reject defendants’ assertion that this evidence fails to show their actions were independently wrongful.

DISPOSITION

The judgment is affirmed. Mistras is to recover its costs on appeal.

NOT TO BE PUBLISHED

WEINGART, J.*

We concur:

CHANEY, J.

BENDIX, Acting P. J.