JSA Depot v. Foreverlawn CA4/3 ( 2016 )

Filed 6/28/16 JSA Depot v. Foreverlawn 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.,
Plaintiffs and Appellants, G050701
v. (Super. Ct. No. 07CC06601)
FOREVERLAWN, INC., OPINION
Defendant and Respondent.
Appeal from a judgment of the Superior Court of Orange County, Mary
Fingal Schulte, Judge. Reversed.
Gaston & Gaston and Matthew J. Faust for Plaintiffs and Appellants.
Buchalter Nemer, Robert M. Dato, Kalley R. Aman, and Sarah A. Syed for
Defendant and Respondent.
* * *
This is the third appearance here of this case. In a prior appeal, we reversed
a $987,000 judgment in favor of plaintiffs JSA Depot, Inc. (JSA), and Foreverlawn of
Southern California, Inc. (FSC), due to the insufficiency of the evidence to support the
damages award. (See JSA Depot, Inc. v. Foreverlawn Inc. (Aug. 31, 2011, G044164)
[nonpub. opn.] (JSA Depot I).) We remanded the matter “for a new trial on the amount of
damages only.” (Ibid.)
After remand, plaintiffs petitioned this court for a writ of prohibition to
challenge an order of the trial court. We issued an opinion (JSA Depot, Inc. v. Super. Ct.
(Apr. 19, 2013, G047288) [nonpub. opn.] (JSA Depot II)), in which we explained, inter
alia, that the scope of the new trial on damages encompassed the question of whether
plaintiffs’ losses were caused by defendant Foreverlawn Inc.’s breach of an obligation it
owed to plaintiffs.
Now, plaintiffs appeal from a judgment entered in defendant’s favor. As
we shall explain, we reverse because the trial court erred in granting defendant’s
summary judgment motion. Defendant did not meet its initial burden of production
because it failed to show plaintiffs did not possess, and could not reasonably obtain,
1
sufficient evidence to support any amount of damages.
FACTS
Prior Proceedings, Including JSA Depot I and JSA Depot II
In December 2005, defendant and JSA entered into a contract whereby
defendant granted JSA an exclusive license to sell defendant’s artificial turf in several
counties in California and Nevada. (JSA Depot I, supra, G044164.) Plaintiffs sought
1
Because we reverse the judgment, we do not address plaintiffs’ alternative
argument that the court erred by denying JSA’s motion for a new trial after the court
granted defendant’s summary judgment motion.
2
damages at trial pursuant to several causes of action, including breach of contract and of
the implied covenant of good faith and fair dealing, and interference with
contract/prospective economic relations. (Ibid.) The jury found defendant liable to JSA
and FSC in the combined amount (after a posttrial elimination of duplicative damages by
the trial court) of $987,000. (Ibid.) Defendant appealed.
In JSA Depot I, supra, G044164, we noted that defendant “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 amount of
damages awarded by the jury. (Ibid.) We remanded for a new trial on the issue of the
amount of damages only. (Ibid.)
On remand, defendant moved in limine to exclude evidence of alleged lost
future damages upon retrial. Defendant’s brief argued “the contract between the parties
was terminated in July 2007 and there was no finding by the jury that the termination was
a breach of contract.” The trial court ruled: “Motion to Exclude Evidence of Damages
for alleged lost profits is denied. As the jury in this case found that Plaintiff did all or
substantially all of the significant things that the contract required it to do (Verdict
Forms) there is a sufficient basis for this court to find that termination of the agreement
constituted a breach. As the termination was invalid, evidence of post-termination
damages are admissible.”
Plaintiffs filed their own motion in limine, seeking to determine the scope
of the retrial on damages. Plaintiffs argued the trial court should exclude defendant’s
evidence it did not breach the contract because the issue of liability had already been
resolved in plaintiffs’ favor. (JSA Depot II, supra, G047288.) The trial court ruled it
would admit evidence of liability relevant to “tie” damages to the eight defined categories
of alleged breaches of contract. (Ibid.) Plaintiffs challenged the trial court’s ruling by
petitioning this court for a writ of prohibition and/or other appropriate relief. (Ibid.)
3
In JSA Depot II, supra, G047288, we denied plaintiffs’ writ petition on the
2
issue of causation of damages. We observed that evidence relevant to whether plaintiffs’
alleged losses were caused by defendant’s acts and omissions was admissible under the
Evidence Code and we saw “no reason to issue a writ of mandate ordering the court to
follow the Evidence Code in conducting the trial.” (Ibid.)
The Current Appeal
1. Defendant’s Motion for Summary Judgment
On March 6, 2014, defendant moved for summary judgment “on the
grounds that no triable issue of material fact exists to support the elements of causation
and harm required to prove the four causes of action upon which [defendant] was found
liable at trial.”
Attached to defendant’s summary judgment motion were (1) excerpts from
the reporter’s transcript of the first trial and defendant’s counsel’s declaration declaring
such excerpts were true and correct copies; (2) defendant’s counsel’s April 10, 2007 letter
notifying JSA and its counsel that JSA had defaulted under the contract and would be
required to “move” 172,000 square feet of turf to cure the default; (3) defendant’s request
for judicial notice of (a) certain jury instructions given in the March 2010 trial in JSA
Depot I, (b) the jury verdict, and (c) JSA Depot I, and (4) defendant’s separate statement
3
of undisputed material facts (SSUMF).
2
We did, however, issue a writ of prohibition precluding the trial court from
including defendant’s cross-complaint in the damages retrial, because the trial court
lacked jurisdiction to do so in the limited retrial defined by JSA Depot I. (JSA Depot II,
supra, G047288) During the first trial, defendant had dismissed its cross-complaint “on
the condition plaintiffs not call additional witnesses.” (Ibid.)
3
The reporter’s transcript excerpts consisted of (1) the testimony of Matthew
Mighell, a principal in JSA, that defendant terminated the contract in July 2007 because
JSA had failed to meet the benchmarks of selling enough turf; (2) the testimony of Evette
4
In defendant’s memorandum of points and authorities supporting its
summary judgment motion, defendant argued no competent evidence had existed at trial
to show damages causally linked to the claims on which plaintiffs had prevailed at trial,
“and no new evidence exists now . . . .” Defendant asserted the trial court in the first trial
had instructed the jury that JSA claimed damages for each of those four causes of action
in two categories: “(1) past lost expected profits during the term of the contract . . . , and
(2) post-contract losses, including loss in expected profits after the termination of the
contract . . . .” In support, defendant referenced its SSUMF Nos. 12, 33, 53, and 69.
Defendant argued the damages awarded by the jury “did not match any amounts
requested by Plaintiffs and could not be tied to any figures presented at trial.” According
to defendant, JSA Depot I “held there was no competent evidence to support any item of
damages awarded by the jury and that all of the damages were speculative, remote,
unreasonable, contingent, and hypothetical. [SSUMF Nos. 16, 37, 56, 72].” As to the
legal standard on summary judgment, defendant stated, inter alia: “Furthermore, under
the doctrine of ‘law of the case,’ any principle or rule of law stated in an appellate court
opinion that is ‘necessary’ to the court’s decision must be followed in all subsequent
proceedings in the action, whether in the trial court or on a later appeal.”
Defendant’s memorandum then discussed in more detail the four causes of
action on which plaintiffs had prevailed at the first trial. As to plaintiff’s breach of
contract and breach of implied covenant claims, defendant discussed the specific types of
Reyes, the bookkeeper and office manager for FSC and JSA, testifying she is not a
certified public accountant, does not have a bachelor’s degree in accounting or finance,
and is not a licensed or certified bookkeeper, and that she prepared a 10-year forecast of
JSA’s projected net future income; (3) the testimony of Dale Karmie that defendant
continued to pay commissions to Mighell even after defendant had adjusted JSA’s
territory; and (4) conversations between the court and counsel in which the court
excluded an FSC and a JSA projection of future income, but refused to exclude a similar
document that had already been admitted into evidence.
The trial court granted defendant’s request for judicial notice.
5
damages it asserted JSA Depot I had purportedly found to be unsupported and incapable
of ever being supported. Defendant asserted JSA Depot I found “JSA could not establish
that any of its customer contracts were canceled due to [defendant’s] late delivery of turf
4
or delivery of defective turf. [SSUMF Nos. 17, 38.]” (Italics added.) Defendant
asserted JSA Depot I made three other findings on plaintiff’s breach of contract and
breach of implied covenant claims, i.e., that JSA could not establish (1) it would have
earned any net profit from any sale lost due to late or defective delivery, or the amount of
net profit; (2) any damages arising from defendant’s failure to forward timely leads; and
5
(3) it lost a library contract “due to [defendant].” Defendant then concluded, with no
SSUMF reference: “No new evidence supports these damage claims and summary
judgment should be granted for [defendant].”
As to plaintiff’s interference claims, defendant’s memorandum stated JSA
Depot I found JSA “could not establish damages” for interference, citing SSUMF No. 73
(referencing page 9 of JSA Depot I as well as two pages from the reporter’s transcript of
4
SSUMF Nos. 17 and 38 both state: “JSA cannot establish that any of its
customer contracts were canceled due to [defendant’s] late delivery of turf or delivery of
defective turf.” Both SSUMF Nos. 17 and 38 refer to pages 7 and 8 of JSA Depot I as
their sole supporting evidence. In fact, pages 7 and 8 of JSA Depot I do not say JSA was
incapable of establishing that any customer contracts were canceled due to defendant’s
late or defective deliveries. Rather, those pages state the evidence presented at the first
trial was insufficient to support the jury’s award of damages: “First, JSA invokes the
$120,000 in contracts that its customers canceled due to Foreverlawn deliveries that were
late or defective.” “JSA cites no evidence reflecting how much, if any, of the $120,000
in lost FSC sales would have been net profit to JSA. [¶] Second, JSA relies on $67,000
in purchase orders with Foreverlawn. It asserts they ‘represented . . . turf that turned out
to be defective, short, late, or some combination of each.’ But the purchase orders do not
say so on their faces, and JSA points to no other evidence to that effect.” (JSA Depot I,
supra, G044164.)
5
Defendant’s corresponding SSUMF Nos. 18, 19, 20, 39, 40, and 41 all
begin with the phrase, “JSA cannot establish . . . . ,” variously rely on pages 7 to 9 of JSA
Depot I, and continue to read too much into that opinion, which never held or stated
plaintiffs were incapable of proving damages.
6
the first trial containing defendant’s testimony it paid JSA commissions for sales made by
defendant in JSA’s territory) and SSUMF No. 57 (referencing page 9 of JSA Depot I).
Defendant then concluded, with no SSUMF reference: “No new evidence exists to
support the claim for damages on either interference claim and summary judgment should
6
be granted for” defendant.
Finally, as to plaintiff’s alleged lost future profits, defendant stated
plaintiffs could not recover lost future profits on any cause of action because defendant
had terminated the contract pursuant to the contractual terms “and there was no finding
by the jury that the termination was a breach of contract. [SSUMF Nos. 11, 32].”
SSUMF Nos. 11 and 32 state, “At trial, JSA did not assert, and the jury was not
instructed, that the July 5, 2007 termination of [the contract] was a breach of contract,”
7
and cite as supporting evidence Jury Instruction No. 300. Defendant’s memorandum
then drew the following legal conclusions: “Because there was no finding by the jury
that [defendant’s] termination of the [contract] was a breach of contract, all rights and
obligations under the [contract] were lawfully terminated in July 2007 . . . . Hence, . . . as
a matter of law, [JSA] cannot request or present evidence of alleged lost profits after the
termination of the contract.” “JSA likewise cannot recover lost future profits for breach
of the implied covenant of good faith and fair dealing because, once [defendant] lawfully
terminated the [contract] on July 5, 2007, there was no longer an implied covenant . . . in
6
In fact, page 9 of JSA Depot I does not say JSA was incapable of
establishing damages for interference. Rather, page 9 states plaintiffs presented
insufficient evidence of the jury’s award of $31,000 damages for JSA’s interference
claim and $30,000 for FSC’s claim. (JSA Depot I, supra, G044164.)
7
Jury Instruction No. 300, titled “Breach of Contract — Introduction,” states
JSA “claims that [defendant] breached this contract in separate instances as follows:” and
then lists eight types of claimed breaches, such as JSA’s allegation defendant “failed to
timely deliver prepaid orders for turf to JSA . . . .” Defendant’s termination of the
contract is not listed as a type of claimed breach. The “Jury Instructions” referenced by
defendant are the CACI instructions given to the jury in JSA Depot I.
7
the contract. [SSUMF Nos. 29-30]. [¶] The interference claims are no different” since
they are predicated on violation of the contract. “[SSUMF Nos. 52, 68].” SSUMF No.
29 states, “JSA did not cure the default and [defendant] terminated the contract on July 5,
2007,” citing certain reporter’s transcript pages as supporting evidence. SSUMF No. 30
states, “The parties[’] rights and obligations under the [contract] terminated upon the July
5, 2007 termination of the [contract],” citing certain reporter’s transcript pages as
supporting evidence. SSUMF No. 52 states, “At trial, [FSC] claimed that [defendant]
negligently interfered with the relationship between [FSC] and JSA that probably would
have resulted in an economic benefit to [FSC],” citing Jury Instruction No. 2204 as
supporting evidence. SSUMF No. 68 states, “At trial, JSA claimed that [defendant]
intentionally interfered with contracts between JSA and JSA’s customers and sub
dealers,” citing Jury Instruction No. 2201 as supporting evidence.
Defendant’s memorandum further argued: “In addition, the Court of
Appeal[] found that Plaintiffs have no competent evidence of lost future profits, finding
the claim ‘speculative,’ ‘contingent,’ and ‘merely possible.’ [SSMUF Nos. 21, 42, 59,
74].” Defendant cited, as supporting evidence for SSMUF Nos. 21, 42, 59, and 74, JSA
Depot I and some pages from the reporter’s transcript of the first trial. Defendant
concluded: “No new competent evidence exists to support Plaintiffs’ claim for lost future
profits. Accordingly, summary judgment should be granted for” defendant. Defendant
provided no SSUMF reference to support this conclusion.
2. Plaintiffs’ Expert
In April 2014, defendant moved ex parte for an order compelling the
deposition of plaintiffs’ expert witness, Tony Yip, a certified public accountant.
Defendant’s counsel declared that during Yip’s July 31, 2012 deposition, Yip offered
opinions on plaintiffs’ lost profits claim, but also warned that his opinions might change
if he were provided records of sales of defendant’s Northern California and Phoenix
8
dealers. Defendant’s counsel therefore had not closed Yip’s deposition and had made
“extensive efforts to try to complete [Yip’s] deposition to obtain his final, complete
opinions that he intends to offer at trial.”
3. Plaintiffs’ Opposition to Defendant’s Summary Judgment Motion
Plaintiffs filed a memorandum of points and authorities opposing
defendant’s summary judgment motion. Plaintiffs argued: “According to the defendant’s
moving papers, it is entitled to summary judgment for two reasons: (1) Plaintiffs are not
entitled to lost future profits as a matter of law, and (2) Plaintiffs cannot provide any
evidence of damages. . . . [T]hese arguments are premised upon material omissions that
the defendant has chosen to omit from its moving papers. First, the defendant has
previously brought a motion to exclude evidence of lost future profits, a motion the Court
denied. Second, the moving papers bear no mention of the fact that the defendant has
already taken the deposition of Plaintiffs’ lost profits expert.”
Plaintiffs attached as an exhibit the court’s April 11, 2012 minute order
which denied defendant’s motion to exclude evidence of alleged lost future profits. The
court’s order stated that the jury in the first trial found plaintiff performed or substantially
performed under the contract and thus defendant’s termination of the contract constituted
a breach.
Plaintiffs further argued that a triable issue of fact existed on the issue of
damages because plaintiffs intended to proffer testimony from their expert witness Yip at
trial, and “defendant knows this because the defendant has taken Mr. Yip’s deposition
and is aware that Mr. Yip intends to testify that Plaintiffs lost $1,224,741 in future profits
as a result of defendant’s bad acts. (Ex. D., Yip Depo.; Ex. E, Yip Report.) Indeed,
defendant[] hired [its] own expert to testify that Mr. Yip’s opinion is overstated.”
Plaintiffs’ exhibit D consisted of a single page from Yip’s deposition, showing that
defendant’s counsel had marked and authenticated as exhibit 1 Yip’s report of “10 pages,
9
consisting of [his] various calculations regarding the lost profit of both JSA and” FSC.
Exhibit E consisted of two pages of dollar amounts and percentages apparently
calculating lost profits for 2007-2011, of which the first page was stamped as page 1 of
10 of defendant’s exhibit 1 for witness Yip dated July 31, 2012. Plaintiffs asked the court
to take judicial notice of exhibits G through Q. Exhibit Q was JSA Depot II.
As to SSUMF Nos. 17, 18, 19, 38, 39, 40, 57, and 73 — on which
defendant relied for its assertion plaintiffs were incapable of establishing damages for
breach of contract, breach of the implied covenant, and interference — plaintiffs disputed
each of these identically as follows: “When defendant deposed Plaintiffs’ expert witness,
Tony Yip, they learned . . . that the Plaintiffs are seeking lost profits in the amount of
approximately $1.2 million.”
As to SSUMF Nos. 11, 29, 30, 32, 52, and 68 — on which defendant relied
for its assertion plaintiffs were incapable of establishing lost future profits damages
because defendant purportedly legally terminated the contract — plaintiffs disputed
SSUMF Nos. 11 and 32, stating: “The jury instruction does not list the termination of the
[contract] as a breach, but Plaintiffs sought — and were awarded — lost future profits as
a result of defendant’s bad acts. Defendant has already been ruled to be liable to
Plaintiffs for future lost profits. Defendant is simply trying to relitigate issues it has
already lost.” Plaintiffs disputed SSUMF No. 29, stating: “The verdict from the original
trial already found that JSA had complied with, or substantially complied with all of its
obligations under the [contract]. Defendant is simply trying to relitigate issues it has
already lost.” Plaintiffs disputed SSUMF No. 30, stating: “Defendant has already been
ruled to be liable to Plaintiffs for lost future profits. Defendant is simply trying to
relitigate issues it has already lost.” Plaintiffs disputed SSUMF No. 39 with the same
explanation quoted in the preceding paragraph of this opinion. Plaintiffs did not dispute
SSUMF Nos. 52 (asserting FSC claimed at trial that defendant negligently interfered with
its relationship with JSA that would have probably been economically beneficial to FSC)
10
and 68 (asserting JSA claimed defendant intentionally interfered with contracts between
JSA and its customers and sub dealers).
4. Defendant’s Reply
In defendant’s reply, it argued “the one page excerpt of deposition
testimony and two page exhibit from Tony Yip’s deposition transcript fall far short of
meeting the standard for expert declarations and are insufficient to avoid summary
judgment.” “Futhermore, Yip cannot — and does not — provide an expert opinion on
causation and Plaintiffs do not offer a single declaration or other admissible fact to show
causation or harm.”
5. Plaintiffs’ Submission of Yip’s Deposition
Following defendant’s reply, plaintiffs submitted Yip’s entire 246-page
July 31, 2012 deposition as supplemental evidence in support of their opposition to
defendant’s summary judgment motion.
6. The Court Hearing
At the hearing on defendant’s summary judgment motion, the court stated
its tentative decision was that defendant had failed to meet its “initial burden of proof that
would even require the plaintiff to address the issues . . . .”
Defendant’s counsel argued defendant had met its burden. She argued
defendant had set forth material undisputed facts to show there was no causation and no
damage or harm. She asserted defendant had supported those facts with trial testimony,
plaintiffs’ deposition testimony, “the law of the case” from the Court of Appeal, citations
to the law and to the case from the Court of Appeal, plaintiffs’ complaint, and reporter’s
transcripts, all as reflected in defendant’s SSUMF. She concluded the burden should
shift to plaintiffs “to submit some kind of evidence including admissible expert
11
testimony.” She observed that plaintiffs had had two years to try to marshal “causation
and damages evidence with an expert with their clients’ declarations.” She pointed out
the court had now sustained defendant’s objection to plaintiffs’ “one and only expert
report” so it was unclear how plaintiff could “go forward from this point.”
The court noted JSA Depot I did not “foreclose [plaintiffs from presenting]
additional evidence.” Defendant’s counsel asserted plaintiffs had no additional evidence.
Plaintiffs’ counsel said to her, “You have taken expert depos.” Defendant’s counsel
replied she had taken an expert deposition but the expert had not committed to an
opinion. Instead, the expert had said his opinion might change and that he needed new
documents. Defendant’s counsel asserted that defendant had tried several times “to
conclude that deposition,” but plaintiffs had refused to produce the expert.
The court stated, “It . . . sounds like it all hangs on Mr. Yip’s testimony.”
Plaintiffs’ counsel agreed, and stated defendant’s summary judgment motion involved
issues on which both sides knew there was competent evidence on disputed facts.
Plaintiffs’ counsel argued Yip had testified at his deposition to damages of $1.2 million
and that plaintiffs had “been trying to subpoena some records” and plaintiffs’ counsel
was “not sure if that’s going to change Mr. Yip’s opinion.” In response to the court’s
inquiry, plaintiffs’ counsel clarified that Yip had not testified at the first trial; in other
words, that Yip was a new witness. Plaintiffs’ counsel argued that both sides had expert
witnesses.
Defendant’s counsel argued defendant had no burden to “somehow present
Yip’s testimony,” Yip was plaintiff’s expert, Yip’s testimony was inadmissible for many
reasons, and plaintiffs’ submission of “one page of deposition testimony and an expert
report with no explanation” had been properly stricken by the court.
12
7. The Court’s Ruling
The court granted defendant’s summary judgment motion for the following
expressed reasons. The court sustained defendant’s objections to plaintiffs’ exhibits B,
C, D, E, and F. The court granted plaintiffs’ request for judicial notice of exhibits G
through Q, and defendant’s request for judicial notice Nos. 1 through 3. Plaintiff did not
dispute facts 1-5, 10, 12, 14-16, 22-26, 31, 33, 35-37, 43-47, 52-56, 60-63, and 68-72.
Facts 6-9, 11, 27-30, 32, 48-51, 64-67 were irrelevant to defendant’s summary judgment
motion, as they were relevant only to the issue of liability, not “to the issue of damages,
which was the only issue remanded for trial.” Three years had passed since the issuance
of JSA Depot I, which held no substantial evidence produced at trial had supported the
award of damages. Now, one month before the scheduled damages retrial, “the only
evidence of damages that the plaintiffs . . . offer is the Yip report, and snippets of
deposition testimony, some of it from an Ohio proceeding (Exhibits B-F to the
Declaration of Matthew J. Faust). [Citation.] The Court has sustained the objections to
this evidence. The deposition of Mr. Yip, lodged on the eve of the hearing, is not
considered by the Court, as it was not properly offered in the opposing papers. [¶]
Defendants carried their [sic] burden of demonstrating entitlement to summary judgment
and the plaintiffs did not proffer any admissible evidence in opposition to the motion so
as to create a triable issue of fact.”
The court entered judgment in defendant’s favor.
DISCUSSION
Plaintiffs contend the court’s grant of defendant’s summary judgment
motion was erroneous for two independent reasons. First, they contend defendant failed
to meet its burden of production to make a prima facie showing plaintiffs could not
establish an element of their cause of action. Second, and alternatively, plaintiffs contend
13
the court’s order failed to specifically refer to the evidence proffered by defendant in
support of its summary judgment motion as required by Code of Civil Procedure
8
section 437c, subdivision (g).
Defendant contends it carried its initial burden of production by relying on
JSA Depot I and JSA Depot II under the doctrine of law of the case. It argues its citations
to these prior opinions and the reporter’s transcript from the first trial “‘conclusively
negated’ plaintiffs’ claim for future lost profits.” It argues that if “there is no new
evidence at the time a summary judgment motion is filed, such a motion is proper
because [the] law of the case satisfies the initial burden on summary judgment.
[Citation.] [Defendant] therefore met its initial burden because the onus was on plaintiffs
to establish changed circumstances, and they failed to do so.”
A defendant moving for summary judgment “bears an initial burden of
production to make a prima facie showing of the nonexistence of any triable issue of
material fact.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal. 4th 826 (Aguilar).) “A
burden of production entails only the presentation of ‘evidence.’” (Id. at p. 850.) “A
prima facie showing is one that is sufficient to support the position of the party in
question.” (Id. at p. 851.) If the defendant “carries his burden of production, he causes a
shift, and the [plaintiff] is then subjected to a burden of production of his own to make a
prima facie showing of the existence of a triable issue of material fact.” (Id. at p. 850.)
“The pleadings serve as the ‘outer measure of materiality’ . . . .” (Weil & Brown, Cal.
Practice Guide: Civil Procedure Before Trial (The Rutter Group 2015) [¶] 10:51.1, p. 10-
19.)
A defendant may move for summary judgment by contending the plaintiff’s
action has no merit. (§ 437c, subd. (a).) A defendant shows that a plaintiff’s cause of
action has no merit by showing that an element of the cause of action cannot be
8
All statutory references are to the Code of Civil Procedure.
14
established, or that there is a complete defense to that cause of action.” (§ 437c, subd.
(p)(2).)
To show that the plaintiff cannot establish an element of a cause of action, a
defendant may “show that the plaintiff does not possess, and cannot reasonably obtain,
needed evidence.” (Aguilar, supra, 25 Cal.4th at p. 854.) A defendant must do more,
however, than simply allege “that the plaintiff does not possess, and cannot reasonably
obtain, needed evidence” (ibid.), or simply suggest “the possibility that plaintiff cannot
prove its case” (6 Witkin, Cal. Procedure (5th ed. 2008) Proceedings Without Trial, §
241, p. 687). Rather, in order to shift the burden of production to the plaintiff, “a
defendant who cannot negate an element of the plaintiff’s case is required to produce
direct or circumstantial evidence that the plaintiff not only does not have but cannot
reasonably expect to obtain a prima facie case.” (Ibid.) For example, the defendant may
present evidence of admissions made “by the plaintiff following extensive discovery to
the effect that he has discovered nothing” (Aguilar, at p. 855), or of the plaintiff’s
“factually devoid discovery responses” (Union Bank v. Superior Court (1995) 31
Cal. App. 4th 573, 590).
We independently review the court’s grant of summary judgment to
defendant. (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal. 4th 1138, 1142.)
“In performing our de novo review, we view the evidence in the light most favorable to
plaintiffs as the losing parties.” (Ibid.)
We conclude the court’s order granting defendant’s summary judgment
motion was erroneous for two independent reasons. First, the court’s order failed to
“specifically refer” to the evidence proffered by defendant to support its motion and
which indicated no triable issue exists, as required by section 437c, subdivision (g). The
court’s written order focused on plaintiffs’ showing, with the exception of the following
conclusory, nonspecific statement concerning defendant’s showing: “Defendants carried
their burden of demonstrating entitlement to summary judgment . . . .”
15
Second, defendant failed to show plaintiffs did not possess, or could not
reasonably obtain, evidence sufficient to make a prima facie case they suffered damages
caused by defendant’s wrongful acts or omissions. Defendant contends its reliance on
JSA Depot I and JSA Depot II was a sufficient showing to meet its initial burden of
production based on the doctrine of “law of the case.” “‘The doctrine of “law of the
case” deals with the effect of the first appellate decision on the subsequent retrial or
appeal: The decision of an appellate court, stating a rule of law necessary to the decision
of the case, conclusively establishes that rule and makes it determinative of the rights of
the same parties in any subsequent retrial or appeal in the same case.’” (Morohoshi v.
9
Pacific Home (2004) 34 Cal. 4th 482, 491.)
Defendant correctly states that the law of the case here includes JSA I’s
holding that insufficient evidence supported the jury’s damages award in the first trial.
And, defendant logically concludes that plaintiffs, on retrial, “could not rely on the
incompetent damages evidence they presented at the first trial.” But defendant
incorrectly asserts it met its initial burden on summary judgment simply by arguing (with
no evidentiary support) that plaintiffs were incapable of producing new evidence on
retrial. Instead, defendant needed to produce direct or circumstantial evidence that
plaintiff did not possess and could not reasonably obtain any competent evidence of
9
Defendant also quotes the following passage from Witkin: “Where the
sufficiency of the evidence to sustain the judgment depends on the probative value or
effect of the evidence itself (as distinguished from the credibility of witnesses), and there
is no substantial difference in the evidence in the retrial, the former decision is law of the
case.” (9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 470, p. 528). The balance of
Witkin’s text goes on to state: “The evidence produced on a retrial is seldom identical to
that in the first trial, and the doctrine will be applied notwithstanding insubstantial
changes, e.g., where the new evidence is merely cumulative or of such slight probative
value as to have no effect on an already existing conflict. (Ibid.) “In reaching its
conclusion that the evidence is the same, the reviewing court may examine the opinion on
the previous appeal, and, if necessary, compare the records of the two trials.” (Id. at p.
529.)
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damages. The result of defendant’s failure to do so is that the burden of production did
not shift to plaintiffs. Moreover, defendant’s contention plaintiffs “presented the same
evidence as that considered in [JSA Depot I] because they offered nothing new” is simply
false. On retrial, plaintiffs intend to present Yip’s expert testimony on the amount of lost
future profits damages they allegedly suffered. But again, the burden never shifted to
plaintiffs to even require them to show they had new evidence.
The bounds of materiality defined by the operative complaint for purposes
of defendant’s summary judgment motion on retrial is that plaintiffs sought damages in a
sum “according to proof.” As to both pre- and post-contract termination damages,
defendant cited no direct or circumstantial evidence plaintiffs did not possess and could
not reasonably obtain new and competent evidence of damages in some sum to be proved
at trial. Accordingly, defendant failed to meet its initial burden of production and the
trial court was required to deny defendant’s motion for summary judgment.
DISPOSITION
The judgment is reversed. Plaintiffs shall recover their costs incurred on
appeal.
IKOLA, J.
WE CONCUR:
ARONSON, ACTING P. J.
THOMPSON, J.
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