Robi v. Five Platters, Inc.

• Decision Date: 14 November 1990
• Docket Number: No. 89-55433,89-55433
• Citation: 918 F.2d 1439
• Parties: , 16 U.S.P.Q.2d 2015 Martha ROBI, Plaintiff-Appellee, v. FIVE PLATTERS, INC., Jean Bennett, and Buck Ram, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1439

918 F.2d 1439

18 Fed.R.Serv.3d 1013, 16 U.S.P.Q.2d 2015

Martha ROBI, Plaintiff-Appellee, v. FIVE PLATTERS, INC., Jean Bennett, and Buck Ram,

Defendants-Appellants.

No. 89-55433.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Oct. 1, 1990.

Decided Nov. 14, 1990.

Cheri S. O'Laverty and Richard A. Rosen, Los Angeles, Cal., for defendants-appellants.

Allen Hyman, Nagler & Schneider, Beverly Hills, Cal., for plaintiff-appellee.

Appeal from the United States District Court for the Central District of California.

Before PREGERSON, REINHARDT and HALL, Circuit Judges.

OPINION

PREGERSON, Circuit Judge:

Paul Robi, ¹ former member of the successful musical group "The Platters," brought this action against Buck Ram, the group's former manager, Ram's corporation, "Five Platters, Inc." (hereinafter, "FPI"), and FPI President Jean Bennett. Robi sought declaratory relief, cancellation of FPI's "Platters" trademark registration, damages for intentional interference with contractual relations and prospective economic advantage, and injunctive relief.

This is the second time this case has come before us on appeal. The first appeal arose after the district court granted a preliminary injunction preventing FPI from conducting vexatious litigation or interfering with Paul Robi's use of "The Platters" name. In granting the injunction, United States District Judge Consuelo Marshall gave claim preclusive res judicata effect to a prior action brought by FPI against Robi in a California Superior Court regarding its rights to "The Platters" trademark. After trial in that prior state action (hereinafter, "the 1974 Decision"), Superior Court Judge William Levit made specific findings and entered judgment for Paul Robi. ²

On the first appeal, we upheld the district court's preliminary injunction and held that the 1974 Decision generated both claim preclusion and issue preclusion against FPI which prevented FPI from further challenging Paul Robi's use of the name "The Platters." See Robi v. Five Platters, Inc., 838 F.2d 318 (9th Cir.1988). ³

After we affirmed the preliminary injunction, the action continued in the district court. Prior to trial, the district court granted Robi's motion for summary adjudication of issues pursuant to Fed.R.Civ.P. 56(c) and 56(d) and adopted the findings set forth in the 1974 Decision. After a 20-day bench trial, the district court entered judgment for Paul Robi on all causes of action, set forth numerous findings of fact and conclusions of law, which included the 1974 Decision's findings, and ordered FPI to pay Robi $1,510,000 in compensatory damages and $2,000,000 in punitive damages.

The district court later amended the judgment twice: first, to cancel FPI's trademark, "The Platters," and enter a permanent injunction prohibiting FPI from challenging Paul Robi's right to use "The Platters" name; and later, to clarify that all three of FPI's registered "Platters" marks were to be canceled.

FPI appeals both the judgment as amended and the summary adjudication of issues. We affirm the grant of summary adjudication, the damage awards, and the cancellation of all the "Platters" trademarks.

I. SUMMARY ADJUDICATION OF ISSUES

Whether res judicata or collateral estoppel operates to bar claims is a mixed question of law and fact which this court reviews de novo. Springs v. First National Bank of Cut Bank, 835 F.2d 1293, 1295 (9th Cir.1988). A summary judgment motion brought pursuant to Fed.R.Civ.P. 56(c) is a proper way to establish claim preclusion and issue preclusion. See Takahashi v. Board of Trustees of Livingston Union School District, 783 F.2d 848 849 (9th Cir.1986), cert. denied 476 U.S. 1182, 106 S.Ct. 2916, 91 L.Ed.2d 545 (1986). Issue preclusion precludes relitigation of all issues actually litigated and necessarily decided in prior proceedings. Robi, 838 F.2d at 322.

In the prior appeal in this case, we determined that the 1974 Decision generated issue preclusion against FPI. Robi, 838 F.2d at 327. Our prior ruling also rejected FPI's argument, made again here, that the issue of "The Platters" trademark was not raised in the 1974 Decision. Specifically, we found that FPI entered its registration of the mark into evidence in that action and advanced various legal theories to support its claim to the group name. Id. at 323. Thus, the district court did not err in adopting the 1974 Decision's findings--which under the doctrine of issue preclusion are deemed conclusive in subsequent actions--in its summary adjudication of issues.

II. DAMAGES FOR INTENTIONAL INTERFERENCE WITH CONTRACTUAL RELATIONS

A. Compensatory damages

The district court's findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous. Fed.R.Civ.P. 52(a); Rozay's Transfer v. Local Freight Drivers, Local 208, 850 F.2d 1321, 1326 (9th Cir.1988) cert. denied, 490 U.S. 1030, 109 S.Ct. 1768, 104 L.Ed.2d 203 (1989). Particular deference must be paid to the district court's credibility findings. Id. 109 S.Ct. at 1327, citing Anderson v. City of Bessemer City, 470 U.S. 564, 579-80, 105 S.Ct. 1504, 1514, 84 L.Ed.2d 518 (1985). The district court's computation of damages, which is a finding of fact, will not be set aside unless clearly erroneous. Galindo v. Stoody Co., 793 F.2d 1502, 1516 (9th Cir.1986).

To establish a claim of intentional interference with contractual relations under California law, Paul Robi had to show (1) that he had valid and existing contracts; (2) that FPI had knowledge of his contracts and intended to induce their breach; (3) that the contract was in fact breached; (4) that the breach was caused by FPI's wrongful conduct; and (5) that Robi suffered damage. ⁴ See Olivet v. Frischling, 104 Cal.App.3d 831, 837, 164 Cal.Rptr. 87, 89-90 (1980).

Ample evidence existed to support the district court's findings that FPI defendants damaged Paul Robi's business and professional reputation, including:

1) Over 50 letters and telegrams written by parties associated with FPI to numerous trade magazines, booking agents, promoters, and performance venues claiming that Robi had no right to perform as The Platters and threatening to sue anyone who hired or promoted Robi. The evidence included correspondence sent by FPI after the district court entered its preliminary injunction enjoining such activity.

2) Testimony of three music producers who stated that FPI representatives told them that Robi's group was phony and had no rights to the name "The Platters;" that the representatives threatened to put Robi out of business and threatened them with litigation; and that but for FPI's actions, they would have hired and promoted Robi in more frequent and lucrative bookings.

3) Testimony of Paul and Martha Robi regarding the income and business opportunities lost as a result of FPI's interference.

While some of the Robis' testimony may have been conflicting, we defer to the trial court's findings regarding the credibility of the various witnesses. See Rozay's Transfer, 850 F.2d at 1327. Although Paul Robi did not present his own business records, ⁵ he did present ample written evidence of FPI's harassing behavior, which the court determined was intended to and did discourage parties from hiring or promoting him.

In calculating the compensatory damage award, the district court assumed that, but for interference from FPI, Paul Robi's group would have grossed at least as much, if not more than, FPI's group. The court then took the most conservative difference between the two groups' gross earnings for the period in question and applied Paul Robi's lowest profit rate, as established by the testimony of several witnesses.

It is well-established under California law that while the fact of damages must be clearly shown, the amount need not be proved with the same degree of certainty, so long as the court makes a reasonable approximation. See, e.g., Hutcherson v. Alexander, 264 Cal.App.2d 126, 135, 70 Cal.Rptr. 366, 372 (1968); Johnson v. Cayman Dev. Co., 108 Cal.App.3d 977, 983, 167 Cal.Rptr. 29, 32 (1980); 6 Witkin, Summary of California Law, Sec. 1325 at 782 (9th ed.1988). Under the Restatement (2d) of Torts, once an injured person proves that his business would have been profitable, he need not prove precisely "the amount of the profits he would have made or the amount of harm that the defendant has caused"; rather, he need only "present such evidence as might reasonably be expected to be available under the circumstances." Rest.2d of Torts, Sec. 912(d) at 482.

The seminal California case regarding uncertainty as to the amount of damages in a tort action is Hutcherson v. Alexander, 264 Cal.App.2d 126, 70 Cal.Rptr. 366. Hutcherson involved a dispute between neighboring business owners over a large sign erected by one owner which blocked the other establishment from the public's view. The trial court concluded that although it was clear that the plaintiff owners had suffered business losses, the evidence regarding the amount of the damages was insufficient, because the business had only recently been established. Rather than attempt to estimate the plaintiffs' damages, the trial court retained jurisdiction over the matter in order to fix plaintiffs' damages at a later date.

On appeal, the California Court of Appeals ruled that the trial court erred in refusing to estimate damages at the close of trial. The appellate court held that because the trial court had determined that the defendant's conduct in fact damaged the plaintiffs, and because the evidence was speculative only in the sense that the court "could not calculate the damages with certainty," the court "should have nevertheless resorted to the best evidence available and fixed damages accordingly." Id. at 135, 70 Cal.Rptr. 366.

In the present case, the district court attempted to do just that. After Paul Robi established the fact of damages through testimony by several witnesses that his...