Octapharma Ag v. Bio-Medics

Filed 6/13/08 Octapharma Ag v. Bio-Medics CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from an order of the Superior Court of Orange County, Corey S. Cramin, Judge. Affirmed in part and stayed in part. Motion of Bio‑Medics to dismiss or stay the appeal. Granted in part and denied in part. Motion of Plasma Collection Centers, Inc., and Biomat USA, Inc., to stay the appeal. Denied. Motion to admit new evidence. Denied. Motions to seal additional evidence. Denied as moot.

Covington & Burling, Roy M. Bartlett, Deanna L. Kwong and Jessica D. Gabel for Plaintiffs and Appellants.

Freeman, Freeman & Smiley, Dawn B. Eyerly and Azadeh Allayee for Defendant and Respondent Bio-Medics.

Mitchell Silberberg & Knupp, Christopher B. Leonard and Todd E. Reese for Defendants and Respondents Plasma Collection Centers, Inc., and Biomat USA, Inc.

* * *

Introduction

Octapharma AG, a manufacturer of blood plasma products, and its American distributor, Octapharma USA, Inc. (together, Octapharma), appeal from an order denying their request for a preliminary injunction against respondents Bio‑Medics, Plasma Collection Centers, Inc. (PCCI), and Biomat USA, Inc. (Biomat).

Octapharma sued Bio-Medics for breach of two agreements: (1) the Plasma Supply Agreement (as amended) and (2) the Security Agreement. Octapharma sued PCCI and Biomat, which are not parties to those agreements, for interference with contract. In the Plasma Supply Agreement, Bio‑Medics agreed to supply Octapharma AG with specified quantities of blood plasma. In several of the amendments to the Plasma Supply Agreement, Octapharma AG agreed to loan Bio‑Medics money to build and operate blood plasma donor centers. Octapharma sought a preliminary injunction to enjoin Bio‑Medics, PCCI, and Biomat from engaging in certain acts alleged to constitute ongoing or threatened breaches of, or interference with, the Plasma Supply Agreement and the Security Agreement.

The trial court denied Octapharmas request for a preliminary injunction in a minute order. Octapharma appealed from that order. Bio-Medics has moved to dismiss or stay the appeal, and PCCI and Biomat have moved to stay the appeal, based on a forum selection clause in the Plasma Supply Agreement stating the sole place of jurisdiction for any litigation commenced under the agreement is Munich, Germany. Octapharma has brought a motion to admit new documentary evidence on appeal and to conditionally seal the new evidence. Bio-Medics, PCCI, and Biomat have brought their own motions to seal the new evidence.

We conclude:

1. Based on the forum selection clause, the appeal is stayed as to Bio-Medics for claims arising out of the Plasma Supply Agreement. The appeal is not stayed as to Bio-Medics for claims arising out of the Security Agreement, which does not have a forum selection clause.

2. The appeal is not stayed as to PCCI and Biomat because they are not parties to the Plasma Supply Agreement containing the forum selection clause.

3. The trial court did not abuse its discretion in denying a preliminary injunction against Bio‑Medics because it has completed the sale of the four original blood plasma donor centers to PCCI and Biomat, and has ceased collecting plasma from those donor centers.

4. The trial court did not abuse its discretion in denying a preliminary injunction against PCCI and Biomat because Octapharma did not sue to repossess collateral under the Security Agreement and because the trial court did not abuse its discretion in considering the factor of relative interim harm to the parties.

5. Octapharmas motion to admit new documentary evidence does not meet the standards for admitting additional evidence under Code of Civil Procedure section 909. The motions to seal the new evidence are therefore moot.

Accordingly, Bio‑Medicss motion to dismiss or stay the appeal is granted in part and denied in part; PCCI and Biomats motion to stay the appeal is denied; the order denying Octapharmas motion for a preliminary injunction is affirmed to the extent the appeal is not stayed; Octapharmas motion to take additional evidence is denied; and the motions to seal the new evidence are denied as moot.

Nothing we say in this opinion constitutes a final adjudication of the lawsuit. (Hunt v. Superior Court (1999) 21 Cal.4th 984, 999.)

Facts

Octapharma AG develops and manufactures two blood‑plasma‑based products used to treat human patients in the United States: intravenous immune globulin (IGIV) and albumin. Octapharma USA, Inc., sells and distributes those two products in the United States, under the names Octagam and Albumin Human.

Bio‑Medics operates blood plasma donor centers and sells the plasma collected at those centers to companies such as Octapharma AG. PCCI also is engaged in the business of operating human blood plasma donor centers and selling the collected plasma. Biomat owns PCCIs common stock. Defendant Grifols, S.A. (Grifols), a Spanish company, is the parent company of Biomat.[1] Octapharma does not own or operate blood plasma donor centers but relies on long-term supply contracts with plasma suppliers, such as Bio-Medics.

On December 17, 2004, Octapharma AG and Bio‑Medics entered into a long‑term supply agreement, the Plasma Supply Agreement, under which Bio‑Medics agreed to supply, and Octapharma AG agreed to purchase, specified quantities of blood plasma in equal monthly installments each year through 2008. The plasma was to be supplied from Bio‑Medicss blood plasma donor centers in Rexburg, Idaho (the Rexburg Center); Logan, Utah; Orem, Utah; and Los Angeles, California (collectively, the four original blood plasma donor centers). The Plasma Supply Agreement included a forum selection clause stating, [t]he sole place of jurisdiction for any litigation commenced hereunder to be Munich, Federal Republic of Germany.

Also on December 17, 2004, Octapharma AG and Bio‑Medics entered into an amendment to the Plasma Supply Agreement by which Octapharma AG agreed to lend Bio‑Medics $650,000. As security for the loan, the amendment granted Octapharma AG a security interest in the equipment, machines, and furniture at the four original blood plasma donor centers, and in plasma collected at those centers. The amendment states, [i]n the event that any dispute arises under or related to this Amendment it is agreed that the governing law shall be Swiss Law. Place of jurisdiction is Zrich, Switzerland.

In February 2005, Octapharma AG and Bio‑Medics entered into the Security Agreement granting Octapharma AG a continuing security interest in identified collateral [a]s security for the full, prompt and complete performance by Debtor of the indebtedness and obligations of Debtor under the Plasma Supply Agreement. The Security Agreement defined the collateral as all equipment, machinery, furniture, and source plasma whether now owned or existing or hereafter created or acquired that is located in or on the four original blood plasma donor centers operated by Bio-Medics, and all products and proceeds of such equipment, furniture, and source plasma. The Security Agreement stated: Debtor shall not sell, assign, pledge, exchange, lease, hire out, grant a security interest in, or otherwise dispose of the Collateral or any interest therein. The Security Agreement did not include a forum selection clause.

Octapharma AG perfected its security interests by filing UCC‑1 financing statements in California, Idaho, Nevada, and Utah.

Between July 2005 and February 2007, Octapharma AG and Bio-Medics entered into six additional amendments to the Plasma Supply Agreement. The amendments provided for Bio‑Medics to supply plasma through 2011 and increased the volume to be supplied. As a result of the amendments, Bio‑Medics was to supply Octapharma AG with 100,000 liters of blood plasma in 2005, 150,000 liters in 2006, and 220,000 liters in 2007. The amendments also provided for additional loans conditioned on Bio-Medics using the proceeds to develop, license, and operate additional blood plasma donor centers. Under the Plasma Supply Agreement, as amended, Octapharma AG loaned Bio-Medics a total of about $2.7 million.

Bio‑Medics did not supply the volume of plasma required under the Plasma Supply Agreement for 2005 and 2006. The shortfall continued into 2007. From January 2007 through May 17, 2007, Bio‑Medics supplied between 28.9 percent and 89.5 percent of the monthly plasma requirement under the Plasma Supply Agreement.

In March 2007, Bio‑Medics entered into an agreement to sell the four original blood plasma donor centers to PCCI. In an addendum to the purchase and sale agreement, Bio‑Medics was given the right to continue operating and collect plasma at the Rexburg Center until September 30, 2007. Bio‑Medics represented to PCCI that none of the four original blood plasma donor centers was under any obligation to supply plasma to any third party and that Bio‑Medics could meet its supply commitment to Octapharma AG through its other centers and through new centers Bio‑Medics was developing.

Shortly before entering into the addendum to purchase the blood plasma donor centers, PCCI learned that Bio-Medicss assets were encumbered with a lien and security interest securing a loan to Octapharma AG. Gary Crandall (whose partnership owns Bio‑Medicss stock) advised PCCI he would have the liens revised to omit the four original blood plasma donor centers. When documentation reflecting the release of the liens did not arrive, PCCI inquired further, and Crandall advised it that Octapharma AG had agreed to file revised UCC‑1 financing statements. PCCIs acquisition of the four original blood plasma donor centers closed even though revised UCC‑1 financing statements were not filed.

On May 25, 2007, Bio‑Medics tendered Octapharma AG a cashiers check in the amount of $2,699,143.09 to pay off the loans under the Plasma Supply Agreement and amendments. Octapharma AG refused the check on the ground Bio‑Medics attached conditions to it and suggested that the offered check represented not only payment of the loan, but also a settlement of claims that would preclude Octapharma AG from enforcing its rights and remedies for Bio-Medics breaches of the Security Agreement, including breaches that occurred before the check was offered.

Proceedings in the Trial Court

Octapharma commenced this lawsuit in May 2007 by filing a complaint alleging five causes of action: (1) breach of the Plasma Supply Agreement; (2) breach of the Security Agreement; (3) intentional interference with contract; (4) negligent interference with contract; and (5) intentional interference with contract. In the first cause of action, Octapharma alleged Bio‑Medics breached the Plasma Supply Agreement beginning in January 2007 by failing to supply the requisite quantities of source plasma. In the second cause of action, Octapharma alleged Bio‑Medics breached the Security Agreement by selling or transferring ownership of equipment and source plasma subject to Octapharma AGs security interest.

In the third and fourth causes of action, Octapharma alleged PCCI and Biomat intentionally or negligently interfered with the Plasma Supply Agreement and the Security Agreement by (1) entering into agreements to purchase the four original blood plasma donor centers; (2) purchasing, controlling, and/or diverting to third parties the equipment and plasma collected at Bio‑Medicss donor centers including the four donor centers identified in the agreements; and (3) otherwise causing Bio‑Medics not to perform, or not to be able to perform, its obligations under the Plasma Supply Agreement, as amended, and the Security Agreement. In the fifth cause of action, Octapharma USA alleged PCCI and Biomat interfered with Octapharma USAs contractual relationships with customers and distributors.

When Octapharma filed its complaint, it also sought a temporary restraining order against Bio‑Medics, PCCI, Biomat, and Grifols to prevent them from selling or transferring any Bio‑Medics blood donor centers; selling, transferring, or assigning any plasma collected at Bio‑Medics blood donor centers; selling, transferring, or assigning any assets subject to the Security Agreement; and breaching or inducing Bio‑Medics to breach the Plasma Supply Agreement and the Security Agreement. The trial court issued a restraining order against Bio‑Medics only, restraining it from selling or transferring any interest in blood plasma donor centers other than the four original blood plasma donor centers, and set a hearing on an order to show cause (OSC).

Octapharma then filed a motion for a preliminary injunction against PCCI and Biomat. Octapharmas motion for a preliminary injunction sought to enjoin the following: (1) Selling, purchasing, transferring, optioning to sell, or otherwise disposing of any ownership or other interest in, including but not limited to, the leases and United States Food & Drug Administration (FDA) licenses of, any of the 12 Donor Centers currently or previously owned or under development by Bio‑Medics; (2) Entering into, consummating, and/or assigning any agreement to sell, purchase, transfer, or dispose of, or any option to sell, transfer, or otherwise dispose of, any ownership or equity interest in, including but not limited to, the leases and FDA licenses of, any of the Bio‑Medics Donor Centers; (3) Supplying, shipping, delivering, selling, or offering to sell to anyone other than Octapharma AG any plasma collected at any of the four Donor Centers referenced as sources of supply of plasma in the [Plasma Supply Agreement]; and (4) Breaching or inducing Bio‑Medics to breach (or further breach) in any way its obligations under . . . the [Plasma Supply Agreement] or . . . the . . . Security Agreement.

After extensive briefing and oral argument, the trial court denied the OSC and Octapharmas motion for a preliminary injunction in a minute order entered on June 13, 2007. Before the hearing, the court had issued a two‑page, single‑spaced tentative ruling. At the hearing, the court advised counsel it would not issue a written ruling, and the order denying the preliminary injunction stated simply, Motions for Preliminary Injunction denied. On June 25, 2007, Octapharma filed a notice of appeal from that order.

Motion to Stay Appeal

On December 4, 2007, PCCI and Biomat filed a motion to stay the appeal of the order denying Octapharmas motion for a preliminary injunction pending resolution of litigation in Germany between Octapharma AG and Bio‑Medics. On January 9, 2008, Bio‑Medics filed a similar motion to dismiss or stay the appeal. The motions are based on the forum selection clause in the Plasma Supply Agreement, stating, [t]he sole place of jurisdiction for any litigation commenced hereunder to be Munich, Federal Republic of Germany. Octapharma submitted opposition to both motions, and, at our invitation, PCCI and Biomat submitted a reply.

We grant Bio-Medicss motion to stay but only as to claims arising out of the Plasma Supply Agreement. We deny PCCI and Biomats motion to stay the appeal.

I.

Trial Court Stay

On July 20, 2007, Bio‑Medics filed a motion to dismiss or stay the trial court action based on the forum selection clause of the Plasma Supply Agreement. (PCCI and Biomat did not bring their own motion or join in Bio‑Medicss motion.) After Bio-Medics filed the motion, Octapharma apparently filed an amended complaint, but no party has provided us with a copy of it. Bio‑Medicss motion was heard on November 13, 2007, at which time Octapharmas counsel notified the court that Octapharma had filed a lawsuit in Germany against Bio‑Medics.

The trial court granted Bio‑Medicss motion to dismiss or stay and ordered the entire case stayed as to all defendants. In a written order entered November 13, 2007, the trial court concluded the forum selection clause was enforceable and applicable to the first cause of action for breach of the Plasma Supply Agreement, the third cause of action for anticipatory breach of the Plasma Supply Agreement, and the portion of the fourth cause of action for declaratory relief relating to the Plasma Supply Agreement. These findings apparently relate to the amended complaint, as the original complaint did not include causes of action for anticipatory breach and declaratory relief. The trial court also stayed the claims against Bio‑Medics arising out of the Security Agreement. The court explained: As alleged by Plaintiffs, the Security Agreement secures not only the repayment of the loans, but also Bio‑Medics performance of its plasma supply obligations under the PSA [Plasma Supply Agreement]. Without resolving the issue, the face of the Security Agreement at least supports this as a good faith contention. As such, although the causes of action based upon the Security Agreement raise some issues that are unrelated to the PSA, such as whether it was proper for Bio‑Medics to agree to sell some of its collection centers, those causes of action also raise issues that relate to Bio‑Medics performance of its plasma supply obligations under the PSA. Therefore, there are at least some issues that are common to the claims under the PSA and the claims under the Security Agreement. To avoid the potential for conflicting results and the potential waste of resources, the Court stays the claims against Bio‑Medics that are not subject to the forum selection clause in the PSA.

The trial court stayed the litigation as to the remaining defendants for these reasons: The claims against the other Defendants clearly present issues that are common to the claims against Bio‑Medics regarding the PSA [Plasma Supply Agreement]. The concurrent litigation of those issues in Germany and in this Court could potentially lead to inconsistent rulings and would potentially waste valuable resources. No one has presented any authority or argument to show that the resolution of the issues in Germany would not apply in this case. Plaintiff was given the opportunity to demonstrate that at least some claims should be severed or otherwise allowed to proceed at this time. However, after considering all arguments by Plaintiffs against a stay, the Court has not found any of them to warrant allowing any claims in this action to proceed at this time.

Octapharma has not challenged the trial courts order staying the litigation by notice of appeal or petition for writ of mandate.

II.

Legal Standards

At the outset, we emphasize we are not bound by the trial courts order staying the litigation. A superior court decision is not law of the case (Clemente v. State of California (1985) 40 Cal.3d 202, 211 [law of the case applies only to appellate court and Supreme Court decisions]) and has no precedential value (Schachter v. Citigroup, Inc. (2005) 126 Cal.App.4th 726, 738). We therefore reject Bio-Medicss argument we should dismiss the appeal because the trial court has determined courts in the United States do not have jurisdiction over the litigation. Whether the trial court in this case stayed the proceedings in the superior court does not influence our decision whether to stay the appeal.

A contractual forum selection clause is enforceable unless it is unreasonable. (Smith, Valentino & Smith, Inc. v. Superior Court (1976) 17 Cal.3d 491, 495; Intershop Communications AG v. Superior Court (2002) 104 Cal.App.4th 191, 195‑196 (Intershop Communications).) A forum selection clause is enforced by a motion to stay or dismiss for forum non conveniens pursuant to Code of Civil Procedure sections 410.30 and 418.10. (Berg v. MTC Electronics Technologies Co. (1998) 61 Cal.App.4th 349, 358.)

A distinction has been drawn between a mandatory and a permissive forum selection clause for the purpose of analyzing whether the clause should be enforced. (Intershop Communications, supra, 104 Cal.App.4th at p. 196.) A mandatory clause will ordinarily be given effect without any analysis of convenience; the only question is whether enforcement of the clause would be unreasonable. (Ibid.) When the forum selection clause permits submission to a jurisdiction of a particular forum without expressly mandating litigation in that forum, the clause is permissive and traditional forum non conveniens analysis applies. (Ibid.; see also Berg v. MTC Electronics Technologies Co., supra, 61 Cal.App.4th at pp. 358‑360.)

In Intershop Communications, the court concluded a forum selection clause stating [t]o the extent permitted by the applicable laws the parties elect Hamburg to be the place of jurisdiction was mandatory. (Intershop Communications, supra, 104 Cal.App.4th at p. 196.) The forum selection in the Plasma Supply Agreement, which states [t]he sole place of jurisdiction for any litigation is Munich, is equally mandatory.

Octapharma does not contend the forum selection clause in the Plasma Supply Agreement is unenforceable, and has initiated litigation against Bio-Medics in Germany. Instead, Octapharma contends it is entitled by statute to proceed with its appeal pending resolution of that litigation. In Dial 800 v. Fesbinder (2004) 118 Cal.App.4th 32, 47, the court stated: As to the pendency of a dispute in the courts of another nation, the controlling rule of law is as follows: The pendency of the action in [a foreign country] is not a bar to the institution of another action between the same parties and for the same cause of action in the courts of California, nor was it the duty of the Superior Court to stay the action pending the determination of the earlier suit in [the foreign country], even though the entire controversy might be there disposed of. As a matter of comity, although not a matter of right, the court had power to continue the case if the circumstances warranted such action. [Citation.] [] . . . The reason why the pendency of an action in the courts of one sovereignty will not abate an action in the courts of another sovereignty is twofold: First, because a foreign judgment depending on foreign law may be unjust, and could not be enforced beyond the jurisdiction of the foreign court without a new suit on it as only prima facie evidence; and second, and chiefly, because the remedy in the country where the last suit is brought may be more adaptable and safe, and means for effectuating a judgment may be found in the latter and not in the former country. [Citations.] Thus, California is not required to dismiss an action merely because initiatory steps are taken in a foreign country. [Citation.] Rather, a California judge has discretion to stay the trial in this states court pending the outcome of a foreign action. [Citation.]

III.

Bio-Medicss Motion to Dismiss or Stay the Appeal

Bio‑Medics argues the appeal should be stayed because the forum‑selection clause in the PSA [Plasma Supply Agreement] governs this action and [t]his appeal arises directly from [Octapharmas] claims that Bio‑Medics breached the PSA. We agree we should exercise our discretion to stay the appeal to the extent it is based on claims arising out of alleged breaches of the Plasma Supply Agreement. The forum selection clause is included in the Plasma Supply Agreement, and, therefore, any claims arising out of it should be litigated to resolution first in the agreed‑upon forum.

Octapharmas appeal is also based on claims arising directly out of the Security Agreement, which does not have a forum selection clause. The Security Agreement stated that, in the event of a default, Octapharma may commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect any of the Collateral and to enforce any other right in respect of the Collateral. The Security Agreement included obligations independent from the Plasma Supply Agreement; for example, the Security Agreement stated that Bio‑Medics shall not sell, assign, pledge, exchange, lease, hire out, grant a security interest in, or otherwise dispose of the Collateral or any interest therein. The Security Agreement defined the collateral as all equipment, machinery, furniture, and source plasma whether now owned or existing or hereafter created or acquired that was located in or on the four original blood plasma donor centers.

In the second cause of action, Octapharma alleged Bio‑Medics breached the Security Agreement by selling or transferring the collateral. That claim is based on the terms of the Security Agreement and therefore is not derivative of the Plasma Supply Agreement. Octapharmas motion for a preliminary injunction sought to enjoin Bio‑Medics from selling or transferring the collateral blood plasma donor centers and plasma to PCCI and Biomat. Thus, Octapharmas motion for a preliminary injunction and appeal from the order denying it are not subject to the forum selection clause of the Plasma Supply Agreement to the extent the motion sought to prevent Bio‑Medics from selling or transferring the collateral in violation of the Security Agreement.

Bio‑Medics argues the Security Agreement is inextricably intertwined with performance under the Plasma Supply Agreement, so that claims arising out of both agreements must be stayed pending resolution of the litigation in Germany. In support of this argument, Bio‑Medics points to Octapharmas assertion the Security Agreement, in addition to indebtedness, secured performance of Bio‑Medicss plasma supply obligations under the Plasma Supply Agreement. The forum selection clause controls jurisdiction over litigation commenced under the Plasma Supply Agreement. The forum selection clause does not control litigation commenced under the Security Agreement, and does not limit our ability to construe provisions of the Plasma Supply Agreement as necessary to resolve issues arising in litigation commenced under the Security Agreement. Thus, even if the Security Agreement secured performance of Bio‑Medicss plasma supply obligations under the Plasma Supply Agreementan issue we do not decidethe forum selection clause would not compel us to stay litigation arising under the Security Agreement.

We therefore conclude, as to Bio-Medics, the appeal is stayed pending resolution of the litigation in Germany, but only to the extent the appeal is based on claims arising out of alleged breaches of or interference with the Plasma Supply Agreement. We decline to stay the appeal to the extent it is based on claims arising out of alleged breaches of or interference with the Security Agreement because it does not have a forum selection clause.

IV.

PCCI and Biomats Motion to Stay the Appeal

PCCI and Biomat are not parties to either the Plasma Supply Agreement or the Security Agreement. Octapharma sued PCCI and Biomat on the theory they interfered with those contracts, rather than for breach. Thus, the forum selection clause of the Plasma Supply Agreement did not require Octapharma to sue PCCI and Biomat in Germany or prohibit Octapharma from suing them in California.

A nonparty may be subject to a forum selection clause when the nonpartys conduct is closely related to the contractual relationship. (Lu v. Dryclean-U.S.A. of California, Inc. (1992) 11 Cal.App.4th 1490, 1493-1494 (Lu); see also Manetti‑Farrow, Inc. v. Gucci America, Inc. (9th Cir. 1988) 858 F.2d 509, 514, fn. 5 [a range of transaction participants, parties and non‑parties, should benefit from and be subject to forum selection clauses].) In Lu, supra, 11 Cal.App.4th at page 1492, the franchisees sued the franchisor and the franchisors two corporate parents for fraudulently inducing the franchisees to enter the franchise agreement. The trial court dismissed the action based on the franchise agreements forum selection clause requiring litigation to be conducted in Florida. (Id. at pp. 1492‑1493.) On appeal, the franchisees argued enforcement of the forum selection clause would be unreasonable because the two corporate parents did not sign the franchise agreement. (Id. at pp. 1493‑1494.) The Court of Appeal affirmed, finding the corporate parents conduct was closely related to the contractual relationship between the franchisor and its franchisees because the corporate parents allegedly participated in the fraudulent misrepresentations that induced the franchisees to enter into the franchise agreement. (Id. at p. 1494.) Under these circumstances, the fact that [the corporate parents] did not sign the [franchise] Agreement does not render the forum selection clause unenforceable. (Ibid.)

PCCI and Biomat do not cite Lu or related authority. Nor do PCCI and Biomat argue their alleged conduct was closely related to the Plasma Supply Agreement so as to make them subject to its forum selection clause. Rather, PCCI and Biomat argue this appeal should be stayed because all of Octapharmas causes of action asserted against them are derivative of the claims against Bio‑Medics and depend on there having been an unexcused breach by Bio‑Medics of the Plasma Supply Agreement that has resulted in damage to Appellants. Octapharma did, however, assert claims for breach of the Security Agreement that are not derivative of the Plasma Supply Agreement. For example, Octapharma sought an injunction enjoining PCCI and Biomat from purchasing assets covered by the Security Agreement and from interfering any further with that agreement.

Further, to prevail on a cause of action for interference with contractual relations, a plaintiff is not required to prove the contract was breached. Rather, the plaintiff may prove either actual breach or disruption of the contractual relationship. (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126.) [C]ases have pointed out that while the tort of inducing breach of contract requires proof of a breach, the cause of action for interference with contractual relations is distinct and requires only proof of interference. (Id. at p. 1129.) Thus, Octapharmas interference causes of action do not necessarily depend on a finding of unexcused breach of the Plasma Supply Agreement.

PCCI and Biomat argue a stay of the appeal is necessary to protect the German courts jurisdiction and to avoid the risk of inconsistent rulings and duplication of effort and judgments. PCCI and Biomat fail to show, however, that adjudication of claims for interference with contract could or would interfere with the German courts adjudication of claims for breach of contract against Bio‑Medics. We perceive no risk in inconsistent judgments by proceeding with Octapharmas appeal as to PCCI and Biomat because [t]he granting or denying of a preliminary injunction does not constitute an adjudication of the ultimate rights in controversy. (Cohen v. Board of Supervisors (1985) 40 Cal.3d 277, 286 (Cohen).) Appellate review of an order granting or denying a preliminary injunction similarly does not constitute an adjudication on the merits. (Robbins v. Superior Court (1985) 38 Cal.3d 199, 218; IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 75.) A full hearing at trial is still required to adjudicate the ultimate rights in controversy here. (IT Corp. v. County of Imperial, supra, 35 Cal.3d at p. 76.)

Denying the motion to stay could result in some duplication of judicial effort. But Octapharma properly invoked its statutory right to appeal (Code Civ. Proc.,  904.1, subd. (a)(6)), and therefore we have a duty to exercise appellate jurisdiction (Leone v. Medical Board (2000) 22 Cal.4th 660, 669). On balance, we conclude our obligation to exercise appellate jurisdiction, and Octapharmas right to appeal, outweigh the risk our efforts would duplicate those of the German court.

Merits of the appeal

I.

Principles of Review

A decision on a request for a preliminary injunction rests in the trial courts discretion. (Hunt v. Superior Court, supra, 21 Cal.4th at p. 999.) In deciding whether to issue a preliminary injunction, a trial court weighs two interrelated factors: the likelihood the moving party ultimately will prevail on the merits, and the relative interim harm to the parties from the issuance or nonissuance of the injunction. (Ibid.) When a trial court denies a request for a preliminary injunction, it implicitly finds the party seeking the injunction failed to satisfy either or both of the likelihood of prevailing on the merits factor and the relative interim harm factor. (Cohen, supra, 40 Cal.3d at p. 286.)

On appeal, the question becomes whether the trial court abused its discretion in ruling on both factors. (Cohen, supra, 40 Cal.3d at pp. 286‑287.) Accordingly, denial of a request for a preliminary injunction will be upheld on appeal if the trial court did not abuse its discretion with respect to either the question of success on the merits or the question of relative interim harm. (Ibid.; Whyte v. Schlage Lock Co. (2002) 101 Cal.App.4th 1443, 1450 (Whyte).) A trial court abuses its discretion when its decision exceeds the bounds of reason by being arbitrary, capricious or patently absurd. (Dodge, Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1420.)

Octapharma several times seizes upon statements made by the trial court in its tentative decision to challenge the courts reasoning and attempt to show abuse of discretion. In denying issuance of a preliminary injunction, a trial court is not required to prepare a statement of decision or explain its reasoning. (Whyte, supra, 101 Cal.App.4th at p. 1450.) The trial court properly denied Octapharmas motion for a preliminary injunction in a minute order, without explanation. We review the correctness of that order, not the courts reasons, and infer the court impliedly found against Octapharma on both the likelihood of prevailing on the merits factor and the relative interim harm factor. (Id. at p. 1451; see Cohen, supra, 40 Cal.3d at pp. 286‑287.) We do not consider the trial courts oral comments or the tentative decision, and do not use them to undermine the order ultimately entered. (Whyte, supra, 101 Cal.App.4th at p. 1451.) Moreover, the trial court emphasized at the hearing the tentative decision was not a complete statement of its reasoning and just hit on a few of the areas.

II.

Denial of Preliminary Injunction Against Bio-Medics

The appeal is stayed as to any claims against Bio‑Medics arising out of the Plasma Supply Agreement, therefore, our discussion as to Bio‑Medics is limited to the issue whether the trial court abused its discretion in denying a preliminary injunction based on claims arising out of the Security Agreement.

All of the respondents argue the Security Agreement has expired because it secured only the debt Bio-Medics owed to Octapharma AG, and Bio‑Medics tendered Octapharma AG a check for the full balance of the indebtedness. Octapharma argues the Security Agreement remains in effect, notwithstanding Bio‑Medicss tender of payment, because that agreement also secured Bio‑Medicss obligations to supply plasma under the Plasma Supply Agreement. We do not address that issue because, accepting Octapharmas assertion the Security Agreement remains in effect, the record supports a finding Bio‑Medics is not in possession of the collateral provided under the Security Agreement.

An injunction is warranted [w]hen it appears, during the litigation, that a party to the action is doing, or threatens, or is about to do, or is procuring or suffering to be done, some act in violation of the rights of another party to the action respecting the subject of the action, and tending to render the judgment ineffectual. (Code Civ. Proc.,  526, subd. (a)(3).) An injunction should not issue as a remedy for past acts that are not likely to recur. (East Bay Mun. Utility Dist. v. Department of Forestry & Fire Protection (1996) 43 Cal.App.4th 1113, 1126.)

Octapharma sought to enjoin Bio-Medics for selling, transferring or assigning any assets subject to the Security Agreement. The Security Agreement defined the collateral as all equipment, machinery, furniture, and source plasma whether now owned or existing or hereafter created or acquired that is located in or on the four original blood plasma donor centers operated by Bio‑Medics, and all products and proceeds of such equipment, furniture, and source plasma. Bio‑Medics sold the four original blood plasma donor centers to PCCI in 2007, and ceased collecting plasma at the Rexburg Center at the end of September 2007. Sale, transfer, or assignment of assets subject to the Security Agreement is no longer pending or threatened. The threatened sale and transfer of the assets have occurred and cannot recur.

Because Bio‑Medics transferred the collateral to PCCI, Octapharmas recourse would have been an action for conversion or to repossess the collateral from PCCI and/or Biomat. (See Official Comments on U. Com. Code, 23B pt. 2 Wests Ann. Cal. U. Com. Code (2002 ed.) foll.  9315, pp. 324‑325.) Octapharma did not seek that recourse in the complaint.

III.

Denial of Preliminary Injunction Against PCCI and Biomat

A. Octapharma Is Not Entitled to a Preliminary Injunction to Protect and Preserve Collateral Under
the Security Agreement.

Octapharma sought to enjoin PCCI and Biomat from (1) completing their purchase of the four original blood plasma donor centers; (2) selling, transferring, or assigning any plasma collected at any of the four original blood plasma donor centers to anyone other than Octapharma; (3) selling, disposing of, or transferring any other assets subject to the Security Agreement; and (4) inducing Bio‑Medics to breach the Plasma Supply Agreement or Security Agreement.

Octapharma argues it was entitled to a preliminary injunction to protect and preserve its collateral under the Security Agreement.[2] A security interest continues in collateral that is sold, disposed of, or otherwise transferred without the secured partys authorization. (Cal. U. Com. Code,  9315, subd. (a)(1) & (2); Nev. Rev. Stat. Ann.,  104.9315, subd. 1(a) & (b).) When the debtor defaults and the collateral has been sold or transferred to a third party, the secured party may seek repossession of the collateral from the transferee or, in an appropriate case, maintain an action for conversion. (See Official Comments on U. Com. Code, 23B pt. 2 Wests Ann. Cal. U. Com. Code, supra, foll.  9315, pp. 324‑325; 4 White & Summers, Uniform Commercial Code (5th ed. 2002)  34‑9, p. 390.)

Octapharma cites Turbinator, Inc. v. Superior Court (1995) 33 Cal.App.4th 443, as supporting its right to a preliminary injunction to protect and preserve its security. In Turbinator, the court held, a creditor whose security interest has lapsed retains priority rights against a subsequent purchaser which acquires its interest in the collateral with actual knowledge of the first creditors interest. (Id. at p. 446.) Based on that holding, the court concluded the secured party had priority over a purchaser of the collateral and was entitled to an injunction to protect and preserve the collateral. (Id. at p. 447.) In Turbinator, the court noted the action was an effort by [the plaintiff] to gain possession of certain personal property in which, at one time at least, it held a secured interest. (Id. at p. 446.)

Octapharma was not entitled to an injunction against PCCI and Biomat to protect its collateral under the Security Agreement because Octapharma did not sue them for conversion or to repossess the collateral. Octapharma sought damages from PCCI and Biomat for intentional and negligent interference with contract, and sought injunctive relief as an ancillary remedy to preserve the status quo pending resolution of its claims for damages. Octapharmas right to injunctive relief does not turn on whether PCCI and Biomat are threatening to impair or have impaired Octapharmas security interest in the collateral (which we will assume for the sake of argument includes any plasma collected at the four original blood plasma donor centers) by selling the collateral to anyone other than Octapharma. Octapharmas right to injunctive relief depends instead on whether it established an injunction was necessary as an ancillary remedy to prevent a pending or threatened act from occurring that would cause irreparable injury or tend to render the judgment for money damages ineffectual. (See Code Civ. Proc.,  526, subd. (a)(2) & (3).)

Accordingly, we must decide whether the trial court abused its discretion in weighing the likelihood of Octapharma prevailing on the merits of the interference with contract claims, and the relative interim harm to the parties in relation to the interference with contract claims. We do not consider whether injunctive relief was warranted to preserve and protect the collateral under the Security Agreement. As we explain in the next subpart, we do not address the likelihood of success on the merits factor as to PCCI and Biomat, because, we conclude, the trial court did not abuse its discretion on the interim harm factor. (See Whyte, supra, 101 Cal.App.4th at p. 1450.)

B. The Trial Court Did Not Abuse Its Discretion on the Interim Harm Factor.

The interim harm factor involves consideration of such things as the inadequacy of other remedies, the degree of irreparable harm, and the necessity of preserving the status quo. (Abrams v. St. Johns Hospital & Health Center (1994) 25 Cal.App.4th 628, 636; see Code Civ. Proc.,  526, subd. (a).)[3] Here, the trial court did not abuse its discretion in weighing those considerations.

1. Preserving the Status Quo

An injunction properly issues only where the right to be protected is clear, injury is impending and so immediately likely as only to be avoided by issuance of the injunction. (East Bay Mun. Utility Dist. v. Department of Forestry & Fire Protection, supra, 43 Cal.App.4th at p. 1126; see Code Civ. Proc.,  526, subd. (a)(3).) An injunction should not issue as a remedy for past acts which are not likely to recur. (East Bay Mun. Utility Dist. v. Department of Forestry & Fire Protection, supra, 43 Cal.App.4th at p. 1126.)

Here, the threatened injury has already occurred: Bio‑Medics has completed the sale to PCCI of the four original blood plasma donor centers. The sale cannot recur. There is, arguably, the potential of prospective interference with the Plasma Supply Agreement in that the plasma collected at the four original blood plasma donor centers will not be delivered to Octapharma. But as explained in the next sub‑subpart, money damages are an adequate remedy for such potential interference.

Octapharma contends the interference with contract is ongoing because Bio-Medics is in the process of transferring control of its remaining donor centers . . . to the Grifols Defendants. This apparently refers to a second stage transaction in which a company called David Barrett, Inc., will acquire all Bio‑Medicss stock in a transaction scheduled to close in June 2008. The transaction is conditioned on the owner of Bio‑Medics stock providing a release and waiver executed by Octapharma releasing Bio‑Medics from any plasma supply obligation. At the hearing on the OSC re preliminary injunction, counsel for PCCI and Biomat commented the owner of Bio‑Medics stock was engaged in a transaction to sell the stock to an entity controlled by Grifols.

Neither comments by counsel nor the scant evidence of the second stage transaction reveals whether the entity acquiring the Bio‑Medics stock will be PCCI or Biomat. Nor does Octapharma explain how a stock sale constitutes interference with or threatened interference with the Plasma Supply Agreement, particularly when the transaction is conditioned on Octapharma releasing Bio‑Medics from its plasma supply obligation. The trial court did not abuse its discretion in declining to enjoin the second stage transaction.

2. Adequacy of Money Damages

A court may issue a preliminary injunction when money damages would be inadequate or extremely difficult to calculate. (Code Civ. Proc.,  526, subd. (a)(4) & (5); Thayer Plymouth Center, Inc. v. Chrysler Motors Corp. (1967) 255 Cal.App.2d 300, 306.) [B]efore a court may issue a nonstatutory injunction as a provisional remedy for breach of contract, it must appear that monetary relief would not afford adequate relief or that it would be extremely difficult to ascertain the amount of damages. (Pacific Decision Sciences Corp. v. Superior Court (2004) 121 Cal.App.4th 1100, 1110; see also Tahoe Keys Property Owners Assn. v. State Water Resources Control Bd. (1994) 23 Cal.App.4th 1459, 1471 [In general, if the plaintiff may be fully compensated by the payment of damages in the event he prevails, then preliminary injunctive relief should be denied].)

Here, substantial evidence supported an implied finding that Octapharmas causes of action against PCCI and Biomat for interference with contract can be remedied by an award of money damages. In a letter to Bio‑Medics, dated April 24, 2007, Octapharma stated: Should Bio‑Medics breach and default its obligations under the Agreement in 2007, Octapharma will face damages by Bio‑Medics in the amount of U.S. $270 for each liter of plasma that Bio‑Medics fails to provide. This is equal to a damage of U.S. $7,452,000.00 for 2007 until today only and U.S. $24,406,920.00 for the entire year of 2007, based on the average supply until today. In its reply memorandum in support of the OSC re preliminary injunction, Octapharma stated, [i]t has never been disputed that the monetary damages in this case are calculable.

3. Irreparable Injury

An injunction may issue to prevent great or irreparable injury. (Code Civ. Proc.,  526, subd. (a)(2).) To entitle a plaintiff to injunctive relief the burden is upon him to prove actual or threatened injury . . . . Facts concerning the irreparable injury which, it is asserted, will result to the complainant unless protection is extended . . . must be pleaded. (City of Torrance v. Transitional Living Centers for Los Angeles, Inc. (1982) 30 Cal.3d 516, 526.)

Octapharma asserts, a preliminary injunction is required to prevent harm to the hundreds, if not thousands, of U.S. patients who are treated with Appellants Octagam product. In support of its motion for a preliminary injunction, Octapharma submitted form declarations from about 35 physicians, 14 pharmacists, and 17 nurses who are treating patients with Octagamfor IGIV therapy. The declarations contained blank spaced to be filled in by the declarant. The form declaration states the declarant typically provide[s] or recommend[s] this particular IGIV formulation because, in my professional experience, it has a lower incidence of untoward reactions and is better tolerated in most instances. The form declaration also states: I am very concerned about the welfare of these patients if this IGIV formulation becomes less available. Not only is this formulation often preferred due to its clinical efficacy and low incidence of untoward reactions, but changing from this formulation of IGIV to another IGIV product carries the potential risk of negative side effects for these patients, such as headaches, fatigue, nausea, and even severe reactions such as rash, back and bone pain. . . . [] . . . Additionally, changing from Octagam to another I[G]I[V] product may require patients to be placed in controlled medical settings such as hospitals in order to monitor the transition and manage the occurrence of any side effects.

Respondents objected to these declarations, but the trial court never ruled on the objections.

Octapharma contends the trial court did not consider the declarations from the health care providers, believing it could not consider harm to third parties. The trial court never stated it could not or would not consider the evidence of potential harm to third parties, and, under the relevant standard of review, we presume the trial court considered such evidence. (Whyte, supra, 101 Cal.App.4th at pp. 1450‑1451.) The reporters transcript shows the trial court asked Octapharmas counsel for authority for the proposition that harm to third parties is a factor when considering whether to issue an injunction. After counsel cited Jeneski v. Myers (1984) 163 Cal.App.3d 18, the court asked counsel for PCCI and Biomat to respond to Octapharmas assertion and to the health care provider declarations.

For purposes of argument, we assume, without deciding the issue, a trial court may consider harm to third parties in deciding whether to issue a preliminary injunction. The health care provider declarations submitted by Octapharma did not, however, establish irreparable injury. The trial court might have discounted the declarants credibility, or declined to draw the inference that a significant number of patients using Octagam could not safely switch to a different IGIV.[4] (See Whyte, supra, 101 Cal.App.4th at p. 1450 [trial court is sole judge of declarants credibility].) The declarations are written in such equivocal language (e.g., changing to another IGIV carries the potential risk of negative side effects; changing to another IGIV may require patients to be placed in controlled medical settings) that the trial court could have declined the draw the inference the patients would in fact suffer harm from a disruption in the supply of Octagam.

Moreover, the declarations concern only the possible effects on patients if there is a disruption in supply of Octagam; the declarations do not show that there has been or will be any actual or threatened disruption in the production of Octagam, or that any acts of PCCI and Biomat would cause the disruption. Octapharma did not submit evidence that it did not have other sources of blood plasma sufficient to maintain Octagam production. Octapharma alleged that Bio‑Medics supplied about one-third of Octapharmas blood plasma needs, and Octapharma has other blood plasma suppliers.

Motion to Admit New Documentary Evidence

With the reply brief, Octapharma filed a motion to admit new documentary evidence pursuant to Code of Civil Procedure section 909. The motion requests we admit: (1) a copy of a plasma supply agreement dated March 5, 2007 between Bio‑Medics and PCCI, and (2) an updated plasma delivery chart purporting to track deliveries of plasma from Bio‑Medics to Octapharma through October 29, 2007. The motion was accompanied by a request to conditionally seal the evidence. Respondents opposed the motion to admit new documentary evidence, and all filed their own motions to seal the new evidence.

Code of Civil Procedure section 909 authorizes the Court of Appeal to take additional evidence for the purpose of making the factual determinations or for any other purpose in the interests of justice. However, [t]he circumstances under which an appellate court can receive new evidence after judgment, or order the trial court to do so, are very rare. (Philippine Export & Foreign Loan Guarantee Corp. v. Chuidian (1990) 218 Cal.App.3d 1058, 1090.) The evidence normally must enable us to affirm the judgment rather than lead to reversal, and [t]he power to take evidence in the Court of Appeal is never used where there is conflicting evidence in the record and substantial evidence supports the trial courts findings. (Ibid.) It follows that if the judgment can be affirmed without consideration of [the] motion to take additional evidence, we need not consider it. (Wachovia Bank v. Lifetime Industries, Inc. (2006) 145 Cal.App.4th 1039, 1048.)

Octapharmas motion to admit new documentary evidence does not satisfy those standards. Octapharma asks us to admit the new evidence to reverse, rather than affirm, the order denying a preliminary injunction. Octapharma argues the Bio‑Medics/ PCCI plasma supply agreement, which includes a clause stating money damages are an inadequate remedy for breach, establishes money damages are an inadequate remedy for breach of the Plasma Supply Agreement. Substantial evidence supported the trial courts implied finding that money damages are an adequate remedy for breach (or interference with) the Plasma Supply Agreement, and, therefore, taking additional evidence on the issue would be improper. Octapharma argues the updated plasma delivery chart shows that Bio‑Medics continues to breach its plasma supply obligations under the Plasma Supply Agreement. This is nothing new: Bio‑Medics has conceded it has fallen short, and continues to fall short, in meeting its plasma supply requirements under the Plasma Supply Agreement. In any case, Octapharmas appeal based on claims against Bio‑Medics arising out of the Plasma Supply Agreement is stayed pending outcome of the litigation in Germany.

In addition, the Bio‑Medics/PCCI plasma supply agreement does not qualify for admission under Code of Civil Procedure section 909 because it existed and was discoverable when the trial court heard the motion for a preliminary injunction. (See In re L. B. (2003) 110 Cal.App.4th 1420, 1423, fn. 1.) The Bio‑Medics/PCCI plasma supply agreement was made in March 2007, several months before the hearing on Octapharmas OSC re preliminary injunction. When denying an ex parte application for expedited discovery, the trial court explained to Octapharma it could bring a noticed motion for advanced discovery and have more time to gather evidence in support of a preliminary injunction. Octapharma chose to proceed immediately with a motion for a preliminary injunction rather than to conduct discovery.

In addition, the updated plasma delivery chart offered by Octapharma is inadmissible because it was not authenticated. (Evid. Code,  1401, subd. (a) [authentication of a writing is required before it may be received in evidence].) The chart is appended to the declaration of Jessica D. Gabel, an attorney representing Octapharma, who states: The Plasma Delivery Chart is based upon information received weekly from Barbara Glantschnig, the Head of Corporate Quality Assurance Plasma and Plasma Procurement for Octapharma AG. Ms. Glantschnig is responsible for tracking the total volume of plasma that Octapharma AG receives from its plasma suppliers. The initial delivery chart was attached to her declaration submitted to the trial court. The declaration does not establish that Gabel has personal knowledge of the amount of plasma received by Octapharma or that Gabel prepared the chart or has knowledge of its preparation. (See id.,  702, subd. (a) [testimony is inadmissible unless witness has personal knowledge of matter].) Gabels declaration does not show the chart is a business record (id.,  1271) or falls within any other exception to the hearsay rule.

Disposition

Bio‑Medicss motion to dismiss or stay the appeal is granted in part and denied in part, and the appeal is stayed as to Bio‑Medics for claims arising out of the Plasma Supply Agreement only. PCCI and Biomats motion to stay the appeal is denied. The order denying Octapharmas request for a preliminary injunction is affirmed to the extent the appeal is not stayed. Octapharmas motion to take new documentary evidence is denied, and the motions to seal the additional evidence are denied as moot.

Respondents shall recover their costs incurred on appeal.

FYBEL, J.

WE CONCUR:

ARONSON, ACTING P. J.

IKOLA, J.

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[1] Grifols was named as a defendant in Octapharmas complaint, but was not served before the hearing on the motion for a preliminary injunction, and is not a party to the appeal.

[2] The Security Agreement states its terms which are defined in the Uniform Commercial Code, as enacted by the State of Nevada, . . . will, unl