Hines v. Premier Power Renewable Energy CA4/3 ( 2014 )

Filed 11/25/14 Hines v. Premier Power Renewable Energy 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
DAVID HINES,
Plaintiff and Respondent, G049912
v. (Super. Ct. No. CIVDS1017426)
PREMIER POWER RENEWABLE OPINION
ENERGY, INC.,
Defendant and Appellant.
Appeal from a judgment of the Superior Court of San Bernardino, Brian S.
McCarville, Judge. Affirmed and remanded.
Acker & Whipple, Stephen Acker and Leslie Anne Burnet for Defendant
and Appellant.
Law Offices of Thomas N. Jacobson and Thomas N. Jacobson for Plaintiff
and Respondent.
A jury awarded David Hines $58,977.03 against his former employer
Premier Power Renewable Energy, Inc. (Premier). The trial court denied Premier’s
motion for a judgment notwithstanding the verdict (JNOV) and motion for new trial.
After denying Premier’s motion to tax costs, the court awarded Hines $9,267.64 for costs
and $122,378 for attorney fees. On appeal, Premier maintains the judgment must be
reversed because the verdict contains internally inconsistent findings and there was
insufficient evidence to support the verdict and the amount of damages awarded. Premier
asserts the court erred in denying its motion for nonsuit, admitting into evidence exhibit
No. 89, denying the JNOV, denying the motion for new trial, denying the motion to tax
costs and granting Hines’s motion for attorney fees. Finding all the contentions lack
merit, we affirm the judgment and remand the matter for the trial court to determine the
amount of attorney fees recoverable by Hines in this appeal.
I
Premier sells and installs solar panels on residential homes and commercial
structures. In April 2008, Premier hired Hines to expand its sales of solar panels in
Southern California. Initially, he was the only employee making sales for the company in
the Southern California territory.
The parties executed a contract titled, “Premier . . . incentive compensation
plan for Southern California sales manager/solar consultant 2008” (capitalization
omitted; hereafter, the Agreement). The “Introduction” to the contract provided, “The
following incentive [c]ompensation plan offered to . . . Hines for a [s]olar [c]onsultant
position is effective from [April 14, 2008,] and expires on [December 31, 2008,] to
encourage superior sales performance. The minimum quota for each [s]olar [c]onsultant
will be $2 million in total booked sales for each year the plan is in effect. The goal for
each [s]olar [c]onsultant will be [$]3 million per year.”
The Agreement next provided a “[g]eneral description” of the incentive
compensation plan. This section began with the following statement: “This is an At-Will
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agreement and may be terminated at any time, without cause, by either party.” The
paragraph then described the nature of and schedule for commission payments. “A
current [s]olar [c]onsultant will only receive a commission after the initial down payment
and the first progressive payment equal to or greater than 25 [percent] of the total cost of
[the] system has been received, 50 [percent] of the total commission is due and payable
the next pay period after the deposit and the [first] progressive payment have been made.
The remaining 50 [percent] of commission will be due and payable as described in the
[c]ommission [i]nstallments section of this compensation plan. Commission earnings are
based on the total sales price generated from sales of products, after applying
discounts/charge back, if any. [Premier] will provide leads to [the s]olar [c]onsultant as
they become available at no charge to the consultant.”
Under the terms of the Agreement, Hines was to receive an annual base
salary of $35,000. “For all single sales of $300,000 to $700,000 the following
commission rates” applied: (1) a 5 percent “base commission rate” for sales up to
$300,000; (2) a possible 3 percent commission rate for sales between $300,000 to
$700,000 unless it was “a commercial sale over 36kWDC”; (3) “[u]p to 1 [percent]
override on all sales other than personal sales in Arizona, San Bernardino, Riverside and
[Los Angeles] counties depending on the margin”; and (4) “[a] possible 1 [percent]
commission on ‘self generated leads[.]’” The Agreement further explained, “An active
[s]olar [c]onsultant will become eligible for benefits when a total of $375,000[] of
booked sales is achieved.” It defined a booked sale as having a $1,000 down payment
and a first “progressive payment equal to or greater tha[n] 25 [percent] of the total cost of
[the] job and the rescission date has passed.”
The Agreement provided there would be “charge backs” for cancellations.
“Any sales contract canceled for any reason, and 1) the [c]ompany has not been paid in
full, or 2) there is a refund due to the customer, the [s]olar [c]onsultant’s commission for
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the canceled sale will be deducted from the [s]olar [c]onsultant’s [c]ommission [e]arnings
at the same commission rate that was paid.”
Premier terminated Hines from his employment on March 9, 2009. He
filed a wrongful termination complaint on December 27, 2010, alleging the following:
(1) breach of contract; (2) breach of the covenant of good faith and fair dealing;
(3) “violation of public policy” as expressed in the Labor Code, i.e., nonpayment of
wages; (4) intentional infliction of emotional distress (IIED); and (5) an accounting. In
addition, Hines requested attorney fees and punitive damages with respect to the second
and third causes of action.
Hines attached a copy of the Agreement to his complaint and explained that
in addition to a base salary of $35,000 per year plus commissions, he “was to be paid a
portion of what was referred to as ‘overages.’” He alleged, “Overages were amounts
received by . . . Premier, in excess for the sales goals for each project.” Hines stated that
from April 2008 to January 2009 he was told by his superiors that his performance was
exemplary. In early 2009, Hines was told he was being “terminated due to poor
performance and failure to make appointments.” Hines claimed this was simply untrue.
Premier moved to strike the punitive damages allegations from the
complaint. The trial court granted the motion with respect to the second cause of action
(breach of the implied covenant of good faith and fair dealing), and denied the motion
with respect to the third cause of action (violation of public policy pursuant to the Labor
Code).
Before trial, the parties submitted trial briefs. In his brief, Hines alleged
that before working for Premier, he and his wife were both employed and supported their
two young daughters. They decided to give up their jobs based on Premier’s
representation the company was offering Hines “a lifetime career path.” Hines explained
he was promised many things, some of which were included in the Agreement (discussed
above). Hines explained other things were orally promised by Premier’s president,
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Dean Marks, such as “[a]n overage equal to 50 [percent] on all sums included in the sales
price above the company’s estimate or goal for the sale of the job.” In addition, Hines
knew Premier was “planning to go public” and he would be “gifted stock in the
corporation.”
In his trial brief, Hines explained he began working for Premier from his
home because Premier did not have an office for him. He used his own resources to pay
for many business expenses. In May 2008 he hired Mark Markovich to assist him, and
they worked together from Hines’s home. Hines stated he worked long hours. He was a
top sales performer.
Hines explained that when he was given an opportunity to study for and
take the contractor’s exam for solar contracting, he asked Marks if this would benefit
Premier. Marks encouraged him to take the exam. In the fall of 2008, Hines noticed
Premier was not paying him correctly and asked about it. Around this same time, he
passed the contractor’s exam and began to feel “snubbed by upper management” and
deprived of leads. Premier began having meetings with Markovich and without him.
Hines received a letter in March 2009 stating he was being terminated due to poor work
performance. After being discharged, Hines went into business for himself, but he did
not solicit Premier’s customers for his own business.
Premier’s trial brief stated Hines was an “at-will” employee who could be
terminated at any time and without cause. It asserted, however, Hines was fired for good
cause because he engaged in misconduct and did not perform his job duties. Specifically,
he began setting up his own solar panel installation company in October 2008 and failed
to carry out his job duties for Premier. It claimed Hines missed a mandatory company
meeting, missed three sales appointments, and failed to timely provide a client with a bid.
Premier asserted it did not breach the Agreement because Hines was paid everything he
was owed. It reasoned Hines was not entitled to commissions that became available after
his termination.
5
At trial, Premier moved to exclude any argument or evidence Hines could
collect commissions due to cancelled contracts. The court denied the motion.
During the trial, the parties presented evidence supporting the statements
made in the trial briefs. In addition, Hines presented evidence there were numerous
problems with the solar panel installations that directly affected his commissions.
Specifically, the company was unable to timely install the panels and often installed them
incorrectly. Many discontented customers cancelled their contracts or refused to provide
good referrals.
Markovich testified he no longer worked for Premier and now owned his
own solar panel business. He explained that customer referrals were very important and
estimated 85 to 90 percent of his work was referral business. He opined a job could be
completed in 35 to 40 days but it took Premier months to complete their installations.
Markovich also testified that six months before Hines was terminated, Premier stopped
giving Hines good leads. The company executives held meetings without Hines and
steered work away from him. Markovich testified Carl Marino told him to rewrite
contracts written by Hines so he would not be paid.
Hines presented evidence he was not paid all the amounts owed to him.
Hines presented evidence Premier’s employee handbook provided that after six months,
employees were entitled to receive 80 vacation hours per year. The handbook also
specified an employee’s final paycheck would include unused vacation pay. Hines was
not paid for unused vacation time.
Hines prepared exhibit No. 89 to help the jury calculate damages for unpaid
commissions, overrides, and overages. He testified exhibit No. 89 contained a list of all
his solar panel sale contracts. Hines stated he was not seeking commissions with respect
to customers who cancelled within their three-day rescission period or for reasons
unrelated to Premier’s misconduct. He explained he removed those numbers from his
commission calculations. Hines stated he was only seeking payment from sales contracts
6
cancelled because of Premier’s negligence. Hines stated exhibit No. 89 also contained
calculations for the overages owed, calculated as the difference between the price of the
system and the price of the actual contract. Hines explained he was promised 50 percent
of this additional profit to the company. And finally, exhibit No. 89 contained a chart
titled “Markovich override,” representing a summary of the solar panel contracts
Markovich obtained, of which Hines was promised 1 percent commission.
The jury was given special verdict forms related to each cause of action,
separately titled Part I, II, III, and IV. Parts I and II referred to the first two causes of
action for breach of contract and breach of the implied covenant of good faith and fair
dealing. Part III asked the jury to determine if there was a “nonpayment of wages.” The
jury did not indicate an amount of damages in Part I or II of the verdict. In Part III, it
determined Premier owed Hines $1,538.46 for unpaid vacation, $28,443.70 for unpaid
“overages,” and $28,841.02 for “unpaid commissions.” The final section of the special
verdict, Part IV, asked the jury if Hines was entitled to “waiting-time penalty for
nonpayment of wages.” (Capitalization omitted.) On this form, the jury determined
Premier willfully failed to pay owed wages for a total of five days, and Hines’s daily
wage rate was $153.85 per day.
Premier moved for JNOV, a new trial, and to tax Hines’s costs. The trial
court denied these motions and granted Hines’s motion for attorney fees, awarding
$122,378. The court determined Hines could not collect prejudgment interest and
ordered him to prepare a judgment. The court entered the final judgment on January 3,
2013, for $58,977.03 in damages, $122,378 for attorney fees, and $9,267.64 for costs.
II
A. Were There Inconsistent Special Verdicts?
Premier contends the judgment must be reversed because the jury returned
inconsistent special verdicts on the three causes of action. It is wrong.
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“A special verdict is inconsistent if there is no possibility of reconciling its
findings with each other. [Citation.] If a verdict appears inconsistent, a party adversely
affected should request clarification, and the court should send the jury out again to
resolve the inconsistency. (Code Civ. Proc., § 619; [citations].) If no party requests
clarification or an inconsistency remains after the jury returns, the trial court must
interpret the verdict in light of the jury instructions and the evidence and attempt to
resolve any inconsistency. [Citations.] [¶] On appeal, we review a special verdict
de novo to determine whether its findings are inconsistent. [Citation.] 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.] ‘“‘Where the 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.]’ [Citation.]
‘The appellate court is not permitted to choose between inconsistent answers.
[Citations.]’ [Citation.] The proper remedy for an inconsistent special verdict is a new
trial. [Citation.]” (Singh v. Southland Stone, U.S.A., Inc. (2010) 186 Cal.App.4th 338,
357-358, fn. omitted.)
Hines’s case focused on three causes of action, breach of contract, breach
of the covenant of good faith and fair dealing, and nonpayment of wages in violation of
public policy.1 The parties prepared separate special verdict forms as to each claim,
labeled Part I, II, and III, respectively. Premier asserts the jury’s findings on the third
claim (Part III) awarding damages, was inconsistent with its finding with respect to the
other forms (Part I and II) for which the jury did not specify damages. We will address
each verdict form separately, beginning with the third claim on which the jury based its
damage award.
1 The IIED claim was dismissed during trial.
8
i. Nonpayment of Wages
With respect to the wage claim, the trial court instructed the jury with a
version of CACI No. 2700 (essential factual elements) modified only to insert the correct
party names. The court instructed as follows: “Hines claims that [Premier] owes him
unpaid wages. To establish this claim, . . . Hines must prove all of the following:
“1. That . . . Hines performed work for [Premier];
“2. That [Premier] owes . . . Hines wages under the terms of the employment; and
“3. The amount of unpaid wages. [¶] ‘Wages’ includes all amounts for labor performed
by an employee, whether the amount is calculated by time, task, piece, commission or
some other method.” (Italics added.)
The special verdict form pertaining to unpaid wages, called Part III, asked
the jury about each of the above essential factual elements, as follows: (1) “Did . . .
Hines perform work for [Premier]?”; and (2) “Does [Premier] owe . . . Hines wages,
including vacation pay and/or unpaid overages (PAR), under the terms of the
employment?” The jury answered “yes” to these two questions. The last question of
Part III asked the jury “What is the amount of unpaid wages?” Next to the word
“vacation” the jury entered the amount $1,538.46. The jury filled in the sum of
$28,443.70 next to the word “overages.” And finally, the jury determined the amount of
“unpaid commissions” was $28,841.02.
ii. Breach of Contract
With respect to the breach of contract action the court instructed the jury
using a modified version of CACI No. 303, as follows: “To recover damages from
[Premier] for breach of contract, . . . Hines must prove all of the following:
“1. That . . . Hines and [Premier] entered into a contract;
“2. That . . . Hines did all, or substantially all, of the significant things that the contact
required him to do or that he was excused from doing those things;
“3. That . . . Hines was harmed by that failure.”
9
We note the original version of CACI No. 303 delineates two additional
elements of proof. In addition to Nos. 1 and 2 above, CACI No. 303 requires proof
“[3. That all conditions required by the contract for [name of defendant]’s performance
[had occurred/[or] were excused];] [¶] [4. That [name of defendant] failed to do
something that the contract required [. . . it] to do; and] [¶] [or] [¶] [4. That [name of
defendant] did something that the contract prohibited [ . . . it] from doing; . . .].”
Element 3 is used when the conditions for performance are at issue because
if such conditions have been excused or performed, the respective duties of the parties
may be affected. Element 4 relates to the element of breach, i.e., the unjustified or
unexcused failure to perform a contract. In this case, the jury was not instructed on these
two elements.
The special verdict form pertaining to the breach of contract claim (called
Part I) proved problematic for the jury. Part I asked the jury to answer the following
questions, and instructed, “[i]f you answered no [to any question], go to Part II.”
“1. Did . . . Hines and [Premier] enter into a contract? [¶] Yes___ No___ [¶] . . . [¶]
“2. Did . . . Hines do all, or substantially all, of the significant things that the contract
required him to do? [¶] Yes___ No___
“or
“Was . . . Hines excused from having to do all or substantially all, of the significant
things that the contract required him to do? [¶] Yes___ No___ [¶] . . . [¶]
“3. Did all the conditions that were required for [Premier’s] performance occur or were
they excused? [¶] Yes___ No___ [¶] . . . [¶]
“4. Did [Premier] fail to do something that the contract required it to do?” [¶] Yes___
No___ [¶] . . . [¶]
“5. Was . . . Hines harmed by that failure? [¶] Yes___ No___ [¶] . . . [¶]
“6. “What are . . . Hines’s damages? [¶] TOTAL:____________”
10
The jury answered “yes” to the first two questions, concluding the parties
entered into a contract and Hines did all, or substantially all, of the significant things that
the contract required him to do. It left blank the question asking if Hines was excused
from having to do all the things required under the contract. Thus, the jury found no
issue with respect to Hines’s performance or his obligations under the contract. As
directed by the modified jury instruction (CACI No. 303), Hines could recover for breach
of contract if these two elements were satisfied (and if there was evidence of harm).
The third question in Part I asked the following compound question: “Did
all the conditions that were required for [Premier’s] performance occur or were they
excused?” (Italics added.) The jury answered, “No.” It cannot be assumed the jury
answered “no” to whether the conditions occurred or “no” to the issue of excuse. This
question should have been broken into two parts as was done with question No. 2. In
question No. 2, the jury was asked about Hines’s performance separately from whether
his nonperformance was excused. Thus, if the jury had determined Hines failed to
perform his duty under the contract, it could separately answer if his obligation was
excused.
Contrary to Premier’s contention, the jury’s response to question No. 3 was
not necessarily a finding in its favor. If the jury determined “no” the conditions did not
occur then Premier’s duty did not become due and there could be no breach. If, however,
the jury determined the conditions occurred and there was “no excuse” that would
suggest the jury determined the contract required Premier to perform. Under this
interpretation, the jury should have continued answering the other questions listed in
Part I regarding breach and damages. However, the jury followed the directions that
instructed it to stop after answering “no” and proceed to Part II. We conclude the jury’s
answer of “no” to the two-part question renders the special verdict form ambiguous (not
inconsistent).
11
We recognize Premier helped prepare the forms and made no objection they
were incomplete or ambiguous before or after the jury was discharged. Hines argues the
failure to object to the forms before the jury is discharged may forfeit any ambiguity or
insufficiency in the verdict. (Jensen v. BMW of North America, Inc. (1995)
35 Cal.App.4th 112, 131.) “However, waiver is not automatic, and there are many
exceptions. [Citations.] [¶] Waiver is not found where the record indicates that the
failure to object was not the result of a desire to reap a ‘technical advantage’ or engage in
a ‘litigious strategy.’ [Citation.]” (Woodcock v. Fontana Scaffolding & Equip. Co.
(1968) 69 Cal.2d 452, 456, fn. 2. (Woodcock).) We have no such evidence here and will
not deem the issue forfeited.
“[W]here 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.)
In this case, the trial court was never told there were ambiguities in the jury
verdict forms before they were given to the jury. The issue of ambiguity was not raised
in Premier’s motion for new trial. Rather, Premier argued the jury’s responses were
inconsistent. In the motion, Premier argued the jury affirmatively determined Premier
“fulfilled its contractual obligations.” The trial court correctly rejected this argument. It
is plain from the jury verdict forms that the jury never answered the question, “Did
Premier breach the contract?” Indeed, the jury’s response of “no” to question No. 3
related to the issue of the preconditions for Premier’s performance, not whether Premier
fulfilled its obligation under the contract. Because the issue was not raised or decided in
the lower court, the correct interpretation of the jury’s answers in Part I of the special
12
verdict form falls upon us to consider in the first instance. (Woodcock, supra, 69 Cal.2d
at pp. 456-457.)
We conclude the verdict form is not hopelessly ambiguous because it is
possible to give a correct interpretation based on the pleadings, evidence and instructions.
(See Woodcock, supra, 69 Cal.2d at pp. 456-457.) The pleadings and evidence alleged
Premier made both written and oral promises to Hines concerning compensation. The
Agreement addressed the terms of Hines’s base salary, commission rate, and calculation
of overrides. The employee handbook addressed the issue of vacation pay. Hines alleged
he was orally promised stock, overages, and other production bonuses. The instructions
stated that to prove breach of a contract (oral or written) Hines need only prove there was
a contract, he substantially performed all his obligations under the contract, and he was
harmed. The jury answered these three questions in the affirmative in Parts I and III.
The two verdict forms can be reconciled because Part I asks if there was a breach of the
terms of employment and Part III asked the jury to calculate wages due “under the terms
of the employment.” The damages for Parts I and II would be the same.
We conclude the correct interpretation of the jury’s “no” response in Part I,
question No. 3 is that the conditions to Premier’s performance took place and there were
“no” excuses. Thus, the jury determined Premier breached its promise to pay wages but
was instructed to specify damages in Part III of the verdict form.
iii. Breach of the Covenant of Good Faith and Fair Dealing
The above analysis regarding Part I applies equally to the jury’s answers in
Part II (concerning the breach of the covenant of good faith and fair dealing). As with
Part I, the special verdict form contained a compound question about the preconditions
required for Premier’s performance. However, the jury’s response of “no,” when read in
conjunction with the record and Part III, can correctly be interpreted as making a factual
finding in Hines’s favor.
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With respect to this claim, the trial court instructed the jury with a modified
version of CACI No. 325, as follows: “In every contract or agreement there is an implied
promise of good faith and fair dealing. This means that each party will not do anything to
unfairly interfere with the right of any other party to receive the benefits of the contract;
however, the implied promise of good faith and fair dealing cannot create obligations that
are inconsistent with the terms of the contract. [Hines] claims that [Premier] violated the
duty to act fairly and in good faith. To establish this claim, [Hines] must prove all of the
following: [¶] 1. That . . . Hines and [Premier] entered into a contract; [¶] 2. That . . .
Hines did all, or substantially all, of the significant things that the contract required him
to do or that he was excused from having to do those things; [¶] 3. That all conditions
required for [Premier’s] performance had occurred; [¶] 4. That [Premier] unfairly
interfered with . . . Hines’s right to receive the benefits of the contract; and [¶] 5. That
. . . Hines was harmed by [Premier’s] conduct.”
The special verdict form (Part II) asked the jury to answer the following
questions: (1) “Did . . . Hines and [Premier] enter into a contract?”; (2) “Did . . . Hines
do all, or substantially all, of the significant things that the contract required him to do?”;
[¶] (3) “Did all the conditions that were required for [Premier’s] performance occur or
were they excused?”; (4) “Did [Premier] unfairly interfere with . . . Hines’s right to
receive the benefits of the contract?”; (5) “Was . . . Hines harmed by [Premier’s]
conduct?”; and (6) “What are . . . Hines’s damages?”
As with the breach of contract claim (special verdict form Part I), the jury
answered “yes” to the first two questions finding there was a contract and Hines did not
breach the contract. It answered “no” to the compound question of whether there was a
nonoccurrence of a condition or whether there was an excuse. We adopt by reference our
above discussion of the case law and analysis of ambiguous verdicts. Once again, we
hold the verdict form in Part II can be correctly interpreted when read in conjunction with
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pleadings, evidence, instructions, and the jury’s determination in Part III that Premier
owed Hines damages related to a breach of the covenant of good faith and fair dealing.
B. Was the Evidence Sufficient to Support the Verdict?
Premier challenges the sufficiency of the evidence to support the jury’s
verdict awarding (1) unpaid commissions, (2) unpaid overages, (3) unpaid vacation pay,
and (4) the waiting-time penalty. Premier first argues there could not possibly be
evidence in the record to support the jury’s award of any damages because the jury
determined there was no breach of contract. This argument is based on the faulty premise
the jury found in Premier’s favor on the first two causes of action. As discussed above,
we have interpreted the jury’s verdict as finding in Hines’s favor on all causes of action.
Accordingly, this argument on appeal is unpersuasive. We will address Premier’s
separate challenges to each category of damages below.
i. Unpaid Commissions
With respect to unpaid commissions, Premier recognized the $28,841 jury
award could have been based on several different theories of recovery. Hines presented
evidence he was owed a 5 percent commission on solar panel contracts he directly
obtained. He presented evidence this totaled $92,050. Hines also asserted he was owed a
1 percent override on solar panel contracts obtained by Markovich. He calculated he was
owed $13,466 in overrides. Hines estimated he was owed $52,600 for commissions lost
when Premier cut back on giving him leads to new customers. To calculate his total
damages he added the above sums (plus $40,845 owed for overages discussed in the next
section) and subtracted $109,509 (his pay as reflected in his W-2 tax forms generated by
Premier for 2008 and 2009).
Premier argues there was no evidence it owed Hines money for unpaid
commissions pursuant to the Agreement’s terms. It first points to evidence Hines was
terminated for cause. It does not explain how this relates to the issue at hand. It points to
nothing in the Agreement or handbook stating an employee could not collect owed
15
commissions if terminated for cause. This argument is irrelevant. And due to the utter
lack of any case authority or legal analysis, we deem it waived. It is incumbent upon an
appellant to present relevant legal authority and reasoned argument on each point made,
otherwise, the argument may be deemed waived. (Badie v. Bank of America (1998)
67 Cal.App.4th 779, 784-785 (Badie).)
Second, Premier attacks Hines’s reliance on four cancelled solar panel
contracts. It notes the Agreement plainly stated commissions would not be paid on
cancelled contracts. Premier concludes, “The only way the jury could have ever awarded
unpaid commissions on canceled sales was to affirmatively find there was a breach of the
[covenant of] good faith and fair dealing, and it did not do so.” As noted above, this
argument fails because we have construed the verdict to find the jury did find a breach
occurred.
Third, on appeal Premier discusses evidence proving customers cancelled
their contracts for reasons other than improper and untimely installations. In essence,
Premier is attempting to reargue the issue of whether it breached the covenant of good
faith and fair dealing. It focuses on cancelled contracts involving customers having the
last names, Agarwal, Kelly, Handzel, and Devine.2
Specifically, it asserted there was evidence “Mr. Agarwal” cancelled his
contract because of Hines, and not because of Premier’s poor performance. It maintains
there was no evidence the “Kelly contract” was sent to Premier before it was cancelled.
Premier stated the evidence showed “customer Handzel” never said she wished to cancel
due to Premier. Premier did not discuss any of the evidence with respect to the “Devine’s
contract” other than to say it was cancelled.
2 The parties do not mention the customers’ first names. We recognize
Premier’s former chief financial officer, Teresa Kelley, has a similar last name as one of
the customers. To avoid confusion, we will refer to the customer Kelly as the “Kelly
contract.”
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“‘When a finding of fact is attacked on the ground that there is not any
substantial evidence to sustain it, the power of an appellate court begins and ends with the
determination as to whether there is any substantial evidence contradicted or
uncontradicted which will support the finding of fact.’ [Citations.]” (Foreman & Clark
Corp. v. Fallon (1971) 3 Cal.3d 875, 881 (Foreman).) The judgment is presumed to be
correct. (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.) Moreover, we
must presume “‘the record contains evidence to sustain every finding of fact.
[Citations.]’” (Foreman, supra, 3 Cal.3d at p. 881.) It is Premier’s burden to
demonstrate that it does not. (Ibid.)
It is well settled that to meet this burden, Premier had the duty to fairly
summarize all the facts in the light most favorable to the judgment. (Foreman, supra, 3
Cal.3d at p. 881.) And the burden to provide a fair summary of the evidence “grows with
the complexity of the record. [Citation.]” (Western Aggregates, Inc. v. County of Yuba
(2002) 101 Cal.App.4th 278, 290.)
The record in this case is very complex. The testimony heard by the jury
spans five volumes of reporter’s transcripts (it exceeds 10,000 pages). There are also
eight volumes (2,053 pages) of appellant’s appendix. Premier provided copies of
approximately 180 exhibits. Nevertheless, Premier has provided only a brief summary of
the trial evidence, and its summary consists of facts supporting only its defense.
As aptly noted by Hines in the respondent’s brief, the issue of unpaid
commissions and the covenant of good faith and fair dealing was hotly disputed at trial
and Hines presented a great deal of evidence supporting his claims. Hines complains that
Premier, on appeal, has “taken great liberty to provide information out of context.” We
agree. One clear example of this is Premier’s portrayal of the Agarwal contract. Premier
claims the evidence proved this contract was cancelled due to Hines’s conduct, not due to
Premier’s negligence. To support this claim, it cites to the one favorable piece of
17
evidence: Hines testified he remembered Agarwal mentioned in an e-mail he wanted to
cancel his contract in June 2008 “based on [his] experience with . . . Hines.”
Premier omits all the other material evidence regarding the Agarwal
contract. It skips over the fact Hines also testified the Agarwal contract was not actually
cancelled in June. Hines presented evidence (exhibit Nos. 9 & 10) showing Agarwal
decided to continue with the contract based on his discussion with a Premier employee
and Agarwal did not actually cancel the contract until October 2008 and, at that time,
cited problems relating to the installation process. In an e-mail dated October 27, 2008,
Agarwal complained the company took roof measurements in August 2008 and the
project was to be completed by October 26, 2008. Agarwal grumbled he had “not heard
from” Premier since August. When all the material evidence on this issue is considered,
it would be reasonable for the jury to infer Agarwal cancelled the contract in October due
to Premier’s negligence and not because of Hines.
By not mentioning or discussing all the relevant testimony and exhibits,
Premier has left it for us to figure out why Agarwal’s many e-mails would not support the
jury’s conclusion. However, it is not our job to construct theories or arguments that
would undermine the judgment. We must presume the record contains evidence to
sustain every finding of fact and presume the judgment is correct. (Foreman, supra,
3 Cal.3d at p. 881.)
Respondent’s brief is full of other examples showing Premier failed to
present in its appeal a true picture of the material evidence presented at trial. Hines
explains the record contains facts, not mentioned by Premier, that support the jury’s
determination of damages. Premier’s decision to recite only its own evidence is not a fair
summary for purposes of determining whether any inferences drawn by the jury were
reasonable and supported by substantial evidence. (Foreman, supra, 3 Cal.3d at p. 881.)
We conclude Premier’s failure to set forth all material evidence waives the issue on
appeal. (Ibid.)
18
Premier’s next challenge to the unpaid commission award also fails. It
argues exhibit No. 89 shows the alleged commissions owed for customers Handzel,
Devine, Kelly, and Agarwal totaled $11,497, and the jury returned a verdict of $28,841.
Premier boldly asserts the difference between these two amounts is not supported by any
evidence in the record. Not so. In his briefing, Hines correctly points out that Premier’s
argument fails to acknowledge there was other evidence of unpaid commissions. Exhibit
No. 89 demonstrated he was not paid commissions owed on other sale contracts (in
addition to the four customers Premier singled out). And, as stated above, the
commission award encompassed not only 5 percent for direct sales, but also 1 percent for
overrides and additional damages incurred when Premier starved Hines of customer leads
during his final few months of employment.
We recognize Premier also challenges the evidence supporting these latter
two sources of commissions (overrides and damages for lost leads). As we now explain,
these contentions also lack merit.
First, Premier attacks Hines’s claim for damages arising from lost leads by
discussing all the contrary evidence Premier presented at trial proving there was no
misconduct. Once again, Premier cites only to its own evidence and omits any mention
of Hines’s evidence on this issue. Premier is not entitled to a second trial. It fails to
appreciate our standard of review. We must look only at the evidence supporting the
judgment and disregard evidence to the contrary. (Campbell v. Southern Pacific Co.
(1978) 22 Cal.3d 51, 60.) It was Premier’s burden to demonstrate the evidence was not
sufficient to support the judgment. And to satisfy this burden, Premier was required to
set forth in its brief all material evidence upon the point, not merely its own. (Foreman,
supra, 3 Cal.3d at p. 881.) “‘Unless this is done the error is deemed to be waived.’
[Citations.]” (Id. at pp. 881-882.) We conclude the argument is waived and assume the
evidence supports the judgment.
19
Second, Premier offers a great many arguments regarding the other possible
component of the unpaid commission award, i.e., overrides. It recognized the Agreement
specified Hines would receive, “Up to 1 [percent] override on all sales other than
personal sales in Arizona, San Bernardino, Riverside[,] and [Los Angeles] counties
depending on the margin.” Hines testified he calculated the amount of overrides in
exhibit No. 89 by using all of Markovich’s sales from May 20, 2008, to March 7, 2009,
using a spread sheet provided by Markovich. Premier asserts there is a whole host of
problems with Hines’s evidence and it presented these argument to the jury during the
trial. It concludes, “If some portion of the jury’s award of ‘unpaid commission’ was
intended to include amounts for ‘overrides,’ then there is no substantial evidence to
support that portion of the award.” (Italics added.)
Premier’s conclusion goes to the heart of the problem. The special verdict
does not answer the question as to what portion, if any, of the $28,841 unpaid
commission award “was intended to include amounts for ‘overrides.’” If we were to
assume for the sake of argument that the jury agreed with all of Premier’s arguments at
trial regarding overrides, and it rejected Hines’s request for $13,466 in overrides, we still
would have no grounds to disturb the verdict. The jury’s award of unpaid commissions
could have been based entirely on the calculations for the 5 percent commission rate
allegedly owed for Hines’s direct sales (total amount requested $92.050) and/or damages
for commissions lost during the last four months of employment (total amount requested
$52,600). Either of these two sums standing alone could account for the $28,841 the jury
calculated for unpaid commissions. The jury appears to have discounted some accounts
20
and calculated its own figure for unpaid commissions. We will not speculate the award
included overrides.3
ii. Unpaid Overages
Hines testified that before the Agreement was executed he was promised he
would be paid overages. In exhibit No. 89 he designed a chart showing that for each of
his customers there was a “PAR price,” representing the solar panel sale price based on
Premier’s pricing model. He explained the solar panel system was supposed to be sold at
this price. The chart also showed the price of the actual contract. This sum ranged from
several hundred to thousands of dollars more than the PAR price depending on the
customer. Hines explained Premier promised to pay him 50 percent of this additional
profit for each contract. He calculated he was owed $40,845 for overages. The jury
awarded much less, calculating $28,443 for overages.
It is undisputed the promise to pay overages is not contained in the
Agreement. Premier argues evidence of an oral agreement to pay overages was
improperly admitted extrinsic and/or parol evidence. We conclude Premier
misunderstands the nature of these legal concepts. “The test of admissibility of extrinsic
evidence to explain the meaning of a written instrument is . . . whether the offered
evidence is relevant to prove a meaning to which the language of the instrument is
reasonably susceptible. [Citations.]” (Pacific Gas & E. Co. v. G. W. Thomas Drayage
etc. Co. (1968) 69 Cal.2d 33, 37, italics added.) It was Hines’s theory there was an oral
contract to pay overrides in addition to the promises made in the Agreement. The
evidence was not intended to explain the meaning of the Agreement.
3 Premier devotes a few sentences to arguing the jury’s commission award
should not have included Hines’s claim for $11,000 in bonuses. This argument fails for
the same reason as the overrides issue. Because the jury was not asked to delineate the
basis for its award, we will not speculate bonuses were included. There was substantial
evidence of other sources for the unpaid commission award.
21
As for the admissibility of parol evidence, the test is well established as
follows: “To the extent a contract is integrated, the parol evidence rule precludes the
admission of evidence of the parties’ prior or contemporaneous oral statements to
contradict the terms of the writing, although parol evidence is always admissible to
interpret the written agreement. [Citation.]” (Esbensen v. Userware Internat., Inc.
(1992) 11 Cal. App.4th 631, 636-637.) Premier does not allege the Agreement was a
fully integrated written agreement. It does not provide case authority or legal analysis on
this point.4 We have reviewed the Agreement, and it does not explicitly provide the
parties intended for the Agreement to represent a complete employment package or the
entire agreement between the parties. To the contrary, the Agreement outlined an
incentive plan for a defined term of over eight months (April 2008 to December 2008)
and did not purport to represent all the terms of Hines’s employment with Premier.
Moreover, an oral agreement to pay overages was not admitted to contradict the terms of
the Agreement but rather was evidence of an additional sales incentive plan.
Premier adds it was error to admit evidence of an oral agreement because
there was no cause of action for breach of an oral contract. It provides no case authority
or legal analysis on this point. Premier does not assert the issue was raised below, or
considered by or ruled upon by the trial court. It does not explain why it should be
decided in the first instance by this court. We deem the contention waived. (See Badie,
4 “If a writing is intended by the parties as a ‘complete and exclusive
statement of the terms of the agreement’ (see Code Civ. Proc., § 1856, subd. (b)), the
contract is ‘fully’ or ‘completely’ integrated and parol evidence is inadmissible even to
add terms not inconsistent with the writing. Obviously, such a determination must be
based on proof of the parties’ intent [citation] and a critical element in that proof is the
nature of the alleged consistent oral understanding. [Citation.] The Supreme Court has
held that in order to bar evidence of a consistent oral understanding, the court must
convince itself at a minimum that such an understanding would not ‘naturally’ have been
excluded from the writing. [Citation.]” (Esbensen, supra, 11 Cal.App.4th at p. 637,
fn. omitted.)
22
supra, 67 Cal.App.4th at pp. 784-785 [appellant must present relevant legal authority and
reasoned argument on each point made]; Mansell v. Board of Administration (1994)
30 Cal.App.4th 539, 545-546 (Mansell) [it is not the proper function of Court of Appeal
to search the record on behalf of appellants or to serve as “backup appellate counsel”];
Kim v. Sumitomo Bank (1993) 17 Cal.App.4th 974, 979 (Kim) [appellate court not
required to consider points not supported by citation to authorities or record].)
Premier argues no jury instructions were given to determine overages. It
does not explain the relevance of this fact. Nor does it address the significance or
relevance of the other instructions apparently given to address the oral agreement for
overages. The jury was instructed, “Contracts may be written or oral. [¶] Contracts may
be partly written and partly oral. [¶] Oral contracts are just as valid as written contracts.”
(CACI No. 304.) It was also instructed regarding implied in fact contracts (CACI No.
305), and modification of written contracts (CACI No. 313). Premier does not address
why these instructions were insufficient or inadequate for the jury to determine overages.
It does not assert it objected to the jury instructions, notified the trial court about its
concerns, or that this is an appropriate issue for appellate review in the first instance. An
appellate court is not required to consider points not supported by citation to authorities
or record. (Kim, supra, 17 Cal.App.4th at p. 979.) We deem this issue also waived.
(Badie, supra, 67 Cal.App.4th at pp. 784-785; Mansell, supra, 30 Cal.App.4th at
pp. 545-546.)
Premier’s remaining arguments regarding overages appear to be the same
unsuccessful ones made at trial. Premier cited to evidence it claims proves there was no
agreement to pay overages, Hines was not part of the overages program, Hines was not
eligible for the program because he was hired to be a manager and not a sales consultant,
Hines used the wrong forms and untimely requested overages, and Hines’s calculations
were unreliable. Once again, Premier has presented only favorable evidence supporting
its theory of the case and it fails to mention the evidence presented by Hines during trial
23
on these same issues. We therefore deem his point waived and assume the evidence
supports the judgment. (See Foreman, supra,
3 Cal.3d at p. 881.)
iii. Vacation Pay
Under the title, “Employee Benefits” the employee handbook explains
Premiere offers its employees vacation. “[Premier] recognizes the need for balance in an
employees’ work life and personal life. Paid vacation is to promote and increase
productivity and a healthy morale through rest and relaxation. [¶] All regular employees
working 32 hours or more hours per week on a regular basis are eligible for paid
vacation.” The handbook simply states employees having six months to three years of
service will earn 80 vacation hours.
The handbook cautions that earned vacation hours must be taken prior to
the next anniversary date. “There is no carryover of vacation hours into the following
anniversary year.” It was undisputed Hines did not use any of his vacation hours. The
handbook promised that after termination of employment, “[i]n your final paycheck, you
will receive pay for all hours worked up through your last day of employment in addition
to any unused earned vacation.” It was undisputed Premier did not include in Hines’s
final paycheck any money for unused earned vacation.
At trial, Hines asserted he was owed $4,977. He explained he calculated
this sum based on his salary and commissions. He admitted the employee manual did not
describe how vacation pay would be calculated. Hines began working April 4, 2008, and
was terminated on March 10, 2009. Premier contends because there was no evidence
Hines intended to take a vacation, his “hours would have lapsed before he could have
used them, but for the fact of his termination.” It also argues there was no evidence to
support the sum requested by Hines, or the $1,538.46 awarded by the jury. It concludes
the award appears arbitrary, further supporting its argument there is no substantial
evidence to support the award of vacation pay. We disagree.
24
Hines presented evidence of his base salary and average commission pay,
and calculated the value of 80 vacation hours. Premier did not present evidence to
contradict Hines’s premise these sums are used to calculate vacation pay for employees.
It presents no legal authority to support the notion an employee should not be paid
accrued vacation time if he is fired before he takes a vacation. The employee manual
does not specify how the 80 hours vacation time is calculated, and Premier did not
present evidence on this issue. Therefore, it was up to the jury to decide what a
reasonable hourly rate was for the unused vacation time that the employee manual
promised would be in the final paycheck.
The jury calculated Hines was owed significantly less than what he
requested and awarded $1,538.46. In the absence of any evidence to the contrary, this
figure could be based on 80 hours and a more conservative estimate of commission pay.
It could be based on less vacation hours but at a higher salary/commission combination.
In either case, because Hines presented evidence of his base salary and commissions it
cannot be said there was insufficient evidence to support the jury’s verdict.
iv. Waiting-Time Penalty
Part IV of the special verdict asked the jury to answer questions about the
Labor Code penalties for the failure to timely pay wages. The jury answered, “Yes” to
the following questions: (1) did Hines “perform work for” Premier?; (2) did Premier
discharge Hines?; and (3) did Premier “willfully fail to pay the full amount of wages
earned by . . . Hines on his last day of employment?”
The jury responded “Days: 5” in response to the special verdict’s question,
“For how many calendar days following . . . Hines’s last day of employment did Premier
. . . willfully fail to pay the full amount of . . . Hines’s wages?” It determined Hines’s
daily wage rate at the time of his employment was $153.85.
25
Labor Code section 2035 provides that if an employer fails to pay the full
amount of wages, “the wages of the employee shall continue as a penalty from the due
date thereof at the same rate until paid [but for no longer] than 30 days.”
Premier argues “there is no willful failure to pay wages if the employer and
employee have a good faith dispute as to whether and when the wages were due.” It
asserts there was a good faith disagreement about commissions and overages. Noticeably
absent from the analysis is any mention of the unpaid vacation hours. Premier does not
assert theses sums were not paid in good faith. It fails to cite to any evidence it had a
good reason to believe absolutely no vacation hours accrued during Hines’s first year of
employment. This evidence is sufficient, standing alone, to support the jury’s verdict
there was a willful failure to pay wages. Vacation is a form of wages. (Suastez v. Plastic
Dress-Up Co. (1982) 31 Cal.3d 774, 779 [“It is established that vacation pay is not a
gratuity or a gift, but is, in effect, additional wages for services performed”].) We find no
error.
C. Should Nonsuit Have Been Granted?
On appeal, Premier asserts it “moved for nonsuit at the end of Hines’s
opening statement because he had not identified sufficient facts to make out a cause of
action for breach of written contract with respect to the claim for commissions.” It
explains the motion was based on the theory the written contract did not provide for
“commissions earned after such time as the consultant is actively employed” and Hines
waited two years after leaving his employment to seek unpaid commissions. Premier
argued the trial court improperly denied the nonsuit motion on the grounds there was not
an integration clause in the Agreement.
To support this argument, Premier discusses the terms of the Agreement. It
concluded Hines “did not suggest sufficient evidence to show he would be entitled to
5 All further statutory references are to the Labor Code, unless otherwise
indicated.
26
recover commission or overages on sales which were ‘booked’ upon the receipt of
customer payments after he left Premier . . . .” It added, Hines did not allege the
Agreement was amended to provide for “commissions on cancelled contracts,
commissions due after he was terminated, contracts paid for after he left Premier, and
overages, which he freely admitted were not part of the written contract.”
This argument fails because it is not an accurate description of what
occurred in the trial court. Premier’s counsel made an oral motion for nonsuit after the
jury heard Hines’s and Premier’s opening statements. Premier’s counsel stated there
were two aspects to the motion. First, there was no evidence to support the third cause of
action for a violation of public policy. Second, “[T]here is a contract, which clearly
traverses the provisions of which that would bar the claims that there was some sort of
other commission scheme that [Hines was] entitled to commissions at all after he left and
counsel has not illuminated any sort of a basis for saying the contract was entered into
under fraud, duress, or the writing is not valid and binding.” Counsel concluded under
the parol evidence rule counsel had not stated a cause of action for breach of the written
contract.
Hines’s counsel responded the Agreement was prepared by the employer
and it does not contain an integration clause. He argued there was no reason an employee
could not introduce evidence about the other part of the employment package “which
would be the part that relates to overages and some of the other items.” Hines’s counsel
did not address the issue of whether the contract was breached by Premier’s failure to pay
commissions “booked” after he left.
Hines’s counsel next addressed the challenge to the third cause of action
(violation of public policy). After Premier’s counsel replied to arguments about the third
cause of action, the trial court asked for additional briefing regarding that issue. The
court denied the motion for nonsuit as to the contract action, stating, “The opening
statement indicated there was an employment contract, however, there is not an
27
integration clause such to the effect that there was parol [evidence] or there is an
argument or any suggestions there is going to be parol evidence that the written document
was not everything so I think that is well covered in the opening statement so that is
denied.”
“Section 581c of the Code of Civil Procedure authorizes a motion for
nonsuit after plaintiff’s opening statement. In ruling on the motion, the court must accept
as true all facts set forth in the statement and indulge in every legitimate inference that
may be drawn from such facts. [Citation.] Granting a motion for nonsuit at this stage is a
disfavored practice and will be upheld only where it is clear plaintiff’s counsel has stated
all facts he expects to prove and such facts do not constitute a cause of action.
[Citation.]” (Sturgeon v. Curnutt (1994) 29 Cal.App.4th 301, 305 (Sturgeon).) We find
no error.
In the opening statement Hines’s counsel asserted there was a written
agreement that contained only part of the compensation package. Counsel told the jury
there were “other items” not included in the Agreement and because the Agreement did
not have an integration clause it must be viewed as only part of the terms of employment.
He argued, “The other part that was very significant that was included in it is there was
something called overages and . . . Hines and others will explain to you how that
worked.” Counsel stated there were various documents and other references made to the
“overage issue” and Hines was not paid for overages. Simply stated, Hines alleged in the
opening statement that extrinsic evidence would be used to add to the promises made in
the written agreement (because it does not have an integration clause). Hines’s counsel
explained it was Hines’s theory the nonpayment of overages was a breach of the contract
as modified.
“In ruling on the motion, the court must accept as true all facts set forth in
the statement and indulge in every legitimate inference that may be drawn from such
facts. [Citation.]” (Sturgeon, supra, 29 Cal.App.4th at p. 305.) Hines’s counsel stated
28
facts he expected to prove and those facts constituted a viable cause of action. Nonsuit
on the breach of contract claim was properly denied.
D. Should the Trial Court Have Excluded Exhibit No. 89
As described in some detail above, exhibit No. 89 contained Hines’s
calculations for his commissions, overrides, and overages earned during his employment.
The exhibit contains three pages of tables and each of these pages lists customer names
and sums of money depending on the element of damages. The final page of the exhibit
contained Hines’s summary of the evidence gathered from the other three pages. During
Hines’s testimony, counsel asked questions about exhibit No. 89 and what documents he
used to calculate each element of his alleged damages. Premier did not object to use of
the exhibit during the trial.
After both parties rested, but before the jury was instructed, the parties
discussed Hines’s many exhibits. Premier’s counsel stated he objected to the admission
of exhibit No. 89. Before the trial court ruled, Hines’s counsel offered to submit an
amended version of exhibit No. 89, based on more accurate calculations. Counsel
suggested, “Since we completed the case, one of the things that we did is we recalculated
the items that were on the original number 89. [The original] was prepared from
documents he kept in the ordinary course through his employment to some extent with
regard to the commissions and the overage split and Markovich’s overrides and, of
course, the last page consists of a summary of the various damages.” Counsel stated the
updated document could be admitted, after which both parties could present argument or
Hines could seek to reopen and identify the document and its contents. Hines stated the
document represented Hines’s testimony and would help the jury deliberate because the
jury will not have to “paw through each contract.” Counsel argued the documents were
reliable because the figures are “subject to verification by the contracts which form the
basis of it, and also with regard to the W-2 forms, which have been identified and
stipulated to going into evidence.”
29
Premier argued the exhibit was “a good demonstrative exhibit,” but it
should not be deemed admissible evidence. Premier’s counsel argued Hines conceded
during the trial that were multiple errors in his calculations. Counsel stated it was unclear
where many of the figures came from, and the evidence was unreliable.
The trial court ruled, “I think it is an admissible piece of evidence save the
last page, which . . . compiles the three pages over again.” The court stated it would
remove page four because it was argumentative.
On appeal, Premier asserts exhibit No. 89 lacked foundation and reliability.
It maintains, “There was no satisfactory explanation at trial of the source of all the figures
in exhibit No. 89, particularly those on page three regarding overages.” Premier notes
Hines testified he was referred to the “pricing module” and customers described in
documents contained in exhibit No. 4. Premier asserts some of the customer names were
not contained in exhibit No. 4 (but does not tell us which ones). It also points out Hines
testified he relied on an Excel chart, but it was not introduced as an exhibit. Premier
concludes that based on these facts, the trial court improperly overruled its objection to
admission of the exhibit. On appeal, Premier adds a few new arguments not raised
below. It contends Hines’s reliance on a spreadsheet obtained from Markovich renders
exhibit No. 89 hearsay evidence that should have been excluded. Premier does not
explain its failure to raise the hearsay issue below. Nevertheless, it concludes the trial
court should have excluded it on this basis.
More importantly, Premier does not cite to a single case or legal treatise to
support its argument the court erred in admitting exhibit No. 89. There is no mention of
the standard of review, the basis for the court’s ruling, or whether there is legal authority
supporting exclusion of demonstrative evidence. It is incumbent upon an appellant to
present relevant legal authority and reasoned argument on each point made, otherwise,
the argument may be deemed waived. (Badie, supra, 67 Cal.App.4th at pp. 784-785;
Mansell, supra, 30 Cal.App.4th at pp. 545-546 [it is not the proper function of Court of
30
Appeal to search the record on behalf of appellants or to serve as “backup appellate
counsel”]; Kim, supra, 17 Cal.App.4th at p. 979 [appellate court not required to consider
points not supported by citation to authorities or record].) We deem the issue waived.
E. Should the Trial Court Have Granted the JNOV?
With respect to our review of the JNOV ruling, Premier correctly provides
case authority regarding our standard of review. “The trial court’s power to grant a
motion for JNOV is the same as its power to grant a directed verdict. (Code Civ. Proc.,
§ 629.) The court must accept as true the evidence supporting the jury’s verdict,
disregarding all conflicting evidence and indulging in every legitimate inference that may
be drawn in support of the judgment. The court may grant the motion only if there is no
substantial evidence to support the verdict. [Citations.] On appeal from the denial of a
motion for JNOV, we determine whether there is any substantial evidence, contradicted
or uncontradicted, supporting the jury’s verdict. [Citation.]” (Tognazzini v. San Luis
Coastal Unified School Dist. (2001) 86 Cal.App.4th 1053, 1057-1058.)
On appeal, Premier asserts that “[f]or the reasons discussed above in
sections I through IV” of the appellate brief, there was “no substantial evidence to
support the jury’s award of damages against Premier.” It adds there cannot be evidence
to sustain the award of damages because the jury found no breach of contract or of the
covenant of good faith and fair dealing. Premier then summarizes the arguments raised
in section I through IV. We need not rehash the same arguments. We have rejected all of
Premier’s arguments on appeal regarding the sufficiency of the evidence alleged in
sections I through IV, and interpreted the special verdict as finding Premier was liable for
breaches warranting damages. The trial court properly denied the JNOV.
F. Should the Trial Court Have Granted the New Trial Motion?
Premier asserts the new trial motion was improperly denied because the
jury’s verdict was fatally inconsistent and “against the law.” Earlier in this opinion, we
determined the jury’s responses on the special verdict forms were ambiguous, not
31
inconsistent. Based on the pleadings, evidence, instructions, and other portions of the
verdict forms, we reconciled and interpreted the jury’s responses on the forms as finding
in favor in Hines. We find no error with respect to the trial court’s denial of the new trial
motion.
G. Should the Motion to Tax Costs Have Been Granted?
Hines’s memorandum of costs requested in addition to filing, jury, and
court reporting fees, $2,212 for deposition costs, $350 for service of process, $747 for
attachment expenses, and $360 for exhibits. It requested a total of $9,267.64. Premier
filed a motion to tax costs attacking the jury fees, service of process for David Kerdoon,
attachment expenses, and deposition costs related to Teresa Kelley, who did not testify.
Hines filed an opposition, and the court ruled in his favor awarding the exact sum he
requested ($9,267).
On appeal, Premier narrows the argument to two particular costs it found
offensive. First, it complains Kelley’s deposition testimony (costing $670) was irrelevant
because she did not testify at trial. Premier asserts Hines’s counsel purchased an airline
ticket the day before departing and therefore paid an unnecessarily high price of $435 to
fly to Sacramento. In addition, the court awarded the cost of a hotel stay in conjunction
with the deposition. Premier argues counsel could have purchased the ticket 10 days in
advance when it would have been much less expensive. Second, Premier challenges the
court’s refusal to subtract the $75 fee for service of a trial subpoena upon Kerdoon
because Hines did not list him as a witness for trial.
“Whether a cost item was reasonably necessary to the litigation presents a
question of fact for the trial court and its decision is reviewed for abuse of discretion.
[Citation.]” (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 774.)
Noticeably absent from Premier’s brief, is any discussion of the evidence presented in
Hines’s opposition to the motion to tax costs. With respect to the cost of Kelley’s
deposition, Hines explained she was Premier’s chief financial officer at the time he was
32
terminated. She left the company after Hines and he was unsure about the reasons why
she relocated. Moreover, it was unclear if she would be called as one of Premier’s
witnesses because she was the person responsible for accounting of overages and other
compensation. Hines’s counsel believed that to adequately prepare for trial, the nature of
Kelley’s testimony must be determined. However, finding a day to take Kelley’s
deposition proved difficult and travel arrangements could not be made until she gave
some assurance she would appear. She was very uncooperative.
Hines also offered evidence regarding Kerdoon, one of Premier’s
disgruntled customers. Hines explained Kerdoon had also sued Premier and subpoenaed
Hines to testify in his case. Hines planned to use Kerdoon as a rebuttal witness because
he could confirm Premier’s negligence in installing the solar panels. Hines stated it
“became unnecessary because of the press to finish the trial and the statements made by
. . . Marks during his testimony. A valid subpoena was issued and communications were
maintained with his counsel in the event he was needed to testify.”
The above evidence, cited in Hines’s opposition, is likely what the trial
court relied upon in making its ruling. Premier does not suggest the evidence was false
or unreliable. Indeed, it makes no mention of it. We find no reason why the court could
not have relied on it because it adequately explained why the costs requested were
reasonable. It cannot be said the court abused its discretion in denying the motion to tax
costs.
H. Should the Trial Court Have Awarded Attorney Fees?
As a general rule, a successful plaintiff can recover attorney fees only when
they are provided for by statute or by agreement of the parties. (Code Civ. Proc., § 1021;
Davis v. Air Technical Industries, Inc. (1978) 22 Cal.3d 1, 5.) On appeal, Premier
challenges the trial court’s determination Hines was entitled to attorney fees pursuant to
section 218.5. It asserts the court abused its discretion in awarding attorney fees. It is
wrong for several reasons.
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Ordinarily, a trial court’s determination that a litigant is a prevailing party
and its award of costs and fees is reviewed for abuse of discretion. However, the issue in
this case is whether the statute applies to Hines’s lawsuit. The interpretation of section
218.5 and its application to the circumstances in this case are questions of law, subject to
independent review on appeal. (See, e.g., City of Lafayette v. East Bay Mun. Utility Dist.
(1993) 16 Cal.App.4th 1005, 1013.)
“Pursuant to established principles, our first task in construing a statute is to
ascertain the intent of the Legislature so as to effectuate the purpose of the law. In
determining such intent, a court must look first to the words of the statute themselves,
giving to the language its usual, ordinary import and according significance, if possible,
to every word, phrase and sentence in pursuance of the legislative purpose. A
construction making some words surplusage is to be avoided. The words of the statute
must be construed in context, keeping in mind the statutory purpose, and statutes or
statutory sections relating to the same subject must be harmonized, both internally and
with each other, to the extent possible. [Citations.] Where uncertainty exists
consideration should be given to the consequences that will flow from a particular
interpretation. [Citation.] Both the legislative history of the statute and the wider
historical circumstances of its enactment may be considered in ascertaining the legislative
intent. [Citations.]” (Dyna-Med, Inc. v. Fair Employment & Housing Com. (1987)
43 Cal.3d 1379, 1386-1387.)
Section 218.5 provides in relevant part: “In any action brought for the
nonpayment of wages, fringe benefits, or health and welfare or pension fund
contributions, the court shall award reasonable attorney[] fees and costs to the prevailing
party if any party to the action requests attorney[] fees and costs upon the initiation of the
action. . . . This section shall not apply to an action brought by the Labor Commissioner.
This section shall not apply to a surety issuing a bond pursuant to . . . the Business and
Professions Code or to an action to enforce a mechanics lien brought under . . . the Civil
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Code. [¶] . . . This section does not apply to any cause of action for which attorney[] fees
are recoverable under [s]ection 1194 [actions to recover minimum wage and overtime
compensation].”
On its face, the statute applies to this case. Hines’s action was primarily
brought for the nonpayment of wages and benefits (including commissions, overages, and
vacation pay). The first cause of action alleged “substantial losses in earnings, bonuses,
and job benefits.” The second cause of action alleged that as a direct result of Premier’s
breach of the covenant of good faith and fair dealing, Hines “has lost substantial
employment benefits . . . including . . . lost wages[] and other employee fringe benefits.”
The third cause of action alleged violations of Labor Code statutes relating to “the timely
compensation of employees.” The prayer requested these wage-related damages and
attorney fees.
On appeal, Premier suggests Hines’s request for attorney fees under
section 218.5 was based on one claim—the waiting-time penalty under section 201—and
not on the other wage-related causes of action. It then argues the $122,378 attorney fees
award was unreasonable in relation to the $769 damages recovered for the Labor Code
violation. We find this argument misrepresents the record.
Hines’s attorney fees motion was brought under section 218.5 and was
based on all claims relating to unpaid wages and benefits.6 In Hines’s motion and
supporting attorney declaration, Hines explained he was not seeking fees relating to
6 Premier misstates the record by arguing Hines’s motion for attorney fees
did not specify section 218.5, and that he only mentioned section 201 as the basis for
recovery of fees. Premier complains Hines first mentioned section 218.5 in its reply brief
to the opposition. Nonsense! The face page of the “notice of motion and motion for
attorney[] fees” clearly states, “Hines, will move the court for an order for attorney[] fees
pursuant to . . . section 281.5.” (Italics added.) The attached memorandum of points and
authorities explained Hines was seeking attorney fees for all matters relating to the timely
payment of wages, which included all causes of action except the one for emotional
distress. It mentioned the first two causes of action in addition to section 201 (the third
cause of action).
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the discovery and work done on his claim for emotional distress. Hines’s attorney
declared “less than” 10 percent of his time “was expended on matters not relating to the
timely payment of wages.” Hines argued, “The bulk of discovery was concentrated on
Premier’s failure to pay [Hines] everything owed at the time of his termination. The
awards for breach of contract and breach of the covenant of good faith and fair dealing
are predicated on the failure of Premier to pay [Hines] on or before the termination date
wages owed . . . .” Hines added the 10 percent deduction was “more than generous to
Premier,” especially since the IIED was based on the fact Premier did not pay wages
owed. This argument lacks merit. We conclude the $122,378 attorney fees award was
reasonable in relation to the $58,977 for wage-related damages.
In addition, Premier argues the attorney fees should have been apportioned
because under section 218.5 the prevailing party may only recover fees on statutory
causes of action. It cites authority holding, “‘When a cause of action for which attorney
fees are provided by statute is joined with other causes of action for which attorney fees
are not permitted, the prevailing party may recover only on the statutory cause of
action.’” (Bell v. Vista Unified School Dist. (2000) 82 Cal.App.4th 672, 686-687.)
Premier reasons attorney fees “were not recoverable under any of the
causes of action of the complaint” because none involved violations of statutes permitting
attorney fees. It explains the Agreement did not contain an attorney fees clause and so
fees were not recoverable for the first two causes of action and the tort claims would not
support the recovery of fees. It notes no fees were requested with respect to the
accounting claim, and in any event, that issue was not litigated. Premier argues, “[T]he
basis upon which Hines sought recovery of attorney[] fees was section 218.5, which was
not even specifically alleged in his complaint. . . . Rather, the [third cause of action]
contains a brief allusion to ‘violation of the public policy as expressed in the California
Labor Code that specifically prohibits any improper withholding of compensation
earned.’ . . . What the claim for violation of public policy boiled down to was an
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instruction . . . regarding a waiting-time penalty for non-payment of wages.” Premier
asserts this claim was a nominal part of the case and Hines spent very little time litigating
that issue. Premier concludes the trial court should have apportioned the attorney fees
award to time spent on the waiting-time penalty from time spent litigating claims for
which fees are not recoverable. It is wrong.
It appears Premier is suggesting on appeal that section 218.5 only applies to
Hines’s causes of action alleging Labor Code violations, and this was the only basis for
the attorney fees motion. It provides no supporting case authority for this theory, and we
have determined it is not a correct statement of the law. “If an employer fails to pay
wages in the amount, time, or manner required by contract or by statute, the employee
has two principal options. The employee may seek judicial relief by filing an ordinary
civil action against the employer for breach of contract and/or for the wages prescribed
by statute. (§§ 218, 1194.) Or the employee may seek administrative relief by filing a
wage claim with the [California Labor Commissioner] pursuant to a special statutory
scheme . . .” commonly known as a “Berman” hearing. (Cuadra v. Millan (1998)
17 Cal.4th 855, 858, italics omitted, disapproved on another ground in Samuels v. Mix
(1999) 22 Cal.4th 1, 16, fn. 4.)
Section 218.5 expressly applies to “any action” based on the nonpayment of
wages or benefits. “Any action” would include claims for breach of contract and breach
of the covenant of good faith and fair dealing. If the Legislature had intended to exclude
contract-related claims from the reach of section 218.5, it could have easily and expressly
done so. Notably, the Legislature expressly specified section 218.5 is inapplicable to
actions brought by the California Labor Commissioner, to a surety issuing a bond, to an
action to enforce a mechanic’s lien, and to an action for which attorney fees are
recoverable under section 1194. (See Earley v. Superior Court (2000) 79 Cal.App.4th
1420, 1427 [“Section 218.5 entitles the prevailing party, in any action for ‘wages,’ to a
mandatory award of costs and attorney fees”].) In summary, section 218.5 permitted
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Hines to recover attorney fees on all claims except his tort causes of action. In his
motion, Hines stated he apportioned 10 percent of his attorney fees to the litigation of the
tort claims, and the rest related to his efforts to recover wages (for which fees were
recoverable). The trial court agreed this was a proper apportionment and we find no
reason to disturb its ruling.
We wish to briefly address Premier’s comment Hines could not seek
attorney fees under section 218.5 because it was not alleged in the complaint. Once
again, it cites no authority to support this contention. We conclude the argument is
meritless. Section 218.5 has no such requirement. Rather, it simply provides attorney
fees are available “if any party to the action requests attorney[] fees and costs upon the
initiation of the action.” (§ 218.5.) Hines’s complaint prayed for attorney fees. And
since his first three causes of action all sought damages for unpaid wages and benefits,
we conclude the complaint adequately placed Premier on notice of potential liability for
Hines’s attorney fees under section 218.5.
I. Was the Issue of Punitive Damages Properly Before the Jury?
Before trial, Premier moved to strike Hines’s claims for punitive damages
as to the second and third causes of action. The trial court granted the motion as to the
second cause of action (breach of the covenant), but not the third (violation of public
policy due to Labor Code violations regarding timely payment of wages). On appeal,
Premier argues this ruling was incorrect. It concludes, “Had the motion . . . been granted,
the jury would not have been given any instruction regarding a waiting time penalty, and
the damages for such a penalty would not have been awarded. Therefore, the trial court’s
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denial of Premier’s motion to strike the punitive damages as to the [f]ourth [c]ause of
[a]ction was prejudicial error.”7
This argument is mystifying because the jury did not award punitive
damages, it was not instructed on punitive damages, and such damages were not part of
the final judgment. We suspect Premier has confused the term “punitive damages” with
the statutory “penalty” imposed for nonpayment of wages and authorized by section 203.
That section provides the employer will pay a penalty if the employer willfully fails to
pay wages. (§ 203 [“wages of the employee shall continue as a penalty” until employer
pays owed wages].) Premier did not move to strike the penalty allegation, and we cannot
construe the court’s ruling on the motion to strike punitive damages as having anything to
do with a statutorily mandated penalty. There is no ruling for us to review on this issue.
J. Should Hines be Entitled to Recover Attorney Fees on This Appeal?
The law is well established that a statute authorizing the recovery of
attorney fees in the trial court also authorizes the recovery of attorney fees incurred on
appeal unless the statute specifically provides to the contrary. (Morcos v. Board of
Retirement (1990) 51 Cal.3d 924, 927.) Such an award is authorized even where the only
issue on appeal is the propriety of the fee award made in the trial court. (Del Cerro
Mobile Estates v. Proffer (2001) 87 Cal.App.4th 943, 951.) Accordingly, we conclude
Hines may recover attorney fees incurred in defending against this appeal in an amount to
be determined by the trial court.
7 We will assume this last statement contains a typographical error regarding
the cause of action because punitive damages were not alleged with respect to the fourth
cause of action for emotional distress. Premier’s motion did not relate to the fourth cause
of action.
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III
The judgment is affirmed. Respondent shall recover his costs and attorney
fees on appeal. The matter is remanded to the superior court to determine the amount of
attorney fees recoverable on appeal by respondent Hines.
O’LEARY, P. J.
WE CONCUR:
BEDSWORTH, J.
FYBEL, J.
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