Poland v.
LA Boxing Franchise Corp.
Filed 11/19/12 Poland v. LA Boxing Franchise Corp. CA4/3
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opinion has not been certified for publication or ordered published for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
CHRISTOPHER POLAND,
Plaintiff and Appellant,
v.
LA BOXING FRANCHISE CORPORATION et al.,
Defendants and
Appellants.
G045158
(Consol. with G045567)
(Super. Ct. No. 30-2009-00121184)
O P I N I O N
Appeal from a judgment
and orders of the Superior Court
of
County, James Di Cesare, Judge. Affirmed.
Ford & Harrison,
Lyne A. Richardson, Julianne Pinter and Michelle B. Abidoye for Defendants and
Appellants.
Mesisca, Riley
& Kreitenberg, Dennis P. Riley and Rena E. Kreitenberg for Plaintiff and
Appellant.
After a two-week
trial, a jury returned a special verdict partly in favor of plaintiff
Christopher Poland and partly in favor of his former employer defendant LA
Boxing Franchise Corporation (LA Boxing) and its principal, defendant Anthony
Geisler. The jury found LA Boxing had
not retaliated against Poland
when it fired him, did not owe him any overtime, and owed him $2,800 in unpaid
wages. It also found that LA Boxing had
not breached a contract it had with Poland,
because he had not performed his part of the bargain. Both LA Boxing and Geisler, however, were
liable to Poland
for a false promise on which he had relied, and the jury awarded Poland
$75,000 in damages for this reliance.
The trial court tacked nearly $19,000 in prejudgment interest onto this
award.
LA Boxing and Geisler
have appealed from the award of prejudgment interest only. Poland,
in turn, has appealed from various aspects of the judgment unfavorable to him
and from the orders denying his posttrial motions
for judgment notwithstanding the verdict (JNOV) and for a new trial.
As to Poland’s
appeal, we affirm both the judgment and the orders denying the posttrial
motions. Most of Poland’s
appeal reflects his dissatisfaction with the jury’s verdict. It passed muster with the trial judge. We do not disturb either the jury’s verdict
or the lower court’s evaluation of it after trial unless something went
seriously wrong. Nothing of the sort
occurred here. On LA Boxing’s appeal, we
affirm the trial court’s award of prejudgment interest.
FACTS
title="">[1]
Boxing had its origins in a scruffy gym in Costa Mesa
focusing on boxing instruction and workouts.
Geisler joined the gym in 2002 and conceived the idea of opening a chain
of nonscruffy gyms catering to a suburban clientele. Geisler opened his first gym in Aliso Viejo
in early 2003, having licensed the name from the original gym’s two owners.
opened in late 2003, and still another opened in Anaheim
shortly thereafter.
began working at the Aliso Viejo gym in 2003 or 2004 as the sales manager,
selling gym memberships. He also created
“sales documents,†scripts used to sell gym memberships to the public. After the Fullerton
location opened, Poland
held the same position there, and he may have also worked at the Anaheim
location for a short time.
In the early stages, the
gyms had only two types of employees – managers and instructors. The managers worked behind the front desk;
their primary task was to sell gym memberships, but they also greeted members
and guests and were in charge of keeping the gym clean. The instructors conducted classes.
In February 2004,
Geisler incorporated LA Boxing and hired a franchising expert to assist in
setting up the franchising operation.
The Aliso Viejo and Fullerton
gyms became franchised stores; another store opened in Albuquerque
during that same period.
After Geisler sold the
Aliso Viejo gym and it became a franchised store in late 2004, Poland
continued to work there as a sales manager until he was terminated in
2005. In 2005 or 2006, he began working
as an independent contractor for the franchise operation. He was paid $500 for each grand opening he
attended, at which he would train the general manager, sell memberships, and
assist the franchisees. He also
developed the corporation’s sales training program.
Eventually, as the
company expanded, Poland
became a full-time employee. In
mid-2005, Geisler offered Poland
a one percent commission on gross franchise receipts, “to keep [him] tied to
the gyms forever.â€
title="">[3] Poland
interpreted this offer to mean he would receive the commission for the rest of
his life, regardless of whether he was working for LA Boxing. Geisler testified that Poland
received this commission as national sales director “because [he] was very
important to the franchise corporation,†but denied that it was “for
life.†Poland
began receiving the one percent commission in March 2006. He went on the company payroll as an employee
in early 2006, with a base pay of $1,000 per month, plus his commissions.
By 2006, Poland
was the only corporate representative to attend the grand openings of the
franchised locations. He was also
involved in “discovery days,†when prospective franchisees would be given a
tour of the company headquarters and meet the people involved in the franchise
operation. On discovery days, Poland
would speak with prospective franchisees as national sales director. He also traveled to troubled franchises to
help them increase their sales, sales being the ultimate indicator of a
franchise’s success. Poland
would be dispatched to these failing franchises to take over the sales
department.
In early 2007, Poland’s
position was divided; someone else became national sales director, and Poland
became national training director. The
commission on the franchisee receipts was split as well, with each person
getting half of one percent. Poland
continued to earn a full commission on the sales he actually made, in addition
to his base salary.
By 2007, Poland was
flying all over the country to assist the franchisees as national training
director. The company charged
franchisees $500 plus expenses per day, provided Poland was able to hit certain
sales figures. Of that amount, Poland
received $400 per day as a bonus. Regardless
of whether he gained the bonus, however, Poland received his base salary and a
commission on his own sales.
Poland testified that in
June 2003, Geisler promised him and a colleague each a 10 percent equity stake
in LA Boxing. The reason for making this
offer was to compensate them for not being able to pay them up front for all
the work they would have to do to make the franchise operation successful. Poland testified he wrote training schedules,
sample training classes, and sales scripts to prepare for franchise filings, as
well as taking over the running of the additional franchise stores. He attended
a franchise convention at the Los Angeles Convention Center in 2003 or 2004, at
which he “did the same as Mr. Geisler,†which was to sell franchises, because
he had “a vested interest in the company.â€
the first few franchised stores opened up and the company offices moved to a
new location, Poland continued to work on corporate documents, on getting a
franchise up and going, on advertising, and finding building vendors. He also did franchisee training and was one
of the three people who created the franchise training manual. Poland spent dozens of hours creating and
refining the training manual. He
reviewed franchise leases and did site approvals until LA Boxing hired someone
for that specific task in November 2006.
Poland trained the managers for the new locations and hired a new
general manager for the Fullerton store.
According to Poland, Geisler was grooming him to take over LA Boxing,
once the company was running smoothly.
testified to another conversation with Geisler in May or June 2007, in which
Geisler once again promised him 10 percent of the corporation, saying he was
close to a deal with the other stockholders to buy some of their stock to give
to Poland. Poland testified that Geisler
constantly put him off with excuses when he asked when he was going to get his
stock. For his part, Geisler testified
he had never offered Poland stock in the company.
testified to numerous problems and complaints regarding Poland’s performance in
dealings with franchisees and gym customers.
One person complained of his tardiness and incompetence at a grand
opening in Westminster in May 2007. A
franchisee in Atlantic City complained that, while there for training in early
2007, Poland had taken the general manager out on the town, resulting in a
two-day absence from work due to a hangover.
In May 2007, Geisler received a serious complaint from a member of a
Connecticut gym regarding an encounter with Poland, who had reportedly chewed
the member out in very strong language for interfering with a sales
presentation Poland was making to a potential customer. The member informed Geisler that he had
called the police regarding what he perceived to be a threat of violence by
Poland. Another member from the same gym
complained to the general manager, who forwarded the complaint to Geisler, that
Poland had made offensive and harassing remarks to her. Still another potential customer e-mailed LA
Boxing after an encounter with Poland to inform the company that she would not
join one of the gyms if there was a possibility of running into him. Geisler also received two complaints in July
2007 from a franchise owner in El Paso about Poland’s using coarse and vulgar
language in front of gym members, which had bad repercussions for the gym. Although Poland was supposed to be in El Paso
for a multiple-day training session, the franchisee asked him to leave after
one day.
Poland himself reported
an altercation on an airplane going to a grand opening in Phoenix resulting in
his being detained and questioned by airport security upon landing. Poland was wearing a polo shirt with the LA
Boxing logo on it during that encounter.
There were also problems
with excessive expenses. In one instance
in late 2006, Poland crashed his personal vehicle and charged $4,500 on the
company credit card to rent a replacement.
A franchisee in Kentucky complained in July 2007 that Poland had put the
cost of a round of golf and of some golf apparel on his hotel room bill, which
was charged to the franchisee’s credit card.
In early July 2007,
Poland went to the Orlando, Florida, store, which was in dire financial
straits, to take over operations. The
store was on the brink of eviction, and Poland’s task was to raise enough money
to keep the doors open. Poland’s efforts
to increase sales having failed, Geisler told him to check the accounts
receivable and determine whether any back dues were owing. If so, Poland should make every effort to
collect the back dues.
afterward, Geisler received a report from the company that processed credit
card transactions for the Orlando store suspending the account because of a
series of unauthorized credit card charges.
Poland had charged not only back dues, but also all of the money that
the members would owe the gym in the future for the entire term of their
memberships. The franchise was not
authorized to make these charges, and they all had to be reversed.
was shut down.
After Poland returned
from Orlando in July 2007, he did not get paid as he thought he should have
been. On July 30, 2007, Poland sent an
e-mail to Geisler demanding payment of wages. Poland sent another e-mail
on the same subject on July 31.
Geisler terminated
Poland on August 1, 2007. Before that
time, however, Geisler and other LA Boxing department heads had been looking to
replace him, because of all the complaints they had been getting about
him.
The event precipitating
Poland’s termination was a report Geisler received from an LA Boxing employee
in the corporate office at the end of July of a threat by Poland to shoot up
the office, starting with Geisler. Geisler
took this threat seriously, called a locksmith to rekey all the offices, and
sent a termination letter to Poland.
mid- to late 2006, Poland informed Geisler that he wanted to purchase a
franchise for himself. Poland began
looking for financing and scouting possible territories in 2007. He testified he told Geisler in May or June
2007 that he had secured financing.
Geisler denied he had ever told Poland he could become a franchisee.
After his termination,
Poland wrote to Geisler requesting an LA Boxing franchise. Geisler refused. Poland never filled out a franchise
application form, signed a franchise agreement or disclosure statement, or
provided the initial $25,000 payment required of franchisees. After Poland’s termination, Geisler continued
to receive complaints about Poland’s behavior with members of LA Boxing
gyms.
Poland filed suit on
April 8, 2009, against LA Boxing for wrongful termination, several Labor Code
violations, and breach of oral contract.
He also sued LA Boxing and Geisler for false promise. In the wrongful termination causes of action,
Poland alleged he had been terminated because he demanded his wages. The only
Labor Code violations still at issue at trial were the two claims for unpaid wages
and overtime. Both the breach of oral
contract and the false promise were based on the promise of equity in LA
Boxing, the one percent commission, and the franchise purchase. The overtime claim was further refined to
apply only to the period between April 9, 2006 and August 1, 2007.
The case was tried to a
jury over 16 days. The jury found that
LA Boxing had not retaliated against Poland for demanding his wages and that,
as an exempt employee, he was not entitled to overtime between April 9, 2006
and August 1, 2007. The jury also found
that, although Poland and LA Boxing had entered into an agreement, Poland had
not performed his part of the bargain.
It found for Poland on unpaid wages and false promise, awarding $2,800
for unpaid wages and $75,000 as past economic damages for false promise.
economic loss or for past and future noneconomic loss (including mental pain
and suffering). The jury responded to
the question “When would a reasonable person have believed that Defendant’s [
“June 07.â€
defendants’ objection, the court entered a judgment that included nearly
$19,000 in prejudgment interest on the false promise claim, calculated from the
date of Poland’s termination, August 1, 2007.
The court denied Poland’s motions for JNOV and for a new trial. LA Boxing and Geisler have appealed from the
portion of the judgment awarding prejudgment interest on the false promise
claim. Poland has appealed from the
judgment and from the denial of his motions.
DISCUSSION
Boxing’s Appeal
Boxing has appealed from the portion of the judgment allowing prejudgment
interest on Poland’s false promise claim from the date of his termination,
August 1, 2007. The trial court held
that a stipulation into which the parties entered just before closing arguments
allowed it to determine the amount of prejudgment interest not only for the
employment claims but also for the false promise. LA Boxing has protested that the stipulation
covered only the employment claims – for wages and overtime – not the false
promise claim. It has also asserted that
August 1, 2007, is not the date from which the court should have calculated the
interest.
Stipulation
We interpret a
stipulation, as we would any contract, to determine the parties’ objective
intent when they entered into it. We
look first to the contract language itself.
If the language is ambiguous, we resolve the ambiguity “by taking into
account all the facts, circumstances and conditions†leading to the
stipulation. (Chacon v. Litke (2010) 181 Cal.App.4th 1234, 1252.) We are bound by the trial court’s
interpretation if it turned on the credibility of conflicting extrinsic
evidence. (Rooney v. Vermont Investment Corp. (1973) 10 Cal.3d 351, 372.) In this case, it did.
Civil Code section 3288
provides for prejudgment interest, “in the discretion of the jury,†in cases of
“an obligation not arising from contract.â€
This section permits an award of interest on unliquidated damages. (Bullis
v. Security Pac. Nat. Bank (1978) 21 Cal.3d 801, 814 (Bullis).) As our Supreme
Court has explained, the award compensates a party for the loss of money or
property. “The award of such interest
represents the accretion of wealth which money or particular property could
have produced during a period of loss.
Using recognized and established techniques a fact finder can usually
compute with fair accuracy the interest on a specific sum of money, or on the
property subject to specific valuation.
Furthermore, the date of loss of the property is usually ascertainable,
thus permitting an accurate interest computation.†(Greater
Westchester Homeowners Assn. v. City of Los Angeles (1979) 26 Cal.3d 86,
102-103.)
Although the statute
specifies the jury as the awarder of prejudgment interest, the court may award
it as trier of fact in nonjury trials. (
16.) Without a stipulation, however, the court has no authority to award
prejudgment interest in a jury trial.
The stipulation that is
the subject of LA Boxing’s appeal occurred as the court and counsel were
discussing jury instructions. Poland’s
counsel stated, “We have a stipulation.
We decided not to put in the verdict form the ability for the jury to
award prejudgment interest in the light of trying to make this a smaller
verdict form. Counsel and I stipulated
that Your Honor can decide the prejudgment interest after the fact based on the
jury’s findings. Plaintiff is entitled
to prejudgment interest on the – on some of these claims and plaintiff is not
waiving it because counsel stipulated that Your Honor can do it after the
fact.†The court then stated, “All
right. So stipulated, counsel? That is a simple matter of calculation.†Defense counsel then stipulated.
Poland’s counsel
prepared a judgment that included nearly $19,000 in prejudgment interest on the
$75,000 award for false promise as well as prejudgment interest on the $2,800
wage claim. LA Boxing’s objection included a copy of a proposed verdict form
exchanged between counsel before trial, which provided lines for prejudgment
interest only for the two wage claims; the final verdict form omitted these two
lines. The proposed form did not include
an entry for prejudgment interest in the false promise portion. Defense counsel asserted that she had not
stipulated to the court’s determination of prejudgment interest for that
claim. Plaintiff’s counsel asserted that
the stipulation was intended to cover all causes of action for which prejudgment
interest could be awarded.
The trial court ruled
that “from the evidence presented†the stipulation appeared to be broad enough
to include the false promise claim. The
court thus based its interpretation on conflicting extrinsic evidence, namely
the documents LA Boxing submitted as exhibits to its objection and the
declarations of counsel. Because the
trial court’s decision turns on the credibility of disputed
limited. We have no basis upon which to
overturn the trial court’s resolution of the factual dispute before it and
therefore find the stipulation to be valid.
(See Estate of Beebee (1953)
118 Cal.App.2d 851, 856-857; see also Parsons
v. Bristol Development Co. (1965) 62 Cal.2d 861, 866, fn. 2 [“when
conflicting inferences arise from conflicting evidence . . . the trial court’s
resolution is binding.â€] .)
In addition to
holding that the stipulation included the false promise claim, the court held
that interest was easily calculated from the amount of the award ($75,000) and
that “it makes sense for the date of loss to be the plaintiff’s termination
date of August 1, 2007.†We review the
choice of a date from which to calculate prejudgment interest for abuse of
discretion. (Michelson v. Hamada (1994) 29 Cal.App.4th 1566, 1588.)
LA Boxing argues that
the court should not have awarded prejudgment interest at all because Poland’s
damages cannot be made certain and because of the large discrepancy between
what Poland requested in damages (hundreds of thousands to over a million
dollars) and what the jury awarded ($75,000).
Accordingly, LA Boxing reasons, the trial court abused its discretion
when it picked August 1, 2007, as the date from which to begin calculating
interest.
While LA Boxing’s
arguments might have some relevance to an award of prejudgment interest under
Civil Code section 3287, the court actually made its award under Civil Code
section 3288, which permits an award of prejudgment interest in the discretion
of the trier of fact in non-contract actions.
It is not necessary, under this code section, that damages be liquidated
or capable of being made certain at the time of trial. (Bullis,
supra, 21 Cal.3d at p. 814.) A
discrepancy between the amount requested and the amount awarded is likewise
irrelevant under this code section.
LA Boxing supports its
arguments against this portion of the judgment exclusively with cases in which
the award of interest was based on Civil Code section 3287. This section entitles a person who can recover damages capable of being made
certain – most commonly contract damages – to prejudgment interest. (See Greater
Westchester Homeowners Assn. v. City of Los Angeles, supra, 26 Cal.3d at p.
102 [distinguishing between interest awarded under Civil Code section 3287 and
interest awarded under Civil Code section 3288].) Both
Polster, Inc., v. Swing (1985) 164 Cal.App.3d 427, and James B. Lansing Sound, Inc. v. National Union Fire Ins. Co. (9th
Cir. 1986) 801 F.2d 1560, based their awards of prejudgment interest on Civil
Code section 3287. The other authority
on which LA Boxing relies, Smith v.
Rickards (1957) 149 Cal.App.2d 648 (Smith),
involved an action for rescission, in which court based its award of interest
on equitable principles. (
has no bearing on an interest award made under either Civil Code statute.
Although LA Boxing
argued in favor of applying Civil Code section 3288 in the trial court, it has
not addressed this section at all on appeal.
It has identified no problem with an award under this code section and
given us no reason or authority to reverse this portion of the judgment. Accordingly we affirm the award of
prejudgment interest in the judgment.
Cross-Appeal
has appealed from the adverse judgment on his overtime wages and breach of
contract claims. He has also appealed
from the judgment on his false promise claim, because of the jury’s refusal to
award him any emotional distress damages and any future economic damages, in addition
to the past economic damages award of $75,000.
Finally, Poland has appealed from the two orders denying his motions for
JNOV and for a new trial.
has identified four issues that he claims require a reversal of the
judgment. These are: (1) an inconsistency between the jury’s
verdict on the breach of contract claim and the verdict on the false promise
claim; (2) the jury’s failure to award emotional distress damages and future
economic damages on his claim for false promise; (3) insufficient evidence to
support an adverse verdict on the breach of contract claim; and (4) an incorrect verdict on his overtime
claim. In the body of the brief,
however, his arguments focus on obtaining a new trial and on the trial court’s
error in denying his motion for new trial.
This inconsistency in purpose creates difficulties for our review,
because the standards of review are not the same for a judgment and for an
order denying a motion for a new trial.
It is well settled that
our review of a challenge to a jury verdict for insufficient evidence “‘begins
and ends with a determination as to whether there is any substantial evidence,
contradicted or uncontradicted,’ to support the findings below. [Citation.]
We view the evidence most favorably to the prevailing party, giving it
the benefit of every reasonable inference and resolving all conflicts in its
favor.†(Oregal v. American Isuzu Motors, Inc. (2001) 90 Cal.App.4th 1094,
1100.) We review an order denying a
motion for a new trial for abuse of discretion, examining the entire record to
assess independently whether the motion should have been granted. (ABF
Capital Corp. v. Berglass (2005) 130 Cal.App.4th 825, 832.) A trial court may grant a new trial for
insufficient evidence or inadequate damages only when, “after weighing the
evidence the court is convinced from the entire record, including reasonable
inferences therefrom, that . . . the jury clearly should have reached a
different verdict . . . .†(Code Civ.
Proc., § 657.) Finally, we review a
special verdict de novo to determine whether it is inconsistent. (Singh
v. Southland Stone, U.S.A., Inc. (2010) 186 Cal.App.4th 338, 358.)
In light of the
substantial confusion generated by Poland’s indecision as to whether he wants a
reversal of the judgment or a new trial, we will apply both standards to the
issues he has identified, where both standards can be applied.
Inconsistent verdicts
argues that the findings in his favor on the false promise claim contradict the
findings against him on the breach of contract claim and are irreconcilable
with each other. Accordingly, he
asserts, the judgment must be reversed, and he should have a new trial.
“A special verdict is
inconsistent if there is no possibility of reconciling its findings with each
other.†(Singh v. Southland Stone, U.S.A., Inc., supra, 186 Cal.App.4th at
p. 357.) If the verdict is truly
inconsistent, then there must be a new trial; the appellate court cannot choose
between two equally probable findings. (
160 Cal.App.4th 1083, 1092.) If the
verdict is merely ambiguous, however, then the both the trial court and the
appellate court can interpret it. (
Equipment Co. (1968) 69 Cal.2d 452, 456-457.)
A successful claim for
breach of contract requires proof of the existence of a contract, plaintiff’s
performance or an excuse for non-performance, defendant’s breach, and
proximately caused damages. (
142 Cal.App.4th 1457, 1489.) A contract
requires (1) parties capable of contracting, (2) their consent, (3) a lawful
object, and (4) sufficient cause or consideration. (Civ. Code, § 1550.)
A false promise is one
made without any intention of performing it.
(Civ. Code, § 1710, subd. 4.) The
plaintiff must show a promise made without any intent to perform it, an intent
to induce plaintiff’s action, justifiable reliance, and resulting damages. (Bondi
v. Jewels by Edwar, Ltd. (1968) 267 Cal.App.2d 672, 677.)
The court instructed the
jury on the breach of contract claim as follows: “Mr. Poland claims that he and LA Boxing
Franchise Corporation entered into a contract for: [¶] 1. ten percent equity in the company; [¶]
2. one percent override; and [¶] 3. a franchise.†The false promise instruction stated, “Mr.
Poland claims he was harmed because defendants made a false promise,†without
specifying the content of the promise.
Although the contract instruction referred to “a contract†with three
parts, counsel’s closing argument suggested to the jury that there were three
separate oral contracts. On the breach of
contract claim, the jury found a completed agreement between the parties, but
lack of performance by Poland. On the
false promise claim, the jury found in Poland’s favor on all questions. The verdict form does not specify which
promise or promises was or were false.
It also does not specify the contract terms the jury believed the
parties agreed to. The jury could, of
course, have believed some of the evidence of contract or false promise but not
all of it. Neither verdict had to be all
or nothing.
Regardless of which
promises and which contract terms the jury endorsed, the favorable verdict on
the false promise claim does not mandate a favorable verdict on breach of
contract, any more than the unfavorable
verdict on breach of contract would have required the jury to find LA Boxing
did not make any false promises to
Poland. These are separate claims with
separate elements; they are not totally interdependent, as Poland would have
it.
Simon v. San Paolo U.S. Holding Co., Inc. (2005) 35 Cal.4th 1159 (
plaintiff and defendant negotiated for the sale of defendant’s office building
and signed a letter of intent, but did not finalize a contract. The defendant falsely promised to proceed to
escrow and to seek approval of the sale from its head office, leading the
plaintiff, Simon, to hire and pay for a real estate attorney to complete the
transaction, which then fell through. (
Simon sued for
found against him on the contract claim and for him on the fraudulent promise
claim. (Simon, supra, 35 Cal.4th at p. 1170.) Simon relied on the defendant’s false promise
only to the extent that he hired a lawyer to complete the transaction; his
damages consisted of the amount he paid the lawyer. He could not recover for breach of the
contract to sell him the building, because the jury found there was no
contract. These were two separate
claims.
Similarly, in this case
the jury could have found that LA Boxing falsely promised Poland a franchise, a
promise on which he relied by working extra hard for low pay or by lining up
financing and looking for suitable locations.
Or the jury might have believed Poland when he said Geisler promised him
stock in LA Boxing, another false promise Poland relied on by working extra
hard for lower pay than he would otherwise have received.
Poland did not identify any other
category of reliance damages, such as investing his money in the corporation,
or paying a franchise fee, or turning down more lucrative employment offers
elsewhere. He was entitled, however, to
the value of whatever he did in reliance on the promise or promises, and that
is presumably what the jury gave him.
But the jury found against Poland on his breach of contract claim, as
the jury did in Simon. Poland was therefore not entitled to recover
what he would have gained had the contract been fulfilled, because LA Boxing
did not breach a contract.
Breach of contract and
false promise are separate causes of action, with separate requirements and
separate damages. A favorable verdict on
one is not inconsistent with an unfavorable verdict on the other. The new trial was not necessary on account of
an inconsistent verdict.
distress damages
The jury correctly found
that Poland was not entitled to future damages for false promise. Future damages are based on the losses
estimated to occur because of the false promise from the commencement of the
action into the future. (See Civ. Code,
§
3283.)
As discussed above,
Poland was harmed because he relied on a false promise to make him a
franchisee, to give him stock, or to give him a commission for life, or perhaps
on some combination of these promises.
He relied by “working for free†or providing “sweat equity.†By the time of trial, he was no longer
relying on these promises. He was not
working for LA Boxing at all, let alone working for substandard pay.
Once again,
with this case. The plaintiff in
the amount he paid the lawyer because of the false promise. His damages did not include his lost profits, i.e., the difference between the
amount he agreed to pay for the office building and its value as of the date
the deal was supposed to close ($400,000).
Lost profits would have been his damages for breach of contract, but the
jury found no contract. The defendants’
false promise did not deprive Simon of the ownership of the building; he never
secured that right. (
1175-1176.)
Poland likewise did not
have an enforceable contract with LA Boxing.
He was therefore not entitled to future damages for not getting a
franchise or not getting stock in LA Boxing.
(See also Kenly v. Ukegawa
(1993) 16 Cal.App.4th 49, 53 [plaintiff not entitled to damages for profits he
would have made if promise kept].) He
was no longer relying on any promises.
He had no economic damages from trial into the future. The jury got it exactly right.
On the issue of emotional distress damages,
Poland argues that, having found past economic damages, the jury was
damages after both he and his wife testified about his distress. Poland is mistaken. The case he cites, Wilson v. R. D. Werner Co. (1980) 108 Cal.App.3d 878, is a personal
injury case. Some courts have held that
failure to compensate a personal injury plaintiff for noneconomic damages when
liability for physical injury has been established is error as a matter of law.
and cases cited therein; Dodson v. J.
Pacific, Inc. (2007) 154 Cal.App.4th 931, 937-938.) Poland, however, did not sue for personal
injuries. He sought damages on a fraud
claim. Poland has not cited to any
authority compelling an award of mental distress damages as a matter of law in
a fraud case. There is no basis for
granting a new trial on this verdict as being “against law.†(Code Civ. Proc., § 657 subd. (6).)
As for the evidence of
mental distress, the jury members were free to disbelieve the testimony of
Poland and his wife on this subject.
(See Tan Jay Internat., Ltd. v.
Canadian Indemnity Co. (1988) 198 Cal.App.3d 695, 708 [existence of
emotional distress left to jury].) They
evidently did, as they did not simply leave that portion of the verdict blank
but entered a zero in the appropriate spot.
The jury could reject even uncontradicted testimony, having had the
opportunity to observe the demeanor of both witnesses. (See Goehring
v. Chapman University (2004) 121 Cal.App.4th 353, 368.) Nothing requires us to overturn this portion
of the verdict. (See
Cal.App.4th 312, 321-322 [appellate court not able to second-guess factual
determinations on damages].)
of contract verdict
Poland also argues that
the breach of contract verdict is not supported by substantial evidence. The jury believed there was a contract, but
Poland did not perform his part of it, and he was not excused from performing. Poland argues that there is no evidence of
his failure to perform the agreement, and therefore he should have a new trial
on this issue. A court may not grant a
new trial on grounds of insufficient evidence “unless after weighing the
evidence the court is convinced from the entire record, including reasonable
inferences therefrom, that . . . the jury clearly should have reached a
different verdict . . . “ (Code Civ.
Proc., § 657.)
The jury was instructed
to consider “a contract†with the following terms: 10 percent equity in LA Boxing, a one percent
commission (or “overrideâ€), and a franchise.
Poland’s counsel later argued to the jury that these were actually three
individual contracts. He also told the
jury that the consideration from Poland for the three agreements was his “sweat
equity.†The special verdict form did
not specify the terms of any contract or contracts, so we do not know which one
or ones the jury believed was or were formed.
Substantial evidence
supports the jury’s determination that Poland did not “do all, or substantially
all, of the significant things that the contract required him to do,â€
regardless of which contract(s) the jury endorsed. The jury could have believed that LA Boxing
agreed to make Poland a franchisee, but Poland never filled out an application,
paid the initial fee, signed a disclosure statement, or took some other
necessary step to complete the process.
The jury could have believed the parties agreed that Poland could have a
10 percent stake in the company, but then Poland behaved so badly – tangling
with franchisees and gym members, driving away potential customers,
embarrassing the company, threatening to shoot up the offices – that he was not
entitled to become an owner. The jury
could also have felt this course of conduct disqualified him from being a
franchisee.
The special verdict form
allowed the jury to consider whether Poland had fulfilled his part of the
agreement – whatever it was – and the jury decided he had not. Substantial evidence supports this decision. The trial court correctly denied Poland’s
motion for new trial for insufficient evidence on this issue.
makes two arguments for overturning this portion of the jury’s verdict. First, he maintains he is not an exempt
employee because he was not paid enough money to qualify as exempt.
the criteria for an exempt employee was insufficient.
To qualify as exempt, an
employee must be paid at least twice the amount that he or she would earn if
paid at minimum wage. (Cal. Code Regs., tit. 8, § 11020, subd.
(1)(A)(2)(g).) In 2006, the minimum wage
was $6.75 per hour. In 2007, it was
$7.50 per hour. LA Boxing paid Poland
$34,498 in 2006 and $54,164 in 2007.
Poland’s first argument
fails because he did not raise it timely in the trial court. Nothing in this record even hints at an
objection to a jury instruction or a verdict on this basis, although he claims
– without citation to the record – that he objected to the special verdict on
this ground. Our independent review of
the record has unearthed no such objection.
Poland also did not raise the issue in either the motion for new trial
or the motion for JNOV. It surfaced for the
first time in the reply briefs for the two motions.
In fact, the issue was
doubly waived – if such a thing is possible.
Poland cannot wait to see what the jury decides and then, if he does not
like it, appeal the decision. (See
(1997) 52 Cal.App.4th 820, 847; Richmond
v. Dart Industries, Inc. (1987) 196 Cal.App.3d 869, 879 [plaintiffs “ought
not have two trials where they could have had but one.â€].) And he cannot bring an issue up for the first
time in a reply brief without some explanation for the tardiness of his
brainstorm. (Cf. San Diego Watercrafts, Inc. v. Wells Fargo Bank (2002) 102
Cal.App.4th 308, 316 [right to due process violated by consideration of
evidence filed after opposition to motion]; Fisher
v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 616.) Moreover, if a jury instruction is too
general or is incomplete, a party must request additional instructions in the
trial court to obtain review on appeal.
(Metcalf v. County of San Joaquin
(2008) 42 Cal.4th 1121, 1131.) Nothing
in the record suggests that Poland asked for a clarifying or more specific jury
instruction on the salary test for exempt employees.
The second argument also
fails. We do not reweigh evidence. The record amply supports the jury’s
conclusion that between April 9, 2006 and August 1, 2007, Poland acted with the
initiative, independence, and authority characteristic of exempt employees.
policy. When he was not traveling, he
attended the weekly Monday morning meetings of department heads. As national training director and the only
member of “the allstar team,†charged with rescuing troubled franchisees, he
traveled all over the country as the company’s sole on-the-spot
representative. All the national directors
reported to him, and he in turn reported weekly to Geisler. He ran weekly conference calls with general
managers, using his own outlines. He
took it upon himself to contact the franchisees’ credit card processing company
to obtain financial reports tailored to his specifications, which he then
reviewed. Until early 2007, he was in
charge of vetting and recruiting general managers for all the franchisees.
efforts to portray himself on appeal as a lowly worker bee, humbly following
orders, are at odds with the portrait he painted of himself a trial: a linchpin
of LA Boxing’s successful franchise operation, Geisler’s heir apparent, and an
“owner†with an “investment†in the corporation. Substantial evidence supports the jury’s
determination that he qualifies as exempt.
Denying Motion for JNOV
jury found that between April 9, 2006 and August 1, 2007, Poland was an exempt
employee and therefore not entitled to overtime pay. The sole issue Poland raised and argued in
his motion for JNOV was whether substantial evidence supported the jury’s
determination that Poland acted with discretion and independent judgment. On appeal, however, Poland identifies this
issue in terms of reversal of the judgment and of the denial of his motion for
new trial. He then argues the issue solely in terms of reversing the judgment.
It
does not appear that Poland challenges the denial of his motion for JNOV on
appeal. He presented no argument or
authority on this issue. Accordingly, we
deem it abandoned. (See
(1995) 39 Cal.App.4th 691, 699.) “One
cannot simply say the court erred, and leave it up to the appellate court to
figure out why.†(Niko v. Foreman (2006) 144 Cal.App.4th 344, 368.)
On
the appeal from the judgment by LA Boxing and Geisler, we affirm the portion of
the judgment awarding prejudgment interest to Poland. On the appeal from the judgment by Poland, we
affirm the judgment. On the appeal by
Poland from the orders denying his motions for new trial and for JNOV, we
affirm the orders. The parties will bear
their own costs on appeal.
BEDSWORTH,
ACTING P. J.
WE CONCUR:
MOORE, J.
IKOLA, J.
Although
a number of these facts are disputed, we recite them in the manner most
favorable to the judgment. (See, e.g.,
Five Bridges Foundation (2012) 203
Cal.App.4th 549, 552.)
Geisler
incorporated LA Boxing, Aliso Viejo, Inc., and owed 51 percent of the stock,
with the two licensors splitting the other 49 percent. When LA Boxing Franchise Corporation was
incorporated, its stock was allocated in the same percentages; however, the
stock was not issued to the licensors because their low credit scores would
have interfered with the company’s ability to get credit and sign leases.
