Procedural Posture

Appellant sellers sought review of a jury verdict entered in the Superior Court of Los Angeles County (California), which awarded respondent buyers damages for fraud and breach of contract, plus punitive damages, in their cross-complaint filed against appellants regarding a dispute over appellants’ duty to guaranty the rent of two tenants.

Overview

Appellant sellers built and sold a shopping center to respondent buyers. When a dispute arose concerning appellants’ duty to guaranty the rents of two tenants, appellants filed an action for declaratory relief and respondents filed a cross-complaint for fraud and breach of contract. A jury rendered verdicts that awarded respondents damages for breach of contract and fraud, plus additional punitive damages. The trial court separately denied appellants declaratory relief and appellants sought review of that determination and of the damages awards. The court modified to judgment to reduce the fraud and punitive damages awards and affirmed the remainder of the judgment, holding that respondents had met their burden of proving fraud by clear and convincing evidence, and that there was substantial evidence supporting the jury’s punitive damages award. The court found that sellers had made guarantees without an intent to perform them, and systematically avoided performing them. The court further held that evidence of appellants’ worth was valid evidence to consider in making a punitive damages award.

Outcome

After the conclusion of the parties closing statements, the jurors were presented with civil jury instructions. The court modified the judgment to reduce respondent buyers’ awards of fraud damages and punitive damages and otherwise affirmed the judgment against appellant sellers, holding that there was substantial evidence proving that appellants committed fraud.

Procedural Posture

Plaintiff individual challenged the judgment of the Superior Court of Los Angeles County, California, granting summary judgment in favor of defendant production company, dismissing his causes of action for conversion and unjust enrichment, and breach of contract, declaratory relief and accounting.

Overview

The individual and the picture company executed a release agreement. The picture company was to make certain payments and grant certain privileges to the individual, and in exchange, the individual gave up certain rights concerning a particular motion picture. The picture company then entered into an agreement with the production company to sell to it the rights to produce the motion picture. The motion picture never reached cash breakeven, and the production company never paid the picture company any participation fee. The appellate court ruled that by law, the production company assumed the obligations of the release agreement, and erred in granting summary judgment on the causes of action for breach of contract, declaratory relief and accounting. The production company made the motion picture utilizing the individual’s rights and services, and it thus accepted the benefits of the individual’s rights and services under the original release agreement. Furthermore, the conversion cause of action was preempted by the Copyright Act, 17 U.S.C.S. § 101 et seq., and there was no cause of action for unjust enrichment under California law.

Outcome

The judgment was affirmed insofar as it summarily adjudicated the causes of action for conversion and unjust enrichment, and reversed insofar as it summarily adjudicated the causes of action for breach of contract, declaratory relief and accounting.