Judge Kerry Bensinger, Case Number: 22STCV30867, Date: 2025-03-24 Tentative Ruling

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RESPONDING PARTY: Defendants Santa Barbara Asset Management and Nuveen Investments, Inc.

This action arises from a breach of employment agreement. Plaintiff James R. Boothe “Boothe” or “Plaintiff”) was the Portfolio Manager and Chief Investment Officer for Santa Barbara Asset Management (“SBAM”). During his employment, SBAM was twice acquired by two separate entities, Nuveen Investments, Inc. (“Nuveen”) in 2005, and TIAA-CREF (“TIAA”) in 2014. Shortly after the TIAA acquisition, Booth entered into a new employment agreement (“Employment Agreement”) with SBAM and Nuveen. As relevant here, the Employment Agreement gave Boothe the right to resign for “Good Reason” if his employment was “moved, consolidated, or otherwise transferred to any other Affiliate” and if Boothe did not retain the ability to hire and fire members of his team.

In 2017, Boothe’s employment was moved from SBAM/Nuveen to a division of TIAA. On March 14, 2019, Boothe met with Nuveen executive William Huffman (“Huffman”) regarding unfilled vacancies in SBAM. Boothe alleges that he orally requested to fill vacancies, and Huffman denied Boothe’s request. Thereafter, Boothe resigned from his position on June 7, 2019, citing the foregoing grounds as the “Good Reason” for his resignation. Boothe argued that by resigning for a “Good Reason,” SBAM and Nuveen (hereafter, “Defendants”) were required to pay Boothe a pro rata bonus, enhanced severance, one year of benefits and his unvested equity. Defendants refused to pay Boothe the foregoing compensation.

On September 21, 2022, Plaintiff filed this action against Defendants seeking estimated damages of $12 million. Plaintiff also requested for pre- and post-judgment interest.

At the Final Status Conference, as well as in Defendant’s motion in limine to exclude Plaintiff’s damages expert, Peter Wrobel, from testifying at trial, Defendants indicated they agreed with Mr. Wrobel’s damages calculations and were “fine with the number he came up with.” (Siegel Decl., Ex. D, p. 40:24-26.)

The case proceeded to a jury trial. At trial, Mr. Wrobel testified that Boothe’s damages were $10,115,539. Defendants did not cross-examine Mr. Wrobel on the damages calculation.

On January 23, 2025, the jury returned a verdict in Plaintiff’s favor and awarded damages in the sum of $10,115,539.

On January 30, 2025, Plaintiff filed this Motion for Entry of Prejudgment Interest.

Civil Code section 3287 provides, in pertinent part, as follows: “A person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in the person upon a particular day, is entitled also to recover interest thereon from that day.”¿ (Civ. Code, § 3287(a).)¿¿¿

The test for recovery of prejudgment interest is whether the defendant actually knows the amount owed or could have computed the amount from reasonably available information.¿ (See Children’s Hospital & Medical Center v. Bonta (2002) 97 Cal.App.4th 740, 774 (Children’s Hospital).)¿ Prejudgment interest is not authorized only in those cases where the amount of damage—as distinguished from liability—depends on the judicial determination of conflicting evidence and is not ascertainable from truthful data supplied by the claimants to the debtors. (Id.) “Damages are deemed certain or capable of being made certain within the provisions of subdivision (a) of § 3287 where there is essentially no dispute between the parties concerning the basis of computation of damages if any are recoverable but where their dispute centers on the issue of liability giving rise to damage.”¿ (Esgro Central, Inc. v. General Insurance Co. (1971) 20 Cal.App.3d 1054, 1060.)¿

Plaintiff seeks an award of prejudgment interest pursuant to Civil Code section 3287(a) on his sole cause of action for breach of contract. Plaintiff argues an award of $5,639,412.99 in interest is mandatory because his damages were certain or capable of being made certain by calculation and Defendants did not dispute Plaintiff’s damages at trial.

The court agrees. First, Plaintiff’s damages were calculable by applying a formula set forth in Section 4(a) of the April 1, 2015 Amended and Restated Employment Agreement (the “Employment Agreement”). (Tr. Ex. 45.) Under Section 4(a), the parties agreed that Defendants would pay Plaintiff (1) a “prorated bonus”; and (2) an “Enhanced Severance Amount” after resigning for a “good reason.” (Id.) The prorated bonus is equal to Plaintiff’s bonus for the calendar year prior to leaving his employment with Defendants (2018), prorated for the number of days Plaintiff worked in 2019. The “Enhanced Severance Amount” is the greater of $3.5 million or “20% of the projected annual Net Revenues” of SBAM at the time of Plaintiff’s termination. Plaintiff’s damages were capable of being made certain by calculation. The issue at trial was liability, not calculation of damages.

Second, Defendants did not dispute Plaintiff’s damages calculation. At trial, Plaintiff’s damages expert testified that Plaintiff’s damages were $10,115,539. Defendants did not cross-examine Mr. Wrobel on the damages calculation. Indeed, prior to trial, Defendants stipulated to this exact amount. (See Siegel Decl., Ex. D. p. 40-24-26.)

Defendants argue damages were uncertain because (1) Plaintiff estimated $12 million in damages in his Complaint; (2) the Enhanced Severance Amount is based on projected revenue which is “categorically uncertain”; (3) Plaintiff retained a damages expert to opine on damages, and (4) Plaintiff’s right to the payments did not vest on a date certain because Plaintiff failed to execute a release as required by the Employment Agreement. As explained in Plaintiff’s reply, none of these arguments have merit.

Accordingly, pursuant to Civil Code section 3287, subdivision (a), Plaintiff is entitled to a mandatory award of prejudgment interest. Using the date of August 21, 2019, the day after Defendants could have timely paid Plaintiff his prorated bonus and Enhanced Severance following Plaintiff’s termination for good reason, and up to March 18, 2025, Plaintiff calculates the prejudgment interest in the amount of $5,639.412.99 at the rate of ten percent per annum.

Based on the foregoing, Plaintiff’s motion for prejudgment interest is GRANTED. Plaintiff is awarded interest in the sum of $5,639.412.99. Daily interest of $2,769.48 will continue to accrue until judgment is entered.

Kerry Bensinger

Judge of the Superior Court