Opinion
G056437
04-30-2020
PUI FUNG CHAN, et al., Plaintiffs, Cross-Defendants and Appellants, v. ROBERT MICHAEL HAROUTOONIAN, et al., Defendants, Cross-Complainants and Respondents.
Clark Hill and Richard H. Nakamura Jr.; Law Offices of Tony M. Lu and Tony M. Lu; Law Offices of Wynn Kwok and Wynn Kwok; and David Olson Law Group and David Olson for Plaintiffs, Cross-Defendants and Appellants Pui Fun Chan, TT Global aka TagTrends Global, Limited, and Princo Global, Inc. Law Offices of Glenn H. Johnson and Glenn H. Johnson for Defendants, Cross-Complainants and Respondents TagTrends, Inc. and Brand Genetix, Inc. Robert Michael Haroutoonian, in pro. per., for Defendant, Cross-Complainant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2012-00582125) OPINION Appeal from a posttrial order of the Superior Court of Orange County, John C. Gastelum, Judge. Affirmed and remanded with directions. Clark Hill and Richard H. Nakamura Jr.; Law Offices of Tony M. Lu and Tony M. Lu; Law Offices of Wynn Kwok and Wynn Kwok; and David Olson Law Group and David Olson for Plaintiffs, Cross-Defendants and Appellants Pui Fun Chan, TT Global aka TagTrends Global, Limited, and Princo Global, Inc. Law Offices of Glenn H. Johnson and Glenn H. Johnson for Defendants, Cross-Complainants and Respondents TagTrends, Inc. and Brand Genetix, Inc. Robert Michael Haroutoonian, in pro. per., for Defendant, Cross-Complainant and Respondent.
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This appeal is from an order granting a new trial in a complex and bitter business dispute. The underlying litigation concerns a once-thriving business turned upside down, with longtime colleagues accusing each other in a complaint and cross-complaint of wrongs like breach of contract, interference with contractual relations, and outright theft of a business and business assets. The case is unusual in its denouement: After a six-week trial, the jury failed to credit either side's version of events. Instead, the jury found both sides proved their conflicting claims and awarded each nominal damages.
The trial court granted a motion for new trial on the ground the verdict was a "compromise verdict." In other words, the court concluded the verdict was against law because the jury compromised on liability, necessitating a new trial on all claims. We affirm.
I
BACKGROUND
Some undisputed foundational facts are helpful to understanding the issues in this appeal. Plaintiff and cross-defendant Pui Fung Chan (Chan) came to know defendant and cross-complainant Robert Michael "Hart" Haroutoonian (Hart) in 1999 when they both worked for Labeltex, a company engaged in the "trim business." The trim business produces items like buttons, labels and tags used in the manufacture of clothing. Typically, the trim business is a bi-national enterprise, with a United States company doing sales and marketing, and a Hong Kong trading company doing "fulfillment" of the orders. The Hong Kong company hires factories in China to produce the ordered trim pieces, negotiating pricing and production, and ensuring samples and finished products meet customer specifications.
In 1999, Hart and Chan worked either end of the trim business for Labeltex. Hart, based in the U.S., was a salesperson and vice-president of sales for Labeltex; Chan, based in Hong Kong, was merchandising operations manager and handled fulfillment for Hart's accounts. (RT 54; 757.) The two became friends; Chan was best man at Hart's wedding.
In March 2003, Hart left Labeltex and formed two trim companies, tagTrends, Inc. (tagTrends), based in California, and tagTrends Asia, based in Hong Kong. Chan soon joined tagTrends Asia, agreeing to run the fulfillment side of Hart's new enterprise. Hart owned 100 percent of tagTrends, but agreed to give Chan 10 percent of the profits of tagTrends Asia. Hart and Chan did not put this, or any later agreement with each other, in writing.
Hart's new trim enterprise enjoyed early success. Through tagTrends, Hart generated sales orders from prestigious clients in the United States, such as Abercrombie & Fitch and Quicksilver, and placed the orders with tagTrends Asia, who fulfilled the orders working with Chinese factories and sold the goods to tagTrends at cost. TagTrends Asia also filled orders it received directly from other customers. TagTrends Asia was cash positive within two months and profitable that first year. Between 2004 and 2006, tagTrends Asia enjoyed strong growth, and through 2007 it remained profitable. Problems arose, however, with the 2008 worldwide financial crisis. We turn, at this point, to the charges Chan and Hart leveled against each other in the complaint and cross-complaint. A. Chan's Complaint
1. Factual Allegations
Chan alleged the following facts in his complaint:
In mid-2008, tagTrends Asia began to suffer financial difficulties because of Hart's activities. In March 2009, Chan and Hart orally agreed that because Hart could no longer finance tagTrends Asia, Chan would form his own company, tagTrends Global, to carry on the same business at tagTrends Asia's existing location (the March 2009 Agreement). Under this agreement, tagTrends Global would take over the existing employees and other tangible assets, liabilities and resources of tagTrends Asia, and tagTrands Global would handle all new orders from April 2009 forward. The parties further agreed not to wind down tagTrends Asia at this stage because it was owed a lot in outstanding receivables. Chan would run the United States operations related to both tagTrends Global and tagTrends, and Hart would work for tagTrends Global only as a salaried salesperson.
At trial, Chan testified to a factual scenario in which Hart essentially used tagTrends Asia as a piggybank, borrowing large sums of money to finance other new business ventures in the United States, and failing to pay accounts receivable owed by tagTrends to tagTrends Asia. Chan testified tagTrends's outstanding receivables were "around 1.5 million to 2 million" by July 2008. Chan testified Hart was personally so overextended in 2008 that, when the financial crisis hit, Hart could not supply the cash tagTrends Asia needed to meet its obligations to the Chinese factories producing the goods ordered.
Shortly after the parties reached this agreement, Chan informed tagTrends Asia's tagTrends Global would hand all future orders. Chan had Hart, as a board member of tagTrends Asia, sign a novation agreement by which tagTrends Global was allowed to take over the existing lease in Hong Kong.
A year later, Hart and Chan reached a second agreement (the July 2010 Agreement) in which Hart agreed to leave tagTrends Global, give up all of his ownership interests in tagTrends and tagTrends Asia, and start his own business with a different trade name, giving up his rights to use the tagTrends brand name.
2. The Causes of Action Against Hart
Chan alleged Hart breached the March 2009 and July 2010 contracts and interfered with tagTrends Global's contractual relations when Hart continued to use the tagTrends trade name and informed tagTrends Global's customers Chan and tagTrends Global had stolen Hart's business, were falsely claiming to be a successor of tagTrends, and had misappropriated tagTrends' trade secrets and other confidential information. Chan alleged he and tagTrends Global lost significant business because of Hart's accusations. Chan sought a constructive trust on the profits Hart made by using the tagTrends name brand, a declaration that he, and not Hart, has the right to use the tagTrends name brand, and an injunction prohibiting Hart from informing Chan's customers that he was wrongfully using the tagTrends name brand. B. Hart's Cross-Complaint
Chan stated his claims against Hart and Hart's companies, tagTrends and Brand Genetix, Inc. (collectively, Hart).
1. Factual Allegations
Hart alleged the following facts in his operative second amended cross-complaint:
Hart never agreed to give tagTrends or tagTrends Asia to Chan. Instead, Chan fraudulently and deceitfully schemed to steal tagTrends' and tagTrends Asia's business from Hart. Chan began to steal Hart's business and money in late 2008. First, Chan falsely claimed Hart needed to send tagTrends Asia hundreds of thousands of dollars because it could not meet its financial obligations. When Hart sent the requested money, however, Chan did not use it for tagTrends Asia but instead, funneled that money into Chan's own personal account or that of tagTrends Global. Next, in the Spring of 2009, Chan made numerous intentional misrepresentations to Hart to induce Hart to change the tagTrends name to tagTrends Global. Chan claimed the new name would show customers that tagTrends had a broader reach beyond the United States and Asia.
While Hart believed Chan's representations tagTrends (including tagTrends Asia) was merely undergoing a name change, Chan was actually diverting tagTrends's and tagTrends Asia's business assets, including money, customer accounts, employees, proprietary and trademarked processes, and goodwill to an entirely new entity—tagTrends Global—a company owned entirely by Chan. Contrary to Chan's allegations, Hart never agreed to establish tagTrends Global as a new entity that would assume all the assets and business of tagTrends and tagTrends Asia. Additionally, Chan misrepresented to Hart that a novation agreement for the Hong Kong office lease was needed to reflect tagTrends's "name change" to tagTrends Global. In fact, that fraudulently induced novation allowed Chan to effectively transfer the lease and all equipment in the building to tagTrends Global for its operations to the exclusion of tagTrends and tagTrends Asia.
In the Spring of 2010, under the guise of trying to increase efficiencies, Chan asked Hart for all information related to tagTrends's employees and then secretly met with those employees to convince them to work with Chan at tagTrends Global (or its American affiliate, Princo Global) in exchange for raises, equity in the company and promotions, misrepresenting that Hart would be out of the company in three months.
Chan then used his tagTrends Asia e-mail account to notify all of tagTrends' and tagTrends Asia's customers tagTrends had changed its name to tagTrends Global and had a new address, so that customers would believe tagTrends Global was merely a corporate rebranding, and would send all purchase orders and payments directly to tagTrends Global. Chan also falsely informed all the customers of tagTrends and tagTrends Asia that Hart had left the companies, making up lies about his alleged departure.
2. The Causes of Action Against Chan
Hart asserted a cause of action against Chan and tagTrends Global (collectively, Chan) for fraud, alleging Chan misrepresented to Hart that tagTrends Asia was merely changing its name to tagTrends Global, when in fact tagTrends Global was a new and separate entity in which Hart had no interest, ownership, or control. These misrepresentations enabled Chan to transfer to tagTrends Global all of tagTrends' and tagTrends Asia's customers, assets, employees, reputation and goodwill, without Hart's knowledge or consent. Hart also asserted causes of action against Chan for breach of fiduciary duty, conversion, tortious interference with contract, tortious interference with prospective economic advantage, and unfair competition based on fraudulent business practices and false advertising, as well as equitable claims for a constructive trust and accounting. C. The Jury Verdicts on the Complaint and Cross-Complaint
Trial was bifurcated, with claims at law tried first to the jury, and equitable claims tried before the trial court. After six weeks in trial and three days into its deliberations, the jury returned its verdicts.
On the complaint, the jury found Hart breached the March 2009 Agreement and the July 2010 Agreement and awarded Chan $2 in compensatory damages for each breach of contract. The jury found Hart and tagTrends both intentionally interfered with Chan's contractual relations and awarded Chan $3 from each of them. Chan's total damage award was $10.
On the cross-complaint, the jury found Chan made intentional misrepresentations to Hart which Hart reasonably relied on to his detriment. The jury awarded Hart $1 in compensatory damages. The jury further found by clear and convincing evidence Chan acted with fraud, malice or oppression in causing Hart's damages. The jury found Chan breached his fiduciary duty to Hart, but found that breach was not a substantial factor in causing Hart harm. The jury found against Hart and in favor of Chan on the remaining claims in the cross-complaint. Hart stipulated to a punitive damages award of $2.
In the second phase of the trial, the trial court denied each side's request for equitable relief, concluding the jury's factual findings on the legal issues "bind the trial court when granting ancillary equitable remedies based on the same facts." D. The New Trial Motion
Hart filed a motion for new trial under Code of Civil Procedure section 657 (section 657) on three grounds: insufficiency of the evidence, inadequacy of damages, and "error of law/irregularity of the proceedings[.]" Hart expressed the essence of the new trial motion as follows: "[T]he jury returned a verdict that contains contradictory findings of fact, and awarded each side a mere handful of dollars, despite the fact that experts for both sides agreed that the companies in dispute (i.e., tagTrends and tagTrends Asia) were worth many millions of dollars." Hart asserted the jury reached "a compromise verdict . . . to shorten their deliberations."
The trial court agreed and granted Hart's motion for new trial "on all issues[.]" In a one-page written order, the court explained its reasoning as follows: "Here, the jury found in favor of the Cross-Complainants and against [Chan] on the Cross-Complainants' [cause of action] for intentional misrepresentation with a finding of malice. However, the jury only awarded $1 in damages. The [second amended cross-complaint (SAC)] pleads many acts of 'fraud' (see [SAC] ¶57 a-k); however the gravamen of all of the bad acts is that Chan stole, through fraud, tagTrends' and tagTrends Asia's business. Certainly if the Jury agreed with Hart that Chan accomplished this theft through fraud, more than $1 is owed to compensate Hart for the loss. Furthermore, even if the only 'fraud' the jury found was, for instance, taking possession of the books—again, $1 does not suffice as damages for that alleged fraud.
"'When the issue of liability is sharply contested, and the jury awards inadequate damages, the only reasonable conclusion is the jury compromised the issue of liability, and a new trial is required. (Rose v. Melody Lane (1952) 39 Cal.2d 481, 488-489 [(Rose)].) A divided verdict provides further indicia there was a compromise. (Wilson v. R. D. Werner Co. (1980) 108 Cal.App.3d 878, 884 [(Wilson)].)' (Shaw v. Hughes Aircraft Co. (2000) 83 Cal.App.4th 1336, 1346 [(Shaw)].)
"Here, the parties strongly disagreed as to whether Hart willingly agreed, or was fraudulently induced to agree, to transfer tagTrends and tagTrends Asia to Chan. That the jury found there was an agreement to transfer the business to Chan, but that there was also fraud involved in the transfer which damage amounted to $1—leads this Court to believe that the jury compromised the issue of liability—and thus, a new trial is required. That is, the divided verdict coupled with the nominal damages awarded establishes the jury somehow compromised the issue of liability."
The order concluded with the statement a new trial "is granted on all issues and the verdict set aside in its entirety."
II
DISCUSSION
A. Law Governing Motions for New Trial
"The authority of a trial court in this state to grant a new trial is established and circumscribed by statute. [Citation.] Section 657 sets out seven grounds for such a motion: (1) 'Irregularity in the proceedings'; (2) 'Misconduct of the jury'; (3) 'Accident or surprise'; (4) 'Newly discovered evidence'; (5) 'Excessive or inadequate damages'; (6) 'Insufficiency of the evidence' [or the verdict is against law]; and (7) 'Error in law.' [¶] . . . Section 657 . . . provides: '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.'" (Oakland Raiders v. National Football League (2007) 41 Cal.4th 624, 633-634.)
The standard of review applicable to an order for new trial is "highly deferential." (Lane v. Hughes Aircraft Co. (2000) 22 Cal.4th 405, 409 (Lane).) The Supreme Court set forth the standard as follows: "[A]n order granting a new trial under section 657 'must be sustained on appeal unless the opposing party demonstrates that no reasonable finder of fact could have found for the movant on [the trial court's] theory.' [Citation.] Moreover, '[a]n abuse of discretion cannot be found in cases in which the evidence is in conflict and a verdict for the moving party could have been reached . . . .' [Citation.] In other words, 'the presumption of correctness normally accorded on appeal to the jury's verdict is replaced by a presumption in favor of the [new trial] order.' [Citation.]" (Id. at p. 412; see also Johnson & Johnson Talcum Powder Cases (2019) 37 Cal.App.5th 292, 336-337 ["'An order granting a new trial "will not be disturbed unless a manifest and unmistakable abuse of discretion clearly appears"'"].) B. Chan Fails to Demonstrate Error in the Order for New Trial
Chan launches two separate lines of attack on the trial court's order granting a new trial. Neither succeeds.
1. The Order is Not "Defective"
Chan argues the new trial order is "defective because it contains a legally inadequate specification of reasons as to why the trial court deemed Hart's damages inadequate." Chan first complains the order fails to "identify deficiencies 'in the evidence,'" and he asserts a new trial order "must point to the evidence in the record that either supports, or does not support," the findings in issue.
Chan's primary argument for finding the order defective, however, is that the order "does not say who, or what, [the trial court] believed or disbelieved on the issue of damages." Chan points to the following "pertinent part" of the order: "'Certainly if the Jury agreed with Hart that Chan accomplished this theft through fraud, more than $1 is owed to compensate Hart for the loss. Furthermore, even if the only "fraud" the jury found was, for instance, taking possession of the books—again, $1 does not suffice as damages for that alleged fraud.'"
Chan contends this language shows the trial court did not exercise its independent judgment and decide whether Hart's nominal damages were inadequate. Instead, Chan asserts, the court "sidestepped its fact-finding role" and acted upon its "assumption about what the jury did." Chan concluded his argument with the following assertion: "In lieu of making an independent call, the order recites a series of 'ifs' as to the jury's findings phrased in terms of ultimate facts like 'theft' or fraud. But who or what did the trial court believe as to theft or fraud? What evidence, in the trial court's independent judgment, rose to the level of a 'theft' by Chan?"
In other words, Chan argues the court's specification of reasons is deficient because (1) it does not state explicitly the court believed Chan committed theft or fraud, and (2) does not cite the evidence supporting that belief. All of these arguments are off target, however, because they fail to address the essence of the trial court's reasoning.
The court did not order a new trial because it disagreed with the jury's findings on damages or liability. The court granted a new trial because it concluded the jury compromised on liability. In other words, the court concluded the jury did not decide liability based on the evidence; instead, the jury impermissibly decided liability based on a compromise. (See Rose, supra, 39 Cal.2d at p. 490 [because jury reached compromise verdict, defendant's "liability has never been properly determined"].)
Consequently, the order is not "defective" for failing to cite supporting evidence for the trial court's finding the $1 damage award was insufficient compensation for Chan's theft though fraud. Whether Chan stole "possession of the books" or the whole business, the $1 damage award is manifestly inadequate. More to the point, the court's conclusion the jury reached a compromise verdict did not depend on proof of the actual extent of Hart's damages. As explained in the next section, case law holds the circumstances present here—sharply disputed liability and clearly inadequate damages—reasonably lead to the conclusion the jury compromised on liability. (Shaw, supra, 83 Cal.App.4th at p. 1346.) Finally, Chan is simply wrong in contending the new trial order is deficient because it leaves us with "no idea who or what the trial court believed[.]" The court stated its belief plainly: "[T]his Court . . . believe[s] that the jury compromised the issue of liability."
2. The Order Does Not Rely on an "Erroneous Legal Theory"
Chan's second argument is the trial court used "an incorrect legal standard in granting a new trial," necessitating reversal of the order under Knutson v. Foster (2018) 25 Cal.App.5th 1075, 1095-1099 [application of incorrect legal standard for causation requires reversal of new trial order]. Essentially, Chan contends the trial court erred in concluding the jury reached a compromise verdict based on a two-pronged test for a compromise verdict articulated in Rose, supra, 39 Cal.2d at pp. 489-490, and Shaw, supra, 83 Cal.App.4th at p. 1346. Chan argues this test is inapplicable to the facts of this case. The argument lacks merit.
In Rose, supra, 39 Cal.2d 481, the plaintiff sued to recover for personal injuries sustained in defendant's cocktail lounge when the stool on which plaintiff was sitting collapsed. (Id. at p. 484.) Defendant's motion for a directed verdict was denied. The jury returned a verdict for plaintiff, but awarded only $1.00 general damages and $250 special damages, despite his doctor's testimony plaintiff had sustained a painful, permanent injury and despite evidence plaintiff incurred medical bills of $352. (Id. at p. 489.)
Plaintiff's motion for a new trial on the single issue of damages was granted. Defendant appealed from the judgment and from the order granting a limited new trial. The Supreme Court reversed, holding the trial court abused its discretion in granting the limited new trial because the circumstances indicated "the verdict was probably the result of a compromise of the liability issue. [Citation.]" (Rose, supra, 39 Cal.2d at p. 488.)
The high court explained its reasoning as follows: "When the jury fails to compensate plaintiff for the special damages indicated by the evidence, and despite the fact that his injuries have been painful, makes no award or allows only a trifling sum for his general damages, the only reasonable conclusion is that the jurors compromised the issue of liability, and a new trial limited to the damages issue is improper. [Citations.] A contrary conclusion is justified only when the evidence of defendant's negligence is 'overwhelming.' (See Taylor v. Pole, 16 Cal.2d 668, 675; Crandall v. McGrath, 51 Cal.App.2d 438, 440-442.)" (Rose, supra, 39 Cal.2d at p. 489.)
Another panel of this court likewise found an impermissible compromise verdict in similar circumstances of "sharply contested" liability and "inadequate damages" in Shaw, supra, 83 Cal.App.4th 1336. In Shaw, the plaintiff sued his former employer for breach of contract, breach of the implied covenant of good faith and fair dealing, and wrongful termination in violation of public policy, alleging the stated reason for the termination, his sexual harassment of coemployees, was pretextual; the real reason was retaliation for his whistle blowing activities. The jury found for the defense on the breach of contract claim, but awarded the plaintiff more than $400,000 for breach of the implied covenant. The jury also found in plaintiff's favor on the wrongful discharge claim, but awarded him no damages. (Id. at p. 1341, fn. 4.)
We held the jury's verdicts on the breach of contract and breach of implied covenant causes of action were irreconcilable, and both claims had to be retried. (Shaw, supra, 83 Cal.App.4th at p. 1344.) We rejected Shaw's argument that instead of ordering a new trial, we should sustain the jury's award on the implied covenant cause of action as damages for wrongful discharge. We concluded the jury's finding of wrongful discharge could not stand because it was a compromise verdict. Consequently, "all must be set aside and a new trial ordered" on all three claims. (Ibid.)
Our analysis of whether the jury had compromised liability on the wrongful discharge claim drew on two cases, Rose, supra, 39 Cal.2d at 488-489, and Wilson, supra, 108 Cal.App.3d at p. 884. We quote the discussion in full, as the trial court specifically relied on it in the new trial order:
"When the issue of liability is sharply contested, and the jury awards inadequate damages, the only reasonable conclusion is the jury compromised the issue of liability, and a new trial is required. (Rose[, supra,] 39 Cal.2d [at pp.] 488-489.) A divided verdict provides further indicia there was a compromise. (Wilson[, supra,] 108 Cal.App.3d [at p.] 884.)
"Here, the parties disagreed strongly over whether Hughes dismissed Shaw because of sexual harassment or to remove a thorn in its side. The jury bought Shaw's version, but only by a nine-to-three vote, and then awarded him no damages. Not surprisingly, the parties differed wildly on Shaw's damages, but the jury did not even award the $200,000 that Hughes's economist calculated as Shaw's minimum loss.
"As the court concluded in Wilson[,] supra, 108 Cal.App.3d at page 884: 'The conflicting evidence of liability, the clear inadequacy of the damages awarded, and the additional fact that the jury returned a nine-to-three verdict [citation], all indicate that the jury verdict was probably the result of a compromise on the liability issue, requiring a new trial on all issues. [Citation.]'" (Shaw, supra, 83 Cal.App.4th at p. 1346.)
Chan argues "Shaw's two-prong test for determining a compromise verdict" is inapplicable "for several reasons." None of the proffered reasons has merit.
First, Chan argues this case is distinguishable from the three cases cited in the new trial order, Rose, Shaw, and Wilson, because, unlike in those cases, "[t]he jury in this case decided two separate lawsuits (Chan's complaint and Hart's cross-complaint)." Chan argues this is "a critical distinction," but fails to convince us why it makes any difference.
Chan also unsuccessfully attempts to distinguish Shaw from this case by the fact "the jury's compromise in Shaw was on the same cause of action" (i.e., on the wrongful termination claim, original italics) while here "the trial court saw 'compromise' as between two separate lawsuits and two separate causes of action." Chan then tries to inject an element of mystery as to the trial court's reasoning: "Which one was compromised? Chan's? Hart's? Both? Like the reasons for concluding there was a 'theft,' we are left to guess."
But Chan is wrong in suggesting again the trial court hid its reasoning. The court explicitly noted in its order the crux of the dispute in this case: "[T]he parties strongly disagreed as to whether Hart willingly agreed, or was fraudulently induced to agree, to transfer tagTrends and tagTrends Asia to Chan." In the next sentence, the court noted the jury essentially punted on that issue: "[T]he jury found there was an agreement to transfer the business to Chan, but that there was also fraud involved in the transfer[.]" In other words, the jury found breach of contract, but also fraud in the making of the contract. Of course, where a party "was deceived as to the very nature of" the contract being executed, the contract "is void, because there never was an agreement. (Rosenthal [v. Great Western Financial Securities Corp. (1996) 14 Cal.4th [394,] 415.)" (Brown v. Wells Fargo Bank, N.A. (2008) 168 Cal.App.4th 938, 958.) It there was no agreement, it follows there could be no breach of contract.
Here, the jury found both fraud and breach of contract, giving a "win" to both sides. The court concluded this "divided verdict," along with the inadequate damages awarded to Hart, demonstrated the jury compromised on liability. The cited case law clearly supports that conclusion. Given the "highly deferential" standard of review applied to an order for new trial (Lane, supra, 22 Cal.4th at p. 409), Chan fails to demonstrate abuse of discretion in this ruling.
Chan tries two more arguments for finding the "two-prong" compromise verdict test inapplicable. Chan points out the jury's vote on the compromise claim in Shaw, supra, was 9 to 3, while the jury's votes on the various verdicts in issue here (breach of contract and intentional misrepresentation) vary between 10 to 2 and 11 to 1. Additionally, Chan argues Hart urged the trial court to find a compromise verdict, "but submitted no evidence from the jury establishing that they agreed to compromise their verdict." Neither argument merits discussion. Both patently lack merit.
III
DISPOSITION
The trial court's order granting a new trial on all issues is affirmed. The matter is remanded for further proceedings consistent with this opinion. Respondents are entitled to their costs on appeal.
ARONSON, J. WE CONCUR: O'LEARY, P. J. THOMPSON, J.