Miller v. Collectors Universe, Inc.

• Decision Date: 30 August 2007
• Docket Number: No. G036432.,G036432.
• Citation: 154 Cal.App.4th 1047,65 Cal.Rptr.3d 351
• Court: California Court of Appeals Court of Appeals
• Parties: William W. MILLER, Plaintiff, Cross-defendant and Appellant, v. COLLECTORS UNIVERSE, INC., Defendant, Cross-complainant and Appellant.

65 Cal.Rptr.3d 351

154 Cal.App.4th 1047

William W. MILLER, Plaintiff, Cross-defendant and Appellant, v. COLLECTORS UNIVERSE, INC., Defendant, Cross-complainant and Appellant.

No. G036432.

Court of Appeal, Fourth District, Division 3.

August 30, 2007.

Boudreau, Albert & Wohlfeil, LLP, Joel R. Wohlfeil, Andrew S. Albert, San Diego; Ross, Dixon & Bell, LLP, and Jon R. Williams for Plaintiff, Cross-defendant and Appellant.

Attlesey & Thomlinson, LLP, Keith A. Attlesey, Laguna Beach, Suzanne M. Shaw; and Armen R. Vartian for Defendant, Cross-complainant and Appellant.

OPINION

IKOLA, J.

Under Civil Code section 3344, subdivision (a) (section 3344(a)), a person who knowingly and' without authorization uses another's name on goods, or to advertise, sell, or solicit purchases of goods or services, is liable to the injured party for statutory damages of $750 or actual damages suffered "as a result of the unauthorized use," whichever is greater, as well as profits from the unauthorized use, discretionary punitive damages, and attorney fees and costs. In this case, a jury found by special verdict that Collectors Universe, Inc. (Collectors), used the name of William W. Miller without his consent on 14,060 certificates opining to the authenticity of various collectible autographs and memorabilia. Each certificate corresponded to a separate and different collectible item. The parties disagree—starkly—on the consequence of the jury's finding. In Miller's view, the jury's special verdict entitles him to $10,545,000 in statutory damages, calculated by multiplying 14,060 by $750. Collectors, in contrast, insists Miller's statutory damages are limited to $750 for the single use of his name on all the certificates. The correct assessment of statutory damages turns on the interpretation of section 3344(a) and the application of that statute to the facts in this case.

We hold that under the facts shown by the evidence in this case, Miller had but a single cause of action for wrongful appropriation of his name, thereby limiting his statutory damages to $750. Because the entire trial was premised upon a ruling in limine erroneously interpreting and applying section 3344(a), we reverse for a new trial.

FACTS

Prior to July 2000, Miller and his brother-in-law, Darrell Talbert, cofounded and co-owned Odyssey Group and Odyssey Publications (collectively "Odyssey"). Odyssey Publications published the Autograph Collector Magazine and other publications. Odyssey Group sold and auctioned celebrity autographs and memorabilia, specializing in entertainment and historical categories.

In July 2000, Collectors purchased Odyssey from Miller and Talbert for a purchase price of $810,000¹ and employed both men as officers of the newly created Odyssey division of Collectors. . Collectors engaged in auctioning and selling collectibles. In addition, various divisions of Collectors offered services grading and authenticating stamps, sports cards, coins, and autographs. The division of Collectors that authenticated autographs and autograph memorabilia was PSA/DNA Authentication Services (PSA/DNA). In 2003, PSA/DNA primarily authenticated sports autographs, but sought to expand into historical, political, and entertainment categories, and discussed these plans with Miller. The type of authentication services offered by PSA/DNA involved third party authentication, "where a customer submits an autograph to [be authenticated] for a fee." Miller, in contrast, throughout his collectibles career had performed first party authentication for Odyssey, i.e., authenticating items he personally acquired for Odyssey for resale.

PSA/DNA charged each third party customer a minimum authentication fee of $50; the fee varied depending on whether the customer requested a certificate of authenticity or a letter of authenticity. Each letter of authenticity cost more than $50 and consisted of a letter size sheet of paper bearing a detailed description of the authenticated item and a corresponding serial number. A certificate of authenticity, in contrast, cost $50 and was a 3-by 5inch index card stating, "This item has been examined by PSA/DNA and it is our unwavering opinion that the item is genuine."² Thus, a certificate did not identify or describe in writing the authenticated item. The index card certificates were distinguishable from one another only by an individualized serial number. Regardless of whether a certificate or letter documented an authentication, the authenticated item was marked with DNA ink visible only under a laser lamp. In their appellate briefs, both Miller and Collectors refer to certificates of authenticity and letters of authenticity collectively as "COA's." We adopt that terminology for collective reference to those documents.

Between December 2003 and August 2004, Collectors printed approximately 50,000 certificates of authenticity, each bearing Miller's typed name (not his signature) with the typed names of five other individuals under the heading "Expert Committee." Upon a customer's request for a letter of authenticity in lieu of a certificate, PSA/DNA affixed a serial number to the letter and discarded the unused certificate of authenticity linked to that serial number, so that the total number of COA's sold during this period never exceeded 50,000. Each letter of authenticity was signed "[o]n behalf of the PSA/DNA Authentication Team" by one of the five experts other than Miller, and beneath this handwritten signature were imprinted the names and signatures of all six team members, including Miller.

Collectors terminated Miller's employment in May 2004.³ In a May 23, 2004 email message, Miller angrily informed Collectors' chief executive officer, Michael Haynes, that he (Miller) had never been a PSA/DNA authenticator.⁴ Haynes emailed back that he would "immediately make sure [Miller's] name [was] not associated with [PSA/DNA]." Thereafter, Collectors sold no authentications represented by letters of authenticity bearing Miller's name. Collectors did, however, sell some authentications backed by certificates of authenticity bearing his name. The reason for Collectors' continued.use of Miller's name on certificates of authenticity after his termination, according to PSA/DNA's president, was that PSA/DNA needed "a couple of weeks to round up some of the authenticators who had been traveling at the time, and to also wait for some of the new preprinted certificates that did not have [Miller's] name on [them]."⁵ Ultimately, PSA/DNA issued between "a few thousand" and 14,000 COA's after Miller's termination and possibly even after June 30, 2004, the date Miller's attorney demanded that PSA/DNA cease using Miller's name on COA's.

In August 2004, Miller sued Collectors for common law invasion of privacy and for violating section 3344(a). Collectors cross-complained for misappropriation of trade secrets, breach of contract, and conversion. In phase one of a bifurcated trial (prior to jury selection), Judge Sheila Fell heard argument on whether Miller was entitled under section 3344(a) to recover $750 in statutory damages per COA issued by Collectors without his consent. Judge Fell agreed with Miller's position that "750 can be applied for each violation," and clarified that her ruling was based "mostly" on "the legislative intent." The corresponding minute order reports the court ruled: "For each prohibited authentication, plaintiff is permitted to recover the statutory amount of: 1. Actual damages or $750.00 (whichever is greater); 2. Profits realized by defendant's unauthorized use; 3. Punitive damages; and, 4. Attorneys fees and costs." (Italics added.)

Phase two of the bifurcated trial was held before Judge Robert Monarch, apparently due to "conflicts in Judge Fell's calendar." Before commencing his case-in-chief, Miller dismissed with prejudice his claims for common law invasion of privacy and punitive damages.

Judge Monarch instructed the jury with CACI No. 1804 defining the elements of a section 3344 claim as follows: "Plaintiff claims that defendant violated his right to privacy. To establish this claim, plaintiff must prove all of the following: [¶] 1. Defendant knowingly used plaintiffs name on merchandise or to sell products or services; [¶] 2. Defendant did not have plaintiffs consent; [¶] 3. Defendant's use of plaintiffs name was directly connected to defendant's commercial purpose; [¶] 4. That plaintiff was harmed; and, [¶ ] 5. That defendant's conduct was a substantial factor in causing plaintiffs harm."

As to the potential damages under section 3344(a), the jury was instructed with a modified version of CACI No. 1821 (proposed by Miller) that, unlike the standard instruction, removed the assessment of damages other than profits from the jury's purview. The modified version given to the jury provided: "If you decide that plaintiff has proved his claim against defendant, the court will calculate and award damages, if any, for the certificates of authenticity defendant issued without plaintiffs consent. [¶] In addition, plaintiff may recover any profits that defendant received from the use of plaintiffs name. To establish the amount of such profits, you must: [deduct defendant's expenses from the gross revenue from such use.]" Under the standard CACI No. 1821 not given here, entitled "Damages Under Civil Code Section 3344," the jury "must decide how much money will reasonably compensate [name of plaintiff] for the harm" and award him or her $750 if the plaintiff fails to prove damages such as humiliation, embarrassment, mental distress, and harm to reputation, or proves "an amount of damages less than $750."

The jury was given a modified special verdict form modeled on CACI Verdict Form No. VF-1804. Whereas the standard form asks the jury to compute the plaintiffs damages itemized as past economic loss, future economic loss, past noneconomic loss, and future noneconomic loss, the modified form omitted the question, but...