Cove, Inc. v. Mora

• Citation: 172 Cal.App.3d 97,218 Cal.Rptr. 7
• Parties: The COVE, INC., a California corporation, Plaintiff, Cross-Defendant and Appellant, v. Jett S. MORA, et al., Defendants, Cross-Complainants and Appellants. Civ. B009694.
• Decision Date: 12 September 1985
• Court: California Court of Appeals Court of Appeals

Page 7

218 Cal.Rptr. 7

172 Cal.App.3d 97

The COVE, INC., a California corporation, Plaintiff, Cross-Defendant and Appellant, v. Jett S. MORA, et al., Defendants, Cross-Complainants and Appellants.

Civ. B009694.

Court of Appeal, Second District, Division 5, California.

Sept. 12, 1985.

As Modified Sept. 27, 1985.

Certified for Partial Publication ^*

Review Denied Nov. 20, 1985.

MacDonald, Halsted & Laybourne, Orville A. Armstrong, Prof. Corp., Darlene E. Rabe and Gary L. Urwin, Los Angeles, for appellant, The Cove.

Joseph S. Fischbach, Beverly Hills, for appellants, Jett S. Mora and Priscilla B. Mora.

HASTINGS, Associate Justice.

Plaintiff, cross-defendant and appellant, The Cove, Inc. (the Cove) appeals a court order granting a new trial to defendants, cross-complainants, Jett S. Mora and Priscilla B. Mora (the Moras), and from an order denying the Cove attorneys' fees pursuant to section 1717 of the California Civil Code.

The Moras owned the Chancellor Hotel located in Los Angeles, California. When they purchased the hotel, the Cove was a lessee of a portion of the premises which it operated as a restaurant. The parties became embroiled in numerous disputes over their respective rights and duties as lessor and lessee. The Cove eventually filed a one-count multi cause of action complaint alleging breach of lease, trespass, and seeking declaratory and injunctive relief. The Moras filed a cross-complaint seeking a declaration that the lease was voidable and damages for breach of lease, nuisance and other causes of action. Both the complaint and cross-complaint sought attorneys fees.

After a six-week jury trial, the jury returned a general verdict in favor of the Cove in the amount of $18,000 actual damages and $60,000 punitive damages. The Cove had sought damages for lost profits of approximately $263,000 and punitive damages of $900,000. The court entered judgment in accordance with the jury verdict. The court sitting without a jury granted the Cove's request for an injunction, denied that of the Moras, and adjudicated the remaining issues in favor of the Cove.

The Moras moved for a new trial and judgment notwithstanding the verdict. The evidence submitted in support of the motion was a set of five identical declarations from five members of the jury. Each declaration stated:

"I, [Juror], say and declare as follows:

"That I was one of the jurors in this action. That I am submitting this declaration based upon facts within my personal knowledge at the request of (the Moras' counsel).

"That the jury specifically found that the plaintiff did not prove by a preponderance of the evidence that the conduct of Mr. Mora proximately caused lost profits. Our award of $18,000 is for general emotional upset/pain and suffering.

"I declare under penalty of perjury that the foregoing is true and correct to the best of my knowledge.

"Executed this ____ day of December 1983, at Los Angeles, California.

"/s/ [Juror]" In granting the new trial, the minute order of the court contains the following: "The defendants' (the Moras') motion for new trial against Plaintiff (the Cove) is granted on the issue of damages only. Said ruling is based on the declarations of jurors showing that the jury had unlawfully rewarded compensatory damages on a nonexistent legal theory. (Krouse v. Graham, 19 Cal.3d 59, 80-82, 137 Cal.Rptr. 863, 562 P.2d 1022.) Absent compensatory damages, there is no basis for punitive damages."

The Cove contends the court abused its discretion in granting the new trial because it relied on inadmissible evidence as defined by section 1150 of the California Evidence Code. ¹

Based upon the requirements of this section, the Cove argues that none of the declarations set forth any overt, objectively verifiable acts or statements of any juror or jurors. Instead they contain only conclusional language on the collective mental process of the jury that purports to rationalize the basis for its supposedly erroneous verdict. The foundation for this argument, it claims, is found in People v. Hutchinson, 71 Cal.2d 342, 78 Cal.Rptr. 196, 455 P.2d 132, and People v. Hall, 108 Cal.App.3d 373, 380, 166 Cal.Rptr. 578. In Hutchinson 71 Cal.2d at page 350, 78 Cal.Rptr. 196, 455 P.2d 132, the court in construing section 1150 stated "The only improper influences that may be proved under section 1150 to impeach a verdict ... are those open to sight, hearing, and the other senses and thus subject to corroboration." In Hall, the court noted, 108 Cal.App.3d at pages 380-381, 166 Cal.Rptr. 578, "The declarations which appellant sought to introduce simply asserted, in identical language, each juror's belief and intent at the time he or she signed the verdict. They made no references to any objective events which might account for their asserted mistakes, much less to any objective evidence of misconduct. In short, they presented no admissible evidence of jury misconduct.... We conclude that the trial court did not err in granting a motion to strike the declarations, and in denying the motion for a new trial."

The trial court was not impressed with the Cove's argument and in granting the new trial stated that it relied on the case of Krouse v. Graham, 19 Cal.3d 59, 80-82, 137 Cal.Rptr. 863, 562 P.2d 1022. In Krouse there were four identical juror declarations alleging that "several jurors commented" on their belief that plaintiff's counsel would be paid one-third of the total award. The declarations further recite that the jury "considered" this belief and its award to Mladinov (the plaintiff) was "determined" by adding $30,000 for legal fees to the $60,000 the jury estimated Mladinov would require to hire a helper for ten years. The defendants moved to strike the declarations on the twin grounds that they contained inadmissible evidence and involved the "mental processes" of the jurors. The Supreme Court opinion (by Justice Richardson) discusses Evidence Code section 1150, subdivision (a), and People v. Hutchinson, supra, 71 Cal.2d 342, 78 Cal.Rptr. 196, 455 P.2d 132. In commenting on the jurors' declarations the opinion states, "An assertion that a juror privately 'considered' a particular matter in arriving at his verdict, would seem to concern a juror's mental processes, and declarations regarding them, accordingly, would be inadmissible under section 1150. It is not clear from the record whether the jury's treatment of attorneys' fees constituted 'overt acts objectively ascertainable' and thus admissible or rather may more properly be described as evidence of the jury's 'subjective reasoning processes' and thus excludable, all as more fully developed in Hutchinson.... [p] Although the declarations before us are inconclusive regarding the nature and extent of any open discussion or agreement between the jurors regarding the subject of attorneys' fees, they do concur in alleging that the Mladinov verdict was inflated by $30,000 to compensate her for her attorneys' fees. This, of course, is a serious matter and, without indicating our own views as to the merits, we conclude that the declarations, taken together, raise an issue of sufficient moment that, in fairness, the declarations should have been admitted and considered by the court in its ruling upon defendant's motion for new trial." (19 Cal.3d at pp. 81-82, 137 Cal.Rptr. 863, 562 P.2d 1022.)

With the Krouse, Hutchinson, and Hall cases in mind, we turn to some of the colloquy between the court and counsel at the hearing on the motion for a new trial because it helps to pinpoint the court's reasoning and the Cove's argument.

"MR. ARMSTRONG [the Cove's counsel]: What I read here [the declarations] is it says that the jury specifically found that the plaintiff did not prove by a preponderance of the evidence that the conduct of Mr. Mora proximately caused loss profits.

"That statement is not any declaration as to what one juror said or what one juror did. As...