NHC Ins. Services v. Millennium
Corporate Solutions
Filed 2/7/12 NHC Ins. Services v. Millennium Corporate
Solutions CA2/4
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opinion has not been certified for publication or ordered published for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 FOUR
NHC
INSURANCE SERVICES, INC.,
Plaintiff and Respondent,
v.
MILLENNIUM
CORPORATE SOLUTIONS,
Defendant and Appellant.
B210893 c/w B211955
(Los Angeles County
Super. Ct. No. BC342970)
APPEAL from a
judgment and an order of the Superior Court of
County, Mel Recana, Judge.
Affirmed in part, reversed in part, and remanded.
Barnett & Rubin, Jeffrey D.
Rubin, Kathryn B. Salmond; Law Offices of Robert H. Pourvali, and Robert H.
Pourvali for Defendant and Appellant.
Lurie, Zepeda, Schmalz & Hogan, Troy L. Martin, and M. Damien Holcomb for
Plaintiff and Respondent.
__________________________________
INTRODUCTION
In this consolidated appeal,
appellant Millennium Corporate Solutions (Millennium) appeals from a money
judgment following a jury verdict and from a
tanto credit as a result of a settlement by a joint tortfeasor, Sherry
Lopez. Millennium contends (1) the trial
court abused its discretion in denying a motion to bifurcate trial; (2) the
trial court erred in conditionally granting Millennium’s motion for a new trial
because the negligent interference claim was preempted by the California
Uniform Trade Secrets Act, Civil Code sections 3426 to 3426.11 (CUTSA); (3) the
court erred in denying Millennium’s motion for a judgment notwithstanding the
verdict (JNOV) because there was insufficient evidence to support the jury’s
verdict; and (4) the court erred in calculating the credit for the Lopez
settlement. We conclude the trial court
did not err in denying the bifurcation
motion and the motion for a JNOV, but erred in conditionally granting the
motion for a new trial. We further
conclude the court did not err in calculating the offset credit for the Lopez
settlement. Accordingly, we affirm in
part, reverse in part, and remand for a recalculation of the amount of the
money judgment against Millennium.
NHC Insurance
Services, Inc. (NHC) is an insurance agency and brokerage founded by Nancy
Collinge in 1986. In 1989, NHC hired
Lopez as an agent and broker. During the
following years, Lopez assumed more power and responsibilities at NHC. In 1998, she became vice-president of
NHC. Later, Lopez gained check writing
authority on NHC’s bank accounts and also assumed responsibility for
supervising the finances of NHC.
Throughout the course of her employment with NHC, Lopez had access to
confidential or trade secret information regarding NHC’s clients, including
their names, contact and business information, identity of insurers, types of
coverage, coverage limits, amount of premiums, and renewal dates.
Collinge was
the sole owner of NHC until 1999, when she gave Lopez a 10 percent
ownership interest in NHC. Collinge also
orally agreed that Lopez could purchase up to seven percent ownership interest
in NHC each year. Collinge testified the
purpose of the oral agreement was to allow her to retire, because she
contemplated that Lopez would gradually buy out her ownership interest in
NHC. In a separate Buy-Sell Agreement
between NHC and Lopez, the value of NHC was defined as NHC’s net annual
commission income multiplied by a valuation factor of 1.5.
In February
2005, Collinge was diagnosed with leukemia.
When Lopez was informed of the diagnosis, she expressed deep concern for
Collinge and encouraged Collinge to rely on her more. Around the same time, NHC’s outside
accountant, Kevin Thompson, began noticing NHC had a cash flow problem and
discussed this issue with Lopez and Collinge.
Around August
2005, Collinge discovered at least $180,000 was missing from NHC’s trust
account. After several weeks of
investigation, Collinge confronted Lopez and suspended her without pay pending
a complete investigation of the alleged embezzlement. Although Lopez was suspended, Collinge asked
her to finish work on the renewal of a major client’s insurance policies. The client, Pinnacle Communities (Pinnacle),
was one of NHC’s two largest accounts at the time. Lopez secured the renewal, which resulted in
a significant financial benefit to NHC.
A few days after being suspended,
Lopez asked an employee of NHC to obtain a client list from NHC’s computer
system, but the employee declined to do so.
The employee reported Lopez’s request to Collinge, and NHC changed the
passwords for its computer system that day.
Another NHC employee testified she saw Lopez take what appeared to be
client files from NHC in 2005. In
addition, as late as December 8, 2006, Lopez had access to a smartphone
containing contact information for various NHC clients.
On October
24, 2005,
Lopez began working for Millennium.
Shortly thereafter, Lopez gave a list of over 100 prospective clients to
Millennium’s office manager, Clarissa Sarabia, so that Sarabia could send an
announcement out to the entities on the list.
Lopez testified she prepared this list, which included NHC clients, from
public information sources such as the internet, phone books, and various
chambers of commerce. Sarabia sent the
announcement, which read as follows:
“We are extremely pleased and proud to announce that
effective October 24, 2005, Sherry Lopez has joined the Property & Casualty
Division of Millennium Corporate Solutions Inc., as a Vice-President. Sherry comes to MCS with an extensive
background in Property & Casualty sales and consulting. She has been in the insurance business for
over 35 years, and is well versed in all commercial & personal lines of
insurance. Sherry also has her Certified
Insurance Counselor (CIC) designation.
“Millennium Corporate Solutions is a leading
consulting and insurance brokerage firm in Southern California serving clients on a regional as well as national
basis.
“The MCS Property & Casualty Division is committed
to exceeding customer expectations by providing superior service and
cutting-edge technology. Our staff of
experienced talent is comprised of top quality professionals that provide our
clients with expertly designed comprehensive and cost-effective insurance
programs.
“Please visit our website at www.mcsins.com for a complete
summary of Millennium Corporate Solutions’ client services.â€
At trial, NHC’s insurance industry
expert, Greg Robson, opined the announcement was “very
unusual . . . in that it was sent by the employer as
opposed to the producer and it clearly was soliciting and advertising.†After the solicitation was sent, 22 clients
left NHC, and 18 of these 22 clients switched brokers from NHC to
Millennium. All 18 former clients received
Millennium’s solicitation.
Several former NHC clients contacted
Lopez as a direct result of receiving the solicitation. Frank Amason, president of McKenna
Engineering & Equipment Company, testified that prior to receiving the
solicitation, he had never heard of Millennium and did not know that Lopez had
left NHC. He contacted Lopez after
receiving the solicitation. Amason
testified that one of the main factors in his decision to move his insurance
policies to Millennium was Lopez’s knowledge of his insurance policies. Ronald A. Pringle, president of Sandy Pringle
Associates, called Lopez after he received the solicitation. He asked her who would take care of him
because “I [had] a rather specific type of business and my insurance
requirements were unusual.â€
Similarly, Connie Pernicone,
vice-president and controller of Pinnacle, testified she did not know Lopez had
moved to Millennium until she received the solicitation. She switched Pinnacle’s policies to
Millennium because “[w]e had to go where a broker went that we had a relationship
with because we had to continue our business and have personal contact retained
for the information we might need.†She
made the decision to switch only after receiving the solicitation.
Jane Klein, the vice-president of the
Bedford Group (Bedford), testified that prior to receiving the solicitation,
she had never heard of Millennium except as a bonding company. Charles Quarles, president of Bedford, testified he switched to Millennium
because of Lopez’s expertise in dealing with developers and her “personal
touch.†Bedford and Pinnacle were NHC’s two largest
clients.
As a result of the client switches,
NHC presented evidence it lost approximately $501,516.65 in annual commission
income. Sherry Acosta, the accounting
manager for NHC, calculated this figure based upon the 2005 commissions paid by
the 18 clients. NHC also introduced
income statements prepared by Acosta showing its revenues and expenses in 2003,
2004, and 2005. From these income
statements, a jury could determine NHC lost about $101,627.57 in contingency
revenues based upon the difference between average contingency income in 2004
and 2005 and the lower contingency income in 2006. Acosta admitted that determining the amount
of contingency loss would be a “guess†as “contingency is a very complicated
issue.†Collinge testified that many
things can affect whether an agency will receive contingency revenue such as
loss ratios or number of claims being made in a particular year, and there is
no guarantee that NHC will receive a contingency from any given insurance carrier
year to year.
Robson opined that an appropriate
valuation multiplier for the value of NHC would be between 1.4 to 1.7 times
annual commissions. During closing
argument, NHC’s counsel argued that on the misappropriation of trade secrets
claim, the jury should award NHC damages in the amount of 1.5 times the annual
commissions lost.
On December 16, 2005, NHC filed a
complaint for damages against, among others, Lopez and Millennium. NHC alleged claims against Lopez for breach
of fiduciary duty and conversion (collectively the embezzlement claims). It alleged claims against Lopez and
Millennium for misappropriation of trade secrets and for interference with
prospective economic advantage. As to
the misappropriation claim, NHC alleged that “confidential information
regarding NHC’s clients, including names, addresses, phone numbers, policy
types, coverage limits, premium amounts, and renewal
dates . . . all . . . constitute[d]
NHC’s trade secrets.†As to the
interference claim, NHC alleged that Millennium and Lopez “interfered with
these potentially lucrative relationships by using NHC’s confidential and trade
secret information to contact NHC’s clients and induce them not to renew their
policies using NHC’s services.†NHC did
not describe any confidential, nontrade secret information allegedly misused by
NHC.
Prior to trial, Millennium moved to
bifurcate on the grounds (1) that NHC’s misappropriation of trade secret case
was unrelated to NHC’s embezzlement claims against Lopez, and (2) that the
facts of the embezzlement claims would bias the jury against Millennium. The trial court denied the motion, stating,
“I’ll be giving a jury instruction . . . at the beginning
of the trial indicating to the jurors that we have two cases which are separate
and independent and they should try them separately.â€
The subsequent trial lasted seven
weeks. After the evidence was presented
and before the jury was instructed, Millennium objected to a proposed jury
instruction on negligent interference with prospective economic advantage on
the ground that the complaint asserted a claim for intentional
interference. NHC contended it could
amend its pleadings to conform to proof because it “submitted evidence which
suggests that Millennium did not take appropriate actions to determine if any
of the people that Millennium was contacting were NHC clients.†The trial court agreed with NHC, and
instructed the jury on both intentional and negligent interference.
On the individual claims against
Lopez, the jury found Lopez liable for breach of fiduciary duty and
conversion. The jury awarded NHC damages
only on the breach of fiduciary duty claim, in the amount of $210,978.44. The jury found Lopez not liable on the
interference claims.
As to Millennium, the jury found
Millennium liable for negligently interfering with NHC’s prospective economic
relationship with 18 of NHC’s 22 former clients. Specifically, the jury found that “Millennium
engage[d] in wrongful conduct by using NHC’s confidential and trade secret
information to contact and solicit NHC’s clients and induce them not to renew
their policies using NHC’s services.â€
The jury further found that NHC’s “[p]ast economic loss, including lost
profits,†on this claim was $615,356.30.
The jury was initially deadlocked on the
misappropriation claim. Before the jury reached a verdict on this
claim, NHC and Lopez entered into a settlement which, as stated in open court,
applied “to Sherry Lopez’s liability only†and was for “all causes of actionâ€
against her. NHC’s counsel stated that
“[a]n acknowledgment of satisfaction will be filed immediately upon the
successful transfer of all Sherry Lopez’s interest in NHC back to Nancy
Collinge.â€
Subsequently, the jury found (1) that
Lopez and Millennium misappropriated NHC’s trade secrets, (2) that information
relating to NHC’s clients’ insurance policies (including the insurance company,
policy type, policy limits, renewal dates, and amount of premiums) was a trade
secret, (3) that the misappropriation caused NHC to lose 18 clients, and (4)
that the misappropriation caused an “actual loss†of $410,237.60. On this claim, the jury was instructed that
actual loss was the “gross amount NHC would have received but for [the
wrongful] conduct, . . . subtract[ed] [by] the expenses NHC
would have had if [the wrongful] conduct had not occurred.â€
Millennium filed a
the damages award was excessive and duplicative because (1) the negligent
interference claim was not viable as it was preempted by CUTSA, (2) the jury’s
verdict was fatally inconsistent, and (3) there was insufficient evidence to
support the jury’s findings on causation and damages. Millennium also filed a separate motion for a
JNOV on the ground of insufficient evidence.
The trial court ruled that unless NHC agreed to a reduction of its
damages from $1,025,593.90 to $750,000, the court would grant Millennium’s motion
for a new trial on the ground that the damages award was excessive. NHC accepted the remittitur, and a money
judgment was entered against Millennium in the amount of $750,000. Millennium appealed from the judgment.
In the same order deciding the motion
for a new trial, the trial court addressed Millennium’s motion for an order
requiring NHC to file a partial satisfaction of judgment in favor of
Millennium. Millennium contended that it
was not liable on the misappropriation claim or that under Code of Civil
Procedure section 876, subdivision (a),
of half of the damages on the misappropriation claim (or $205,118.83) because
NHC filed an acknowledgment of full satisfaction of judgment in favor of Lopez.
NHC opposed the motion on the ground that the parties to the Lopez
settlement specifically agreed that the settlement would not affect the
liability of Millennium on any causes of action. It admitted that “[t]he assets obtained by
NHC in the settlement are of an indeterminate amount.†However, at the hearing on the motion, NHC’s
counsel stated that “I would make an offer of proof to the court that if the
court would like to see further evidence [on the settlement value], that we
have further briefing on that.†NHC’s
counsel then indicated how the settlement amount could be calculated, and after
providing some estimates, stated that “[s]o at most we have $230,000 that NHC
received from the settlement.â€
The trial court held that Millennium
was entitled to a credit of $205,118.83 because the “settlement amount of the
assets transferred by Lopez to NHC was indeterminate.†(See Dillingham
Construction, N.A., Inc. v. Nadel Partnership, Inc. (1998) 64 Cal.App.4th
264, 287 [“[W]here the settling parties have failed to allocate [the settlement
amount], the trial court must allocate in the manner which is most advantageous
to the nonsettling party.â€].)
NHC moved for reconsideration on the
ground that it “was not given an opportunity to present evidence of the value
of the settlement as a result of NHC’s counsel’s trial schedule and
manipulative tactics by Millennium.†In
the motion, NHC asserted that the value of the settlement proceeds was
$262,918.44. NHC also alleged that its counsel
was previously unable to determine the settlement value as he was overburdened
by Millennium’s other posttrial motions as well as preparing for trial in
another matter. Millennium opposed the
motion on the ground that the motion presented no new facts as the value of the
settlement could have been determined by NHC’s counsel previously. It also contended that the explanation for
the delay was unsatisfactory as NHC’s counsel was not a sole practitioner. The trial court reversed its prior decision on
the ground that NHC had provided new or different facts and a satisfactory explanation
for its failure to produce them previously.
The court awarded Millennium a pro tanto credit for the Lopez settlement
in the amount of $26,495.76. Millennium
appealed this order.
DISCUSSION
On
appeal, Millennium contends: (1) the
trial court should have bifurcated NHC’s embezzlement claims against Lopez from
its misappropriation of trade secret claims; (2) the court should have granted
the motion for a new trial as to the negligent interference claim because that
claim was preempted by CUTSA; (3) the court should have granted the motion for
a JNOV as the jury’s findings on causation
and damages were not supported by the evidence; and (4) the money judgment
should have been reduced by a pro rata credit of $205,118.83. We conclude (1) the trial court did not abuse
its discretion in denying the bifurcation motion, (2) the negligent
interference claim is preempted by CUTSA, (3) there was sufficient evidence to
support the jury’s findings on causation and damages, and (4) the court did not
err in calculating the offset credit. We
address each conclusion in turn.
I. Motion to Bifurcate
Millennium
contends the court abused its discretion by denying its motion to bifurcate
NHC’s claims for misappropriation of trade secrets against Millennium and Lopez
from its embezzlement claims against Lopez.
(Shade Foods, Inc. v. Innovative
Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 911 [orders
on bifurcation motion reviewed for abuse of discretion].) According to Millennium, the court should
have bifurcated the claims because (1) NHC’s trade secrets claims was unrelated
to its embezzlement claims against Lopez; and (2) the embezzlement claims
consisted of “highly charged, inflammatory and emotional testimony†that may
have biased the jury against Millennium.
We find no abuse of discretion.
Although NHC’s claims were unrelated, several witnesses -- including
Collinge and Lopez -- were important and necessary to both sets of claims. A separate trial would have incurred
additional time and costs. In addition,
we find no prejudice to Millennium. The
trial court instructed the jury that the cases were separate, and the jury’s verdict
indicates it was not inflamed by the embezzlement claims. Had the jury been unduly influenced by
evidence that Lopez stole money from Collinge while the latter was suffering
from cancer, presumably it would have found Lopez liable on all claims. Instead, the jury found Lopez liable for
damages only on the breach of fiduciary claim.
On this record, the trial court did not abuse its discretion in denying
Millennium’s motion to bifurcate trial.
II. CUTSA Preemption
Millennium was
found liable for negligent interference with prospective economic advantage and
for misappropriation of trade secrets.
Millennium contends the jury’s verdict on
stricken as that claim is preempted by CUTSA.
We agree.
name="_ftnref3" title="">[3]
CUTSA provides certain remedies for
misappropriation of trade secrets. It
explicitly provides that its “general purpose [is] to make uniform the law with
respect to the subject of this title . . . .†(Civ. Code, § 3426.8.) It also provides that “other civil remedies
that are not based upon misappropriation of a trade secret†are not affected by
CUTSA. (Civ. Code, § 3426.7, subd.
(b)(2).) In K.C. Multimedia, Inc. v. Bank of America Technology & Operations,
Inc. (2009) 171 Cal.App.4th 939 (K.C.
Multimedia, Inc.), the appellate court interpreted Civil Code section
3426.7, subdivision (b)(2) to preempt common law claims that are “‘based on the
same nucleus of facts as the misappropriation of trade secrets claim.’†(K.C.
Multimedia, Inc., at p. 958.) In
that case, the appellate court affirmed the pretrial dismissal of causes of
action for breach of confidence,
interference with contract, and unfair competition because the trial court
properly found that these claims “‘hinge[d] upon the factual allegation that [defendants]
misappropriated [appellant’s] trade secrets.’â€
(Id. at p. 959.)
NHC contends that its negligent
interference claim is not preempted by CUTSA because the claim could be based
upon misuse of confidential, nontrade secret information. However, NHC has never identified any
confidential information used by Millennium to interfere with NHC’s prospective
economic relationships with its former clients that it did not also contend
constituted trade secrets. Rather, NHC
alleged in its complaint and argued at trial that Millennium misused
confidential information about NHC’s customers, including their identities and
insurance needs, to solicit the clients and induce them to switch brokers. The use or disclosure of confidential
customer lists, containing “‘pricing information and knowledge about [the]
particular . . . needs of customers,’†used by former
employees of a company to solicit former customers of the company, constitutes
a misappropriation of trade secrets. (
Cal.App.4th 1514, 1521.) NHC asked the
jury to find such information constituted trade secrets and the jury did so,
further finding a misappropriation of such trade secrets. (See K.C.
Multimedia, Inc., supra, 171
Cal.App.4th at p. 954 [“[T]he determination of whether a claim is based on
trade secret misappropriation is largely factual.â€].) Thus, NHC’s negligent interference claim
hinged upon the factual allegation that Millennium misappropriated NHC’s trade
secrets. Because the negligent
interference claim involved “‘the same nucleus of facts as the misappropriation
of trade secrets claim’†(id. at p.
958), it was not independently viable.
Accordingly, Millennium could be liable only on the misappropriation of
trade secrets claim.
name="_ftnref4" title="">[4]
III. Sufficiency of the Evidence
Millennium
next contends there was insufficient
evidence to support the jury’s findings on causation and damages as to the
misappropriation claim. We address each
jury finding separately.
A. Causation
The jury found that “Millennium’s
misappropriation of information relating to NHC’s client’s insurance policy
[was] a substantial factor in causing [NHC] actual loss.†Millennium contends NHC did not present
competent evidence as to why its former clients left and why it did not attempt
to retain these clients. We review a
challenge to a jury’s finding under the substantial evidence rule. If there is substantial evidence in the
record to support the jury’s finding, we will affirm. (Saks
v. Charity Mission Baptist Church (2001)
90 Cal.App.4th 1116, 1132.)
Here, there was evidence that all 18
of NHC’s former clients switched insurance brokers from NHC to Millennium after
they received the solicitation sent by Millennium announcing Lopez’s employment. Several former NHC clients testified they did
not know Lopez had moved to Millennium before receiving the solicitation. These clients contacted Lopez as a direct
result of the solicitation. Some clients
testified they switched to Millennium because Lopez knew their business needs
and insurance requirements. NHC had
alleged, and the jury found, that this information constituted NHC’s trade
secrets. A reasonable jury could infer
from these facts that but for the solicitation by Millennium and the use of
NHC’s trade secrets by Lopez, the former customers would have remained with
NHC. We next turn to the damages awarded
by the jury.
B. Damages
Initially, we must
address the trial court’s remittitur because generally, an appeal challenging
the sufficiency of a damages award looks to the damages amount awarded by the
remittitur, not to the amount found by the jury. (Bullock
v. Philip Morris USA, Inc. (2008) 159 Cal.App.4th 655, 688-689.) The trial court issued an order granting
Millennium’s motion for a new trial unless NHC consented to a remittitur
reducing the damages against Millennium from the $1,025,593.90 awarded by the
jury on both the misappropriation and interference claims to $750,000. In light of our decision that the
interference claim is no longer viable, and the fact that the jury’s damages
award on the misappropriation claim was only $410,237.60, the court’s order is
now an additur, in that it increases the amount of damages. As such, it is invalid as the court was not
empowered to issue an additur in the absence of a motion by NHC for a new trial
on the ground of inadequate damages.
(See § 657 [grounds for new trial]; Girch
v. Cal-Union Stores, Inc. (1968) 268 Cal.App.2d 541, 547.) Accordingly, the trial court lacked statutory
authority to issue its order, and the order must be vacated. The effect is that the jury’s damages award
is reinstated.
The jury found the actual loss from
the misappropriation of trade secrets to be $410,237.60. In determining this figure, the jury was instructed
that actual loss is the “gross amount NHC would have received but for [the
wrongful] conduct, . . . subtract[ed] [by] the expenses NHC
would have had if [the wrongful] conduct had not occurred.†“[A]s with any other pecuniary remedy, there
must be some reasonable basis for the [jury’s] computation†of damages on a
CUTSA claim. (Ajaxo Inc. v. E*Trade Financial Corp. (2010) 187 Cal.App.4th 1295,
1305.)
After reviewing the record, we
conclude substantial evidence supports the jury’s computation of the damage
amount. An exhibit prepared by Acosta
showed NHC received $501,516.55 in annual premiums from the 18 lost
clients. The income statements prepared
by Acosta show that NHC earned approximately $101,627.57 in annual contingency
income for all of its clients. NHC’s two
largest clients at that time, Pinnacle and Bedford, were among the 18 clients
that switched to Millennium. The income
statements also show that the “Total SELLING EXPENSE†was $103,719.58 in 2003,
$255,845.90 in 2004, and $114,133.59 in 2005, for an average selling cost of
$157,892. These revenue and cost figures
allowed the jury to agree upon a damages amount of between $245,671 (annual
commissions, no contingency income, subtracting the highest selling cost
figure) to $499,424 (annual commissions, plus average contingency revenue,
subtracting lowest selling cost figure).
The jury’s finding on damages was within this range, and is thus
supported by substantial evidence.
Accordingly, the jury’s verdict was supported by sufficient evidence,
and the trial court did not err in denying Millennium’s motion for a JNOV.
IV. Offset
Credit to Money Judgment for Settlement by Joint Tortfeasor
Millennium is liable for $410,237.60
in damages on the misappropriation claim, plus any applicable costs, fees, and
interest. Because of the Lopez
settlement, Millennium was entitled to an offset credit. The trial court initially found that
Millennium was entitled to a credit of $205,118.83. NHC moved for reconsideration, and the trial
court agreed, reducing the offset credit to $26,495.76. Millennium challenges the trial court’s order
reducing the offset credit on both procedural and substantive grounds. Millennium contends the trial court abused
its discretion in granting NHC’s motion for reconsideration because: (1) NHC’s motion did not comply with the
mandatory requirements of section 1008; and (2) the court’s prior order
was legally correct.
A. New or Different Facts
Under section 1008, a party may move
for reconsideration of a court order “based upon new or different facts,
circumstances, or law.†(§ 1008, subd.
(a).) “The party seeking reconsideration
must provide not just new evidence or different facts, but a satisfactory
explanation for the failure to produce it at an earlier time. [Citation.]â€
(Glade v. Glade (1995) 38
Cal.App.4th 1441, 1457.) Here, NHC
provided new facts about the settlement value and an explanation for why it did
not produce these facts previously. The
trial court found the evidence credible and the explanation satisfactory. In addition, the value of the settlement
amount was not in the trial record, and could not easily be calculated by
evidence produced at trial. (Cf.
(2005) 135 Cal.App.4th 206, 212-213 [evidence was not “new†where it could be
discovered or produced at trial].)
Moreover, at the hearing on the prior order, NHC’s counsel had requested
an opportunity to further brief the court on the settlement value, but the
court had denied the request. (Cf.
motion for reconsideration where appellant was denied opportunity to speak with
court].) On this record, NHC complied
with the requirements of section 1008.
B. Amount
of Offset Credit
Millennium contends the trial court
should not have reconsidered its prior order because that order was
correct. However, the correctness of a
prior order does not prohibit the court from reconsidering the order and
issuing another valid order. Here, the
trial court ordered that the settlement amount first be used to satisfy the
individual judgment against Lopez on the breach of fiduciary claim, and then be
applied to the joint judgment on the misappropriation claim. This order comports with the hierarchy of
interests in multi-party litigation:
“[f]irst in the hierarchy is maximization of recovery to the injured
party for the amount of his injury to the extent fault of others has
contributed to it.†(
Harvester Co. (1978) 82 Cal.App.3d 492, 496; see also McCall v. Four Star Music Co. (1996) 51 Cal.App.4th 1394, 1399
[“[W]here fewer than all of the joint tortfeasors satisfy less than the entire
judgment, such satisfaction will not relieve the remaining tortfeasors of their
obligation under the judgment. Stated
otherwise, ‘partial satisfaction has the effect of a discharge pro tanto.’ [Citations.]â€].) NHC received a judgment of $210,978.44
against Lopez on the breach of fiduciary claim, and of $410,237.60 against Millennium
and Lopez on the misappropriation claim, and was entitled to any applicable
costs, fees, and interest. The court’s
order would allow NHC to fully recover on the judgment. In addition, there was no prejudice to
Millennium because as a joint tortfeasor, Millennium was individually liable
for the full amount of damages on the misappropriation claim. (American
Motorcycle Assn. v. Superior Court (1978) 20 Cal.3d 578, 582.) Thus, the trial court did not abuse its
discretion in granting the motion for reconsideration and reducing the offset
credit to $26,495.76.
DISPOSITION
The order granting the motion for reconsideration and awarding a pro
tanto credit is affirmed. The judgment is affirmed in part, reversed in part, and
remanded for further proceedings to recalculate the amount of the money
judgment in light of this opinion. The
parties are to bear their own costs on
appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
MANELLA,
J.
We concur:
WILLHITE, Acting P. J.
SUZUKAWA, J.
All further statutory citations are to the Code of Civil Procedure,
unless otherwise stated.
876, subdivision (a), provides: “The pro
rata share of each tortfeasor judgment debtor shall be determined by dividing
the entire judgment equally among all of them.â€
