12-570285
Defendants filed a motion for judgment notwithstanding the verdict or, in the alternative, a motion for new trial. The moving papers also offer a “hybrid” ruling, granting the motion for judgment notwithstanding the verdict and issuing a remittitur, with the grant of a new trial only if plaintiff fails to accept the remittitur.

Standard of review in ruling on JNOV motion: “The trial judge cannot reweigh the evidence or judge the credibility of witnesses. If the evidence is conflicting or if several reasonable inferences may be drawn, the motion for judgment notwithstanding the verdict should be denied. A motion for judgment notwithstanding the verdict of a jury may properly be granted only if it appears from the evidence, viewed from the light most favorable to the party securing the verdict, that there is no substantial evidence to support the verdict. If there is any substantial evidence, or reasonable inferences to be drawn therefrom, in support of the verdict, the motion should be denied. The trial court cannot consider witness credibility.” In re Coordinated Latex Glove Litigation, (2002) 99 Cal.App.4th 594, 606.

As to motion for new trial: An order granting new trial must state the ground or grounds relied on by the court, including the reasons for granting the relief. CCP 657.

Statement of reasons can be filed separately, no more than 10 days after the filing of the new trial order. CCP 657, Ballou, (1987) 189 Cal.App.3rd 65, 71-72 This time limit is jurisdictional. Hand Electronics, Inc. (1994) 21 Cal.App.4th 862, 867-868.

In seeking an order for judgment notwithstanding the verdict, Amster alleges that there is no substantial evidence to support the jury’s verdict in plaintiff’s favor as to the damages awarded, $947,500.

Plaintiff Robert George (“George”) was awarded $947,500 only for breach of partnership damages against defendant Dr. Robert Amster (“Amster”). Motion, Swartz declaration, Ex F, Verdict Form, 2:1-17

George argues that he is not limited to the economic/lost profit damages valued by his expert at $947,500 because the partnership was terminated in bad faith, however, the jury verdict does not support that a finding that the termination was “in bad faith”.

The jury found for George on breach of fiduciary duty and wrongful exercise of control over the partnership assets by Amster, but found that George suffered no damages as a result. Motion, Swartz declaration, Ex F, Verdict Form, 3:1-24

The jury also found that Amster owed George money for services George rendered, and later stated the reasonable value of George’s services was “$0.00” (which is not addressed by either party via this motion). Motion, Swartz declaration, Ex F, Verdict Form, 4:1-11

It is undisputed that the only evidence offered at trial quantifying George’s damages due to Amster’s wrongful conduct was via George’s expert, Ben William Sheppard, a CPA with more than 20 years’ practice. Motion, Swartz declaration, Ex A, 1:21-24

Sheppard was tasked with evaluating the amount of George’s economic damages and identifying the extent of benefits and proceeds paid to Amster since inception of YNUC. Motion, Swartz declaration, Ex A, 4:4-10

Sheppard estimated George’s economic damages to fall within the range of $950,000 to $1.9 million in five and ten-year projections, assuming he had a 50-50 ownership interest in YNUC, with $947,500 as the economic loss for five years. Motion, Swartz declaration, Ex A, 4:19-21; 5: 20-23; 34-18-21; Ex C, 33:1-15; Opposition, Katz declaration, Ex F, 34:23-26.

In reaching said amounts, Sheppard tried to identify fair compensation for equity and/or work to George based on George’s expectations of 50% of the clinics’ revenue as a 50% partner. Motion, Swartz declaration, Ex B, 2:19 – 3:8; 7:24 – 8:3; 8:14-16.

The jury found that the partnership between George and Amster terminated on May 9, 2012. Motion, Swartz declaration, Ex F, Verdict Form, 2:26-28.

The jury concluded that George was entitled to $947,500 damages from Amster due to Amster’s breach of the partnership agreement. Motion, Swartz declaration, Ex F, Verdict Form, 2:1-21.

As noted above, $947,500 is Sheppard’s estimated damages for the first five years of the partnership, however, the jury found that the partnership was terminated on May 9, 2012, 17 months into the partnership.

The jury’s findings against Amster on the remaining issues in the verdict form are counterbalanced by the follow-up questions, in which the jury found that George sustained no additional damages.

Therefore, the amount of damages awarded by the jury was intended only to compensate George for economic damages for breach of the partnership which, by the jury’s determination occurred well before the five year anniversary of the partnership. An award of $947,500, the estimated damages for five year-partnership, is excessive.

George’s argument that $947,500 is reasonable based on Amster’s bad faith conduct culminating in terminating the partnership, with George entitled to additional damages due to additional wrongful acts in addition to terminating the contract, is misplaced and unsupported by the jury’s verdict. The jury found for George on the other two theories of Amster’s alleged misconduct, but expressly rejected any additional award of damages founded upon said misconduct.

Amster also seeks an order for a new trial on the following grounds: (1) damages award was excessive; (2) evidence was insufficient to justify the verdict; and (3) verdict is inconsistent and therefore contrary to law.

The court’s analysis of the propriety of the $947,500 damages award above applies equally here as to the ground that the damages award was excessive, which analysis is incorporated herein by reference. Awarding five years of projected damage for the breakup of a partnership after 17 months clearly is excessive.

The same analysis also applies to the second grounds for a new trial—that the evidence was insufficient to justify the verdict. The jury found Amster breached the partnership, breached his fiduciary duty to George and wrongfully exercised control of the partnership assets, but only awarded damages for the breach of partnership.

The damages awarded, however, $947,500, were inconsistent with George’s expert’s valuation of damages because, as noted above, said amount was projected for a five-year period, with the partnership terminated more less than halfway through the projected period.

The third ground for a new trial, that the verdict is inconsistent and therefore contrary to law also is supported by the $947,500 damages award founded only upon breach of partnership, with no award of damages for the additional misconduct found by the jury.

Notwithstanding Amster’s argument that Sheppard’s valuation of damages has no evidentiary support, but is based on hypotheticals, Amster chose not to offer his own expert, or any other qualified witness, to quantify damages. It is also not apparent that Sheppard’s hypotheticals as to future profits did not take into consideration the facts known to the parties as to the nature of the partnership and the scope of its anticipated purpose. Amster offers no authority to support that hypotheticals are inadmissible.

The court finds that, viewing the evidence from the light most favorable to George and relying solely upon evidence offered through his expert’s testimony and the jury’s verdict, there is no substantial evidence to support the jury’s verdict awarding a five-year projection of damages, $947,500, where the partnership was in existence less than half that time. The award was therefore excessive. In so finding, the court grants the motion for judgment notwithstanding the verdict on said ground.

The court also grants the motion for new trial on the grounds that (1) the damages award was excessive; (2) the evidence was insufficient to justify the damages awarded in the jury’s verdict; and (3) based on the foregoing, the verdict is inconsistent and therefore contrary to law. CCP 657(5), (6) The granting of this motion is founded upon the reasons set forth above.

The order granting the motion for new trial is conditional; the court finds that reducing the damages to $127,048, which is founded upon George’s expert’s projections of damages calculated, based on evidence relied upon by said expert, through the termination date of the partnership on May 9, 2012, as determined by the jury, is fair and reasonable. If George accepts the reduction in damages by filing and serving notice of acceptance no later than 10 days from May 20, 2014, judgment shall be entered in the foregoing sum, with no order for a new trial issued.