California Court of Appeals, Fourth District, First Division
PACIFIC CORPORATE GROUP HOLDINGS, LLC, Plaintiff, Cross-defendant and Appellant,
THOMAS KECK, Defendant, Cross-complainant and Appellant.
APPEALS from orders and a judgment of the Superior Court of San Diego County, No. 37-2007-00105668-CU-CO-CTL Joan M. Lewis, Judge.
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
Pettit Kohn Igrassia & Lutz, Douglas A. Pettit and Jenna H. Leyton-Jones for Plaintiff, Cross-defendant and Appellant.
Edelson & Rezzo and L. B. Chip Edelson for Defendant, Cross-complainant and Appellant.
Pacific Corporate Group Holdings, LLC (PCGH) brought this action against its former employee, Thomas Keck, seeking to collect on a promissory note. Keck defended against the action by claiming that any money that he owed PCGH was offset by monies that PCGH owed him. Keck also filed a cross-complaint against PCGH seeking damages for unpaid bonus and severance payments that he claimed were due him pursuant to two employment agreements. In a special verdict, the jury found that PCGH owed Keck $270, 547.95 under the terms of a 2006 employment agreement (2006 Agreement). PCGH filed a motion for judgment notwithstanding the verdict (JNOV) or for new trial on the ground that there was no substantial evidence to support the jury's finding that the parties entered into the 2006 Agreement. The trial court denied PCGH's motion. Keck filed a motion for additur, or in the alternative, for a new trial on damages, on the ground that the jury had awarded inadequate damages in light of the bonus and severance provisions in the 2006 Agreement. The trial court granted Keck's motion, and issued an additur and conditional order granting a new trial on damages. PCGH refused to consent to the additur, and thus, the trial court's order directing a new trial on damages became effective. Both parties subsequently filed motions for attorney fees, which the court denied.
PCGH filed two appeals seeking reversal of the judgment; the trial court's order denying its motion for new trial and JNOV; the trial court's order granting Keck's motion for additur, or, in the alternative, a new trial on damages; and the trial court's order denying its motion for attorney fees. Keck filed an appeal from the trial court's order denying his motion for attorney fees.
The trial court's order granting a new trial on damages resulted in a vacatur of the underlying judgment. Accordingly, we conclude that we lack appellate jurisdiction to consider PCGH's appeals from the judgment, the trial court's order denying its motion for new trial, and the trial court's order
denying attorney fees. We also conclude that we lack appellate jurisdiction to consider Keck's appeal from the trial court's order denying attorney fees. We affirm both the trial court's order denying PCGH's motion for JNOV and the trial court's order granting Keck's motion for additur, or in the alternative, a new trial on damages. We remand the matter to the trial court with directions to conduct a new trial on damages and any other necessary proceedings.
II. FACTUAL AND PROCEDURAL BACKGROUND
A. The trial
PCGH is an investment advisory firm. In 2005, PCGH hired Keck pursuant to a July 8, 2005 letter agreement (2005 Agreement). The 2005 Agreement stated in relevant part:
"On or prior to June 30, 2006 you shall receive a $100, 000 incentive compensation payment as an advance on the 2006 Bonus and such payment shall be deducted from the final 2006 Bonus amount determined by [PCGH] for the fiscal year ending December 31, 2006."
Keck never received any bonus pursuant to this provision of the 2005 Agreement.
Keck signed a promissory note in favor of PCGH in exchange for a $200, 000 loan in March 2006.
In the fall of 2006, Keck engaged in negotiations with PCGH, including with its chairman and chief executive officer, Christopher Bower, concerning both a new employment agreement and a new equity sharing agreement. PCGH made a written offer of employment to Keck on November 30.
Keck signed the offer, and, on December 1, sent Bower an e-mail informing him that he had signed the 2006 Agreement. Bower responded by sending Keck an e-mail that stated, "Great."
On November 30, 2006, PCGH paid Keck a signing bonus of $50, 684.93, as required by the terms of the 2006 Agreement. Samantha Sacks, PCGH's former senior vice-president of accounting and finances, authorized the payment because PCGH's management gave her the 2006 Agreement and instructed her to pay the bonus. It was Sacks's understanding that the 2006
Agreement "was final." Bower also informed a representative of the California Public Employee Retirement System (CalPERS), an important client of PCGH's, that the 2006 Agreement had been finalized.
PCGH terminated Keck on December 12, 2006, after learning that Keck had called CalPERS in order to caution CalPERS to carefully read the terms of the new equity sharing agreement at PCGH.
At trial, Keck acknowledged that he had paid nothing out-of-pocket to repay the March 2006 promissory note. However, Keck contended that any money that he owed PCGH on the note was offset by amounts that PCGH owed him under the 2005 Agreement and the 2006 Agreement.
B. The jury's verdict and the judgment
The parties agreed to a special verdict form that began by stating, "The parties agree that [PCGH] loaned $200, 000 to [Keck], he signed a Promissory Note dated March 21, 2006, and he has not made any payment." The jury found that PCGH owed Keck "$100, 000 for a bonus payment due on or about June 30, 2005,  payable to Keck or payable for his use in repayment of the Promissory Note." The jury also found that PCGH and Keck entered "a new employment contract, [the 2006 Agreement], replacing his initial employment agreement of July 8, 2005, based upon the terms of a November 2006 offer of employment." The jury further found that PCGH "fail[ed] to do something that [the 2006 Agreement] required it to do, " and that this failure caused Keck to suffer $270, 547.95 in damages.
The trial court entered a judgment that recited the jury's special verdict and stated, "Accordingly, it appearing by reason of said special verdict and pursuant to Code of Civil Procedure, section 431.70,  PCGH's recovery of $200, 000 shall be offset by Keck's recovery of $370, 547.95." The judgment further stated, "The Court enters judgment for [Keck] against [PCGH] in the net monetary amount of $170, 547.95."
C. The postjudgment motions
Keck filed a motion for additur, or in the alternative, for a new trial limited to the issue of his damages. Keck also filed a motion for attorney fees.
PCGH filed a motion for new trial, or in the alternative, for JNOV. PCGH also filed a motion for attorney fees.
The trial court denied PCGH's motion for new trial or JNOV, granted Keck's motion for additur or new trial on damages,  and denied both parties' motions for attorney fees.
D. The appeals
PCGH filed a notice of appeal that stated that PCGH was appealing the judgment; the trial court's order denying PCGH's motion for new trial or in the alternative, JNOV; and the trial court's order granting Keck's motion for additur, or in the alternative, a new trial on damages. PCGH filed a separate notice of appeal of the trial court's order denying its motion for attorney fees.
Keck filed an appeal from the trial court's order denying his motion for attorney fees.
A. The scope of the claims reviewable on appeal
We first consider, sua sponte, whether we have appellate jurisdiction over all of the claims raised in PCGH's appeals and Keck's appeal. (See e.g., Drum v. Superior Court (2006) 139 Cal.App.4th 845, 849 [43 Cal.Rptr.3d 279] ["because the timeliness of an appeal poses a jurisdictional issue, we must raise the point sua sponte"].) For reasons explained below, we conclude that we lack appellate jurisdiction to consider several of the claims raised in
the briefing on appeal, in light of the fact that the trial court granted Keck's motion for new trial on damages and vacated the judgment.
"When a motion for a new trial is granted the judgment is vacated." (Marshall v. Brown (1983) 141 Cal.App.3d 408, 414 [190 Cal.Rptr. 392] (Marshall).) This is true even where the trial court grants only a partial new trial. (See Beavers v. Allstate Ins. Co. (1990) 225 Cal.App.3d 310, 329 [274 Cal.Rptr. 766] (Beavers).) The Beavers court explained: "[T]he rule is settled that the portions of the judgment which are not subject to the new trial order are nevertheless not appealable. The courts have reasoned that the new trial order has the effect of vacating the entire judgment and holding in abeyance the portions which are not subject to a new trial until one final judgment can be entered. [Citations.] As [one] court explained it in the context of a new trial on the single issue of damages, the 'superior court judgment was set aside in its entirety when the court granted a new trial as to damages....' [Citation.] 'As there can be only a single judgment in an action, if the order granting the limited new trial of damages is to stand, there will be no final judgment until the trial of that issue ends and the determination of the appeal, if any, from the then judgment.' " (Ibid.)
In light of this authority, we lack jurisdiction to consider PCGH's claim that the trial court erred in denying its motion for new trial. The trial court's new trial order vacated the judgment, and "it has long been settled that an order denying a motion for new trial is not independently appealable and may be reviewed only on appeal from the underlying judgment." (Walker v. Los Angeles County Metropolitan Transportation Authority (2005) 35 Cal.4th 15, 19 [23 Cal.Rptr.3d 490, 104 P.3d 844], italics omitted; see City of Los Angeles v. Glair (2007) 153 Cal.App.4th 813, 819-820 [63 Cal.Rptr.3d 280] [dismissing appeal from order denying motion for new trial because "order denying a new trial motion is not separately appealable, " and appeal could not be construed as one from the judgment under the circumstances of the case].)
We reject PCGH's contention that we may review the denial of its motion for new trial pursuant to authority that, "One who moves for a new trial on all issues and obtains a new trial only on limited issues is an aggrieved party who has a right of appeal from the new trial order." (Ferraro v. Pacific Fin. Corp. (1970) 8 Cal.App.3d 339, 355 [87 Cal.Rptr. 226] (Ferraro).) Ferraro, and the case law cited in Ferraro in support of this proposition, is premised on the fact that any aggrieved party may appeal from an order granting a new trial, even the party that moved for the new trial and had its motion granted in part. (See, e.g., Spencer v. Nelson
(1947) 30 Cal.2d 162 [180 P.2d 886] (Spencer).) However, there is no authority that stands for the proposition that
a party may appeal from an order denying a new trial, simply because that party has properly appealed from an order granting another party's new trial motion.
Further, while PCGH argues that it would be anomalous for this court to affirm an order granting a new trial on damages and to consider claims that go to liability in a subsequent appeal, given the limited nature of an interlocutory appeal from an order granting a motion for new trial, that is precisely the outcome that case law contemplates. (Marshall, supra, 141 Cal.App.3d at p. 414; King v. Goldberg (1958) 159 Cal.App.2d 543, 545 [323 P.2d 1035] [" 'It is true that certain findings of fact have been left undisturbed. When the issue selected for retrial has been tried, and findings thereon have been made, and a new judgment entered, the appeal, if any be taken, will come as an appeal from that judgment, and may include a review of the entire record, ' " quoting Universal Film Mfg. Co. v. Kerrigan (1920) 47 Cal.App. 255, 257 [190 P. 475])]; accord Beavers, supra, 225 Cal.App.3d at p. 329; Love v. Wolf (1967)249 Cal.App.2d 822, 840 [58 Cal.Rptr. 42].) For ...