Judge: Joseph Lipner, Case: 20STCV45192, Date: 2025-03-05 Tentative Ruling

Case Number: 20STCV45192    Hearing Date: March 5, 2025    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

            Defendant Global Win Capital Corporation (“Global Win”) moves for judgment notwithstanding the verdict or, in the alternative, a new trial.

            The Court tentatively DENIES the motion.  It would be most helpful to the Court if at the hearing counsel for both sides are prepared to support arguments concerning the matters discussed below with specific citations to the record.   

Motion for Judgment Notwithstanding the Verdict

            Defendant moves for Judgment Notwithstanding the Verdict (“JNOV”) on the grounds that there is no substantial evidence on at least one element of each cause of action on which the jury found for Plaintiff Jeffrey Yang (“Yang”).  Each of these elements involved hotly disputed fact issues on which the jury found for Yang. 

The general verdict in favor of Yang on each claim “implies findings in favor of the prevailing party on all material issues. If the evidence supports implied findings on any set of issues that will sustain the verdict, it is assumed that the jury found in favor of the prevailing party on those issues. (Wilson v. County of Orange (2009) 169 Cal.App.4th 1185.)  There is ample evidence in the record to support the jury’s liability determinations in favor of Yang.

Legal Standard

            Code of Civil Procedure section 629 states that “[t]he court, before the expiration of its power to rule on a motion for a new trial, either of its own motion, after five days’ notice, or on motion of a party against whom a verdict has been rendered, shall render judgment in favor of the aggrieved party notwithstanding the verdict whenever a motion for a directed verdict for the aggrieved party should have been granted had a previous motion been made.” (Code Civ. Proc. § 629.)

            A JNOV motion ordinarily challenges whether the evidence was sufficient to prove the claims or defenses asserted by the opposing party and now embodied in the jury’s verdict. (Moore v. San Francisco (1970) 5 Cal.App.3d 728, 733-34; see Martin v. Ideal Packing Co. (1957) 156 Cal.App.2d 232, 235 [a JNOV motion is “in the nature of a demurrer to the evidence”].) It thus has the same function as a motion for nonsuit or directed verdict, the only difference being that the JNOV motion lies after a verdict for the opposing party has been rendered. (Beavers v. Allstate Ins. Co. (1990) 225 Cal.App.3d 310, 327; CC-California Plaza Assocs. v. Paller & Goldstein (1996) 51 Cal.App.4th 1042, 1050.)   

            All evidence supporting the verdict is presumed true, so the issue is whether the facts constitute a prima facie case or defense as a matter of law.  (Fountain Valley Chateau Blanc Homeowner's Ass’n v. Department of Veterans Affairs (1998) 67 Cal.App.4th 743, 750.) “The court may not weigh evidence, draw inferences contrary to the verdict, or assess the credibility of witnesses. The court must deny the motion if there is any substantial evidence to support the verdict.” (Begnal v. Canfield & Assocs., Inc. (2000) 78 Cal.App.4th 66, 72.  

            A JNOV motion is governed by the same rules that govern a motion for directed verdict or nonsuit. (Hauter v. Zogarts (1975) 14 Cal.3d 104, 110; Rollenhagen v. City of Orange (1981) 116 Cal.App.3d 414, 417 [disapproved on other grounds in Brown v. Kelly Broadcasting Co. (1989) 48 Cal.3d 711, 738].) Further, a JNOV motion “may be granted only if it appears from the evidence, viewed in the light most favorable to the party securing the verdict, that there is no substantial evidence in support.” (Sweatman v. Department of Veterans Affairs (2001) 25 Cal.4th 62, 68; Wolf v. Walt Disney Pictures & Television (2008) 162 Cal.App.4th 1107, 1137-38.) A JNOV in favor of a defendant is proper “only where, disregarding conflicting evidence on behalf of the defendants and giving to plaintiff's evidence all the value to which it is legally entitled, therein indulging in every legitimate inference which may be drawn from that evidence, the result is a determination that there is no evidence of sufficient substantiality to support a verdict in favor of the plaintiff.” (See Reynolds v. Wilson (1958) 51 Cal.2d 94, 99.)  

Yang’s Breach of Contract Claim

            Global Win argues that it is entitled to judgment on the breach of contract claim because of lack of evidence that Yang performed the contract and lack of evidence that Yang resigned for good reason. 

Global Win first argues that it is undisputed that Yang violated his contractual obligations to devote full time and attention to Global Win’s business, to provide undivided loyalty to Global Win, and to refrain from devoting any time to any outside business that would interfere with or derogate from his obligations to Global Win without approval from Global Win’s Board.  (Mot. at 11:7-11.)  This was the argument that Global Win presented to the jury at trial and that the jury rejected.  Far from being based on undisputed evidence, these issues were hotly contested and there was substantial evidence supporting the general verdict in favor of Yang.

The contract language on which Global Win relies reads as follows:  “Executive agrees to devote his best efforts, energies, and skill to the discharge of the duties and responsibilities attributable to his position, and to this end will devote his full time and attention exclusively to the business and affairs of the Company.  Executive recognizes that, during the period of Executive’s employment hereunder, Executive owes an undivided duty of loyalty to the Company.  Executive agrees that, without the approval of the Board, Executive shall not devote any time to any business affiliation which would interfere with or derogate from Executive’s obligation under this Agreement other than that with the Company, its parents, subsidiaries or affiliates.”  (Exhibit 17-2.) 

This is a complex contractual term.  Global Win argues for its most restrictive meaning so that any work Yang did other than for Global Win violates the contract.  Yang points out that the last sentence implies that only business affiliations that conflict with Yang’s obligations require board approval, and that this sentence is consistent with an understanding that obligations that do not conflict are permissible and do not require board approval.  Moreover, while Yang agreed to devote his “full time and attention” exclusively to the business and affairs of the Company, Yang contended at trial that the parties agreed that he could also work on other endeavors on his own time, rather than during business hours.  Each party submitted substantial though conflicting evidence at trial that supported their interpretations.

Yang submitted evidence that his side venture, RREPAC, was for a liquid aseptic packing business idea that was entirely unrelated to Global Win’s bulk cardboard business and thus did not conflict.  Yang testified that both Chairman Wu and Kevin Jiang approved of Yang’s business, and the jury was permitted to accept that testimony.  Yang also offered the idea to Global Win which was not interested.  He got permission for his travels to Brazil, where he did work for Global Win from Kevin Jiang, and there was no interference with his work.  He testified that he fulfilled his obligations to Global Win and that RREPAC did not interfere with his work for Global Win.  While the jury could have accepted the various contrary arguments that Global Win makes in its motion, it did not do so.

Yang also presented substantial evidence that he had good reason to resign.  This includes, for example, evidence that the internal audit report was a pretext to manufacture grounds for Plaintiff’s termination. Moreover, there was substantial evidence that Global Win changed Yang’s job duty in a manner inconsistent with his position as chief financial officer and materially diminished his authority.  While Global Win characterizes this as an immaterial change, there is disputed evidence on this point and the jury was entitled to determine that the changes were material.

Yang’s Whistleblower Retaliation Claim

Global Win argues that there is no evidence to show that he disclosed Global Win’s alleged engagement in illegal activities to someone with authority over Yang or an employee with authority to investigate the non-compliance. (Mot. at 14:7-12.)  Plaintiff testified that he reported the alleged illegal activity to Ellis Liu, the director of human resources and  to CEO Junming Shu.  The evidence at trial established that these high-ranking individuals within the corporation satisfied the requirement for the reporting obligation.

Motion for New Trial

Legal Standard

Code of Civil Procedure section 657 provides, in pertinent part, as follows: 

The verdict may be vacated and any other decision may be modified or vacated, in whole or in part, and a new or further trial granted on all or part of the issues, on the application of the party aggrieved, for any of the following causes, materially affecting the substantial rights of such party: 

1. Irregularity in the proceedings of the court, jury or adverse party, or any order of the court or abuse of discretion by which either party was prevented from having a fair trial. 

2. Misconduct of the jury; and whenever any one or more of the jurors have been induced to assent to any general or special verdict, or to a finding on any question submitted to them by the court, by a resort to the determination of chance, such misconduct may be proved by the affidavit of any one of the jurors. 

3. Accident or surprise, which ordinary prudence could not have guarded against. 

4. Newly discovered evidence, material for the party making the application, which he could not, with reasonable diligence, have discovered and produced at the trial. 

5. Excessive or inadequate damages. 

6. Insufficiency of the evidence to justify the verdict or other decision, or the verdict or other decision is against law. 

7. Error in law, occurring at the trial and excepted to by the party making the application. 

When a new trial is granted, on all or part of the issues, the court shall specify the ground or grounds upon which it is granted and the court’s reason or reasons for granting the new trial upon each ground stated. 

A new trial shall not be granted upon the ground of insufficiency of the evidence to justify the verdict or other decision, nor upon the ground of excessive or inadequate damages, unless after weighing the evidence the court is convinced from the entire record, including reasonable inferences therefrom, that the court or jury clearly should have reached a different verdict or decision. 

(Code Civ. Proc. § 657.) A motion for new trial is a creature of statute and the Court may grant a new trial only by conforming to the statutory procedures.¿ (Sanchez-Corea v. Bank of America (1985) 38 Cal.3d 892, 899-900.)¿ Further, under Article VI, section 13, of the California Constitution, no judgment shall be set aside or new trial granted unless, after an examination of the entire cause, including the evidence, the Court shall be of the opinion that the error complained of has resulted in a miscarriage of justice.¿ (In re Marriage of Steiner & Hosseini (2004) 117 Cal. App. 4th 519, 526.)¿

            As an initial matter, contrary to Global Win’s argument, the Court after weighing the evidence is not “convinced from the entire record, including reasonable inferences therefore, that the . . . jury clearly should have reached a different verdict or decision” (Code Civ. Proc. § 657) on the liability determinations that Global Win’s motion challenges.  The Court therefore proceeds to discuss the one other argument that Global Win asserts in its new trial motion.

Inconsistent Verdict

            Global Win argues that the jury’s general verdict in favor of Global Win on the claim for breach of fiduciary duty is inconsistent with the general verdict in favor of Yang for breach of contract.  Global Win is not correct.

            Verdicts are inconsistent when they are “beyond possibility of reconciliation under any possible application of the evidence and instructions.”  (Oxford v. Foster Wheeler LLC (2009) 177 Cal.App.4th 700 [citation omitted].)  If any conclusions could be drawn thereunder which would explain the apparent conflict, the jury will be deemed to have drawn them.”  (Ibid.)  Global Win does not demonstrate inconsistent verdicts under this exacting standard.

            The jury could have easily found that Yang violated his fiduciary duty to Global Win in one narrow respect—failing to return the housing allowance that was provided to him—while also finding that Yang did “substantially all” of the “significant things” that the contract obligated him to do by fulfilling his duties to Global Win in all other respects.  Indeed, that is what appears to have been what the jury determined, given that the jury awarded damages to Global Win of only $41,000, which was in the approximate amount of the housing allowance.

            To prevail on its argument, Global Win would have to show that an executive who violates his fiduciary duty to his employer, no matter how limited or insignificant the breach, automatically forfeits all of his or her rights under the employment contract.  No case of which the Court is aware has such a Draconian rule of law. 

Global Win’s cases do not support such a legal argument and are therefore inapposite.  (See Fowler v. Varian Associates, Inc. (1987) 196 Cal.App.3d 34, 41-42 [justifying discharge of marketing manager who, while still employed, attempted to form competing company and refused to reveal information about company to employer]; Mamou v. Trendwest Resorts, Inc.  (2008) [employee may not use principal’s time, facilities, or proprietary secrets to build a competing business].)  None of these cases involved failing to return a housing allowance. To the extent that Global Win is arguing that the jury’s fiduciary duty verdict means that it agreed that Yang was unlawfully competing with Global Win, Global Win is not entitled to such an interpretation of the verdict on this motion.   indeed, the jury appears to have concluded no such thing given the limited damage award in favor of Global Win which tracks the funds relating to the housing allowance.