Lock & Lock Co., Ltd. vs. Lock & Lock Usa Distributor, Inc.

Motion in Limine

Cal. Super. - 4th Dist.February 11, 2015

L I M N E X U S L L P 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Grant L. Kim (Bar No. 114989) Grant.Kim@limnexus.com Phillip Shinn (Bar No. 112051) Phil.Shinn@limnexus.com Lisa J. Yang (Bar No. 208971) Lisa.Yang@LimNexus.com LIMNEXUS LLP 220 Montgomery Street, Suite 1411 San Francisco, CA 94104 Phone: (415) 619-3320 Lisa J. Yang (Bar No. 208971) Lisa.Yang@LimNexus.com LIMNEXUS LLP 1055 West Seventh Street, Suite 2800 Los Angeles, CA 90017 Phone: (213) 955-9500 Fax: (213) 955-9511 Attorneys for Plaintiff and Cross-Defendant LOCK & LOCK CO., LTD., Plaintiff WEIHAI HANACOBI HOUSEWARE CO., LTD., and Cross-Defendant JOON IL KIM SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE LOCK & LOCK CO., LTD., a foreign company doing business in California; WEIHAI HANACOBI HOUSEWARE CO., LTD., a foreign company doing business in California, Plaintiffs, VS. LOCK & LOCK USA DISTRIBUTOR,INC., a California corporation; JINYOUNG PARK,an individual; JYP Investments, LLC, a California limited liability corporation; and DOES 1-10, inclusive, Defendants. JINYOUNG PARK, an individual, Cross-Complainant, VS. LOCK & LOCK CO., LTD, a South Korean company; JOON IL KIM, an individual; and ROES 1-50 inclusive, Cross-Defendants, AND CONSOLIDATED ACTIONS CASE NOS.: 30-2015-00771369-CU-BC-CJC (Lead Case); 30-2015-00795053-CU-MC-CJC Assignedfor allpurposes to Hon. James Crandall; Dept. C33 MOTION IN LIMINE NO.1 TO BIFURCATE PUNITIVE DAMAGES CLAIMS AND TO EXCLUDE EVIDENCE REGARDING LOCK & LOCK CO., LTD. AND JOON IL KIM’S WEALTH AND FINANCIAL CONDITION IN THE FIRST PHASE OF BIFURCATED TRIAL Complaint Filed: Trial Date: February 11, 2015 May 7, 2018 MOTION IN LIMINE NO. 1 TO BIFURCATE PUNITIVE DAMAGES CLAIMS AND TO EXCLUDEEVIDENCE L I M N E X U S L L P 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 L INTRODUCTION This motion is made in two parts. First, Plaintiff and Cross-Defendant LOCK & LOCK CO., LTD. (“LL KOREA”)and Cross- Defendant JOON IL KIM (“KIM”) (collectively, the “Cross-Defendants’) seeks by this motion for the Court to issue an order bifurcating the trial on the issue of punitive damages on the Third Amended Cross-Complaint (“TACC”). Under Civil Code section 3295(d), the Court is mandated to preclude the admission of evidence of Cross-Defendants’ alleged profits and financial condition until after the trier of fact (1) returns a verdict for Cross-Complainant JINYOUNG PARK (“Park”) awarding actual damages and (2) finds that a Cross-Defendants are guilty of malice, oppression or fraud in accordance with Civil Code section 3294. See Civil Code §3295(d). The Court is vested with authority to bifurcate the trial on punitive damages pursuant to sections 598 and 1048(b) of the Code of Civil Procedure As recognized by the California Supreme Court, Civil Code section 3295(d) also “requires a court, upon application of any defendant,to bifurcate a trial so that the trier of fact is not presented with evidence of the defendant’s wealth and profits until after the issues of liability, compensatory damages, and malice, oppression, or fraud have been resolved against the defendant. Bifurcation minimizes potential prejudice by preventing jurors from learning of a defendant's “deep pockets” before they determine these threshold issues.” (Emphasis added.) Torres v. Automobile Club ofS. Cal. (“Torres”) (1997) 15 Cal. 4th 771, 777-78 (emphasis added). Accordingly, Phase One ofthe bifurcated trial should proceed on the issues of issues of liability, compensatory damages, and whether Park has proved by clear and convincing evidence that Cross-Defendants engaged in conduct with malice, oppression or fraud. Phase Two should proceed on the amount of punitive damages to be awarded,if any. Accordingly, Cross-Defendants respectfully requests that the Court issue an order bifurcating the issue of punitive damages on the TACC. 11 11 11 11 1MOTION IN LIMINE NO. 1 TO BIFURCATE PUNITIVE DAMAGES CLAIMS AND TO EXCLUDEEVIDENCE L I M N E X U S L L P 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Second, and in addition to the above bifurcation, Cross-Defendants seek by this motion for the Court to issue an order in limine, before voir dire, excluding all evidence of Cross-Defendants’ profits and financial condition until after the trier offact has returned a verdict for Park awarding actual damages and finds that Cross-Defendants are guilty of malice, oppression or fraud. It naturally follows that evidence of Cross-Defendants’ financial condition and profits should be excluded from Phase I of the bifurcated trial for the very same reasons that the law mandates bifurcation in the first place: a trier of fact should not be presented with evidence of a defendant’s wealth and profits until after the issues of liability compensatory damages, and malice, oppression or fraud have been resolved against the defendant. Not only is such evidence irrelevant during Phase I, such evidence would unduly prejudice Cross-Defendants, likely confuse the issues, mislead the jury, and improperly invade Cross-Defendants’ privacy rights. II. THE COURT HAS AUTHORITY TO GRANT THIS MOTION INLIMINE Motions in limine, “on or at the threshold; at the very beginning; preliminary” are not specifically authorized by any California statute. However, a trial court's consideration of such motions appears to be authorized under California Code of Civil Procedure §128(a)(3), (8) which provides that every court has the inherent power to provide for the orderly conduct of its proceedings and to amend and control its processes and orders to make them conform to law and justice. California appellate courts have uniformly upheld and authorized the use of motions in limine by trial courts. In Clemens v. American Warranty Corp, (1987) 193 Cal.App.3d 444, 451, the Second Appellate District held: “Although not expressly authorized by statute [a motion in limine], is recognized in decisions as a proper request which the trial court has inherent power to entertain and grant. The purpose of the motion is to avoid the obviously futile attempt to unring the bell in the event a motion to strike is granted in the proceedings before the jury. The scope of such motion is any kind of evidence which could be objected to at trial, either as irrelevant or subject to discretionary exclusion as unduly prejudicial.” 7d. 11 11 2MOTION IN LIMINE NO. 1 TO BIFURCATE PUNITIVE DAMAGES CLAIMS AND TO EXCLUDEEVIDENCE L I M N E X U S L L P 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 III. THE ALLEGATIONS CONTAINED IN THE TACC ESTABLISH THAT CROSS- DEFENDANTS’ FINANCIAL CONDITION AND PROFITS ARE NOT RELEVANT TO THE ISSUES OF LIABILITY, COMPENSATORY DAMAGES, AND MALICE, OPPRESSION OR FRAUD A. Cross-Defendants’ Financial Condition Is Not Relevant In the First Phase of the Bifurcated Trial Evidence of Cross-Defendants’ financial condition is not relevant to any ofthe issues to be decided during the first phase of the bifurcated trial. In the TACC, Park alleges that he is a partial owner and shareholder of LOCK & LOCK DISTRIBUTOR, INC. (“LL USA”) and filed the TACC derivatively on behalf of LL USA. [TACC, 93] Park alleges that KIM is an officer, director, managing agent, and/or owner of LL KOREA [TACC, 95]. Park alleges that Cross-Defendants entered into an oral agreement wherein (1) LL USA would be the exclusive distributor and wholesaler of LL Korea, and (2) Cross-Defendants agreed to supply certain product at an agreed upon pricing, (3) Cross-Defendants would provide timely quotations for various product packages, within 2-3 days, as requested by LL USA’s primary customer QVC, and (4) LL USA would have ninety (90) days from receipt of product to send payment to Cross-Defendants. [TACC, 957, 63]. Park further alleges that Cross-Defendants breached this oral agreement by (1) suddenly and without notice increasing prices by at least 225%, (2) failing to provide timely quotations and taking weeks and even months to provide quotations, (3) demanding immediate payment for shipped product, (4) soliciting the business of QVC and selling product directly to them. [TACC, 9958, 59, 64, 65, 70]. In addition, Park alleges that Cross- Defendants intentionally and negligently interfered with LL USA’s prospective economic relationship with QVC [TACC, 9973-84], and intentionally and negligently interfered with LL USA’s contractual relationship with QVC [TACC,9985-97.]. Furthermore, Park alleges that Cross-Defendants engaged in unfair business practices [TACC, 4998-101.], and engaged in conspiracy [TACC, 94102-105.]. Park further seeks declaratory relief and injunctive relief [TACC, 9106-111]. As apparent from even a cursory review of the allegations in the TACC, Cross-Defendants’ financial condition is not relevant to any ofthe claims alleged by Park. As discussed above, in the 3MOTION IN LIMINE NO. 1 TO BIFURCATE PUNITIVE DAMAGES CLAIMS AND TO EXCLUDEEVIDENCE L I M N E X U S L L P 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 first phase, the jury does not decide whether to award punitive damages. Cal. Civ. Code § 3295(d). Thus, evidence of Cross-Defendants’ financial condition with respect to punitive damages is irrelevant in the trial’s first phase. See Torres v. Automobile Club ofSo. Calif. (1997), supra, 15 Cal. 4th at 777-78. Nor is Cross-Defendants’ financial condition relevant to the issue ofliability. See Las Palmas Assocs. v. Las Palmas Ctr. Assocs. (1991) 235 Cal. App. 3d 1220, 1242 (“[T]he rule [is] that evidence of a party’s wealth is generally irrelevant to the issues ofliability,” and irrelevant evidence is, of course, inadmissible); Fisher v. Superior Court (1980) 103 Cal. App. 3d 434, 444 (evidence regarding the wealth of the defendant is inadmissible on the issue ofliability); Coy v. Superior Court (1962) 58 Cal. 2d 210, 222-23. Cross-Defendants’ financial condition is similarly irrelevant to the amount of compensatory damages — if any — owed to Plaintiff. As a general rule, a defendant’s wealth may not be considered when determining compensatory damages. See, e.g., Farmy v. College Housing, Inc. (1975) 48 Cal. App. 3d 166, 183 (evidence of wealth tainted award of compensatory damages and required retrial); Weaver v. Shell Oil Co. (1933) 129 Cal. App. 232, 234 (1933) (argumentto the jury regarding the wealth of the defendant was reversible error); Hoffman v. Brandt (1966) 65 Cal. 2d 549, 554 (1966) (questions ofliability and compensatory damages should be decided without regard to a party’s financial resources). In short, Cross-Defendants’ financial resources have no probative value with regard to the factual issues to be decided during the first phase of trial and must be excluded during that phase. See Torres v. Automobile Club ofSo. Calif. (1997), supra, 15 Cal. 4th at 777-78 (1997) (plaintiff must prove primafacie case of liability for damages before introducing evidence of defendant’s financial condition); Farmy v. College Housing, Inc. (1975), supra, 48 Cal. App. 3d at 183 (defendant’s wealth is irrelevant to the calculation of the amount of compensatory damages). 11 11 11 11 4MOTION IN LIMINE NO. 1 TO BIFURCATE PUNITIVE DAMAGES CLAIMS AND TO EXCLUDEEVIDENCE L I M N E X U S L L P 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 B. Evidence of Defendants’ Financial Condition Would Be Unduly Prejudicial To Cross-Defendants, and Confusing and Misleading to the Jury Evidence of Cross-Defendants’ financial condition is also inadmissible under California Evidence Code § 352 becauseits probative value is substantially outweighed by both the risk of undue prejudice to Defendants as well as the risk of confusing the issues and misleading the jury. As discussed above, evidence of Cross-Defendants’ financial condition is not relevant to any factual issues to be decided during the first phase ofthe trial in this case. Thus, it has no probative value. In contrast, the risk of undue prejudice is extremely high where, as here, one of the defendants is a large corporation. See Adams v. Murakami (1991) 54 Cal. 3d 105, 121 (evidence of wealth may improperly taint the jury’s decision to impose punitive damages as well as its decision to find liability); See Torres v. Automobile Club ofSo. Calif. (1997), supra, 15 Cal. 4™ at 777-78 (same); See Las Palmas Assocs. v. Las Palmas Ctr. Assocs. (1991, supra, 235 Cal. App. 3d at 1242 (“evidence of a [party’s] wealth can induce fact finders to abandon their objectivity and return a verdict based on passion and prejudice”). Moreover, any probative value that evidence of Cross-Defendants’ financial resources might have (and it has none) is substantially outweighed by the likelihood that it will confuse the issues to be tried before the jury. Any probative value that evidence of Cross-Defendants’ financial resources might have (and it has none) is substantially outweighed by the likelihood thatit will confuse the issues to be tried before the jury. California law has long protected defendants in civil actions from unwarranted and potentially harmful intrusion into their private financial affairs. Civil Code section 3295 was “intended to protect defendants from being pressured into settling non-meritorious cases in order to avoid divulging their financial privacy...” Jabro v. Superior Court (2002) 95 Cal.App.4th 754, 757; See also Valley Bank ofNevada v. Superior Court (1975) 15 Cal.3d 652, 656; Dompeling v. Superior Court (1981) 117 Cal.App.3d 798, 808 (personal financial information comes within the zone of privacy protected by article I, section 1 of the California Constitution.) “In the commercial world, businesses, regardless of their legal form, have zones of privacy which may not be legitimately invaded.” H&MAssociates 5MOTION IN LIMINE NO. 1 TO BIFURCATE PUNITIVE DAMAGES CLAIMS AND TO EXCLUDEEVIDENCE L I M N E X U S L L P 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 v. City ofEl Centro (1980) 109 Cal.App.3d 399, 410; See also Roberts v. GulfOil Corp. (1983) 147 Cal.App.3d 770, 795 [“Corporations do have a general right to privacy.”]. Here, Cross-Defendants avail themselves to the law and request that the Court issue an order in limine protecting against the unnecessary disclosure of Cross-Defendants’ private financial information until, if at all, Phase II of the bifurcated trial on punitive damages. IV. CONCLUSION For the foregoing reasons, Cross-Defendants request the Court issue (1) an order bifurcating the issue of punitive damages at trial in the instant action, and (2) a protective order in limine, before voir dire, precluding Park from introducing evidence of or otherwise referring to Cross-Defendants financial condition unless and until he proves a primafacie case ofliability for punitive damages. Dated: April 27,2018 LIMNEXUS LLP "2aAl Grant L. Kim Phillip Shinn Lisa J. Yang Attorneys for Plaintiff and Cross-Defendant LOCK & LOCK CO., LTD., Plaintiff WEIHAI HANACOBI HOUSEWARE CO., LTD., and Cross-Defendant JOON IL KIM By: 6MOTION IN LIMINE NO. 1 TO BIFURCATE PUNITIVE DAMAGES CLAIMS AND TO EXCLUDEEVIDENCE L I M N E X U S L L P 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE STATE OF CALIFORNIA ) ) ss. COUNTY OF LOS ANGELES ) I am employed in the county of Los Angeles, State of California. I am over the age of 18 and not a party to the within action; my business address is 1055 West Seventh Street, Suite 2800, Los Angeles, California 90017. On April 27, 2018, I served the foregoing document described as: MOTION IN LIMINE NO. 1 TO BIFURCATE PUNITIVE DAMAGES CLAIMS AND TO EXCLUDE EVIDENCE REGARDING LOCK & LOCK CO., LTD. AND JOON IL KIM’S WEALTH AND FINANCIAL CONDITION IN THE FIRST PHASE OF BIFURCATED TRIAL on the interested parties in this action as follows: Allan E. Perry, Esq. Michael Y. Yi, Esq. Law Offices of Allan E. Perry Kim Park Choi & Yi 242 S. Orange Avenue 3435 Wilshire Blvd., Suite 2150 Brea, CA 92821 Los Angeles, CA 90010 aeplawyer@gmail.com myi@kpcylaw.com Attorneysfor Defendants and Cross- Attorneysfor Plaintiffand Cross-Defendant Complainants, Lock & Lock USA Donney Kim Distributor, Inc. and Jinyoung Park M BY E-MAIL OR ELECTRONIC TRANSMISSION: Based on a court order or an agreement of the parties to accept service by e-mail or electronic transmission, I caused the documents to be sent to the persons at the e-mail addresses listed above. 1did not receive, within a reasonable time after the transmission, any electronic message or other indication that the transmission was unsuccessful. M (State) I declare under penalty of perjury under the laws of the State of California that the above is true and correct. / NM ~7 DATED: April 27, 2018 NA - Rachel Kim 1MOTION IN LIMINE NO. 1 TO BIFURCATE PUNITIVE DAMAGES CLAIMS AND TO EXCLUDEEVIDENCE