Mann v. Spark Public Relations, LLC CA1/1 ( 2021 )

Filed 4/15/21 Mann v. Spark Public Relations, LLC CA1/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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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ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION ONE
AARON MANN,
Plaintiff, Cross-defendant and
Appellant, A155257
v. (San Francisco City & County
SPARK PUBLIC RELATIONS, LLC et Super. Ct. No. CGC-16-552836)
al.,
Defendants, Cross-complainants
and Respondents.
Defendant Spark Public Relations, LLC (Spark) acquired plaintiff
Aaron Mann’s company, SocialArc, Inc. (SocialArc) and entered into an
employment agreement with Mann. During the acquisition process,
SocialArc executed a loan agreement with Spark, for which Mann signed a
personal guaranty. Spark subsequently concluded Mann failed to meet
certain performance metrics and terminated his employment. In response,
Mann sued Spark and its chief executive officer, defendant Alan Soucy,
alleging various claims related to his employment agreement. Spark and
Soucy filed a cross-complaint against Mann, alleging breach of the personal
guaranty and fraud.
Following trial, the jury returned a verdict in Spark’s and Soucy’s favor
on all of Mann’s claims apart from nonpayment of wages. As to the cross-
complaint, the jury found in Spark’s favor for the breach of personal
guaranty.
On appeal, Mann contends insufficient evidence supports the jury
verdict as to his claims for breach of contract and breach of the covenant of
good faith and fair dealing. He further contends the trial court erred in
denying his motion for nonsuit as to Spark and Soucy’s cross-claim for breach
of personal guaranty. We disagree and affirm the judgment.
I. BACKGROUND
Mann operated a social media company called SocialArc, which
provided brand strategy and certain analytics software it had developed.
Soucy is the chief executive officer of Spark, a public relations firm.
Soucy and Mann agreed Spark would acquire certain assets of
SocialArc. To that end, they signed a letter of intent contemplating Spark
would purchase SocialArc’s assets, “including intellectual property related to
its services, databases, customer relationships, and equipment.” The letter of
intent also anticipated an employment agreement with Mann. He would
operate a new “Digital Services Operating division” at Spark and receive a
bonus tied to the specific financial performance of the division. The letter did
not state a target acquisition date, and noted, “Each party shall be
responsible for its own legal, accounting and other fees and expenses related
to the transactions contemplated by this Letter of Intent.” Mann, however,
believed he and Soucy agreed to a 30-day timeline for completing the
acquisition.
Spark and SocialArc also began working together pursuant to a
services agreement. Pursuant to that agreement, SocialArc performed
Internet and social media marketing services for Spark clients. SocialArc
also began performing internal work for Spark, such as updating its website
2
and automating its statement of work drafting and approval process. Mann
believed Spark would pay SocialArc for its work under the services
agreement.
The acquisition did not close within the 30-day period anticipated by
Mann. As a result, SocialArc required additional funds to maintain its
operations until the acquisition closed. Spark thus provided a cash advance
of $50,000 to SocialArc pursuant to a master promissory note. Shortly
thereafter, Spark advanced another $40,000 to SocialArc under the note. A
few weeks later, Spark provided a final advance of $35,000 under the note.
In connection with the final advance and at Spark’s request, Mann executed
a personal guaranty of the note. Spark e-mailed Mann monthly invoices for
the amounts due.
In connection with the acquisition, the parties executed various
documents including an asset purchase agreement and an employment
agreement. The asset purchase agreement referenced the outstanding
balance on the note and stated both the note and guaranty “remain
outstanding and all amounts due under the Note shall be repaid . . . in
accordance with the terms of the Note and the Personal Guaranty.”
Pursuant to the employment agreement, Mann would serve as
managing director of Spark’s digital services division (SDS). Mann’s bonus
structure was tied to certain profitability targets. For the remainder of his
first year, Mann was entitled to a bonus if SDS’s operating profit exceeded 20
percent. For subsequent years, Mann was entitled to a bonus if the adjusted
revenue growth exceeded 20 percent from the prior year and its operating
profit exceeded 20 percent. Conversely, Mann could be terminated for,
among other reasons, “failure to achieve the Minimum Threshold
Performance,” defined as (1) “SDS Adjusted revenue growth of less than ten
3
percent” from the prior year, and (2) “current year SDS operating profit is
less than fifteen percent.” The employment agreement defined “Adjusted
revenue growth” as “billable work generated by SDS staff and paid by clients
(less any subsequent refunds or credits),” along with shared services credit.1
Approximately a year and a half after Spark acquired SocialArc, Soucy
informed Mann that SDS would become part of another Spark department
and proposed changing Mann’s position to chief digital officer. This new
position would have no management authority. Mann asserted the change in
position would constitute an involuntary termination and entitle him to
benefits. Soucy disagreed, noting Mann had not met his performance goals.
Soucy and Mann were unable to reach an agreement regarding Mann’s
ongoing employment, and Spark ultimately terminated Mann for cause for
failing to meet the minimum threshold performance metrics.
Mann filed suit against Spark and Soucy for 13 causes of action related
to the services agreement and employment agreement. By trial, the
complaint alleged seven causes of action for declaratory relief, negligent
misrepresentation, concealment (as to the services agreement), breach of
contract, breach of the covenant of good faith and fair dealing, concealment
(as to the employment agreement), and nonpayment of wages and waiting
time penalties.
Spark and Soucy subsequently filed a cross-complaint against Mann,
alleging breach of personal guaranty and fraud.2
1SDS received “Shared Services Credit” for internal work it performed
for Spark as part of its revenue and profit calculation.
2Spark and Soucy also asserted a claim for breach of promissory note,
but the trial court granted summary adjudication as to that claim.
4
At trial, the parties provided conflicting evidence regarding Mann’s
tenure at Spark. Mann asserted Spark refused to provide SDS with the full
allotment of shared services credit for its work. Instead, Spark provided SDS
with a flat $10,000 per month credit. Mann also offered evidence that Spark
raised SDS’s revenue target by $250,000, applied a $238,000 “pro bono”
deduction to the amounts billed by SDS in the first half of 2015, applied more
total pro bono write-offs to SDS than any other department, instituted a
policy that under recorded internal work, allocated credit to other
departments for SDS work, failed to support a large project proposal, and
created a new department that competed with SDS and reduced its shared
services credit. Mann stated he believed SDS’s performance “suck[ed]”
because the profit and loss (P&L) statements and monthly management
reports upon which his assessment was based did not accurately reflect the
true amount of work SDS performed.
Spark presented a different perspective on Mann’s employment. Spark
presented evidence that Mann’s interpersonal interactions were creating
problems within the company, Spark employees outside SDS generated more
than twice the revenue per employee than those in SDS, and SDS’s net profit
was approximately 8.7 percent.
Spark also disputed Mann’s testimony that the P&L statement was
misleading or that policy changes were implemented to harm SDS. Spark
presented evidence it changed an internal policy to “double count” SDS
revenue to incentivize other divisions to work with SDS. Likewise, Spark’s
vice-president of finance testified he never changed the P&L statements to
minimize SDS’s numbers and, in fact, he made some modifications at Mann’s
request to benefit SDS.
5
At the close of evidence, Mann moved for nonsuit on Spark’s cause of
action for breach of the personal guaranty. That motion argued the guaranty
required Spark to make a written demand in order to trigger Mann’s
obligation to repay, and Spark had failed to do so. The court denied Mann’s
motion.
The jury returned a split verdict. On Mann’s claims, the jury found in
his favor for nonpayment of wages but found in Spark’s and Soucy’s favor on
the remaining claims. As to the cross-complaint, the jury found in Spark’s
favor for the breach of personal guaranty, but found in Mann’s favor on the
fraud claim.
Mann filed postjudgment motions for new trial and for judgment
notwithstanding the verdict.3 The motion for new trial asserted juror
misconduct and other irregularities, as well as that insufficient evidence
supported the verdicts. Mann submitted a juror declaration alleging the jury
found in Mann’s favor but checked the wrong box when completing the
verdict form for the breach of guaranty claim. The motion for judgment
notwithstanding the verdict asserted insufficient evidence supported the jury
verdicts on Mann’s breach of contract and good faith and fair dealing claims,
and on Spark’s claim for breach of the personal guaranty. The court denied
both motions, concluding substantial evidence supported the verdict, the
juror declaration was inadmissible, and the verdicts were logical and
consistent even if the declaration was admissible.
Judgment was entered and Mann subsequently appealed.
3Mann also filed a postjudgment motion for equitable accounting,
which also was denied, and motions to tax fees and costs and award waiting
time penalties, which were granted in part. However, these issues are not
relevant to this appeal.
6
II. DISCUSSION
A. Standard of Review
In reviewing a verdict, we determine whether any substantial evidence,
contradicted or uncontradicted, supports the jury’s conclusion. (Piedra v.
Dugan (2004) 123 Cal.App.4th 1483, 1489; Shapiro v. Prudential Property &
Casualty Co. (1997) 52 Cal.App.4th 722, 730.) We “must review the entire
record in the light most favorable to the judgment below and presume in
support of the judgment the existence of every fact the trier could reasonably
deduce from the evidence.” (People v. Rivera (2003) 109 Cal.App.4th 1241,
1244.) “ ‘ “It is not our task to weigh conflicts and disputes in the evidence;
that is the province of the trier of fact. Our authority begins and ends with a
determination as to whether, on the entire record, there is any substantial
evidence, contradicted or uncontradicted, in support of the judgment.” ’ ”
(Schwan v. Permann (2018) 28 Cal.App.5th 678, 693.) “ ‘ “[W]hen two or
more inferences can reasonably be deduced from the facts, a reviewing court
is without power to substitute its deductions for those of the trial court. If
such substantial evidence be found, it is of no consequence that the trial court
believing other evidence, or drawing other reasonable inferences, might have
reached a contrary conclusion.” ’ ” (Piedra, at p. 1489, italics omitted.)
B. Breach of Contract and Breach of the Covenant of Good Faith and
Fair Dealing Claims
Mann asserts the jury verdict, which rejected his claims against Spark
for breach of contract and breach of the covenant of good faith and fair
dealing, was not supported by substantial evidence. We disagree.
1. Relevant Law
“The essential elements of a breach of contract claim are: ‘(1) the
contract, (2) plaintiff’s performance or excuse for nonperformance,
(3) defendant’s breach, and (4) the resulting damages to plaintiff.’ ”
7
(Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602,
1614.) While the third element of a breach of contract cause of action is the
defendant’s actual breach, a breach of the implied covenant of good faith and
fair dealing cause of action requires proof the defendant unfairly interfered
with plaintiff’s right to receive the benefits of the contract. The implied
covenant is supplemental to the express contractual covenants. (Racine &
Laramie, Ltd. v. Department of Parks & Recreation (1992) 11 Cal.App.4th
1026, 1031–1032.) It imposes upon each contracting party the duty to do
everything the contract presupposes he or she will do to accomplish its
purpose but cannot be used to create obligations not contemplated by the
contract. (Pasadena Live v. City of Pasadena (2004) 114 Cal.App.4th 1089,
1093–1094.)
2. Analysis
Mann contends the evidence at trial demonstrates Spark intentionally
suppressed SDS’s revenue and profitability numbers in order to interfere
with Mann’s ability to meet the minimum threshold performance
requirement in his employment agreement. Mann further argues Spark
breached the employment agreement by failing to exercise “ ‘reasonable
discretion’ ” in determining SDS’s profitability and by using a “skewed
calculation” of SDS’s performance to justify terminating Mann with cause.
We conclude substantial evidence supports the jury verdict. Spark’s
P&L statements reflected an operating profit of 8.7 percent for SDS—well
below the minimum threshold performance requirement. Spark presented
evidence that Mann acknowledged SDS’s numbers “suck[ed],” and thus it was
justified terminating Mann for cause.
In response, Mann criticizes various aspects of Spark’s financial
statements. First, Mann argues the employment agreement stated shared
8
services credit would be based on actual hours worked, but instead Spark
applied a flat $10,000 credit. The employment agreement, however, could
reasonably be interpreted as anticipating a budget for such work, as it states
any work resulting in shared services credit must be approved “after
submission of a Project Approval form including scope, budget and schedule.”
While it appears Spark may not have had such a form, the language of the
agreement indicates the parties did not anticipate an unlimited budget for
such work. Spark also presented evidence showing the revenue page of the
monthly management report—which Mann received each month—identified
the $10,000 budget for current and future months, and Soucy testified he
communicated the budget to Mann. Cameron McPherson, Spark’s vice-
president of finance, also testified the shared service credit allocated to SDS
was fair because it was based on a budget and “[i]t’s up to [Mann] to decide,
being the manager of the group,” to make sure his staff work within that
budgeted amount.
Next, Mann asserts Spark changed its long-standing policy on
timekeeping to eliminate recording time for any shared services work. As a
result, Mann asserts it was impossible to properly allocate revenue to SDS,
and the change came at a time when demand for SDS to perform shared
services work was increasing. However, changes to timekeeping would only
be relevant if SDS was billing under its $10,000 budget. But the evidence
indicates SDS received credit for the entire $10,000 each month.
Accordingly, changes to timekeeping would not impact the allocated shared
services credits.
Finally, Mann disputes various expense allocations, such as subjecting
SDS to more pro bono write-offs than any other division. At trial, Spark
presented a wide range of evidence regarding its P&L statements and its cost
9
allocation among departments. McPherson and Julie Mann4 testified they
worked together to create SDS’s first P&L statement. Their goal was to
create an accurate and equitable distribution of expenses, and they believed
the P&L statements met that goal. At no point was Soucy involved in the
creation of the P&L statements. However, once they were created, Soucy
reviewed the P&L statements with Mann. On at least two separate
occasions, Mann acknowledged SDS’s results “suck[ed].” In response to his
meetings with Soucy regarding SDS’s performance, Mann’s approach was to
propose a new agreement regarding his compensation. Mann testified his
goal was for a “change in the yardstick that I was being measured on.” At no
point did Mann state his goal was to dispute the numbers being presented
regarding SDS’s performance.
Mann also offered expert testimony from a forensic accountant and
business valuator, Frank Wisehart, in support of his position. Wisehart
testified Spark’s financial records were unreliable, and he created
reconstructed income statements evidencing Mann would have met the
minimum threshold performance in his employment agreement had Spark
properly calculated SDS’s performance. Wisehart testified his reconstructed
income statements were based, in part, on projections and assumptions and
timecard data.
In response, Spark offered evidence undermining the validity of
Wisehart’s approach. Regarding his use of projections, Wisehart
acknowledged on cross-examination that the reconstructed financial
statements “[p]robably” did not reflect what “actually happened.” He further
4Julie Mann worked as the controller for SocialArc and transferred
into Spark as an accounting manager upon SocialArc’s acquisition.
10
acknowledged some of his data was from projections created before Mann
even began working for Spark.
Spark’s expert, Daniel Ray, broadly criticized Wisehart’s reconstructed
financial statements as speculative and unreliable. For example, Wisehart
testified almost all revenue items were derived from timecard data. But Ray
rejected this approach of relying on time records as opposed to bills actually
paid because no business would consider time records reflective of revenue.
Moreover, the employment agreement defined revenue as not just time billed
but time billed “and paid by clients.” Ray also disputed Wisehart’s addition
of approximately $1.4 million of additional revenue based on purported billed
hours not reflected in time records, noted the reconstructed financial
statements’ use of identical gross potential revenues for every quarter of 2015
was highly unusual, and explained the increase in revenue reflected in
Wisehart’s statements did not correspond to the decreased number of SDS
employees over that same period.
Spark also presented evidence supporting their financial records.
Soucy testified Spark’s balance sheets and P&L statements were reviewed
annually by an outside accounting firm, and at no time had that firm ever
raised concerns about Spark’s financial records. And, ultimately, Wisehart
could not say whether any anomalies identified in Spark’s financial data
prevented Mann from reaching the minimum threshold performance required
under his employment agreement.
In sum, Spark presented substantial evidence at trial supporting its
financial records, including its P&L statements, which demonstrated Mann
failed to meet his minimum threshold performance goals and could be
terminated for cause. Likewise, Spark presented substantial evidence that
Mann’s failure to meet such goals was not the result of Spark’s bad faith or
11
its failure to exercise “ ‘reasonable discretion’ ” in determining SDS’s
profitability. Accordingly, the record supports the jury verdict rejecting
Mann’s breach of contract and breach of the covenant of good faith and fair
dealing claims.5
C. Motion for Nonsuit
“On appeal from the denial of a motion for nonsuit, we apply the same
rules that the trial court applied. A defendant is entitled to a nonsuit if we
find that the plaintiff’s evidence is not sufficient as a matter of law to permit
a jury to find in his or her favor. When making this determination, we do not
weigh the evidence or determine the credibility of witnesses, but accept that
view of the evidence most favorable to the plaintiff as true and disregard all
contrary evidence. We indulge in every legitimate inference that may be
drawn from the plaintiff’s evidence. [Citations.] . . . As a motion for nonsuit
raises an issue of law, we review the trial court’s ruling de novo on appeal.”
(A.M. v. Albertsons, LLC (2009) 178 Cal.App.4th 455, 463.)
1. Relevant Background
The personal guaranty executed by Mann states that he, as guarantor,
“unconditionally guarantees and promises (i) to promptly pay to [Spark] . . .
on demand . . . any and all Obligations (as hereinafter defined) consisting of
payments due to [Spark], and, (ii) at [Spark’s] option and not in substitution
for [Mann’s] payment obligations hereunder, to perform on demand any and
all other Obligations in the place of [SocialArc] . . . .” The guaranty further
states it “is absolute, unconditional, continuing and irrevocable and
constitutes an independent guaranty of payment . . . and is in no way
5Because we conclude substantial evidence supports a finding that
Mann failed to meet his performance metrics and thus constitutes cause for
his termination, we need not address whether Spark’s other alleged bases for
good cause termination have merit.
12
conditioned on or contingent upon any attempt to enforce in whole or in part
any of [SocialArc’s] Obligations to [Spark] . . . . If [SocialArc] shall fail to pay
or perform any Obligations to [Spark] which are subject to this Guaranty as
and when they are due, [Mann] shall, promptly pay to [Spark] all such
liabilities or obligations in immediately available funds.”
Section 3 of the guaranty, entitled “Waivers,” states in part Mann
“waives, to the extent permitted by applicable law, . . . (v) all presentments,
demands for performance, notices of non-performance, notices delivered
under the Note, protests, notice of dishonor, and notices of acceptance of this
Guaranty and of the existence, creation or incurring of new or additional
Obligations and notices of any public or private foreclosure sale . . . .”
Section 5(a) of the guaranty provides “all notices or other
communications to or upon [Spark] or [Mann] under this Guaranty shall be
in writing and shall be faxed, mailed or delivered to each party at its
facsimile number or address as set forth below with respect to [Spark] and at
the facsimile number or address set forth on the signature page hereof with
respect to [Mann].” The signature page lists an address in Berkeley,
California for Mann.
Spark subsequently e-mailed monthly invoices to Mann at his Spark e-
mail address. Those invoices identified SocialArc under the “Bill To”
category, listed the principal payment and interest owed, and stated the
invoice was “Due upon receipt.” McPherson also testified a copy of Mann’s
personal guaranty was attached to the e-mails. During the parties’
negotiations over Mann’s termination, Spark sent an e-mail to Mann stating,
“As you know, you have a personal guaranteed note that is due in the amount
of $125,000 and interest is accruing on the note,” and implying future legal
13
action against Spark would result in Spark “seek[ing] an immediate demand
of repayment in full . . . .”
At the close of evidence, Mann moved for nonsuit on Spark’s claim for
breach of the personal guaranty. Mann argued there was no written demand
in the record and, accordingly, Mann had no repayment obligation. In
response, Spark asserted Mann’s obligation under the personal guaranty
automatically arose the moment SocialArc failed to repay its loans. Spark
further noted the jury could construe the e-mails sent to Mann as an
adequate demand. The court denied the motion.
2. Analysis
Generally, “[a] lender is entitled to judgment on a breach of guaranty
claim based upon undisputed evidence that (1) there is a valid guaranty,
(2) the borrower has defaulted, and (3) the guarantor failed to perform under
the guaranty.” (Gray1 CPB, LLC v. Kolokotronis (2011) 202 Cal.App.4th 480,
486 (Gray1).) Mann does not assert Spark failed to prove any of these
elements at trial. He does not dispute the validity of the guaranty or the fact
neither SocialArc nor he has repaid the loans. Rather, he contends Spark
failed to give proper notice of SocialArc’s default and thus his obligation
under the guaranty was never triggered. Mann contends the e-mailed
invoices were insufficient to constitute a demand for payment.
We disagree. Undoubtedly, the guaranty states it is “on demand.” But
that phrase is used to denote the type of obligation rather than impose a
precondition to repayment. Cases discussing the statute of limitations for
such actions provide useful guidance. In such context, courts have uniformly
held “ ‘a cause of action for money payable on demand accrues with the
inception of the obligation and without the necessity for any demand.’ ”
(Carrasco v. Greco Canning Co. (1943) 58 Cal.App.2d 673, 675; see also
14
California First Bank v. Braden (1989) 216 Cal.App.3d 672, 677 [“For a
guaranty, the breach occurs when the note falls due and remains unpaid.
[Citation.] Ordinarily, the statute of limitations commences running upon
the breach.”].) It would be illogical for a guarantor to have no obligation to
pay while, at the same time, the limitations period runs.
Mann cites one case, Gray1, supra, 202 Cal.App.4th 480, to support his
position that a written demand was required to trigger his repayment
obligation under the guaranty. In Gray1, the court addressed whether a
contract signed between the parties constituted a guaranty or a demand note
protected by the antideficiency statutes and the one-action rule. (Id. at
p. 482.) In concluding the agreement was a guaranty, it rejected the
plaintiff’s argument that the phrase “on demand” transmuted the guaranty
into a demand note. (Id. at p. 488.) The court then commented, “The plain
meaning of ‘on demand’ is that the Guarantor’s obligation to pay does not
arise until the Lender demands the Guarantor step in to answer for the debt
of the Borrower. It is not, as the Guarantor would have us conclude, a trigger
to allow the Lender to ignore the Borrower entirely and demand payment by
the Guarantor even in the absence of the Borrower’s default.” (Ibid.)
We do not find Gray1 persuasive as to whether a guaranty payable “on
demand” requires, in fact, a demand as contemplated by Mann to trigger
repayment obligations. Rather, Gray1 focused on whether a contract was a
guaranty or demand note; it did not address the requirements to enforce a
guaranty. Moreover, the court’s passing comment in Gray1 is at odds with
both the above authority and Civil Code section 2807, which provides a
surety or guarantor6 “who has assumed liability for payment or performance
6“The distinction between sureties and guarantors is hereby abolished.
The terms and their derivatives, wherever used in this code or in any other
15
is liable to the creditor immediately upon the default of the principal, and
without demand or notice.” (Civ. Code, § 2807.)
Mann next argues any interpretation of the guaranty that either
excused a need for a demand or interpreted the e-mails to constitute a
demand would “read Sections 1(a) and 5(a) out of the contract.” But Mann’s
interpretation would read other provisions out of the contract—namely,
section 1(a), which stated Mann’s guaranty is “unconditional[ ],” and
section 3(b)(v), which waives in relevant part “all presentments, demands for
performance, [and] notices of non-performance.”
Under statutory rules of contract interpretation, a contract must be
read to give effect to the mutual intention of the parties at the time it was
made. (Civ. Code, § 1636.) Mutual intent is to be inferred, if possible, solely
from the written provisions of the contract. (Id., § 1639.) The court’s function
is to ascertain what, in terms and substance, is contained in the contract, not
to insert what has been omitted or to omit what has been inserted. (Code
Civ. Proc., § 1858.) Applying these rules, we “look first to the language of the
contract in order to ascertain its plain meaning or the meaning a layperson
would ordinarily attach to it.” (Waller v. Truck Ins. Exchange, Inc. (1995)
11 Cal.4th 1, 18.) If there is no ambiguity, the clear and explicit meaning
controls. (Santisas v. Goodin (1998) 17 Cal.4th 599, 608.)
Here, the guaranty is not ambiguous because its various provisions can
be harmonized. The guaranty’s structure as an unconditional promise to pay
on demand is not ambiguous, but rather tracks the definition of a negotiable
instrument. (See Cal. U. Com. Code, § 3104, subd. (a).) Likewise, there is no
conflict between the “on demand” phrasing, the waiver of notice, and the
statute or law of this state now in force or hereafter enacted, shall have the
same meaning as defined in this section.” (Civ. Code, § 2787.)
16
notice provisions. As explained above, the waiver of presentment, demands
for performance, and notices of nonperformance, comply with the
requirements of Civil Code section 2807. And, “[i]n the great majority of
cases, presentment is waived with respect to notes. In most cases, a formal
demand for payment to the maker of the note is not contemplated. . . . If
payment is not made when due, the holder usually makes a demand for
payment, but in the normal case in which presentment is waived, demand is
irrelevant, and the holder can proceed against indorsers where payment is
not received.” (10 Cal.Jur.3d (2021) Bills and Notes, § 194, fns. omitted.)
Finally, Mann argues Spark failed to make a “proper” demand. But he
does not identify any authority suggesting demands, to the extent they are
required, must be presented in any specific form. In fact, courts have held
the mere filing of a suit can amount to a demand. For example, in Root v.
American Equity Specialty Ins. Co. (2005) 130 Cal.App.4th 926, the court
reasoned, “a suit, even an unserved suit, easily fits several of the definitions
of ‘demand’ as an ordinary person might think of the word demand. ‘The
action or fact of demanding or claiming in legal form; a legal claim . . . . To
ask for (a thing) with legal right or authority; to claim as something one is
legally or rightfully entitled to.’ ” (Id. at p. 933; see Bloom v. Bender (1957)
48 Cal.2d 793, 799–800 [guarantor received proper notice of her obligation
because the filing and serving of a lawsuit against her “constituted sufficient
notice of default”].)
Here, the e-mails sent to Mann included the invoices identifying the
unpaid principal and interest. And McPherson provided undisputed
testimony that Mann’s personal guaranty—under which he was liable for the
17
unpaid amounts—was also attached to those e-mails. Accordingly, these e-
mails sufficiently alerted Mann of his obligation to repay the loan amounts.7
III. DISPOSITION
The judgment is affirmed. Defendants Spark Public Relations, LLC
and Alan Soucy may recover their costs on appeal. (Cal. Rules of Court,
rule 8.278(a)(1), (2).)
7Because we conclude the trial court did not err in denying Mann’s
motion for nonsuit, we need not address his argument that such error was
prejudicial. Likewise, we need not address Mann’s request that this court
order an accounting on remand because we affirm the underlying judgment.
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MARGULIES, J.
WE CONCUR:
HUMES, P. J.
BANKE, J.
A155257
Mann v. Spark Public Relations, LLC
19