JSA Depot v. Superior Court





















Filed 4/19/13 JSA Depot v. Superior Court 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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




>

JSA DEPOT, INC., et al., Petitioners, v. THE SUPERIOR COURT OF ORANGE COUNTY, Respondent; FOREVERLAWN, INC., Real Party in Interest.

G047288 (Super. Ct. No. 07CC06601) O P I N I O N

Original proceedings;
petition for a writ of prohibition to
challenge an order of the Superior Court
of Orange County,
Francisco F. Firmat, Judge. Petition for
a writ of prohibition is granted in part and denied in part.

Gaston & Gaston and
Matthew J. Faust for Petitioners.

No appearance for
Respondent.

Buchalter Nemer, Robert
M. Dato and Kalley R. Aman for Real Party in Interest.

*
* *

In
a prior appeal, this court reversed a $987,000 judgment in favor of two of the
petitionershref="#_ftn1" name="_ftnref1"
title="">[1]
because there was insufficient evidence to support the damages awarded. (See JSA
Depot, Inc. v. Foreverlawn Inc. (Aug.
31, 2011, G044164) [nonpub. opn.] (JSA Depot I).) Our
disposition stated, “The judgment is reversed.
No argument having been made on appeal regarding liability, the matter
is remanded for a new trial on the amount of damages only.” (Ibid.)

On
remand, the trial court entertained various motions by the parties and eventually
issued two pertinent rulings. First, the
court granted respondent Foreverlawn, Inc.’s (Foreverlawn) motion to
“reinstate” its cross-complaint, which had been voluntarily dismissed by
Foreverlawn in the course of the first trial.
Second, in response to a motion in limine pertaining to the scope of the
retrial, the court ruled it would “allow evidence of liability sufficient to
tie to damages in the 8 defined categories [of alleged breaches of
contract]. The special verdict shall ask
the jury in which of 8 ways the conduct of defendant caused damages.” The court set trial for August 27, 2012.

In
an August 20, 2012 petition
for writ of prohibition and/or other appropriate relief, petitioners challenged
both aspects of the court’s order. We
issued an alternative writ and order to show cause, and now grant the petition
in part and deny in part. The court
clearly exceeded its jurisdiction upon remand by allowing Foreverlawn to
“reinstate” its cross-complaint. Thus,
we issue a writ of prohibition restraining the court from conducting a trial in
this action on Foreverlawn’s cross-complaint.


We
decline to provide relief as to the portion of the court’s pretrial order
pertaining to the scope of admissible evidence at trial. Construed fairly, the court’s order and
accompanying oral comments at various pretrial hearings merely suggest that a
fair trial on damages in this case necessarily involves the introduction of
evidence relevant to causation. The
order does not indicate the court intends to allow the question of breach to be
retried.



FACTS



In
December 2005, Foreverlawn and JSA entered into a contract pursuant to which
Foreverlawn “granted an exclusive license to JSA to sell its turf in several
counties in California and Nevada.” (JSA
Depot I, supra, G044164.) JSA and FSC sought damages at trial pursuant
to several causes of action, including breach of contract, breach of the
implied covenant of good faith and fair dealing, and interference with
contract/prospective economic advantage.
(Ibid.) In the jury instructions presented at the
first trial, the jury was apprised of eight ways (some of which overlap) in
which Foreverlawn was alleged to have breached the contract between JSA and
Foreverlawn. To wit, JSA alleged
Foreverlawn breached the contract by (1) failing to timely deliver prepaid
orders of turf, (2) failing to deliver turf of sufficient quality, (3)
improperly altering JSA’s exclusive territory, (4) selling turf directly to
JSA’s subdealers and other customers within JSA’s territory, (5) selling turf
directly to certain national accounts within JSA’s territory, (6) entering into
exclusive dealership agreements with other entities within JSA’s territory, (7)
failing to deliver sales leads to JSA on a timely basis, and (8)
misrepresenting material facts to JSA during the negotiation and execution of
the contract.

The
jury found Foreverlawn liable to JSA and FSC in the combined amount (after a
posttrial elimination of $109,000 in duplicative damages by the trial court) of
$987,000. (JSA Depot I, supra,
G044164.) This total consisted of the
following categories: $109,000 to JSA
for breach of contract; $31,000 to JSA
for interference with contractual relations; $926,000 to JSA for breach of the
implied covenant of good faith and fair dealing ($109,000 for past economic
loss and $817,000 for other economic loss, including loss after termination of
the contract); and $30,000 to FSC for interference with prospective economic
advantage. (Ibid.) We noted in our prior
opinion that “Foreverlawn does not dispute it breached the express and implied
terms of its contract with JSA, interfered with JSA’s contracts with its
subdealers, and interfered with FSC’s potential economic relations.” (Ibid.) But we concluded there was no substantial
evidence to support the damages awarded and remanded for a trial as to damages
only. (Ibid.)

On
remand, Foreverlawn moved to reinstate its cross-complaint. The cross-complaint is not mentioned in our
prior opinion. Foreverlawn dismissed its
cross-complaint during the original trial on the condition plaintiffs not call
additional witnesses. Apparently, no
signed order of dismissal was filed in the action with regard to the cross-complaint. The court granted the motion to “reinstate”
Foreverlawn’s cross-complaint. The court
analyzed the issue in terms of the parties’ intent, explaining at the hearing
on the motion that Foreverlawn’s “stipulation [at the first trial] was we will
dismiss our cross-complaint if no other witnesses are presented. But if any other witnesses are presented,
then the deal is off. [¶] So the case gets tried . . . . It gets reversed. We get a partial trial, retrial, you’re going
to put on more witnesses. And based on
the weird language of this stipulation, your deal is your deal. If you’re going to call witnesses, the
cross-complaint gets [reinstated].” The
court did not discuss its own jurisdiction to reinstate and thereafter hold a
trial on Foreverlawn’s cross-complaint.

JSA
and FSC filed a motion in limine to determine the scope of the trial. JSA and FSC explained that they expected
Foreverlawn to “attempt to introduce evidence that it did not breach the
contract at issue. Because the matter of
breach has already been resolved in [petitioners’] favor (at both the trial and
appellate levels), the Court should limit the proceedings so that the jury is
not presented with conflicting evidence on liability.” On May
16, 2012, the court ruled in a minute order that it would “allow
evidence of liability sufficient to tie to damages in the 8 defined categories
[of alleged breaches of contract]. The
special verdict shall ask the jury in which of 8 ways the conduct of defendant
caused damages.” The court did not
address the issue of the scope of the trial at the May hearing, other than to
comment on a potential special verdict form.
“[W]e’re going to have to have a special verdict form. And the special verdict form is going to have
to address those eight categories. So
put on your thinking hats between now and then because we want to make sure we
get this right.” Counsel for petitioners
objected that he was “going to request a general verdict, but today is not the
time or place to discuss verdict forms.”

In
a prior March 2012 hearing, the court had explicated its thinking on the issue
of the scope of the trial: “[T]his is a
matter that has been tried before, and the Court of Appeal, reading at page 5
of its decision, it says that the jury has found that Foreverlawn breached its
contract with JSA. Foreverlawn
interfered with JSA’s contractual relations.
Foreverlawn interfered with the contract relations of FSC. And Foreverlawn negligently interfered with
the prospective economic relationships of FSC.
[¶] The Court of Appeal also
found that Foreverlawn breached the implied covenant, and based on those
findings, damages have been awarded
by the jury. The Court of Appeal found
that the damages were speculative and threw out completely the award for damages
but left the findings of liability in place.
[¶] Now, with regards to the
breach of contract, the jury was presented eight ways in which [Foreverlawn]
breached the contract. The jury does not
tell us which of the eight ways there was a breach of contract. In order for the jury to calculate damages,
the jury needs to hear the eight ways in which [Foreverlawn] breached the
contract. And it may be that the
original jury found that there was only one way or two ways or three or four,
or all eight ways. Since we don’t know,
I cannot instruct the jury there has been a breach of contract in eight ways,
you’re to award damages in all eight ways that there was a breach of contract,
because it could have been one or eight.
[¶] The only thing I think I can
do is tell the jury this matter was tried once before, the jury found a breach
of contract, and . . . the case needs to be tried. You will know this: there was a breach of contract by the
defense . . . . [There are] eight ways in which
damages are potentially possible, and we don’t know which ones the jury found
in the first trial, so you will hear all of that evidence again so that you can
make your own determination as to what damages are for whatever breach of
contract occurred.”



DISCUSSION



“The reviewing court may affirm, reverse or
modify any judgment or order appealed from, and may direct the proper judgment
or order to be entered, or direct a new trial or further proceedings to be
had. [Citations.] The order of the reviewing court is contained
in its remittitur, which defines the scope of the jurisdiction of the court to
which the matter is returned.
[Citations.] [¶] ‘The effect of an unqualified reversal . . .
is to vacate the judgment, and to leave the case “at large” for further proceedings
as if it had never been tried, and as if no judgment had ever been
rendered. [Citations.]’ [Citations.]
Generally, an unqualified reversal has the effect of remanding the case
for a new trial on all the issues presented by the pleadings [citation] and the
parties have the right to file amended pleadings before a retrial
[citation].” (In re Anna S. (2010) 180 Cal.App.4th 1489, 1499-1500.)

“When
an appellate court’s reversal is accompanied by directions requiring specific
proceedings on remand, those directions are binding on the trial court and >must be followed. Any material variance from the directions is
unauthorized and void. [Citations.] When, for example, ‘a cause is remanded with
directions to enter a particular judgment, it is the duty of the trial court to
enter judgment in conformity with the order of the appellate court, and that
order is decisive of the character of the judgment to which the appellant is
entitled. The lower court cannot reopen
the case on the facts, allow the filing of amended or href="http://www.fearnotlaw.com/">supplemental pleadings, nor retry the
case, and if it should do so, the judgment rendered thereon would be
void.’” (Butler v. Superior Court (2002) 104 Cal.App.4th 979, 982 [when
instructed to enter new default judgment based on evidence presented at default
prove-up hearing, trial court erred by granting motion for reconsideration by
defendant as to striking the answer and entering default]; see also >Griset v. Fair Political Practices Com.
(2001) 25 Cal.4th 688, 701-702 [trial court may not reopen case after
unqualified affirmance by appellate courts].)


“According
to the California Supreme Court, the rule requiring a trial court to follow the
terms of the remittitur is jurisdictional,
unlike the law of the case doctrine.
[Citations.] Therefore, whether
the trial court believed our decision was right or
wrong . . . it was bound to follow the remittitur.” (People
v. Dutra (2006) 145 Cal.App.4th 1359, 1367.) “Prohibition is a proper remedy to restrain a
trial court from proceeding to trial in violation of the terms of a final
judgment of the reviewing court.” (>Hampton v. Superior Court (1952) 38
Cal.2d 652, 656 (Hampton); see
Code Civ. Proc., § 1102.)

In
the prior appeal, this court reversed the judgment but remanded for a limited
trial as to damages only. “Three factors
of importance in assessing the choice of limited new trial as opposed to entire
new trial are: (1) whether liability was
clearly established at the first trial[;] (2) whether the evidence concerning
damages was insufficient or entirely nonexistent; and (3) whether prejudice to
a party would result as a result of the choice of one disposition over the
other.” (Tan Jay Internat., Ltd. v. Canadian Indemnity Co. (1988) 198
Cal.App.3d 695, 705.) If a trial
solely as to damages was unworkable, the method of challenging our disposition
of the prior appeal was to make such concerns clear in the appellate briefing
or to file a petition for rehearing at this court, not to ask the trial court
to “‘add thereto conditions which it assumes the reviewing court should have
included.’” (Hampton, supra, 38
Cal.2d at p. 656.)

A
recent case reaffirmed these general principles and applied them to a situation
in which the remittitur had limited the trial court to a retrial of damages
issues. (Ayyad v. Sprint Spectrum, L.P. (2012) 210 Cal.App.4th 851,
853-854 (Ayyad).) In Ayyad,
the initial class action trial resulted in a jury determination that the
defendant owed $73,775,975 in restitution to plaintiffs (cell phone customers)
based on the payment of unenforceable penalties for early termination, and a
simultaneous jury determination that the defendant suffered offsetting damages
of $225,697,433 based on plaintiffs’ early termination of their contracts. (Id.
at pp. 855-856.) The trial court
ultimately granted a new trial on the question of defendant’s damages. (Id.
at p. 856.) On appeal, the appellate
court affirmed the trial court “‘in all respects’” (ibid.) and explicitly “remanded for retrial on the issue of
[defendant’s] damages, and the calculation of any offset to which [defendant]
may be entitled” (id. at p.
857). On remand, defendant moved to
compel arbitration. (>Id. at pp. 857-858.) The trial court determined it lacked
jurisdiction to hear the motion and the appellate court affirmed. (Id.
at pp. 858, 864.) “If an order grants a
new trial as to a single issue, ‘it opens for examination all of the facts and
circumstances relative to that one issue and as to other issues there shall be
no retrial or examination of the facts.’”
(Id. at p. 861.) “By refusing to consider [defendant’s] motion
to compel arbitration, the trial court did no more than comply scrupulously
with our remand directions. It therefore
did not err.” (Id. at p. 862.) “The lower
court has jurisdiction to consider only
those issues specified in our disposition.
That we did not expressly comment on the issue of arbitration does not
render that fundamental rule inapplicable.”
(Id. at p. 863.)

Applying
these rules to the instant case, it is clear the trial court exceeded its
jurisdiction by authorizing Foreverlawn to “reinstate” its cross-complaint,
thereby expanding the scope of retrial beyond the question of JSA’s and FSC’s
damages. This court did not consider the
question of whether the cross-complaint could be reinstated in our prior
opinion. But as made clear by >Ayyad, supra, 210 Cal.App.4th at page 863, the omission of
Foreverlawn’s cross-complaint in our prior opinion cuts against Foreverlawn’s
position. Indeed, to the extent the
cross-complaint functioned as a mirror image of the allegations made by JSA and
FSC (e.g., it was petitioners who breached the contract and committed torts,
not Foreverlawn), the cross-complaint calls into question the very premise of
Foreverlawn’s liability. The question of
whether a signed dismissal of the cross-complaint (Code Civ. Proc.,
§ 581d) was ever entered is a red herring.
We are not concerned here with whether the dismissal of the
cross-complaint was an appealable judgment or whether the dismissal was made
with prejudice to Foreverlawn raising the same claims in a different action.

A
more interesting question is presented by the court’s ruling to “allow evidence
of liability sufficient to tie to damages in the 8 defined categories [of
alleged breaches of contract]. The
special verdict shall ask the jury in which of 8 ways the conduct of defendant
caused damages.” In a broad sense, the
court’s order is obviously right. To
establish the amount of damages under contract or tort theories of recovery, a
factfinder must decide whether the “detriment” proven by the plaintiff was
“proximately caused” by the “breach of an obligation.” (Civ. Code, §§ 3300 [“For the breach of
an obligation arising from contract, the measure of damages . . . is the amount
which will compensate the party aggrieved for all the detriment proximately
caused thereby, or which, in the ordinary course of things, would be likely to
result therefrom”], 3333 [“For the breach of an obligation not arising
from contract, the measure of damages . . . is the amount which will compensate
for all the detriment proximately caused thereby”].) The jury’s role in a damages retrial cannot
be limited to merely tallying up whatever economic losses are proven without
regard to whether such losses were caused by the defendant’s breach(es). (See Gararden
v. Olinger (1960) 177 Cal.App.2d 309, 311 [“in granting the retrial as
to damages, the court did not curtail its power to determine . . . the causal
connection between defendants’ acts and damages”].) For instance, imagine a JSA witness testifies
that JSA lost a contract with regard to a particular customer that would have
netted $20,000 in profit. The jury’s
task would not end with deciding whether it believed this testimony. Other evidence would be needed to provide a
causal link between the $20,000 loss to actions or omissions by Foreverlawn,
and Foreverlawn would not be foreclosed from introducing evidence tending to
sever the causal link.

Under
this benign interpretation of the court’s order, the court might have simply
said it would follow the Evidence Code in conducting the retrial on
damages. “Except as otherwise provided
by statute, all relevant evidence is admissible.” (Evid. Code, § 351.) “‘Relevant evidence’ means evidence . . .
having any tendency in reason to prove or disprove any disputed fact that is of
consequence to the determination of the action.” (Evid. Code, § 210.) In business litigation like that presented
here, with an extended temporal relationship between the parties and multiple
breaches of contract under consideration, the same evidence is often relevant
to breach, causation, and damages.
Petitioners cannot really expect (as they state in their traverse) the
trial court “to exclude from the retrial evidence relating to the issue of
liability.” The proper framework for
addressing the admissibility of evidence at a trial on damages is to permit the
presentation of evidence that is relevant to the question of damages, not to
exclude evidence that is relevant to the question of breach.

JSA
interprets the court’s order and antecedent oral comments as suggesting
Foreverlawn will be allowed to retry “liability” (or, more accurately,
breach). The court certainly did not
suggest the verdict form will ask the jury whether Foreverlawn breached its
contract or tortiously interfered with the plaintiffs’ contracts/prospective
advantages. JSA’s fears are not entirely
misplaced, as there is a theoretical danger of the damages trial devolving into
a retrial of the question of breach. But
we see no reason to issue a writ of mandate ordering the court to follow the
Evidence Code in conducting the trial.

DISPOSITION



Let
a writ of prohibition issue precluding the trial court from “reinstating”
Foreverlawn’s cross-complaint. The trial
court does not have jurisdiction over claims made by Foreverlawn in its
cross-complaint and the court is therefore precluded from including such claims
in the limited trial we have previously ordered. The alternative writ is discharged. In the interests of justice, each party shall
bear their own costs.







IKOLA,
J.



WE CONCUR:







RYLAARSDAM,
ACTING P. J.







THOMPSON, J.