Opposition Brief — Cohn v. Katz

Supreme Court brief1990

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= JR.

OSEPH & SPRNIOL,

CLERK

In the Supreme Chart

OF THE

United States

OcTOBER TERM, 1990

Bruce Coun, individually, BRUCE COHN

MANAGEMENT, INC. a California

corporation. and DANJOE CORPORATION,

a California corporation,

Petitioners,

¥.

Davip Katz, KATZ-COHN PRODUCTIONS, INC.,

an Arizona corporation, and

KATZ-COHN MANAGEMENT, INC., an

Arizona corporation,

Respondenis.

RESPONDENTS’ BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

JOHN F. WELLS*

Davip A. SCHURICHT

STARK, WELLS, RAHL & SCHWARTZ

Lake Merritt Plaza

1999 Harrison Street, Suite 1300

Oakland, California 94612

Telephone: (415) 834-2200

Attorneys for Respondents

*Counsel of Record

October 3, 1990

BOWME OF GAN FRANCISCO. INC. +- 190 NINTH ST. + S.F.. CA 94103 + (415) 864-2300

TABLE OF CONTENTS

Jope me Rer re eee reer rer errr errr re l

8 errr re Ty Tere rere er cree Tree 2

A. The Joint Venture Contract Found By the Jury to

Have Been Entered Into On February 4, 1983 Was

Within the Issues Framed By the Pleadings and the

Pretrial Statement. (Answering the Petition for Writ

ee 8 eee eee . 2

B. The Court Properly Re-Impaneled the Six Available

Jurors for the Damages Phase of the Trial. (Answer-

ing the Petition for Writ of Certiorari, pp. 18-22) .. 4

The Trial Court Properly Excluded Petitioner Bruce

Cohn’s Testimony As to His Good Faith From the

Damages Phase of the Trial. (Answering the Petition

for Writ of Certiorari, pp. 22-24) ................ 5

CONCLUSION ... o.oo ccc cccccccccccccccucucecevcee 7

TABLE OF AUTHORITIES

Cases

Gilchrist v. Jim Slemons Imports, Inc., 803 F.2d 1488, 1499

CRs Cie. BGG) «oo nce ecacues 003 eee

Jahn v. Brickey, 168 Cal.App.3d 399, 407, 214 Cal.Rptr.

BED, 1290 CHS) on oi nc nknvesds Seber

Pintor v. Ong, 211 Cal.App.3d 837, 259 Cal.Rptr. 577,

SONGZ (IGE). oo vc cscuwrtictesnces eee

Quezada v. Hart, 67 Cal.App.3d 754, 761, 136 Cal.Rptr.

SES, BHP COSTED na ccccnecascéennee tee

Stephens v. Coldwell Banker Commercial Group, Inc., 199

Cal.App.3d 1394, 1402-03, 245 Cal.Rptr. 606, 611 (1988)

Young v. Bank of America Nat’l Trust & Sav. Ass’n, 141

Cal.App.3d 108, 114, 190 Cal.Rptr. 122, 126 (1983) ...

Codes

Cal. Civ. Cote Section Ba58 «cist oc enc eeenseee

Rules

Rule 10 of the Supreme Court Rules .......... tetanic

Page

No.

In the Supreme Court

OF THE

United States

OCTOBER TERM, 1990

BRUCE COHN, individually, BRUCE COHN

MANAGEMENT, INC. a California

corporation. and DANJOE CORPORATION,

a California corporation,

Petitioners,

Vv.

DAVID KATZ, KATZ-COHN PRODUCTIONS, INC.,

an Arizona corporation, and

KATZ-COHN MANAGEMENT, INC., an

Arizona corporation,

Respondents.

RESPONDENTS’ BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

INTRODUCTION

This petition for writ of certiorari is so utterly devoid of merit

that it could be considered frivolous. This was a damage suit

arising under state law for breach of an oral joint venture

agreement, tried as a diversity case in the district court. Jury

verdicts resulted in judgments which were affirmed by the Court

of Appeals in an unpublished opinion. The decision of the Court

of Appeals is not in conflict with the decision of any other Court

of Appeals. It does not decide a federal question in a way in

conflict with a state court of last resort. Indeed, it does not decide

any federal question at all, nor was there any departure from the

accepted and usual course of judicial proceedings such as to call

for an exercise of this court’s power of supervision. In short, none

of the considerations governing review on certiorari are present.

(See Rule 10 of the Supreme Court Rules.)

The petition makes three arguments:

1. That the pleadings and pre-trial statement failed to

give adequate notice of the issues to be cried, which were

contrary to judicial admissions made by respondents;

2. That petitioners were denied due process because the

reconvened jury in the second part of the bifucated trial

included only six of the original eight jurors; and

3. That the trial court committed an error when, in the

damages phase of the trial, it excluded petitioner Bruce

Cohn’s proferred testimony of his good faith in denying the

existence of the joint venture agreement.

These arguments obviously do not warrant this court’s consid-

eration. Furthermore, as we will briefly demonstrate, each is

wrong on the merits; the decision of the court of appeals was

correct.

ARGUMENT

A. The Joint Venture Contract Found By the Jury to Have

Been Entered Into On February 4, 1983 Was Within the

Issues Framed By the Pleadings and the Pretrial Statement

(Answering the Petition for Wnt of Certioran, pp. 10-18)

The complaint alleged that the parties entered into an oral joint

venture agreement on or about September 1, 1982 (Complaint

{ 6, Appendix A-5S0), that it was amended in or about December

1982 (/d. at 7), and that in or about March, 1983, petitioner

Bruce Cohn proposed several modifications to the joint venture

agreement which were rejected (/d. at 9). The joint pretrial

statement included as a disputed factual issue “whether a joint

venture was formed between plaintiffs and defendants and, if so,

its terms”. (Joint Pretrial Statement, § 2E1, Appendix A-65)

The Court of Appeals correctly rejected petitioners’ claim that

the jury’s conclusion that the joint venture was formed in Febru-

ary, 1983, was outside the issues framed by these documents.

(Opinion of the Court of Appeals, Appendix A-3.)

Nor were there any judicial admissions limiting formation of

the contract to the fall of 1982. Respondents sued for breach of a

joint venture agreement that resulted from discussions which

began in the fall of 1982 and continued thereafter for a number of

months. The evidence presented at the trial covered the entire

course of dealing between the parties.

As the record shows, this case involved only one joint venture,

the terms of which were first seriously discussed beginning in

October 1982. Respondents contended that the joint venture was

formed then and later modified in December 1982 but not

thereafter. (R.T. 684-686, 689.) Petitioners argued that no joint

venture agreement was ever reached. (R.T. 481-482.) The jury,

however, choose February 4, 1983 (the date of a meeting among

all of the parties and their attorneys) as the date of the agree-

ment, presumably because the jury found that to be the date when

the terms of the joint venture agreement were finally settled. (See

the Amended Memorandum Opinion and Order, Appendix A-21

to A-23.)

Neither side contended that the agreement was finalized at the

February 4 meeting. Respondents argued that it had been final-

ized earlier, and petitioners argued that it was never finalized.

(R.T. 481-482.) The jury found a middle ground between those

conflicting contentions, finding in respondents’ favor that a joint

venture agreement had been reached, but on terms less favorable

to respondents than they claimed. Petitioners’ argument that the

complaint, pretrial statement, and arguments of counsel at trial

constituted judicial admissions inconsistent with the jury’s verdict

adds nothing to the argument that they did not get fair notice of

the issues. If petitioners’ argument were accepted, it would mean

that no plaintiffs’ verdict could ever be sustained if the plaintiffs

had argued for or alleged that the facts justified greater or

different relief than that which was in fact awarded.

B. The Court Properly Re-Impaneled the Six Available Jurors

for the Damages Phase of the Trial

(Answering the Petition for Writ of Certiorari, pp. 18-22)

Petitioners’ argument that they were denied due process when

the jury was re-impaneled for the second phase of the trial is

difficult to follow. While they assert that the delay between the

two trials was unfair to them, they have not offered any evidence

that they were prejudiced. They suggest that they were prejudiced

by the fact that only six of the eight original jurors were available

for the damages phase of the trial. But all that either party was

entitled to in the first place was a six person jury; eight jurors were

impaneled by stipulation. (R.T. 1-19.) Petitioners expressly stipu-

lated to the possibility of a six person jury in the event of

“los[ing]” up to two jurors. (R.T. 1-19.) Petitioners argue that

had their counsel “even remotely suspected that the ensuing

events would in fact occur, they would have likely made different

choices on peremptory challenge.” (Petition For Writ Of Certio-

rari, pp. 21.) But petitioners do not explain why that should

invalidate the stipulation that the trial would proceed with a six-

person jury in the event that two were lost.’

Petitioners have not cited any authority for the proposition that

the delay in commencement of the second phase of the triai was

reversible error or constituted denial of a constitutional nght.

Instead, they cite cases for the proposition that it is error to order

' Petitioners’ argument respecting their use of peremptory challenges

is indecipherabie. They do not state any logical reason why their counsel

would have desired to have different people on the jury if he had known

that up to two jurors might be lost because they could not be located,

rather than because they were ill. At one point, petitioners concede that

in jury selection, “... precise formulas and stratagems quickly yield to

visceral choice.” (/d.) In the next breath, they suggest that the eight

jurors chosen were acceptable to their counsel because of “a preceived

group personality.” (/d.) Petitioners do not explain why their counsel's

“visceral choice” in choosing the eight jurors would have been different

if he had known in advance that two of the jurors would not be available

- for the second trial. In any event, one purpose of the stipulation

respecting jury size was to deal with just such eventualities.

liability and damages to be tried before different jurics where the

issues are so interwoven that confusion and uncertainty will resuit.

(/d. at 20.) These cases, of course, are inapplicable here because

the damages phase of the trial was not tried to a new jury but to

the same jury which had heard the liability phase, less two of its

members who could not be located.

In any event, under the principle cited by petitioners, the trial

of the damages phase to a separate jury would not have been

improper because the issue to be tried—whether respondent

David Katz had sustained compensable emotional distress as a

result of petitioners’ breach of fiduciary duty—was not so inter-

twined with the liability issues as to cause confusion or uncer-

tainty. Contrary to petitioners’ argument, the “substantive good or

bad faith quality of petitioners’ conduct” and the “net effect of

such conduct on the respondents in terms of damage, including

emotional distress” were not central to both liability and damages.

The first of these two issues was not presented in the damages

phase of the trial,” and the second was not presented in the

liability phase and was the only issue in the damages phase. In

short, the issues presented in the two phases of the trial were

separate and distinct.

The trial judge’s decision to reconvene six of the eight jurors

who were available for the second phase of the trial was well

within his discretion. There is no evidence that it prejudiced

petitioners in any respect. Petitioners are grasping at straws.

C. The Trial Court Properly Excluded Petitioner Bruce Cohn’s

Testimony As to His Good Faith From the Damages Phase

of the Trial

(Answering the Petition for Writ of Certiorari, pp. 22-24)

In the liability phase of the trial, the jury was presented with

the question whether petitioners had breached their fiduciary duty

to respondents. Bruce Cohn and his witnesses testified at length to

their version of the facts and no evidence of their good faith was

excluded. At the conclusion of the liability phase, the jury was

instructed that it was to decide “whether Bruce Cohn violated his

’ See section IIC, infra, of this memorandum.

fiduciary duty . . . to act in the highest good faith.” (R.T. 4-664.)

The jury then determined that respondents had breached their

fiduciary duty. (See R.T. 149, Defendants/Appellant’s Excerpts

69-70.)

Under California law, emotional distress damages may be

awarded for intentional wrongdoing. See, e.g., Jahn v. Brickey,

168 Cal.App.3d 399, 407, 214 Cal.Rptr. 119, 124 (1985);

Quezada v. Hart, 67-Cal.App.3d 754, 761, 136 Cal.Rptr. 815, 819

(1977). There is no requirement that there be a finding of bad

faith or fraudulent misconduct. See, e.g., Young v. Bank of

America Nat'l Trust & Sav. Ass'n, 141 Cal.App.3d 108, 114, 190

Cal.Rptr. 122, 126 (1983) (cited in Gilchrist v. Jim Slemons

Imports, In... 803 F.2d 1488, 1499 (9th Cir. 1986)). See also,

Pintor v. Ong, 211 Cal.App.3d 837, 259 Cal.Rptr. 577, 581-82

(1989) (following Young); Stephens v. Coldwell Banker Com-

mercial Group, Inc., 199 Cal.App.3d 1394, 1402-03, 245

Cal.Rptr. 606, 611 (1988) (same). In the damages phase, the

trial judge properly instructed the jury on the general measure of

tort damages under Cal. Civ. Code Section 3333.”

Bruce Cohn’s proferred testimony as to his good faith and

reasonable belief that he owed no fiduciary duty was irrelevant at

the damages phase of the trial. The trial judge did not abuse his

discretion in excluding such testimony, and the jury instructions

were proper.

Cal. Civ. Code Section 3333 provides in pertinent part:

For the breach of an obligation not arising from contract, the

measure of damages . . . is the amount which will compensate for

all the detriment proximately caused thereby, whether it could have

been anticipated or not.

Ill

CONCLUSION

Nothing about this case merits review by this Court. The jury

findings were squarely within the issues to be tried; petitioners’

jury trial right was not violated; and the trial judge did not err in

excluding evidence proferred by petitioners during the damage

phase of the trial. Certiorari should be denied.

Respectfully submitted,