Jurisdictional Mumbo Jumbo

Drink Tank Ventures LLC v. Real Soda in Real Bottles, Ltd., No. B298881 (D2d2 Nov. 11, 2021)

A and B are parties to a merger diligence NDA that does not result in a transaction. Later, A and B are competitively bidding on C. B wins and acquires C. A sues B for tortious interference with A’s prospective economic advantage with C. A's theory is that B breached the NDA in connection with buying C, and that B’s breach was the kind of independently wrongful conduct that can substantiate a claim for tortious interference with prospective advantage.

As a matter of substance, the Court here holds it is not. To be independently wrongful, some thing must be tortious on its own or otherwise violate some positive law like a statute or regulation. With limited exceptions that don’t apply here, a breach of contract is not tortious. So a breach of contract that interferes with someone else’s pre-contract economic expectancy is not sufficient to support a claim of tortious interference with prospective advantage. 

That all makes sense, and it clears up a somewhat open question. This comes up a lot because plaintiffs like to use this theory to turn what should be claim for consequential damages for breach of contract into a tort claim that is easier to prove with better remedies. Although there are some prior cases from which the rule can be gleaned, this case has a nice clean holding that “[b]ecause a bare breach of contract, without more, is not tortious, such a breach cannot constitute independently wrongful conduct capable of giving rise to the tort of intentional interference with a prospective economic advantage.”

But then there’s the procedure. The case was tried to a jury on the breach-of-contract-as-independent-wrong theory. The jury was instructed that, to satisfy the independent wrong element, it needed to find that B breached the NDA. The jury found that A proved that breach, along with the other elements, and awarded $350k to A. The first time Defendant raised the flaw in the theory was in a post-judgment JNOV. The trial court denied that and B appealed.

The court perceives a procedural quandary here in that everyone acquiesced in trying the case on the breach as wrong theory and instructing the jury on it. No doubt, a new trial motion can raise unpreserved or even invited legal error in jury instructions. See McCarty v. Cal. Dep’t of Transp., 164 Cal. App. 4th 955, 984 (2008). But nobody actually wants a new trial here because the choice is binary. If the theory is valid A wins. If not B wins. Can we even do that with a JNOV—a motion that is fundamentally directed to the adequacy of the evidence? Code Civ. Proc. § 629(a).

se

McCarty v. State of California Dep't of Transp., 164 Cal. App. 4th 955, 984 (2008)

And with that, we are in the wacky funhouse of California post-judgment procedure. 

There are, frankly, lots of ways to get to a reversal here.

#1. Generally where a jury “instruction is erroneous on material elements of the law, the giving of the instruction is deemed excepted to, even in the absence of objection.” Manguso v. Oceanside Unified Sch. Dist., 153 Cal. App. 3d 574, 581–82 (1984); see also Code Civ. Proc. § 647. The Court cites cases here that suggest forfeiture is possible. But they generally entail invited error, estoppel, or something more than mere failure to object, or instructional errors that do not rise to the level of failure to include an essential element. So, if the instruction was erroneous and prejudicial, it seemingly can be attacked in a direct appeal of the judgment, so the post-trial motion question is not relevant. This seems like the most straightforward approach. 

#2. There is also, however, a whole other statute that expressly deals with a post-judgment claim that the judgment cant be supported by a special verdict—Code of Civil Procedure § 663(2). That statute says, in relevant part, that a judgment “based upon . . . the special verdict of the jury, may, upon motion of the  a party aggrieved, be set aside and vacated  by the same court, and another and different judgment entered, for either of the following causes, materially affecting the substantial rights of the party and entitling the party to a different judgment: . . . (2) A judgment or decree not consistent with or not supported by the special verdict.” So a § 663(2) motion—which is admittedly somewhat obscure—was probably the most applicable way to attack the judgment prior to appeal. But that doesn’t seem to have occurred to anyone.

#3. There is also some authority to support the proposition that the “proper way to remedy [a] defective verdict was to grant [a] motion for JNOV on [the defectively defined] claim[.]” Saxena v. Goffney, 159 Cal. App. 4th 316, 329 (2008). But the fact that there’s authority for something in Calfiornia post-trial practice doesn’t mean that authority makes any sense, and I have a hunch that if I took the time trace back the citations in Sexena, it winds up being turtles all the way down. 

But the Court here does not even rely on that weak authority. It accepts the fact that failure to object to the instruction forfeited an appeal. And it dodges the JNOV issue. Indeed, the court rejects that idea that this is an issue of instructional error. It characterizes the error as the trial court’s erroneous legal decision that the breach/wrong theory was a valid way to prove the interference claim. (This seems a little too formalistic, given that the way the error was manifest was in the trial court’s telling the jury it could find a breach of contract as way to establish the independent wrong element.)

Then, to get out of the cage it built for itself, Court of Appeal holds that the trial court did not have subject matter jurisdiction to enter judgment for A when the element of independently wrongful conduct hadn’t been tried or proven. And since subject matter can’t be waived, the court can reach the issue and vacate the judgment. 

That, as Malcolm Gladwell might say, is bananas. Taken at face value, it is a claim that the trial court doesn’t have subject matter jurisdiction to be wrong on the law. But subject matter jurisdiction in California state court is not about what judgment a court can enter. Otherwise, the court could have subject matter jurisdiction throughout the whole case but then lose it by making a legal error. So every wrong judgment would be a void judgment, which gives rise to all kinds of downstream problems, like leaving judgments vulnerable to collateral attack. That does not make any sense. 

Part of the issue is terminology. As the Supreme Court has noted, “the term ‘jurisdiction’ . . . carries two distinct meanings[.]” People v. Chavez, 4 Cal. 5th 771, 780 (2018). “One refers to ordinary acts in excess of jurisdiction. The other concerns so-called ‘fundamental’ jurisdiction, the quality that dictates whether a court has any power at all to resolve a case.” “Fundamental jurisdiction is, at its core, authority over both the subject matter and the parties.” Subject matter jurisdiction is about what kinds of cases a court can even hear.* State court limits on subject matter jurisdiction are rare because “California’s superior courts are courts of general jurisdiction, which means they are generally empowered to resolve the legal disputes that are brought to them.”  Quigley v. Garden Valley Fire Prot. Dist., 7 Cal. 5th 798, 808 (2019). Generally, the limits on state court subject matter jurisdiction occur when some body other than state courts is authorized to adjudicate a dispute. Id. at 808-09 (using as examples the Public Utilities Commission and the State Bar).

But “[e]ven when there's no question that a court's action is well within the scope of its fundamental jurisdiction, the court may still exceed constraints placed on it by statutes, the constitution, or common law. When a trial court fails to act within the manner prescribed by such sources of law, it is said to have taken an ordinary act in excess of jurisdiction.” Chavez, 4 Cal. 5th at 780.

Here, there is no question that the trial court had the authority to adjudicate a claim over whether B tortiously interfered with A’s prospective economic advantage. The Court even straight out comes out and says that. So how it could it fundamentally lose jurisdiction by making an erroneous legal ruling about one of the elements of the claim?

Notably, the cases cited by the court, taken together or apart, do not stand for the proposition that a court, vested with jurisdiction to hear a kind of case, nonetheless lacked fundamental subject matter jurisdiction to enter a judgment because it mae a legal error about the elements of a common law tort claim. 

In People ex rel. Allstate Ins. Co. v. Weitzman, 107 Cal. App. 4th 534, 546 (2003), a statute specifically afforded superior court jurisdiction only over claims brought by certain types of qui tam plaintiffs. That appears to be excess of jurisdiction type of jurisdiction, and the only reference to subject matter jurisdiction is to the trial court ruling being overturned.

In Vaughn v. Condon, 52 Cal. App. 713, 716 (1921), the court held that a court could not afford garnishment against a public entity because that would exceed the scope of a statute permitting garnishment. There’s admittedly some discussion of jurisdiction in an Alabama case that is quoted for the point that the argument could not be forfeited. But Vaughn is an old case, and it likely doesnt square with the Supreme Courts more recent discussion of fundamental jurisdiction in Quigley, which similarly addresses statutory limits on remedies against public defendants.

A third case,  Dollenmayer v. Pryor, 150 Cal. 1, 4 (1906), is the kind of case where limits on subject matter jursidiction have been found—the question was whether the state surveyor general had authority to hear certain kinds of claims.

Finally, People v. Vasilyan, 174 Cal. App. 4th 443, 450 (2009) permitted a convicted defendant to collaterally attack his conviction, because the statute he was convicted of violating was later adjudged not to have defined a criminal offense. That could only occur if the confiction was void, which required a defect in fundamental jurisdiction. 

I’ll concede that Vasilyan is probably the closest case on point. But the analyis is pretty strained. The court appears to be going out of its way to get to a remedy, because, although being convicted for a noncrime is pretty unfair, and it had pretty unfair collateral effects on the defendant, the factual particularities of the case made relief by writ of habeas corpus or coram nobis unavailble. 

Also, the opinion relies on statutory constraints on subject matter jurisidiction in the criminal context that don’t exist with regards to the superior courts’ jurisidciton over common law claims.

Finally, there’s a pretty strong dissent that makes the points about the different kinds of jurisdiction that I reference above. 

But even if Vasilyan is right, and even if it could be ported into the civil context, it takes another big step to get to the restult here. This case would be the equivalent of saying that a criminal court lacks subject matter jurisdiction—and thus that its convictions are void—if it erroenously interprets a statute and instructs that an element of a crime was less strict than the appellate court ultimately found it to be. (For instance, if it said that a willful mens rea didn’t require a defendant’s knowlege that his conduct was illegal, even if a higher court later found that it did. See, e.g., Ratzlaf v. United States, 510 U.S. 135, 141 (1994).) A jurisdictional rule like that would have enormous and destabalizing effects on the finality of judgments.

Don’t get me wrong. Post-jugment remedies in California are a wreck that demands reform. I spend a non-minisclue amount of time tring to explain how they work to out-of-state lawyers at my firm. When I do, they react like I am explaining Joseph K’s appellate options. Our Legislature should replace the various overlapping and confusing statutory remedies, each of confusing scope and with its own procedural mousetraps, with a single raitional procedural vehicle to challenge a judgment after it is entered but prior to appeal. If someone wants, I’ll even write the statute. But injecting a layer of jurisdictional mumbo-jumbo into the process is not going to fix anything. 

Reversed. 

*Due to the interpretation of Article III’s case or controversy requirement as cabining the jurisdiction of the federal courts, standing, ripeness, and mootness are treated as jurisdictional and sometimes as addressing subject matter jurisdiction in federal cases. See Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1122 (9th Cir. 2010); Bland v. Fessler, 88 F.3d 729, 732 n. 4 (9th Cir. 1996). But California does have a limitation akin to Article III, so it tends to treat these doctrines as prudential, not jurisdictional. Wilson & Wilson v. City Council of Redwood City, 191 Cal. App. 4th 1559, 1575 n.8 (2011).

cil, 940 F.2d 1239, 1242 (9th Cir. 1991)

The proper way to remedy the defective verdict was to grant Goffney's motion for JNOV on plaintiffs' battery claim, not to order a new trial

Saxena v. Goffney, 159 Cal. App. 4th 316, 329 (2008)

Not Final

Contreras-Velazquez v. Family Health Cntrs. of San Diego, No.D075577 (D4d1 Mar. 18, 2021)

In rendering a verdict that Defendant isn’t liable, Jury in trial #1 makes a bunch of findings. But the trial court found that there was inadequate evidence to support that result. It granted a new trial on liability, which was affirmed on appeal. At retrial, Defendant argued that certain of the findings in trial #1 were issue preclusive on trial #2. 

But that doesn’t make sense. Issue preclusion or collateral estoppel requires the issue to have been decided in the first proceeding in a decision that was final and on the merits. A jury’s factual finding, upset by a new trial order that is then affirmed on appeal is definitely not final. The effect of a new trial grant is to vacate the judgment and the findings that support it. It thus cannot be the case that factual findings that undergird a verdict that is vacated on a new trial grant have any finality to them. Indeed, if the new trial grant is affirmed, there is no way that the findings could have been reviewed and affirmed on the merits in the first appeal. 

Affirmed.

Grounds vs. Reasons

King v. U.S. Bank, N.A., No. C085276 (D3 Jul. 28, 2020)

Plaintiff, an employee of a Bank, won a $24.4 million jury verdict in a wrongful termination and defamation action based on the Bank’s having trumped up a bunch of fake grounds for discipline. The damages award has several elements: front and back pay, occupational harm, reputational injury, and emotional distress. Plus $15.6 million in punitives. On a new trial motion, the trial court issued a remittur on various grounds, reducing the judgment to $5.6 million, which Plaintiff accepted. 

The Bank appeals on the insufficiency of the evidence on a host of different issues. As is generally the case, it loses.

Plaintiff appeals the grant of the new trial motions and remittitur. Generally, a plaintiff who accepts a remittitur can’t appeal. But he can cross-appeal if the defendant does. The rationale is that the appeal deprives the plaintiff of the benefit of the remittitur.

The Court of Appeal reverses part of the new trial grant, where the trial court ruled that some of the categories of damages were repetitive. The reasons stated in the trial court’s order weren’t supported by the record.

It also reverses a reduction of the $1 million emotional distress award to $25k, but on a procedural grounds. As I have discussed elsewhere, the Code of Civil Procedure imparts very specific requirements on a trial court judge who grants a new trial on certain grounds, including excessive damages. Under § 657, the court needs to issue an order that states both the statutory grounds for the order as well as its reasons. A statement of reasons doesn’t need to be a tome. But it does need to make at least some reference to the evidence that is sufficient to facilitate appellate review. And if the order is procedurally inadequate, the new trial is reversed and the original judgment automatically reinstated. There’s no chance to fix anything on remand.

On the emotional distress reduction, the court’s order stated only that it “finds that the evidence does not clearly support the emotional distress damages award and the award is excessive,” and that the award should accordingly be reduced to $25k. That’s not good enough because it’s little more than a statement of grounds of excessive damages. To hold up, it needed to at least refer to what aspects of the evidence the trial court found to be inadequate.

Finally, in an order that was adequate to hold up under § 657, the trial court found that the evidence of the Bank’s misconduct was sufficient to withstand only a 1:1 ratio of compensatory to punitive damages. The Court of Appeal does not agree with certain aspects of that analysis. But, subjecting the award to the independent due process review required of punitive awards, the Court of Appeal nonetheless agrees that the evidence supports only a 1:1 ratio. Therefore, the punitives were reduced to about $8 million.

Affirmed on modified judgment of $17,179,392.

MNT after SJ.

Brewer v. Remington, No. F76467 (D5 Mar. 4, 2020)

The trial court granted summary judgment for the Defendant in a medmal case based on the statute of limitations. Plaintiff moved for new trial, which the court granted, finding it had misapplied the delayed discovery rule. Defendant appealed. See Code Civ. Proc. § 904.1(a)(4) (grant of new trial is appealable order).

Generally, a new trial motion is subject to an abuse of discretion standard of review. That makes sense given that many of the grounds for new trial entail the trial court weighing evidence subject to facts and judgment calls. But whether to grant summary judgment is always a question of law. A new trial motion after a granted SJ just gives a trial court a shot to correct a legal mistake. So on appeal, that gets reviewed de novo, like any other legal question. Which isn’t inconsistent with the general standard because de novo review of legal error is baked into abuse of discretion.

Affirmed.

Whether or not to move for new trial after losing an SJ that results in a final judgment is an tricky strategic choice. On one hand, it superficially doesn’t really hurt. If you lose, the appeal is basically the same, just delayed a little. 

On the other hand, a new trial motion is time consuming. And given the right to appeal a grant, the case is likely going to the Court of Appeal anyways, subject to the same standard of review regardless. Also, sometimes the moving party’s arguments get better. Plus, most trial judges are pretty set on their decisions.

But I guess there's some marginal value, just stats-wise, in being an appellee vs. an appellant. Especially for post judgment settlement. So if you think the trial judge is persuadable, or if there’s some argument that could have been better presented, maybe it’s worth a shot.

Rogue Juror!

Nodal v. Cal-West Rain, Inc., No. B285482 (D2d6 Jul. 17, 2019)

Unlike in federal court and most other states, in California the affidavit of a juror is admissible in connection with a new trial motion to establish juror misconduct. The testimony needs to be about object acts and statements—a juror’s affidavit about his or her thought processes is improper and inadmissible. Evid. Code § 1150. If misconduct is proven, a presumption or prejudice arises. Unless that is rebutted, the moving party is entitled to a new trial.

This is a PI case involving a blown valve in a vineyard irrigation system. According to the affidavits of two jurors, another juror, who was a farmer and pipe-fitter with 35 years’ experience* told the rest of the jury during deliberations that the system was set up the way anyone in the industry would have done it, so the blown valve must have been the vineyard’s fault. The jury then rendered a 9-3 defense verdict finding that the manufacturer was not negligent.

Although jurors can bring their common sense to bear in their deliberations, they aren’t supposed to be providing freelance expert testimony. So the juror’s statements were clear misconduct. And since the manufacturer did not rebut the presumption of prejudice, a new trial should have been granted.

Reversed.

*FWIW, it would have to be a pretty freaky venire for most lawyers to leave a highly experienced agricultural pipe-fitter on the jury in a case about malfunctioning irrigation equipment.

Can't Collect on Half a Judgment

Newstart Real Estate Inv. LLC v. Huang, No. B292417 (D2d8 Jul. 3, 2019)

P wins a money judgment that includes punitive damages. The Court, however, issues a remittitur on punitives under Code of Civil Procedure § 662.5. P rejected it, resulting in a granted motion for a new trial. P appeals under § 904.1(a)(4). And while that’s proceeding, P starts to make efforts to collect on the compensatory part of the judgment. 

The trial court shuts that down, reasoning that a grant of a new trial has the effect of vacating the whole judgment until retrial occurs and a single final judgment can be entered. The Court of Appeal agrees. You can only collect on a final judgment. When a new trial motion is granted, that vacates the judgment as a matter of law. That a retrial might ultimately be addressed only to the punitives and not to liability or compensatory damages is not relevant to the collectability issue.

Affirmed.

Forgetting Is Not Juror Misconduct

Stokes v. Muschinske, No. B280116 (D2d8 Apr. 8, 2019)

Juror #11 is the CEO of a company. During voir dire, he says doesn’t really want to be on a jury, because he has a big problem with the time commitment. But he also acknowledges that’s not like going to get him bounced for cause. Some time after Juror #11’s individual questioning was over, Plaintiff’s lawyer somewhat vaguely asked if any of the new jurors had been sued before. Juror #11 didn’t chime up. 

More a Question of Who than How Much...

Sandoval v. Qualcomm, Inc., No. D070431 (D4d1 Oct. 19, 2018)

This is an appeal and cross appeal of post-judgment motions in a multi-defendant personal injury case. The trial court denied a JNOV, but grated a new trial on the ground that the jury messed up comparative fault allocation. In granting the new trial, it relied on Code of Civil Procedure § 657(5), which permits a new trial based on excessive or inadequate damages.

The JNOV is as easy affirm. There was substantial evidence, enough to get to a jury, which is all a JNOV addresses. 

On the new trial, right result, wrong provision. While comparative fault deals with damages in a sense, § 657(5) is addressed to the overall damages award, not its allocation between defendants. Regardless, the code nonetheless permitted the trial court to grant a new trial on comparative fault under § 657(6), which addresses the insufficiency of the evidence to justify a verdict. And since there was substantial evidence to support the trial court's decision in its capacity as an independent evaluator of the facts, that would be upheld.

Affirmed.

New Trial Motion Can't Save Unripe Claim from SLAPP Motion

Aron v. WIB Holdings, No. B271271 (D2d2 Mar. 28, 2108)

Plaintiff in this case won an unlawful detainer trial against his Landlord. While that was on appeal, he sued Landlord for damages under a Santa Monica rent control ordinance that offers a private damages remedy against any landlord who brings a UD action in bad faith. Landlord filed an anti-SLAPP motion. The case clearly arose from the UD action, so it arose from protected activity. And since the Santa Monica ordinance specified on it face that a favorable termination of the UD case was a condition to recovery, the trial court granted the motion, because Plaintiff couldn’t show that he was likely to succeed.

Claiming the Mantle of the 13th Juror

Ryan v. Crown Castle NG Networks, Inc., No. H041712 (Dec. 13, 2016)

A jury in this case rendered an apparently nonsensical damages verdict that could not be squared with the instructions and the verdict form. But in response to Plaintiff’s new trial motion on inadequate damages, the trial judge ruled that the court could not “substitute its judgment for that of the jury” and that “declarations were necessary to determine what the jury actually did.” 

Unexpected Comeuppance for Jerky Trial Behavior

Bigler-Engler v. Breg, Inc. No D063556 (D4d1 as modified on rehearing** Jan. 6, 2017)

This is a really loooonnnng opinion arising from an appeal of a products liability trial. Defendants sold, marketed, and prescribed a cold therapy device, But as the court explains—unlike normal cold therapy remedies like an icepack or “a bag of frozen peas”—this device managed to give plaintiff some kind of super awful infection due to constant application of cold. Defendants were, it appears, kind of a motley crew as far as the medical device industry goes and they got tagged with big-time damages, including $5 million in non-economic generals, plus punitives.

New Judgment Adding Fees Does Not Restart the Clock

Hjelm v. Prometheus Real Estate Grp., No. A142723 (D1d2 Oct. 5, 2016)

Plaintiffs’ apartment became infested with bedbugs. They sued their Landlord and won before a jury. Plaintiffs also obtained an attorney’s fee award because their lease included an fee provision, albeit one that purportedly only permitted the landlord to recover. But such a provision is made bilateral by operation of Civil Code § 1717. Ultimately the damages award was about $72k with the fee award almost five times that. 

New Trial, Notwithstanding a Lack of Substantial Evidence

Licudine v. Cedars-Sinai Med. Ctr., No. B268130 (D2d2 Sept. 29, 2016)

The court here affirms the grant of a motion for new trial on damages for a law student injured due to a surgical mistake, clarifying the applicable standard for awarding damages based on future earning capacity. So far as procedure goes, the court clarifies some issues with the difference between new trial and jnov motions as well as some evidentiary issues likely to recur on trial after remand. 

Fake Decks up in the Files?

Kim v. Toyota Motor Corp., No. B247672 (D2d7, as modified Feb. 8, 2016)

This is an automotive products liability case mostly about when plaintiffs can admit evidence of industry custom to show a defect under the risk-benefit test. (The answer, according to the court, is sometimes,  parting ways with other courts that have said always and never.) The court also, however, briefly tackles two points of procedural interest.
 

A $138 Mistake.

King v. California, No. B257676 (D2d1 Nov. 18, 2015)

This is an appeal of a verdict in a civil rights case. A jury awarded damages against some CHP officers it found to have unreasonably searched the plaintiff. Most of the opinion deals with civil rights stuff like the sufficiency of the evidence of unreasonableness under the Fourth Amendment and qualified immunity. The court does, however, address two minor procedural points.

First, it affirms the exclusion of expert testimony from a police policy and practice expert on relevance grounds. The expert offered testimony about CHP policy, but plaintiff didn’t sue the officers for violating policy. He sued them for violating the Fourth Amendment. And since the court didn’t need some expert say what the Fourth Amendment means, the testimony was properly excluded.

The court also affirms a very small—$138—award of economic damages over a claim of inconsistent verdicts. The jury had found no liability on battery, excessive force or similar theories, but it did find the search and seizure were unreasonable. The $138 represented plaintiff’s medical expenses incurred as a result of allegedly being roughed up during the search. The jury was instructed (without objection from defendants) that Plaintiff was entitled to compensation due to any harm incurred by the officers. Based on those instructions, it was not unreasonable or in for the jury to award the expenses as damages, even if it found no liability on claims more commonly associated with compensation for physical injuries. While the court here intimates that the instructions might have been problematic, nobody challenged them. So a denial of a new trial on inconsistency grounds would be upheld because the verdict was entirely consistent with the charge given to the jury.

Affirmed in relevant part.

In Other News . . . .

If you haven’t yet had your fill of California procedure—and really, who could ever have too much California procedure—I have an article on motions for new trial (and the Maroney case in particular) in this month's Los Angeles Lawyer. You could even take the quiz and get some easy CLE!

Not Exactly an Intuitive Rule on Appellate Jurisidiction

Pacific Corporate Group Holdings, LLC v. Keck, No. D062277 (D4d1 Dec. 12, 2014)

Under Code of Civil Procedure § 904.1(a)(4), orders granting new trial motions or denying JNOVs are appealable, independent of an appeal of the underlying judgment. This rule, which is different than most jurisdictions, creates some tricky issues of appellate jurisdiction, this case shows.

A former employee won a $170k jury verdict for an unpaid comp. Both parties moved for new trial, and the employer also moved for JNOV.  The court denied the employer’s motions. But it granted the employee’s new trial motion on inadequate damages because it believed that the jury’s verdict did not reflect certain bonus money to which the employee was entitled under his contract with the employ. The court issued an additur, giving the employer the option of between a $330k judgment and a new trial on damages. The court further denied both parties motions for attorneys’ fees. The employer rejected the additur and appealed the denial of its post-trial motions, the granting of a new trial, and several other orders that were subsumed into the judgment. Both parties appealed the denial of their fee motions.

On the merits, the court here affirms both the orders denying the employer’s JNOV and granting the employee’s new trial. This has the effect of wiping out the judgment entered by the trial court, which means that there is no remaining judgment for the employer to appeal. The court thus would not reach the merits of the employer’s appeal of the judgment, which would have to await an appeal of a final judgment entered after the new trial on damages is held. Similarly, the court lacked jurisdiction to address the fee appeals because with the judgment vacated by the affirmed new trial order, the orders could not be considered as postjudgment orders, subject to appeal under § 901(a)(2).

Affirmed in part and otherwise dismissed.

And I Get Upset when My Broadband Is Slow ....

Holguin v. Dish Network, No. D059983 (D4d1 Sept. 22, 2014)

A technician drilled through a sewer pipe while installing satellite television in plaintiffs’ home. He didn’t realize it. By the time the mistake was uncovered more than a year later, plaintiffs’ house has become a mold mine. Defendants (various AT&T-owned companies) agreed to pay for the remediation. But that didn’t go very well, and the matter winds up in litigation. A jury awarded plaintiffs $109,000. The court followed by awarding $180,000 in attorneys’ fees, —about a third of what plaintiffs’ asked for. Defendants appeal on three somewhat related issues, plus in the court’s award of legal fees. Plaintiffs cross-appeal on the amount of the fee.

Defendants first say that the trial court erroneously instructed the jury on plaintiffs’ contract claims. The evidence showed that there were a series of different form agreements between the plaintiffs and the various defendant entities, signed by plaintiffs at various stages of the installation process. The instructions, however, all referred to “contract,” in the singular. The court here rejects the argument. First, defendants didn’t propose any instruction that used the plural, so the argument was forfeited. And even if it weren’t, the evidence showed that each of the agreements was part of single transaction—the plaintiffs’ signing up telecommunications services. The agreements were replete with cross-references. Under the circumstances, there was no error in treating the various instruments as a series of contracts that “are to be taken together” under Civil Code § 1642, and thus effectively treated as a single contract.

Second, defendants appeal the court’s instruction that the contracts contained an implied term requiring Defendants to properly install the equipment they were providing. They argue that because the contract didn’t contain any such term, it was error for the trial court to tell the jury to imply it. But that argument runs into the law. Every contract includes an implied duty to perform with reasonable care. If you contract to do X, and you do X negligently, you have breached the contract.

Third, defendants appeal the superior court's denials of JNOV and new trial motions that raised the above points as well as the insufficiency of the evidence. The contract points fail for the same reason as above. And as to the adequacy of the evidence, defendants failed to carry their burden on appeal of showing that there was no substantial evidence in favor of the verdict.

Finally, defendants appeal, and Plaintiffs cross-appeal, on the attorneys’ fee award. Defendants first claim that fees aren’t awardable under Civil Code § 1717 because the jury verdict appeared to award damages on negligence, not contract claims.  The court first clarifies that the standard of review is that applicable to determining the prevailing party (abuse of discretion) as opposed to the standard that applies to a determination of the legal basis of an award (de novo). Deciding whether the fee award sufficiently arose from the contract, as opposed to tort, claims was a determination of prevailing party (and claim) status. On the merits, the trial court did not abuse its discretion.  Although the verdict form did not specifically award contract damages, it found that the four elements of breach of contract had been proven and the part of the special verdict that calculated damages was separate from the individual counts on which the jury was polled.

As to the amount of fees, when it calculated the lodestar, the trial court did not abuse its discretion in declining to include about 150 hours of duplicative work a replacement attorney had to do when their first lawyer fell ill. The court’s authority to award reasonable fees permitted it to disallow this time.  Nor did the court err in apportioning fees between contract and tort claims—most of which were nonsuited.  The court employed a reasonable methodology to accomplish the apportionment so it did not abuse its discretion.  Finally, the trial court also did not abuse its discretion in declining to apply an enhancement.  The lodestar itself was a reasonable fee.  Particularly when compared to what the attorneys would obtain under their retainer agreement had there been no § 1717 provision—less than $40 grand—the un-enhanced $180,000 awarded by the court was within the realm of reason.

Affirmed.

Typical Post-Trial Madness

Ochoa v. Dorado, No. B240595 (D2d3 July 22, 2014)

This rear-ender auto accident case is a glorious procedural mess. 

The Difference Between New Trial and JNOV

Grail Semiconductor, Inc. v. Mitsubishi Electric & Electronics, Inc., No. H038714 (D6 Apr. 22, 2014)

This is some heavy-duty litigation over Mitsubishi’s alleged disclosure of memory chip technology in violation of an NDA with plaintiff, the technology’s inventor. A jury awarded plaintiff almost $124 million. The trial court, however, ordered a new trial on damages, ruling that the jury had used an erroneous measure that assumed plaintiff lost the entire value of the technology due to the disclosure, even though the evidence showed that plaintiff still had the ability to profit from the technology after the breach. In this appeal, Mitsubishi argues that on damages, the trial court should have granted it a JNOV—not just a new trial—and that the court should also have granted a new trial on liability due to improperly admitted evidence.