Casden v. Casden

Filed 6/17/08 Casden v. Casden CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

APPEAL from a judgment of the Superior Court of Los Angeles County. Cesar C. Sarmiento, Judge. Affirmed.

Hillel Chodos and Deborah Chodos for Plaintiff and Appellant.

Skadden, Arps, Slate, Meagher & Flom, Thomas J. Nolan, Carl Alan Roth, Stephen Haydon-Khan and Jennifer Del Castillo for Defendants and Respondents.

__________________________________

SUMMARY

This matter has already been before this court several times before. Two brothers, Henry Casden and Alan Casden, worked together at a company Alan owned. However, after a dispute between the two, Henry left his employment. Days later (but more than nine years ago now), Henry filed suit against his brother Alan and two of Alans businesses, alleging he did not receive the benefits to which he was entitled under several agreements relating to his employment. Alan and his companies then asserted a number of claims against Henry seeking rescission of the agreements and damages for fraud and failure to perform job duties.

After the defendants prevailed on a summary judgment motion and subsequent jury trial (after a mistrial), Henry appealed and we reversed both judgments. After retrial, both sides appealed, and we affirmed in part, but reversed and remanded for retrial on certain claims. As relevant to this appeal, Henrys claim for bonus compensation was reinstated (the trial court had found it barred by a release agreement Henry had signed) and he was entitled to a new trial on the amount of damages for breach of an award agreement. After this latest retrial, as to both of these claims, the jury concluded Henry was due no damages. Henry appeals. We affirm.

FACTUAL AND PROCEDURAL SYNOPSIS

In our 2005 opinion, we summarized the proceedings to date as follows: Henry Casden is a lawyer who was a name partner in a law firm prior to February 1988. At that time, Henry went to work as president and in-house lawyer at The Casden Company (TCC), a business his brother Alan Casden owned and controlled. TCC developed and managed commercial and residential properties. Sometime in 1997, TCC decided to reorganize into a real estate investment trust (REIT) called Casden Properties, Inc. (CPI).

Henry signed an agreement with CPI, stating he would serve as the companys president for a term of three years (the Employment Agreement). As a benefit of his employment, Henry was awarded 277,777 Class B Units or shares in the REIT. The terms of the award were memorialized in an agreement (the Award Agreement) between Henry and another company called Casden Investment Corporation (CIC). Henry also entered into a settlement and release agreement (Release Agreement) under which he agreed to release all claims to any ownership interests in Alans companies other than certain claims specifically identified in the agreement.
Less than five months after Henry became president of CPI, he tendered his resignation after a dispute with Alan. Eight days later, Henry commenced this litigation against Alan, CPI and CIC.
Henry styled his complaint as an action for declaratory relief. In his first cause of action, he sought a declaration stating he was entitled to salary and severance pay under the Employment Agreement. In his second cause of action, he sought a declaration stating he was entitled to full, free and unrestricted ownership of all 277,777 of his Class B units in Casden Properties Operating Partnership, LP, free of any claim by defendants or any of them to re-take any or all of said units.
CPI and CIC filed a cross-complaint seeking rescission of the Employment Agreement and the Award Agreement and damages for fraud, breach of the agreements, and breach of fiduciary duty, among other claims. They alleged Henry entered into the agreements without the intention of fulfilling his obligations, and he subsequently failed to perform his duties as president of CPI.
In return, Henry filed a cross-cross-complaint. In his first cause of action against Alan, CPI and CIC, Henry alleged these defendants converted both his severance pay and dividends on his 277,777 units in the REIT. In his second cause of action against Alan and TCC, Henry alleged these defendants breached their oral agreement to pay him an annual bonus of 10 percent of any profits or gains earned by Alan or TCC from the operation or sale of the company, in exchange for his services as president and chief operating officer of TCC.
In the prior appeal in this matter, Henry challenged judgments entered after defendants prevailed on their summary judgment motion and at trial. This court reversed both judgments and the matter went back for a retrial on all of Henrys and defendants claims.[1]
On remand, Henry dropped his conversion claim in its entirety and his declaratory relief claims as to Alan only. When all was said and done, the matter went to trial on (1) Henrys claims for declaratory relief against CPI and CIC based on the Employment Agreement and the Award Agreement, (2) Henrys claim for bonus compensation against Alan and TCC, and (3) CPI and CICs cross-claims for fraudulent inducement of the Employment Agreement and the Award Agreement and breach of fiduciary duty.
At trial, on the eve of the close of evidence, the court made two key rulings which are at issue on appeal. First, the court decided to allow Henry to seek damages for breach of the Employment Agreement and the Award Agreement, even though Henry had styled his complaint as one for declaratory relief and had litigated the case in a manner consistent with his pleadings for more than four years. Second, the court ruled the Release Agreement barred Henrys claim for bonus compensation and the court dismissed the claim.
The jury found CPI breached the Employment Agreement and awarded Henry $450,000 in severance pay. The jury found CIC breached the Award Agreement and awarded Henry $4,999,986 as the value of the 277,777 units. The jury also found Henry breached his fiduciary duties to CPI and CIC and awarded these defendants $1 million in damages.
The trial court entered judgment in accordance with the jurys verdict. The court awarded Henry $159,612.74 in prejudgment interest on the damages for breach of the Employment Agreement and $2,197,254.11 in prejudgment interest on the damages for breach of the Award Agreement. (Casden v. Casden (Apr. 6, 2005, B171910) [nonpub. opn.].)

As relevant to this appeal, in our 2005 opinion, we agreed with Henry that the trial court had erred in dismissing Henrys claim for bonus compensation. Henry had claimed Alan and TCC had breached an oral agreement to pay him an annual bonus of 10 percent of any profits or gains Alan or TCC earned from the operation or sale of the company in exchange for Henrys services as president and chief operating officer of the company. The trial court had dismissed this claim, finding it barred by the Release Agreement. Because the plain language of the Release Agreement specifically defined released claims as any claim resulting from, arising out of or in connection with any purported ownership interest, of any type or nature in any of Alans companies and Henrys claim for bonus compensation did not constitute an ownership or equity interest in any of the companies, we concluded Henrys bonus claim survived the Release Agreement. (Casden v. Casden, supra, B171910, italics added.)

Further, we agreed with CIC that it was entitled to a new trial on damages on Henrys claim for breach of the Award Agreement. Because the trial court had allowed Henry to convert what had always been a declaratory relief claim to one for damages at such a late date, CIC was deprived of a full and fair opportunity to present a defense to Henrys damage claim. In our prior opinion, we reasoned as follows: In his complaint, Henry sought a declaration stating he was entitled to full, free and unrestricted ownership of all 277,777 of his Class B units in Casden Properties Operating Partnership, LP, free of any claim by defendants or any of them to re-take any or all of said units. He did not seek damages for breach of the Award Agreement. In the first trial, Henry litigated his claim in a manner consistent with his pleadings. Apparently neither side conducted discovery on the value of the units. Nor did they designate any damages experts.

After the matter was remanded from this court, Henry stated in opposition to defendants motions in limine he intended to seek damages for CICs wrongful withholding of the units (i.e., breach of the Award Agreement). Defendants pointed out, in the complaint, Henry only sought a declaration of his right to the units and not a determination of the value of the units. They also noted Henry had not designated a damages expert.

Less than a week before trial, the court heard oral argument on the proper procedure for handling Henry's newly-asserted damages claim. Henry argued, because the units no longer existed as a result of the CPI-AIMCO merger, his only remedy was money damages.^[[2]] Defendants asked the trial court to bifurcate the issue of damages from that of liability, in the event the court were to allow Henry to pursue a claim for damages at all. The trial court did not resolve the issue this day (and would not resolve it until defendants last witness was halfway through her testimony).
On the first day of trial, the court indicated it might make sense to bifurcate the damages issue. The court asked the parties to submit briefing on the issue. In the meantime, the court ruled the parties could present evidence concerning Henrys expectations about the value of the units at the time he entered into the Award Agreement because this was relevant to the issue of liability. But the parties could not present evidence concerning the value of the units at the time of the CPI-AIMCO merger because this was only relevant to the issue of damages, and the court had not yet decided whether to bifurcate that issue.
During his opening statement, Henrys counsel told the jury Henry was seeking only declaratory relief: It is a complaint for declaratory relief. Thats a special procedure that is available. You dont actually sue anybody for money or claim any wrongdoing.
Throughout the trial, the parties and the court continued to discuss a possible bifurcation of issues, including the value of the units at the time of the CPI-AIMCO merger. After defendants last witness was halfway through her testimony, the trial court decided to resolve the issue. At the outset of the conference, the court commented: Defendants make a persuasive case that theres a lot of different views and complicated determinations that have to be made in order to come up with what the value of the shares would have been. So on that, Im inclined to agree that there needs to be bifurcation. By the end of the conference, however, the court had changed its position: Well Im not going to bifurcate. Im making that decision for a couple of reasons. One of which is judicial economy [sic]. . . . [P] I think theres evidence that has been offered on the issue of damages by both sides. Certainly it could have been possible for there to be more, but I dont believe either side is prejudiced. [P] I think each side is going to be able to make its -- has some basis in testimony or other evidence to make the arguments that are advantageous to their side and their position. . . .
We find the trial court erred in ruling on the eve of the close of evidence that there would be no bifurcation of the damages issue. There can be no doubt the error was prejudicial. CIC did not have an opportunity to call an expert to testify about the value of the units of this closely-held company, or to put on additional evidence to rebut Henrys claim for damages. It appears likely the trial court just wanted the four-week trial to come to a close. The court already had told the jury evidence would close the day before the court made its ruling on this issue. The court acknowledged there probably was more evidence defendants could have presented on damages, but asserted defendants had presented enough evidence to make the arguments they wanted to make. Having proceeded (for more than four years) as if this was a claim for declaratory relief, defendants clearly were precluded from presenting the best case they could have on damages.
CIC says evidence concerning the value of the units at the time of the CPI-AIMCO merger is relevant to its damages case. Henry argues CIC should be estopped from presenting such evidence because CIC objected to its introduction below. Henrys argument is disingenuous. As he well knows, CIC objected to the admission of this evidence because it had no bearing on Henrys expectations as to the value of the units -- which was the issue the trial court found relevant to the determination of liability. CIC always has maintained the CPI-AIMCO merger is key evidence when it comes to measuring damages. Even though the merger occurred a few years after the breach of the Award Agreement, it was the first and only time the [units] had ever been valued in a market transaction, as CIC points out. We agree this evidence is relevant to a measurement of damages for breach of the Award Agreement, and the trial court should permit CIC to introduce this evidence in a new trial on damages.^[[3]]
For the foregoing reasons, we remand the matter for a new trial on the amount of damages caused by CICs breach of the Award Agreement.[] (Casden v. Casden, supra, B171910, italics added.)
We concluded: The judgment is reversed in the following respects: Henrys claim for bonus compensation is reinstated. The award of $1,000,000 in favor of CPI and CIC on their breach of fiduciary duty claim is reversed. The award of $4,999,986 in favor of Henry on his claim for breach of the Award Agreement plus $2,197,254.11 in prejudgment interest is reversed. The cause is remanded to the trial court (1) for further proceedings on Henrys bonus compensation claim, (2) a new trial on defendants breach of fiduciary claim limited to whether defendants are entitled to restitution of the $107,592.29 in salary and the $10,000 in legal fees, and (3) a new trial on the amount of damages caused by CICs breach of the Award Agreement. In all other respects, the judgment is affirmed.^[[4]] (Casden v. Casden, supra, B171910.)
After remand, Respondents retained a valuation expert from Deloitte & Touche (Mark Hayden) to conduct a detailed valuation analysis. After examining CPIs financial statements, shareholder agreements and related corporate documents, Hayden prepared a report in which he valued the Class B units at between $0 and $5 as of May 12, 1999 (the date of breach and the date on which Henry demanded valuation).

In early 2007, the parties proceeded to trial on the remaining issues. Both Henry and Alan testified regarding the negotiations preceding the formation of the REIT and Henrys award of 277,777 Class B units. Much of the testimony introduced at trial was both parties prior testimony from the 2003 trial. In the spring of 1998, Henry said, he believed he was entitled to a profits bonus as well as an equity bonus when the REIT was formed totaling between $9 million and $12 million. He described initial conversations in which Alan spoke of various shares that would vest over 5 years worth as much as $10 million but also acknowledged that as the REIT project progressed over the summer, Alan told him on successive occasions that for various reasons, including some negative financial events involving the REIT, Henry would be receiving fewer units of lesser value. In early December, Alan told Henry he would be getting $5 million worth of units.

As background, the jury heard testimony regarding the significant downturn in the real estate business in the 1990s preceding TCCs 1997 decision to form a REIT (CPI) to facilitate outside investment. Throughout 1998, TCC sought the requisite outside funding from Wall Street, and, with the aid of Donaldson, Lefkin & Jenrette (DLJ), identified Blackacre Capital Partners (Blackacre) as a potential investor.

According to Alan, the initial expectation was for CPI to retain a $450 million equity stake in the REIT, with key executives to receive shares as incentive to make the REIT succeed. In this context, Alan said, he discussed allocating 500,000 shares in the REIT, vesting over five years, to Henry. Subsequent calculations led to a significant reduction in CPIs retained equity stake, reducing the number of shares to be granted.

In the midst of discussions with Blackacre, financial markets experienced a severe liquidity crisis following the failure of a large hedge fund (Long-Term Capital Credit Management). Because of the impact of the liquidity crisis on Blackacres ability to raise the $330 million contemplated for investment, it wanted to terminate the transaction, but negotiations resumed. Thereafter, Blackacre agreed to invest significantly less and insisted on 8.74 million Class A Preferred CPI shares, rather than common stock, accompanied by stringent terms including a guaranteed payment of 18% annually and a claw back provision. This meant it could redeem its shares at a 50% premium if CPI held a qualifying initial public offering (IPO), standing to recoup $37.50 for each of its Preferred shares. Next in line, Junior Preferred shares issued to professional investors required CPI to pay 12% and carried special redemption rights assuring $25 per share after redemption of Blackacres shares upon IPO or liquidation.

The Class B Units at issue here carried no such preferences or special rights and stood last in line of priority. According to Alan, Henry was not happy about the conditions but Alan told him he had no choice but to accept the Blackacre terms if they were to go forward because they owed between $450 and $500 million beyond the mortgage debt on the REIT properties, including $300 million owed Chase Manhattan and $150 million to Blackacre.

In this context, CPI was formed on December 31, 1998, and Henry became its president the following day. Under the language of the Employment Agreement (which contained an integration clause), Henry was awarded Class B units in CPI with no mention of any guarantee of any particular value.[5] Similarly, the Award Agreement contained no guarantee of value. To the contrary, however, it did recite Henrys express acknowledgement that acquisition of the Units was speculative and involve[d] a high degree of risk of loss, including the substantial risk[] of loss of the entire amount of such investment. Furthermore, Henry expressly acknowledge[d] that he may be required to bear the economic risk of an investment in the Class B Units for an indefinite period of time and that he is able to bear such risk for an indefinite period.

The Class B Units were severely restricted. They could never be sold or transferred and could only be exchanged for CPI common shares one year after an IPO or other such qualifying event. According to the Award Agreement, [the] purpose of the Award is to retain executive officers in key positions by providing such persons with a proprietary interest in the future profits of the Operating Partnership as compensation for their contributions to the Operating Partnership, and as an incentive to make such contributions and to promote the Operating Partnerships growth and profitability in the future.

The defense expert (Hayden) testified in detail regarding how he arrived at his valuation for the shares on the date Henry left his employment (May 12, 1999).[6] He opined theres no value for those units on May 12th given the restrictions, given the preferences of the preferred [shares], given the uncertainty surrounding the IPO [which, as we will further address, did not transpire until March of 2002] and everything else associated with those pieces of paper. He gave little significance to the AIMCO merger that occurred nearly three years later (in March 2002) because, he testified, it was only proper to consider what was known or knowable as of May 12, 1999, pursuant to a principle known as the no-peeking rule.[7] (Alan also testified as to the efforts of executives after Henry left to build additional properties which absolutely increased the REITs value after Henrys departure.)

The jury returned the following special verdict:

QUESTION NO. 1:

What is the amount of damages caused by [CICs] breach of the Award Agreement in withholding Henry Casdens 277,777 units?

$ 0_

QUESTION NO. 2:

What is the basis for your determination in Question No. 1?

___ Agreement between the Parties

___ Value of the Units

_X_ Both

QUESTION NO. 3:

(a) Was there an agreement between Henry Casden and Alan Casden for payment of an incentive compensation/bonus compensation to Henry?

_Yes_ Yes or No

If your answer to Question No. 3(a) is No, please sign and date this form. If your answer is Yes, please proceed to Question No. 3(b), 4 & 5.

(b) If your answer to Question No. 3(a) above is Yes, what is the amount?

$_0_[8]

The subsequently entered judgment provided as follows: (1) Judgment is granted in favor of TCC and Alan on Henrys cross-cross claim for an oral agreement to pay incentive compensation/bonus compensation; (2) Henry shall recover no damages on his claim against CIC for breach of the Award Agreement; (3) Henry is entitled to judgment against CPI for breach of the severance pay provision of the Employment Agreement in the amount of $450,000, plus interest, which amount has been paid in full; and (4) Judgment is granted in favor of CPI against Henry in the amount of $117,592.29 for breach of fiduciary duty.[9]

Henry appeals from the portions of the judgment awarding him no damages on his claim for breach of the Award Agreement and no damages on his claim for breach of the oral agreement to pay bonus compensation.

DISCUSSION

I. We Reject Henrys Claim that He Is Entitled as a Matter of Law to Damages in the Amount of $5 Million for Breach of the Award Agreement.

Henry says he is entitled as a matter of law to $5 million for breach of the award agreement for two reasons: (1) First, he says, the evidence was undisputed that the parties expressly agreed that Henry was to receive $5 million worth of units in exchange for release of Henrys claims to equity. (2) Moreover, according to Henry, because the written agreements do not explicitly state the value of the units or damages for breach, the parties oral agreement as to the $5 million value supplies the missing term and is binding.[10] We disagree.

Henry acknowledges: Of course, there is no question that Alan and Henry both fully understood during all of these conversations that the Class B Units would not have any ascertainable fair market value, and that no objective value for the Units could be determined at that time. For one thing, they would be subject to restrictions and could not be sold for some period of time[ ]; for another, they would come behind other Units with various preferences that would be issued to Blackacre, the principal new investor in the REIT.[] Furthermore, they both understood that the Class B Units might fluctuate in value in the future as the financial fortunes of the REIT went up or down.

But, Henry urges, they nevertheless expressly agreed that the value of the consideration being provided to Henry under the Award Agreement in exchange for the release of his claim[ ] to an equity bonus was $5[ million] and that the $18 per Unit was an ascribed value to be used to determine mathematically the number of Units (277,777) necessary to provide Henry with the agreed total value of $5[ million] ($18 x 277,777 Units = $4,999,986). He also cites prior testimony from Alan that there was no change in the value of the Units by May 12, 1999. He says both he and Alan knew he was giving up a multi-million-dollar claim and it would have made no sense to do so if he thought the Units were worthless.

The problem Henry cannot overcome is the reality that he entered into an agreement for 277,777 Class B Units, subject to all of the restrictions and limitations summarized above, and not an agreement for a guaranteed $5 million, regardless of the subsequent value of those units. He presented the jury with Alans testimony regarding the discussions of $5 million worth of units at the time the agreement was made, but the jury also heard evidence that this projected or assumed valuation turned on multiple factors and contingencies.[11] Moreover, Henry demanded valuation as of May 12, 1999, a date when no IPO or other triggering event was on the horizon, and presented no expert testimony to contradict Haydens valuation in this regard, relying instead on his insistence that he was guaranteed $5 million. The jurys determination of zero damages is supported by substantial evidence, and Henry has failed to establish a basis for his claim to $5 million as a matter of law. (See In re Marriage of Folb (1975) 53 Cal.App.3d 862, 868, disapproved on another ground in In re Marriage of Fonstein (1976) 17 Cal.3d 738, 739, fn. 5; Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 630-631.)

Similarly flawed is his related argument that because the parties written agreements do not explicitly state the value of the Units or damages for breach, their oral agreement as to the $5[ million] value supplies the missing term and is binding. The authorities he cites in support of this contention are inapplicable for the reasons respondents argue. For example, citing Dini v. Dini (1961) 188 Cal.App.2d 506, Henry says damages for breach of an agreement to buy or sell property normally subject to valuation may nevertheless be fixed if the agreement specifies the value. However, as already explained, unlike the facts in the Dini case, Henry did not establish that the agreement specified the valuation upon breach. Accordingly, this argument is without merit. Again, Henry entered into an agreement for 277,777 Class B Units and not for monetary damages in the amount of $5 million. As the jurys verdict is supported by substantial evidence, Henry is bound by the determination as to the value of these units. (Howard v. Owens Corning, supra, 72 Cal.App.4th at pp. 630-631.)

Henrys numerous remaining arguments challenging the jurys assessment of zero damages for breach of the Award Agreement are similar attempts to sidestep the conclusion compelled by the substantial evidence rule.

He says the evidence of the AIMCO merger and other relevant evidence confirmed the reasonableness of the agreement that Henrys units were worth $5 million. As already determined, the jury found otherwise and he is bound by that determination. In our prior opinion, in mentioning the apparent relevance of the AIMCO merger, we specifically recognized that the defense had been unable to conduct discovery on the damages issue, including the retention on an expert in this regard. The point was that the presentation of evidence was unfairly one-sided and denied the defense a full and fair opportunity to present a defense; the experts subsequent determination that this evidence did not support a higher valuation was in no way precluded by the prior opinion.

We reject Henrys unsupported assertion that Haydens valuation was irrelevant; it is little more than a reassertion of his argument that the parties agreed to a valuation of $5 million in the event of breach which we find they did not.

Henry has also failed to demonstrate prejudicial error in the trial courts decision to exclude evidence of defense counsels statements to the jury at the second trial as he has failed to satisfy the necessary elements for judicial estoppel under the authorities he has cited. (See Drain v. Betz Laboratories (1999) 69 Cal.App.4th 950, 955; Thomas v. Gordon (2000) 85 Cal.App.4th 113, 118-119.) Both he and Alan had the opportunity to note and argue inconsistencies in each others testimony in prior proceedings; Henry has failed to show prejudicial error.

Likewise, Henry has failed to demonstrate prejudicial error in the trial courts decision not to explain to the jury how Henry had initially sued for declaratory relief to obtain his units and did not seek damages until January 2003. Although the trial court rejected both parties attempts to explain the lengthy procedural history in this case, both sides took advantage of the opportunity to note inconsistencies in the others testimony in prior proceedings. The trial court did not abuse its discretion in refusing this testimony under Evidence Code section 352, and Henry has failed to demonstrate how he was prejudiced as a result.

Finally, having reviewed the record, we conclude Henry has failed to establish error in the trial courts refusal to instruct the jury as he requested with instructions that inaccurately stated the applicable law (for the reasons already addressed in rejecting Henrys claim that the $5 million figure was a guaranteed amount in the event of breach) or unduly emphasized evidence favorable to Henry (namely, the March 2002 unit value in connection with the AIMCO merger) for the reasons respondents argue.

II. Henry Has Failed to Establish that He Is Entitled to a New Trial on his Profits Bonus Claim.

First, Henry says, he is entitled to a new trial on his claim for a profits bonus because respondents were improperly permitted to insinuate to the jury that the Settlement and Release Agreement barred the profits bonus claim in contravention of our 2005 opinion. We disagree.

Both Alan and Henry testified regarding the terms of Henrys oral incentive compensation agreement as summarized in a memorandum prepared by Martin Goldblum. The Goldblum Memorandum stated that Henry shall be entitled to receive 10% of the after-tax net income of [TCC] for the period commencing with (and including) January 1, 1988, through the last day of [Henrys] employment with [TCC].

Alan maintained the calculation was to be made over the full term of Henrys employment as stated in the writing. According to TCCs financial statements, notwithstanding a favorable 1990, there was no net income over the 11 years of Henrys employment with TCC.[12]

Henry claimed the agreement was later modified such that his bonus was to be calculated and paid annually. He acknowledged, however, that the memorandum stated that [a]ny modifications, amendments or alterations should be discussed between Henry and Alan and that Goldblum would put them in writing upon request if Henry and Alan agreed. He further acknowledged that he did not make such a request of Goldblum. Moreover, he made no written demands for payment of an annual bonus after April 1991 and did not present Alan with his claim he was owed $4 million until shortly before he filed his lawsuit in May 1999.

In his opening statement, respondents counsel said Henry wanted the jury to ignore the terms reflected in the Goldblum Memorandum and instead to cherry-pick one year that went well (1990) but ignore the several years of employee layoffs and downturn in the real estate business. He noted that Henry had expressly excluded certain, much smaller claims in the release he signed, but had no writing to preserve what he said at trial was a claim for $4 million by way of a profits bonus. Respondents counsel stated more than once that the Release Agreement does not release Henrys bonus claim but did question the credibility of failing to document such a claim under these circumstances.

Henry has failed to demonstrate prejudicial error in this regard. From this record including the special verdict questionnaire, it is clear that the jury did not credit Henrys testimony that the agreement was orally modified to provide for annual bonus calculation and distribution. Our prior determination that the Release Agreement did not bar Henrys claim of an oral agreement for bonus compensation did not compel the jury to believe Henrys claims as to the terms of such an agreement and reject Alans. Henry has failed to demonstrate prejudicial error.

In a separate argument in support of his claim of entitlement to a new trial on his profits bonus claim, Henry asserts without citation to any authority that the trial courts exclusion of Dennis Klimmeks testimony was clearly erroneous. Henry wanted Klimmek to testify regarding Henrys role in one particular transaction (a profitable acquisition and sale of a property known as Hawaii Kai). Because the alleged agreement did not turn on Henrys role in any transaction but rather on whether profits were to be calculated and paid annually or over the term of Henrys employment, Henry has failed to demonstrate prejudicial error.

DISPOSITION

The judgment is affirmed. Respondents are entitled to their costs of appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

WOODS, J.

We concur:

PERLUSS, P.J. ZELON, J.

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[1]Casden v. Casden (July 22, 2002, B141774) [nonpub. opn.].

[2] Defendants maintain the units still exist in a current form: While the Casden [units] were contributed in the AIMCO merger, they can be traced precisely to a specific number of corresponding AIMCO [units] and interests in deferred contingent consideration.

[3] We reject CICs argument judgment should be entered in its favor on this claim because Henry failed to prove damages. Henry presented sufficient evidence for the claim to go to the jury. The problem is the evidence was unfairly one-sided because CIC did not have a chance to present its damages case.

[4] On remand, Henry filed a peremptory challenge under Code of Civil Procedure section 170.6 to disqualify the judge who presided over the prior trial and was assigned to conduct a new trial in the matter. Later he filed another motion attempting to challenge a different judge under this provision, and when the trial court denied this second motion, Henry filed a petition for writ of mandate. We concluded the trial court had properly denied Henrys second peremptory challenge and therefore denied his writ petition. (Casden v. Superior Court (2006) 140 Cal.App.4th 417.)

[5] The agreement included a provision stating this Agreement supersedes all existing agreements between the Company and the Executive, whether oral, written, expressed or implied, and contains the entire understanding and agreement between the parties regarding the subject matter contained herein.

[6] Henry maintains his damages were required to be determined as of May 12, 1999, the date of the breach.

[7] Henry presented testimony (through Andrew Starrells who subsequently assumed Henrys duties after he left) that the value for the Class B units at the time of the AIMCO merger approximated or exceeded $5 million.

[8] The remaining questions were as follows:

QUESTION NO. 4:

Did Henry Casden and Alan Casden agree, at Alans request, that the payment of Henrys incentive compensation/bonus compensation would be delayed until funds were available?

___ Yes or No

QUESTION NO. 5:

Was Henry Casdens lawsuit concerning the incentive compensation/bonus compensation, which was filed on July 26, 1999, filed within two (2) years of the time that Henry learned that the incentive compensation/bonus compensation would not be paid by Alan Casden or his related entities?

___ Yes or No

[9] Before the trial preceding this appeal, CPI/AIMCO paid Henry the $450,000 in severance pay, plus interest, and Henry later stipulated that, following the trial on the remaining issues, judgment could be entered against him in favor of CPI in the amount of $117,592.29 (the upper limit specified in our 2005 opinion) for breach of fiduciary duty.

[10] The parties refer to the sum of $5 million but also refer to the calculation as $18 per unit multiplied by 277,777 units for a total of $4,999,986.

[11] The jury also heard Henrys prior testimony stating that the units were worth much less than $18 because of all of the uncertainty associated with them.

[12] Through his own testimony, Henry confirmed this was a rough period characterized by a downturn in the real estate business. Numerous problem loans required restructuring and 40 to 50 employees were let go.