Wang v. TDS Group CA6 ( 2014 )

Filed 11/13/14 Wang v. TDS Group CA6
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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
SIXTH APPELLATE DISTRICT
YA HUI WANG et al., H038786
(Santa Clara County
Plaintiffs and Appellants, Super. Ct. No. 1-09-CV152551)
v.
THE TDS GROUP, INC.,
Defendant and Appellant.
I. INTRODUCTION
Appellant Ya Hui Wang (also known as Emily Wang) marketed and sold
employer-sponsored retirement plans to school district employees through her affiliation
with appellant The TDS Group, Inc. (TDS), a retirement plan administrator. Wang and
TDS had resolved Wang’s previous wrongful termination action with two settlement
agreements that were intended to create their future working relationship. In the present
action, Wang alleges that TDS failed to comply with the terms of the settlement
agreements. Her complaint includes causes of action for breach of contract, breach of the
covenant of good faith and fair dealing, intentional interference with economic
relationship, and intentional interference with prospective business relationship.
The matter proceeded to a jury trial that concluded in a special verdict awarding
Wang more than $4 million on all causes of action. In posttrial motions, the trial court
granted TDS’s motion for new trial on the breach of contract cause of action and also
granted TDS’s motion for judgment notwithstanding the verdict on the tort causes of
action for intentional interference with economic relationship and intentional interference
with prospective business relationship.
Wang has appealed from both posttrial orders. For reasons that we will explain,
we will affirm the order granting TDS’s motion for new trial on breach of contract and
dismiss Wang’s appeal of the order granting the judgment notwithstanding the verdict on
the tort causes of action for intentional interference with economic relationship and
intentional interference with prospective business relationship because the order is
nonappealable.
TDS has cross-appealed. For reasons that we will explain, we will affirm the
August 14, 2012 order denying TDS’s motion for judgment notwithstanding the verdict
on the breach of contract cause of action. We also determine that the August 16, 2012
order denying TDS’s motion for new trial on the tort causes of action for intentional
interference with prospective economic relations and intentional interference with
contractual relations is moot.
II. FACTUAL AND PROCEDURAL BACKGROUND
A. The Complaint
In 2009 Wang brought this action against defendant TDS, a third party pension
plan administrator with whom she was affiliated. According to the allegations in the
complaint, Wang’s claims in the present action arise from her prior dispute with TDS.
Wang had filed a wrongful termination action against TDS in 2004 that included claims
for race and sex discrimination, breach of contract, fraud, and other torts. The 2004
action was resolved by the parties entering into two settlement agreements, dated
October 26, 2007, and January 31, 2008.
Wang alleged that the 2007 and 2008 settlement agreements provided, among
other things, that she had the exclusive right to market and sell employer-sponsored
2
supplemental retirement plans for TDS to school employees of specified school districts;
a right of first refusal to market and sell the retirement plans in other specified school
districts; permission to transfer her book of business to her husband in the event of her
death and disability; and the right to determine if the transfer of her book of business to
another broker-dealer1 was in her best interest. The settlement agreements also provided
that Wang would pay TDS a 7 percent override2 for three years, followed by a 10 percent
override thereafter.
According to Wang, TDS “wrongly cancelled” the 2007 and 2008 settlement
agreements on June 26, 2009, by sending her a termination notice stating that her
affiliation with TDS and all of her agreements with TDS were terminated immediately.
The termination notice was preceded by a conference call with Robert Lotter, in which
Wang was informed that TDS had been sold to Lotter and he was the new CEO. Lotter
stated in the conference call that “everyone who wished to stay with TDS must change
the existing broker to a new broker-dealer called ‘Questar.’ ”
Wang further alleged that in July 2009 the president of TDS, Loy Doug Holt,
informed Wang that Lotter was willing to honor the 2007 and 2008 settlement
agreements if Wang moved to Questar, the new broker-dealer. In August 2009 Lotter
offered to honor the settlement agreements if the override that Wang paid to TDS was
increased from 7 percent to 20 percent and Wang waived her right of first refusal to
market and sell in Contra Costa County. Wang did not accept Lotter’s offer and in
1
A “broker-dealer” is “a person or a financial company that acts both as a broker,
making investments for customers, and as a dealer making investments for themselves[.]”
(Cambridge Business English Dictionary (2014)
[as of Nov. 13, 2014].)
2
An “override” is defined as “a commission paid to managerial personnel on sales
made by subordinates.” (Merriam-Webster’s Online Dict. (2014) [as of Nov. 13, 2014].)
3
September 2009 TDS sent a letter to Wang confirming that her affiliation with TDS was
terminated effective June 26, 2009.
Based on these and other allegations, Wang asserted causes of action for breach of
contract, breach of the covenant of good faith and fair dealing, intentional interference
with economic relationship, and intentional interference with prospective business
relationship.3
B. Trial Evidence
A jury trial was held in 2012. The following is a brief summary of the relevant
witness testimony and other evidence presented at trial.
1. TDS
School districts are the customers of TDS, which is a third party administrator of
supplemental retirement plans for public school employees. Sales advisors, also known
as representatives of TDS, sell the supplemental retirement plans. TDS licenses the
representatives to use the TDS name and logo and receives a commission from the
securities broker-dealer or the insurance company whose product is sold.
All of TDS’s representatives work with the same broker-dealer so that TDS can
receive the commissions for mutual fund sales. TDS does not receive direct payment of
commissions. The broker-dealer pays commissions directly to an individual known as
the OSJ (office of supervisory jurisdiction). Loy Douglas Holt and Alonzo Wickers were
OSJs for TDS. Their duties as an OSJ included supervising the TDS representatives so
that their sales of financial services are done correctly.
The broker-dealer has to approve any outside business activities by TDS that do
not involve securities sales, such as selling fixed insurance products or working as a plan
administrator.
3
The record reflects that the cause of action for breach of the covenant of good
faith and fair dealing was not presented to the jury.
4
2. Wang’s Relationship with TDS
When Wang began working with TDS as a plan administrator representative, the
president of TDS was Holt. Her OSJ was Wickers, who supervised all of TDS’s
representatives and approved all of the sales transactions for the retirement plans.
Wang carried a TDS business card and was assigned to specific public schools
where she would host a presentation to school employees regarding the types of
retirement plans that TDS was offering. Wang also had a direct contract with insurance
companies for selling fixed annuities. About 75 percent of her commissions came “on
the fixed side” and were paid directly to her by the insurance companies. Wang paid
7 percent of her commissions on the fixed side to Holt in accordance with her settlement
agreements with TDS.
If Wang was selling a financial product for TDS that was linked to the stock
market, she had to work under a securities broker-dealer. The commission structure was
different for a financial product that was linked to the stock market. The commission on
the sale of those products was paid first to the broker-dealer, who then paid 7 percent of
the commission to Wickers and 93 percent of the commission to Wang. If the sale was
made by one of Wang’s agents, the agent received 45 percent of the commission directly
from the broker-dealer.
3. The Settlement Agreements
Wang had been successful as a sales agent and had received various awards. She
became involved in a dispute with TDS that was resolved in a settlement agreement dated
October 26, 2007, and a second settlement agreement dated January 31, 2008. According
to Holt, the purpose of the 2008 settlement agreement was to create a future working
relationship between Wang and TDS, provided that she executed TDS’s trademark
license agreement and the registered representatives selling agreement that were attached
as exhibits to the 2008 settlement agreement. Wang understood that she would start a
working relationship with TDS when she signed the trademark license agreement.
5
However, Wang never received a copy of the trademark license agreement, was never
asked to sign it, and began a working relationship with TDS without ever signing it.
Wang believed that the 2008 settlement agreement also included terms that
obligated her to pay TDS a 7 percent override on all business generated from school
districts; permitted her to transfer her book of business to her husband in the event of her
disability or death; allowed her to sell her book of business subject to TDS’s approval,
which could not be unreasonably withheld; and provided that Wang agreed to participate
in a change of broker-dealer if it was determined to be beneficial to all parties.
According to Wang, the 2008 settlement agreement also gave her the exclusive
right to market and sell for TDS in specific school districts. It was never suggested to
Wang that there were provisions in the settlement agreements that would allow TDS to
terminate her on 30 days’ notice. She believed that her relationship with TDS could be
terminated only by mutual agreement.
Wang’s attorney, Richard Abdahla, recalled that when he negotiated the
2008 settlement agreement there were no discussions with TDS regarding whether the
trademark licensing agreement would control the termination of the parties’ rights under
the settlement agreement. Abdahla did not understand during the parties’ negotiations
that the termination of Wickers as OSJ would terminate the 2008 settlement agreement.
He also recalled that TDS never asked Wang to execute the trademark license agreement
that was attached to the 2008 settlement agreement.
Wickers, the former CEO and founder of TDS, was also involved in the settlement
of Wang’s claims. He understood that the 2008 settlement agreement was a global
agreement. The 2007 settlement agreement was intended to allow TDS to move forward
with its business relationship with Wang. The trademark license agreement attached to
the settlement agreement provided that Wickers, as Wang’s OSJ, would manage her
representatives and monitor her sales products. Wickers also understood that the
6
trademark license agreement provided that the settlement agreement would remain in
effect as long as Wickers was Wang’s OSJ.
Holt executed the 2007 settlement agreement and understood that the
2008 settlement agreement was a global agreement that incorporated both the
2007 settlement agreement and TDS’s trademark license agreement. He also understood
that the 2008 settlement agreement would remain in effect as long as Wang had a
relationship with a TDS OSJ, because if she did not have a relationship with a TDS OSJ
then neither he nor Wickers could receive commissions on her sales. Holt further
understood that the agreements provided that TDS could terminate Wang’s rights under
the settlement agreement with 30 days’ notice.
4. Termination of Wang’s Relationship with TDS
At the end of 2008, Holt told Wang about a new broker-dealer named Questar that
would be able to help TDS grow. Holt wanted a new broker-dealer because the existing
broker-dealer for TDS had been sold to another broker-dealer who would not allow TDS
to operate as a plan administration company. He knew that Wang had concerns about
Questar because Questar wanted the insurance companies’ commissions to go through
Questar and would not allow Wang to be paid directly by the insurance companies. Holt
believed that it was cause for termination if Wang did not move to Questar as her broker-
dealer.
Lotter bought TDS in 2009. He knew that Wang had a contractual relationship
with TDS that was different than the other 80 agents affiliated with TDS because it was
based on a settlement agreement. However, Lotter believed that Wang’s contractual
relationship with TDS was similar to that of other agents because it concerned territories,
commission agreements, and trademark agreements.
In May 2009 Wickers told Wang that he was no longer the OSJ for TDS. In
June 2009 Wang participated in a conference call with Lotter in which he stated that he
was the new owner of TDS and that everyone who wanted to stay with TDS would have
7
to change their broker-dealer to Questar within a week. Wang had concerns that under
Questar her commissions would be reduced and she would be appointed as a non-
commissioned agent. Due to her concerns, she did not change her broker-dealer
immediately, as Lotter had requested.
About a week after the conference call with Lotter, Wang’s TDS e-mail was cut
off. Wang then received a letter terminating her relationship with TDS and informing her
she was no longer authorized to contact clients of TDS or to represent to them that she
was affiliated with TDS in any capacity. Wang later had a meeting with Lotter in which
he told her he was not going to honor the 2008 settlement agreement because it was not
beneficial for TDS. During that time Wang could not service her clients and her agents
could not make any money. She has not been able to generate any new clients since her
termination from TDS in 2009.
According to Lotter, Wang did not honor her agreement with TDS when she
refused to move to the new broker-dealer, Questar, because TDS could not get paid
unless she did. Lotter asserted that TDS never told anyone that Wang had done anything
wrong, although Lotter acknowledged sending a letter to school districts about
wrongdoing by TDS representatives that became known as the “ ‘rogue agents’ ” letter.
The letter did not mention Wang by name or identify her as one of the “rogue agents.”
Lotter knew that Wang had a great reputation as a salesperson and a huge territory and he
wanted her to maintain her relationship with TDS under Questar.
5. Termination of Other Relationships with TDS
Wickers retired after TDS replaced him as an OSJ in March 2009. He did not
believe that his removal as OSJ would have any effect on Wang’s contractual relationship
with TDS. Due to serious financial problems, Wickers sold TDS in June 2009. He
understood that no TDS representatives moved to Questar as their broker-dealer after the
sale of TDS to Lotter due their concerns about the potential loss of their commissions.
8
Rene Rocamora owned a small business that provided counseling and financial
services to school teachers regarding their retirement investments. He entered into a
franchise agreement with TDS in 2002. During the June 2009 conference call with Lotter
in which Lotter announced that he had acquired TDS, Lotter mentioned that TDS agents
who wanted to remain with TDS needed to move to a new broker-dealer, Questar.
Rocamora later had a meeting with Lotter in which Lotter told him that he wanted to
change the franchise agreement and have Rocamora pay more fees to TDS.
Rocamora refused to move to Questar because it would have been a major
undertaking to move his thousands of clients and he had not received information about
the new commission structure and fees. On June 26, 2009, Rocamora’s office received a
letter from TDS that unilaterally terminated the franchise agreement.
6. Damages
Wang’s husband, Chris Wong, managed the office and bookkeeping for Wang and
was involved in her settlement negotiations with TDS. According to Wong, during fiscal
year 2009 Wang received gross commissions of $487,078 from insurance companies and
$153,375 from securities broker-dealers. Her 2009 income was down due to her
termination from TDS in June 2009.
Wang’s economics expert, George McLaughlin, was retained to evaluate her lost
income. He calculated that the total net loss to Wang as a result of her termination from
TDS was $8,100,577.
C. Special Verdict and Judgment
The jury rendered its special verdict on March 12, 2012. The special verdict form
asked the jurors to make findings on the causes of action for breach of contract,
intentional interference with prospective economic relations, and intentional interference
with contractual relations. After making the requested findings, the jury awarded Wang
damages in the amount of $4,218,033 on all causes of action.
9
A judgment in the amount of $4,667,121.86 (which included attorney’s fees of
$410,802.50 and costs of $38,286.36) was entered on June 18, 2012.
D. Posttrial Motions
TDS filed a posttrial motion for new trial arguing that it was entitled to a new trial
because (1) the jury had returned a verdict that defeated an essential element of the
breach of contract claim; (2) there was insufficient evidence to support the causes of
action for intentional interference with prospective economic relations and intentional
interference with contractual relations; (3) the damages award was excessive; and (4) the
trial court’s multiple erroneous orders during the trial had resulted in a miscarriage of
justice.
TDS also filed a posttrial motion for judgment notwithstanding the verdict.
Regarding the causes of action for intentional interference with prospective economic
relations and intentional interference with contractual relations, TDS reiterated its
argument that there was insufficient evidence for a finding of liability on those tort
claims. As to the breach of contract cause of action, TDS argued that the claim failed as
a matter of law because there was no evidence of a contract; the trial court should have
interpreted the settlement agreement to include a 30-day at will termination clause and a
no-consequential damages clause, and to lack the material term of the duration of the
contract; and the evidence in support of TDS’s affirmative defense of frustration of
purpose was uncontradicted.
E. Trial Court Orders on Posttrial Motions
The trial court’s August 14, 2012 order granted TDS’s motion for judgment
notwithstanding the verdict in part. The motion was granted as to the tort causes of
action for intentional interference with prospective economic relations and intentional
interference with contractual relations and denied as to the cause of action for breach of
contract.
10
The trial court’s August 16, 2012 order granted TDS’s motion for new trial in part.
The order stated the grounds for the order as follows: “The court, having reviewed the
written submissions of the parties and considered the extensive arguments of counsel,
granted Defendant’s motion for a new trial as to the breach of contract cause of action.
The court concluded that the grounds for granting the motion for a new trial were the
following: (1) abuse of discretion by the court ([Code Civ. Proc. § 657, subd. (1)]);[4]
(2) excessive damages ([§ 657, subd. (5)]); and [(3)] error in law occurring at the trial and
objected to by the moving party ([§ 657, subd. (7)]).” The August 16, 2012 order did not
include a statement of reasons.
Wang filed a timely notice of appeal from the August 14, 2012 order and the
August 16, 2012 order. TDS filed a notice of cross-appeal from both orders.
III. WANG’S APPEAL
On appeal, Wang contends that the August 16, 2012 order granting TDS’s motion
for new trial on the breach of contract cause of action should be reversed because a new
trial is not warranted. Wang also contends that the August 14, 2012 order granting
judgment notwithstanding the verdict on the causes of action for for intentional
interference with prospective economic relations and intentional interference with
contractual relations was improper and should be reversed.
We will begin our evaluation with Wang’s challenge to the order granting TDS’s
motion for a new trial on the breach of contract cause of action since, for reasons that we
will explain, we find that issue to be dispositive.
A. Motion for New Trial—Statutory Framework
“The authority of a trial court in this state to grant a new trial is established and
circumscribed by statute. [Citation.] Section 657 sets out seven grounds for such a
4
All statutory references hereafter are to the Code of Civil Procedure unless
otherwise indicated.
11
motion: (1) ‘Irregularity in the proceedings’; (2) ‘Misconduct of the jury’; (3) ‘Accident
or surprise’; (4) ‘Newly discovered evidence’; (5) ‘Excessive or inadequate damages’;
(6) ‘Insufficiency of the evidence [. . . or the verdict . . . is against the law]’; and
(7) ‘Error in law.’ ” (Oakland Raiders v. National Football League (2007) 41 Cal. 4th
624, 633 (Oakland Raiders).)
When a motion for new trial is granted on all or part of the issues raised in the
motion, section 657 provides that “the court shall specify the ground or grounds upon
which it is granted and the court’s reason or reasons for granting the new trial . . . .”
(§ 657; Sanchez-Corea v. Bank of America (1985) 38 Cal. 3d 892, 899.) Thus,
“[s]ection 657 clearly distinguishes between grounds and reasons.” (Id. at p. 902.)
An order granting a motion for new trial is appealable. (§ 904.1, subd. (a)(4); see
Cobb v. University of So. California (1996) 45 Cal. App. 4th 1140, 1144.) Section 657
provides that “[o]n appeal from an order granting a new trial the order shall be affirmed if
it should have been granted upon any ground stated in the motion, whether or not
specified in the order or specification of reasons, except that (a) the order shall not be
affirmed upon the ground of the insufficiency of the evidence to justify the verdict or
other decision, or upon the ground of excessive or inadequate damages, unless such
ground is stated in the order granting the motion and (b) on appeal from an order granting
a new trial upon the ground of the insufficiency of the evidence to justify the verdict or
other decision, or upon the ground of excessive or inadequate damages, it shall be
conclusively presumed that said order as to such ground was made only for the reasons
specified in said order or said specification of reasons, and such order shall be reversed as
to such ground only if there is no substantial basis in the record for any of such reasons.”
Thus, where, as here, the order granting a motion for the new trial lacks a
statement of reasons, “[t]he order may still be sustained if a new trial should have been
granted upon any ground set out in section 657 except the grounds of insufficiency of the
evidence or inadequate or excessive damages.” (Oakland Raiders, supra, 41 Cal.4th at
12
p. 636; see also Stevens v. Parke, Davis & Co. (1973) 9 Cal. 3d 51, 63 [where no reasons
were specified, the order granting a new trial cannot be sustained upon the ground of
excessive damages].)
B. Standard of Review
Where the trial court’s order granting a motion for new trial includes both the
grounds and a statement of reasons for granting the motion, the standard of review is
abuse of discretion. (Oakland Raiders, supra, 41 Cal.4th at p. 636.)
The standard of review is different where the order granting a motion for new trial
lacks a statement of reasons. “[T]he absence of a statement of reasons calls for
independent review of the trial court’s order granting a motion for a new trial.” (Oakland
Raiders, supra, 41 Cal.4th at p. 640.) “The reviewing court should not . . . defer to the
trial court’s resolution of conflicts in the evidence, or draw all inferences favorably to the
trial court’s decision, because in the absence of a statement of reasons, the record does
not show whether the trial court resolved those conflicts or drew those inferences.”
(Ibid.)
C. Analysis
1. The Parties’ Contentions
Wang contends that the only grounds for a new trial motion that may be
considered on appeal are the statutory grounds, other than insufficiency of the evidence
and excessive damages, that were raised by TDS in its motion, including (1) irregularity
in the proceedings that prevented a fair trial (§ 657, subd. (1)); (2) error in law occurring
at trial and objected to by the moving party (§ 657, subd. (7)); and (3) a verdict that is
against the law (§ 657, subd. (6)).
TDS concedes that since the trial court’s August 16, 2014 order granting a new
trial did not include a statement of reasons, the order cannot be affirmed on the grounds
of insufficiency of the evidence or excessive damages.
13
The parties both begin their appellate arguments with acknowledgment of a defect
in the special verdict on breach of contract. We understand their arguments to raise the
issue of whether the order granting the motion for new trial should be affirmed on the
ground that the special verdict on breach of contract is against the law due to the jury’s
inconsistent answers to the special verdict questions. Specifically, the jury answered
question 3 in TDS’s favor, which would appear to defeat the breach of contract claim.
(§ 657, subd. (6).) Question 3 states: “Did all the conditions that were required for The
TDS Group, Inc.’s performance occur or were they excused?” The jury’s answer of “No”
to question 3 appears to be inconsistent with the jury’s answers in Wang’s favor to the
other special verdict questions on the breach of contract claim.
We therefore turn to an overview of the section 657, subdivision (6) ground for a
new trial of verdict against the law due to inconsistent special verdict answers.
2. Verdict Against the Law
Pursuant to section 657, subdivision (6),5 inconsistent verdicts are against the law
and are grounds for a new trial. (City of San Diego v. D.R. Horton San Diego Holding
Co., Inc. (2005) 126 Cal. App. 4th 668, 682 (City of San Diego).) “[A] special verdict’s
correctness is analyzed as a matter of law and [is] therefore subject to de novo review.
[Citation.]” (Zagami, Inc. v. James A. Crone, Inc. (2008) 160 Cal. App. 4th 1083, 1092
(Zagami).)
“ ‘The inconsistent verdict rule is based upon the fundamental proposition that a
factfinder may not make inconsistent determinations of fact based on the same evidence.
The rule finds parallel expression in the law relating to court findings: “Where the
5
Section 657, subdivision (6) states: “The verdict may be vacated and any other
decision may be modified or vacated, in whole or in part, and a new or further trial
granted on all or part of the issues, on the application of the party aggrieved, for any of
the following causes, materially affecting the substantial rights of such party: [¶] . . . [¶]
6. Insufficiency of the evidence to justify the verdict or other decision, or the verdict or
other decision is against law.”
14
findings are contradictory on material issues, and the correct determination of such
issues is necessary to sustain the judgment, the inconsistency is reversible error.” ’
[Citations.] . . . Where there is an inconsistency between or among answers within a
special verdict, both or all the questions are equally against the law. [Citation.]” (City of
San Diego, supra, 126 Cal.App.4th at p. 682.)
Accordingly, “there is no presumption in favor of upholding a special verdict
when the inconsistency is between two questions in a special verdict. [Citation.]”
(Zagami, supra, 160 Cal.App.4th at p.1092.) “ ‘This rule stems from the nature of a
special verdict and its “ ‘recognized pitfalls,’ ” namely, that it requires the jury to resolve
all of the controverted issues in the case, unlike a general verdict which merely implies
findings on all issues in one party’s favor. [Citations.]’ [Citation.]” (Taylor v. Nabors
Drilling USA, LP (2014) 222 Cal. App. 4th 1228, 1242.)
“With a special verdict, unlike a general verdict or a general verdict with special
findings, a reviewing court will not infer findings to support the verdict. [Citations.]”
(Singh v. Southland Stone, U.S.A., Inc. (2010) 186 Cal. App. 4th 338, 358; see also
Mendoza v. Club Car, Inc. (2000) 81 Cal. App. 4th 287, 302-303 (Mendoza) [same].)
Therefore, “[t]he appellate court is not permitted to choose between inconsistent answers.
[Citations.]” (City of San Diego, supra, 126 Cal.App.4th at p. 682.)
For example, the verdict was determined to be against the law and a wrongful
termination action was remanded for a new trial where “[t]he jury’s finding that there was
no breach of contract is irreconcilable with its finding that [the defendant] did breach the
implied covenant of good faith . . . .” (Shaw v. Hughes Aircraft Co. (2000) 83
Cal. App. 4th 1336, 1344.)
In Zagami, the jury awarded damages of $15,500 on the plaintiff’s claim that the
defendant had breached a contract for rental and delivery of a skiploader tractor, although
the jury had valued the skiploader at $30,000. (Zagami, supra, 160 Cal.App.4th at
pp. 1086-1087.) The appellate court determined that the two damages awards were
15
“internally inconsistent” and therefore against the law, and remanded the matter for a
new trial on the issue of damages. (Id. at p. 1094.)
Similarly, in City of San Diego, the jury made inconsistent findings with regard to
the fair market value of the real property at issue in an eminent domain action. (City of
San Diego, supra, 126 Cal.App.4th at p. 682.) In affirming the trial court’s order
granting a new trial, the appellate court noted that “[w]hen parties submit a special
verdict to the jury, they face the danger of having the jury reach inconsistent findings of
ultimate fact that may warrant a new trial.” (Id. at p 686.)
In the present case, the issue is whether the jury’s answers to the special verdict
questions on breach of contract were inconsistent, such that the verdict is against the law
within the meaning of section 657, subdivision (6) and a new trial was properly granted.
We therefore turn to an examination of the special verdict on breach of contract.
3. The Special Verdict on Breach of Contract
The special verdict on breach of contract is quoted below with the jury’s answers
indicated.
“1. Did Ya Hui (Emily) Wang, Chun Yu, Inc.[6] and The TDS Group, Inc., enter
into a contract?
“ANSWER: [Yes]
“If your answer to question 1 is yes, then answer question 2. If you answered no,
then move on to question 7.
“2. Did Ya Hui (Emily) Wang and Chun Yu, Inc. do all, or substantially all, of the
significant things that the contract required them to do?
“ANSWER: [Yes]
“OR
6
The record reflects that appellant Chen Yu, Inc., a company associated with
Wang, was added as a plaintiff before trial (hereafter, collectively Wang).
16
“Was Ya Hui (Emily) Wang and Chun Yu, Inc. excused from having to do all, or
substantially all, of the significant things that the contract required them to do?
“ANSWER: [left blank]
“If your answer to either option for question 2 is yes, then answer question 3. If
you answered no to both options, then move on to question 7.
“3. Did all the conditions that were required for The TDS Group, Inc.’s
performance occur or were they excused?
“ANSWER: [No]
“If your answer to question 3 is no, then answer question 4. If you answered yes,
then move on to question 7.
“4. Did The TDS Group, Inc. fail to do something that the contract required it to
do?
“ANSWER: [Yes]
“OR
“Did The TDS Group, Inc. do something that the contract prohibited it from
doing?
“ANSWER: [left blank]
“If your answer to either option for question 4 is yes, then answer question 5. If
you answered no to both options, then move on to question 7.
“5. Were Ya Hui (Emily) Wang and Chun Yu, Inc. harmed by that failure?
“ANSWER: [Yes]
“If your answer to question 5 is yes, then answer question 6. If you answered no,
then move on to question 7.
“6. What are Ya Hui (Emily) Wang and Chen Yu, Inc.’s damages? [ANSWER:]
$4,218,033
“After answering question 6, move on to question 7.” (Underscoring added.)
17
In its motion for new trial, TDS argued that the jury’s answer of “No” to
question 3 resulted in the cause of action for breach of contract failing as a matter of law.
TDS asserted that “[i]t is clear from the CACI [Judicial Council of California Civil Jury
Instructions] 303 instruction and the CACI VF-300 [verdict form] that a ‘Yes’ answer is
required in order for the jury to continue answering questions on the breach of contract
claim.”
TDS further asserted that “[t]his jury, after properly being instructed that a
necessary element to the Plaintiffs’ breach of contract cause of action was the occurrence
of all conditions requiring TDS to perform, unanimously responded ‘No.’ ” For that
reason, TDS contended that the verdict in Wang’s favor on the breach of contract cause
of action was against the law. Alternatively, TDS argued that the verdict was against the
law because it “is irreconcilably uncertain and ambiguous.”
According to Wang, question 3 in the special verdict on breach of contract was
originally based on CACI VF-300. Question 3 in the CACI VF-300 verdict form for
breach of contract reads as follows: “Did all the conditions that were required for [name
of defendant]’s performance occur or were they excused? [¶] Yes No [¶] If your
answer to question 3 is yes, then answer question 4. If you answered no, stop here,
answer no further questions, and have the presiding juror sign and date this form.”7
On appeal, Wang asserts that “Plaintiffs’ counsel, counsel for Defendant, and the
court, all read the question [3 in CACI VF-300] as meaning that if the jury answered yes,
they were saying that TDS did everything it was supposed to do, or on the other hand it
may have been excused. [Citation.] In accord with that reading of Question 3, the court
modified the form before it was submitted to the jury. The modified form required an
answer of ‘no’ to Question 3 if the jury intended to proceed further with the breach of
7
The directions for use of CACI VF-300 state: “Include question 3 if conditions
for performance are at issue.” (Judicial Council of Cal., Civ. Jury Instns. (2014)
Directions for Use for CACI VF-300, p. 207.)
18
contract claim and find for Plaintiffs.” TDS does not dispute Wang’s assertion that
question 3 in CACI VF-300 was modified at the time of trial through the agreement of
the parties and the trial court.
Having reviewed the special verdict form in its entirety, we determine that the
jury’s answer of “No” to question 3 (“Did all the conditions that were required for The
TDS Group, Inc.’s performance occur or were they excused?”) on the special verdict
form constitutes the jury’s finding that either (1) Wang failed to prove that the conditions
required for The TDS Group, Inc.’s performance of the parties’ contract had occurred; or
(2) Wang failed to prove that the conditions required for TDS’s performance of the
parties’ contract were excused.
Thus, by answering “No” to question 3, the jury found that Wang had not proven
an essential element of her breach of contract claim. “It is elementary a plaintiff suing
for breach of contract must prove it has performed all conditions on its part or that it was
excused from performance. [Citation.] Similarly, where defendant’s duty to perform
under the contract is conditioned on the happening of some event, the plaintiff must
prove the event transpired. [Citation.]” (Consolidated World Investments, Inc. v. Lido
Preferred Ltd. (1992) 9 Cal. App. 4th 373, 380 (Consolidated World Investments).)
The jury’s “No” answer to question 3 (“Did all the conditions that were required
for The TDS Group, Inc.’s performance occur or were they excused?”) was therefore
inconsistent with the jury’s “Yes” answers to question 4 (“Did The TDS Group, Inc. fail
to do something that the contract required it to do?”) and question 5 (“Were Ya Hui
(Emily) Wang and Chun Yu, Inc. harmed by that failure?”), as well as its “$4,218,033”
answer to question 6 (“What are Ya Hui (Emily) Wang and Chen Yu, Inc.’s damages?”).
In other words, the jury made the following inconsistent findings: (1) Wang had
failed to prove all elements of the breach of contract cause of action because she did not
proved that the conditions required for The TDS Group, Inc.’s performance of the
parties’ contract had occurred or were excused (question 3), and (2) Wang had proved
19
breach of contract because she proved that TDS failed to do something that the contract
required it to do (question 4) and she was harmed by that failure (question 5) in the
amount of over $4 million in damages (question 6).
Since we may not choose between inconsistent answers in a special verdict (City
of San Diego, supra, 126 Cal.App.4th at p. 682), and we may not infer findings in support
of Wang as the prevailing party (Zagami, supra, 160 Cal.App.4th at p. 1092), we find
that the special verdict on breach of contract is against the law due to the inconsistent
special verdict. (§ 657, subd. (6); see Lambert v. General Motors (1998) 67 Cal. App. 4th
1179, 1185-1186 (Lambert).) Although the trial court did not expressly state that a
ground for its order granting TDS’s motion for new trial on the breach of contract claim
was that the special verdict on breach of contract was against law, we may affirm the
order on this ground because it was raised in TDS’s motion. (See Don v. Cruz (1982)
131 Cal. App. 3d 695, 706.)
Wang’s contention that TDS waived any defect in the special verdict because TDS
failed to object and request that the jury be returned for further deliberation does not
persuade us to alter our conclusion. It is well established that “when a complaint is made
that verdicts are inconsistent, no objection is required to preserve the issue for appeal.
[Citations.]” (Godfrey v. Steinpress (1982) 128 Cal. App. 3d 154, 187; see also Lambert,
supra, 67 Cal.App.4th at p. 1182.)
Wang also contends that the trial court failed to comply with its duty to interpret
the verdict and therefore this court should interpret the verdict correctly in Wang’s favor.
This contention is also unpersuasive. Wang relies on the decision in Woodcock v.
Fontana Scaffolding & Equip. Co. (1968) 69 Cal. 2d 452 (Woodcock), which is factually
and legally distinguishable.
In Woodcock, the plaintiff was injured in a construction site accident and brought a
personal injury action alleging that the defendant scaffolding company was negligent.
(Woodcock, supra, 69 Cal.2d at p. 454.) The jury rendered a general verdict of $13,000
20
with the special finding that the negligence of defendant scaffolding company was a
proximate cause of the plaintiff’s injuries. (Id. at p. 455.) On appeal, the defendant
argued that the trial court had erred in denying its request that judgment be reduced by
the amount of the worker’s compensation benefits that the plaintiff had received. (Ibid.)
The California Supreme Court found that the verdict was “ambiguous in not specifying
whether the $13,000 represents the gross or net amount of damages.” (Id. at p. 456.)
To resolve the ambiguous verdict, the Woodcock court applied the following rules:
“ ‘If the verdict is ambiguous the party adversely affected should request a more formal
and certain verdict. . . .’ [Citations.] But where no objection is made before the jury is
discharged, it falls to ‘the trial judge to interpret the verdict from its language considered
in connection with the pleadings, evidence and instructions.’ [Citations.] Where the trial
judge does not interpret the verdict or interprets it erroneously, an appellate court will
interpret the verdict if it is possible to give a correct interpretation. [Citations.] If the
verdict is hopelessly ambiguous, a reversal is required, although retrial may be limited
to the issue of damages. [Citations.]” (Woodcock, supra, 69 Cal.2d at pp. 456-457,
fn. omitted.) The court determined that when the verdict was considered in light of the
instructions to the jury to award the full amount of damages without subtraction for the
worker’s compensation claim, the verdict was unambiguous and the judgment should be
reduced in the amount of the worker’s compensation benefits previously paid. (Id. at
p. 459; see also Lambert, supra, 67 Cal.App.4th at p. 1183 [the first principle of
inconsistent general and special verdicts is that they must be harmonized if possible].)
Thus, the rules stated in Woodcock and Lambert regarding the court’s duty to
interpret an ambiguous verdict apply to inconsistencies between a general verdict with
special findings or between a general verdict and special verdicts. These rules have no
application in the present case because the jury rendered a special verdict on the breach
of contract cause of action, not a general verdict with special findings or a general verdict
with special verdicts. (See Mendoza, supra, 81 Cal.App.4th at pp. 302-303.) As we have
21
noted, where the inconsistency is between the answers to questions in a special verdict,
there is no “presumption in favor of upholding a special verdict. Rather, a special
verdict’s correctness must be analyzed as a matter of law. [Citation.] This is because a
special verdict is far more susceptible to defect than a general verdict, which can be
tested with special findings. [Citation.]” (Id. at p. 303.) Thus, where, as here, the
inconsistency is between the answers to special verdict questions, the court does not have
a duty to reconcile the inconsistencies and interpret the verdict. (Id. at p. 302.)
Having reached the conclusion that the special verdict on breach of contract is
against the law within the meaning of section 657, subdivision (6) due the inconsistency
in the jury’s answer to question 3 and the answers to questions 4, 5, and 6 of the special
verdict, we will affirm the order granting a new trial on the breach of contract cause of
action. Having reached that conclusion, we need not address the other issues raised on
appeal with respect to the merits of the August 16, 2012 order granting TDS’s motion for
new trial on the breach of contract cause of action.
D. Motion for Judgment Notwithstanding the Verdict
Wang contends that the trial court erred in granting TDS’s motion for judgment
notwithstanding the verdict on the tort causes of action for intentional interference with
prospective economic relations and intentional interference with contractual relations
because substantial evidence supports the jury’s findings on those claims.
As a threshold matter, we consider whether the August 14, 2012 order granting in
part TDS’s motion for judgment notwithstanding the verdict is appealable. Wang argues
that the order is reviewable on appeal from the August 16, 2012 order granting a new trial
on the breach of contract cause of action, pursuant to section 906 and the decision in
Beavers v. Allstate Ins. Co. (1990) 225 Cal. App. 3d 310, 330 (Beavers). We disagree.
The California Supreme Court has instructed that “an order granting judgment
notwithstanding the verdict, . . . is but a step preliminary to final judgment and not an
appealable order. [Citation.]” (Jordan v. Talbot (1961) 55 Cal. 2d 597, 602; see also
22
Cobb v. University of So. California (1995) 32 Cal. App. 4th 798, 804 (Cobb) [order
granting partial judgment notwithstanding the verdict is not listed in section 904.1 and is
not appealable].)
In Beavers, the appellate court explained that “[a]n order granting partial judgment
notwithstanding the verdict has the effect of modifying the judgment on the verdict. If
the trial court otherwise upholds the verdict, then the judgment, as modified by the partial
judgment notwithstanding the verdict, is immediately appealable. Where, however, the
trial court grants a new trial as to issues which are not affected by the judgment
notwithstanding the verdict, then the new trial order must be held to have the effect of
vacating and holding in abeyance the entire judgment, as modified by the order granting
judgment notwithstanding the verdict, until one final judgment can be entered.”
(Beavers, supra, 225 Cal.App.3d at p. 330.)
The Beavers court also determined that there was an exception to the rule “that a
partial new trial order vacates and holds in abeyance the entire judgment.” (Beavers,
supra, 225 Cal.App.3d at p. 330.) “The exception occurs when the judgment retains
sufficient vitality to support appellate review if the matter is otherwise properly brought
before the appellate court. . . .” (Ibid.) This exception applied in Beavers because the
trial court had “granted partial judgment notwithstanding the verdict and granted a new
trial as an alternative to the partial judgment notwithstanding the verdict and as to all
other issues.” (Ibid.)
The decision in Beavers is distinguishable from the present case. Unlike the trial
court in Beavers, the trial court here did not grant a new trial on all issues as an
alternative to the partial judgment notwithstanding the verdict. (See Beavers, supra,
225 Cal.App.3d at p. 330.) Instead, the trial court in the present case granted partial
judgment notwithstanding the verdict as to the two tort causes of action and granted a
new trial on the separate breach of contract cause of action. Consequently, our
affirmance of the partial new trial order has the effect of vacating and holding in
23
abeyance the entire judgment until one final judgment can be entered. (See Ibid.) “Any
issue concerning the order granting partial judgment notwithstanding the verdict can be
reviewed by the filing of a petition for extraordinary relief[8] [citation] or once a final
judgment is entered. [Citations.]” (Cobb, supra, 32 Cal.App.4th at p. 804.)
We are also not convinced that section 906 provides that a partial judgment
notwithstanding the verdict is immediately appealable. Section 906 provides in part:
“Upon an appeal pursuant to Section 904.1 or 904.2, the reviewing court may review the
verdict or decision and any intermediate ruling, proceeding, order or decision which
involves the merits or necessarily affects the judgment or order appealed from or which
substantially affects the rights of a party, including, on any appeal from the judgment,
any order on motion for a new trial, and may affirm, reverse or modify any judgment or
order appealed from and may direct the proper judgment or order to be entered, and may,
if necessary or proper, direct a new trial or further proceedings to be had.”
Under section 906, “appellate review following a final judgment properly
encompasses ‘any intermediate ruling, proceeding, order or decision’ of the trial court
that ‘involves the merits’ or ‘necessarily affects’ the judgment or ‘substantially affects
the rights of a party . . . .’ [Citations.]” (Abramson v. Juniper Networks, Inc. (2004)
115 Cal. App. 4th 638, 648-649.) However, “nonappealable orders or other decisions
substantively and/or procedurally collateral to, and not directly related to, the judgment
or order being appealed are not reviewable pursuant to section 906 even though they
8
Wang has not requested that we exercise our discretion to treat the nonappealable
partial judgment notwithstanding the verdict as a petition for an extraordinary writ.
(Olson v. Cory (1983) 35 Cal. 3d 390, 400-401.) We may not exercise that power except
“under extraordinary circumstances, ‘ “compelling enough to indicate the propriety of a
petition for writ . . . in the first instance . . . .” [Citation.]’ ” (Estate of Weber (1991)
229 Cal. App. 3d 22, 25.) Our review of the record does not reveal such extraordinary
circumstances in the present case, where Wang has an appellate remedy.
24
literally may ‘substantially affect[ ]’ one of the parties to the appeal.” (Cahill v. San
Diego Gas & Electric Co. (2011) 194 Cal. App. 4th 939, 948.)
In the present case, we determine that the order granting partial judgment
notwithstanding the verdict on the tort causes of action does not involve the merits of the
partial new trial order on the breach of contract cause of action, does not necessarily
affect the partial new trial order, and is not directly related to the partial new trial order.
(See Fountain Valley Chateau Blanc Homeowner’s Assn. v. Department of Veterans
Affairs (1998) 67 Cal. App. 4th 743, 751 [motion for a new trial has a different purpose
and different standard of review than a motion for judgment notwithstanding the
verdict].) Therefore, section 906 does not support Wang’s contention that the August 14,
2014 order granting partial judgment notwithstanding the verdict is reviewable in this
appeal.
Accordingly, we conclude that the August 14, 2012 order granting TDS’s motion
for judgment notwithstanding the verdict on the causes of action for intentional
interference with prospective economic relations and intentional interference with
contractual relations is not immediately appealable. For that reason, we will dismiss the
appeal from the August 14, 2012 order without reaching Wang’s contentions regarding
the merits of the order. (See Cobb, supra, 32 Cal.App.4th at p. 804.)
IV. CROSS-APPEAL
A. Order Denying Motion for Judgment Notwithstanding the Verdict
TDS has filed a cross-appeal in which it seeks review of the August 14, 2012 order
denying TDS’s motion for judgment notwithstanding the verdict on the breach of contract
cause of action.
Our standard of review is well established. “A motion for judgment
notwithstanding the verdict may be granted only if it appears from the evidence, viewed
in the light most favorable to the party securing the verdict, that there is no substantial
evidence in support. [Citation.] [¶] The moving party may appeal from the judgment or
25
from the order denying the motion for judgment notwithstanding the verdict, or both.
(. . . § 904.1, subd. (a)(4) [making such an order appealable].) As in the trial court, the
standard of review is whether any substantial evidence—contradicted or
uncontradicted—supports the jury’s conclusion. [Citations.]” (Sweatman v. Department
of Veterans Affairs (2001) 25 Cal. 4th 62, 68.) “If the motion presents a legal question
based on undisputed facts, however, we review the ruling de novo. [Citation.]” (Gillan
v. City of San Marino (2007) 147 Cal. App. 4th 1033, 1043-1044.)
1. Question 3
In its cross-appeal, TDS contends that the jury’s answer of “No” to question 3 of
the special verdict on breach of contract defeated an essential element of the cause of
action and therefore compels entry of judgment in TDS’s favor on the breach of contract
cause of action.
We reject this contention because, as we have discussed, the jury’s answer of
“No” to question 3 (“Did all the conditions that were required for The TDS Group, Inc.’s
performance occur or were they excused?”) of the special verdict on breach of contract
in TDS’s favor was inconsistent with the jury’s answers to questions 4, 5, and 6 in
Wang’s favor. We may not choose between inconsistent answers in a special verdict
(City of San Diego, supra, 126 Cal.App.4th at p. 682) and we may not infer findings in
support of TDS (Zagami, supra, 160 Cal.App.4th at p. 1092). Therefore, TDS is not
entitled to judgment notwithstanding the verdict on breach of contract on the ground of
the answer of “No” to question 3.
2. Ambiguity
We understand TDS to also contend that the trial court should have granted its
motion for judgment notwithstanding the verdict on the breach of contract cause of action
on the ground that the parties’ settlement agreements unambiguously incorporated the
terms of the trademark license agreement, which TDS argues provided that Wang could
26
be terminated at will on 30 days’ notice and that she was not entitled to consequential
damages.
Wang responds that TDS has failed to meet its burden to show that there is no
substantial evidence to support the verdict. She also argues that the evidence shows to
the contrary that the parties did not intend the trademark agreement to apply to the
settlement agreements.
The record reflects that during motions in limine the trial court denied TDS’s
request for reconsideration of the court’s in-chambers ruling that the parties’ agreements
were ambiguous. The court stated: “I just believe that there are unanswered questions.
The agreements are ambiguous as far as I’m concerned. I just don’t believe that a party
would knowingly enter into a contract that could be terminated with such . . . important
provisions, that that could just disappear in 30 days. . . . [W]e need evidence on what the
parties really intended.”
Where an issue is raised on appeal as to whether the parties’ contract is
ambiguous, we apply the following standard of review. “The analysis of whether an
ambiguity exists is not limited to the words of the contract. [Citation.] Trial courts are
required to receive provisionally any proffered parol evidence that is relevant to show
whether the contractual language is reasonably susceptible to a particular meaning.
[Citations.] Such parol evidence might expose a latent ambiguity when the contract
appears unambiguous on its face. [Citation.] [¶] Similarly, an appellate court must
consider the proffered parol evidence when conducting its independent review into
whether an ambiguity exists. [Citation.] In other words, appellate courts evaluate the
instrument’s language and relevant extrinsic evidence and decide whether, in light of the
extrinsic evidence, the language is reasonably susceptible to the competing
interpretations urged by the parties. [Citation.]” (Adams v. MHC Colony Park L.P.
(2014) 224 Cal. App. 4th 601, 620, fn. omitted.) “If the interpretation of the contract turns
upon the credibility of extrinsic evidence, the interpretation of the contract is not a
27
question of law, but one of fact and it will not be overturned unless not supported by
substantial evidence. [Citations.]” (LaCount v. Hensel Phelps Constr. Co. (1978)
79 Cal. App. 3d 754, 770 (LaCount).) In accordance with this standard of review, we have
reviewed the 2007 settlement agreement, the 2008 settlement agreement, the trademark
license agreement, and the related extrinsic evidence that was presented at trial.
The unsigned and undated trademark license agreement between TDS and Wang
that is included in the record on appeal includes a 30-day termination term: “This
Agreement may be terminated, without penalty, upon at least thirty (30) days written
notice by either party.” The trademark license agreement also provides that “[n]either
party shall have the right to seek or obtain consequential, special or punitive damages on
account of the failure of the other party to perform or observe any covenant or obligation
under this Agreement on their part to be performed or observed.”
The 2007 settlement agreement includes the following term regarding the
trademark license agreement: “TDS agrees to a future working relationship with Emily
Wang provided Emily Wang executes the Nonexclusive Trademark License Agreement
attached hereto as Exhibit A, and the Registered Representative’s Selling Agreement
attached hereto as Exhibit B, and these agreements shall govern the working relationship
between Emily Wang and TDS.” However, Wang testified that she never received a
copy of the trademark license agreement, was never asked to sign it, and began a working
relationship with TDS without ever signing it.
The 2008 settlement agreement states, with regard to prior agreements, that “[i]n
addition to the terms and conditions set forth herein, TDS will perform the terms and
conditions set forth in the Settlement Agreement And Mutual Release Of All Claims
entered by and between TDS and Wang et al. on or about October 26, 2007, a copy of
which is attached hereto as Exhibit ‘I’ and incorporated by reference herein.”
As to the trademark license agreement, the 2008 settlement agreement contains
two references, which state in part: (1) “TDS agrees that, upon termination of the Non
28
Exclusive Trademark and Marketing License Agreement, Emily Wang has the right to
transfer her book of business . . . directly to Pension Planners.”; and (2) “Emily Wang
may transfer her rights and obligations under the Nonexclusive Trademark License
Agreement to a corporation or LLC in which she is the sole shareholder/member.”
Wang’s attorney testified that when he negotiated the 2008 settlement agreement
there were no discussions with TDS regarding whether the trademark licensing
agreement would control the termination of the parties’ rights under the settlement
agreement. Abdahla also recalled that TDS never asked Wang to execute the trademark
license agreement that was attached to the 2008 settlement agreement.
Based on our review of the parties’ agreements and the related extrinsic evidence,
we determine that the trial court did not err in impliedly ruling that the parties’
agreements are ambiguous with respect to (1) the incorporation of the terms of the
trademark license agreement, and (2) whether the parties had agreed that Wang could be
terminated at will on 30 days’ notice and was not entitled to consequential damages.
In particular, we observe that the 2008 settlement agreement expressly provided
that TDS would perform under the 2007 settlement agreement, not Wang. Also, the
2008 settlement agreement was silent as to the purported incorporation of the trademark
license agreement. Neither the 2007 settlement agreement nor the 2008 settlement
agreement expressly provided that Wang could be terminated at will on 30 days’ notice
and was not entitled to consequential damages. At trial, Wang and her attorney testified
that they did not agree that these trademark license agreement terms would be
incorporated in the subsequent settlement agreements. Their testimony constitutes
substantial evidence of a reasonable contract interpretation—Wang did not agree that the
terms of the trademark license agreement regarding termination and consequential
damages were incorporated in the settlement agreements—that is different than TDS’s
interpretation, and which we may not overturn on appeal. We reiterate that where, as
here, “the interpretation of the contract turns upon the credibility of extrinsic evidence,
29
the interpretation of the contract is not a question of law, but one of fact and it will not be
overturned unless not supported by substantial evidence. [Citations.]” (LaCount, supra,
79 Cal.App.3d at p. 770.)
3. Duration of Contract
Finally, TDS contends that its motion for judgment notwithstanding the verdict on
the breach of contract cause of action should have been granted because Wang failed to
prove the essential contract term of the duration of the parties’ settlement agreements.
Wang disagrees, arguing that TDS failed to request a jury instruction asking the jurors to
determine the duration of the settlement agreement. We determine that TDS has forfeited
this issue by failing to raise it during the trial proceedings.
A party may not withhold a theory from the jury by failing to request jury
instructions “and . . . obtain appellate review of the evidence and reversal of the judgment
on a theory never tendered (or tendered in a different form) to the jury.” (Null v. City of
Los Angeles (1988) 206 Cal. App. 3d 1528, 1535.) Moreover, a party may not present a
new theory for the first time in posttrial motions unless the theory constitutes a question
of law based on undisputed facts. (Stevens v. Owens-Corning Fiberglas Corp. (1996)
49 Cal. App. 4th 1645, 1653-1654 (Stevens).)
The issue of whether a contract is fatally defective because it lacks an express term
of duration may not be resolved as a question of law absent undisputed facts. “In
construing contracts which call for continuing performance or forbearance but which
contain no express term of duration, it is first necessary to determine whether the
intention of the parties as to duration can be implied from the nature of the contract and
the circumstances surrounding it. [Citations.]” (Consolidated Theatres, Inc. v.
Theatrical Stage Employees Union (1968) 69 Cal. 2d 713, 725.) “[I]n some cases the
nature of the contract and the totality of surrounding circumstances give no suggestion as
to any ascertainable term. In such cases the law usually implies that the term of duration
shall be at least a reasonable time. . . .” (Id. at pp. 727-728, fn. omitted.) “What
30
constitutes a ‘reasonable time’ for performance is a question of fact. [Citation.]”
(Consolidated World Investments, supra, 9 Cal.App.4th at p. 381.)
Here, the record shows that the factual question of the duration of the parties’
agreements was not presented by TDS during the trial proceedings. The jury was not
instructed to determine whether the agreements included a term regarding duration and
the special verdict form did not request a finding on the contract’s duration. Moreover,
TDS did not assert that the parties’ settlement agreements lacked an essential term of
duration of the contract until it filed its motion for judgment notwithstanding the verdict.
Since TDS failed to tender the duration of contract theory to the jury, and in the absence
of any undisputed facts regarding duration, we determine that TDS has forfeited the issue
on appeal. (See Stevens, supra, 49 Cal.App.4th at pp. 1653-1654.)
For these reasons, we will affirm that part of the August 14, 2012 order denying
TDS’s motion for judgment notwithstanding the verdict on the breach of contract cause
of action.
B. Order Denying Motion for New Trial
TDS has filed a protective cross-appeal from the trial court’s August 16, 2012
order denying TDS’s motion for new trial on the tort causes of action for intentional
interference with prospective economic relations and intentional interference with
contractual relations, as a precautionary measure in the event that Wang prevailed on her
appeal from the trial court’s order granting TDS’s motion for judgment notwithstanding
the verdict on the tort causes of action.
Since we have concluded that the August 14, 2012 order granting in part TDS’s
motion for judgment notwithstanding the verdict is not immediately appealable and we
will dismiss the appeal from the August 14, 2012 order, we further conclude that TDS’s
protective cross-appeal is moot.
31
V. DISPOSITION
The August 16, 2014 order granting a new trial on the cause of action for breach
of contract is affirmed. Wang’s appeal from the August 14, 2012 order granting TDS’s
motion for judgment notwithstanding the verdict on the causes of action for intentional
interference with prospective economic relations and intentional interference with
contractual relations is dismissed. The August 14, 2012 order denying TDS’s motion for
judgment notwithstanding the verdict on the breach of contract cause of action is
affirmed. TDS’s protective cross-appeal from the August 16, 2012 order denying TDS’s
motion for new trial on the causes of action for intentional interference with prospective
economic relations and intentional interference with contractual relations is dismissed as
moot. The parties are to bear their own costs on appeal.
32
___________________________________________
BAMATTRE-MANOUKIAN, ACTING P.J.
WE CONCUR:
__________________________
MÁRQUEZ, J.
__________________________
GROVER, J.