Ryan v. Crown Castle NG Networks, Inc.
6 Cal. App. 5th 775
| Cal. Ct. App. | 2016Background
- Ryan, an attorney, accepted employment with NextG in 2009 based on an offer promising an option to purchase 75,000 shares with time-vesting and a "performance-vesting" condition; he left employment in January 2011 after 16 months, by which time 25,000 shares had time-vested.
- The option grant referenced a separate "2009 Stock Award Plan" (Plan) that contained a 90-day post-termination exercise window and identified private-equity "Sponsors" whose "Cash-on-Cash Return" controlled performance vesting; Ryan alleges he was not provided the Plan until after leaving.
- Ryan attempted to exercise 25,000 vested options but was told the Plan's 90-day limit and the performance-vesting condition precluded exercise; he sued for breach of employment agreement, breach of implied covenant, fraud/ concealment/ negligent misrepresentation, breach of stock option agreement, and declaratory relief.
- At trial the jury found liability on the employment-contract claims but awarded damages of $73,522 under a "Lost Earnings" item (a tort-type measure) and left the "Value of Stock Options" blank despite instruction to fill it if any contract claim was found; undisputed expectation (contract) damages were $326,250.
- The trial court denied Ryan's motion for a new trial on damages, saying it would not "substitute its judgment for that of the jury" and suggesting juror declarations might be needed to explain the inconsistent verdict.
- The Court of Appeal reversed, holding the trial court erred by refusing to independently weigh the evidence, the jury's damages award lacked any legal or factual basis relative to the contract findings, and that the verdict's inconsistencies and other indicia (patently low damages, close liability issues, non-unanimous polling) warranted a retrial of all issues unless Ryan elected to stand on the judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court had authority/duty to independently weigh evidence on a new-trial motion for inadequate damages | Ryan: trial court must act as a 13th juror and independently reassess sufficiency of evidence and adequacy of damages | NextG: trial court should defer to jury and not "substitute" its judgment on damages | Court: trial court erred by refusing to independently weigh evidence; it has plenary duty to reassess and grant new trial if convinced verdict is inadequate |
| Whether juror declarations were required to justify granting a new trial based on inconsistent/verdict confusion | Ryan: juror reasoning unnecessary; court may reverse based on record inconsistencies and inadequacy of damages | NextG: court lacked basis to overturn without factual declarations explaining jury's reasoning | Court: juror declarations largely immaterial and often inadmissible; verdict itself showed unmistakable inconsistencies sufficient to require relief |
| Whether the $73,522 award could stand as contract damages given jury findings of breach | Ryan: jury's award was legally unsupported because contract claims sought expectancy (value of options) and undisputed expectation damages were $326,250 | NextG: jury has broad fact-finding authority to calculate damages and could have chosen a different measure (reliance/lost earnings) | Court: jury had no basis, under the instructions and verdict form, to award lost-earnings for contract findings; award lacked factual/legal foundation and likely reflected juror confusion or compromise |
| Scope of retrial — damages only or all issues? | Ryan: sought retrial on damages only (or additur to $326,250) | NextG: if new trial required, it should extend to all issues | Court: because verdict was internally inconsistent, jury possibly compromised, and liability basis unclear, new trial should be on all issues unless plaintiff opts to accept reinstated judgment |
Key Cases Cited
- Barrese v. Murray, 198 Cal.App.4th 494 (Cal. Ct. App.) (trial court must independently assess evidence on new-trial motion)
- Collins v. Union Pacific R. Co., 207 Cal.App.4th 867 (Cal. Ct. App.) (trial court acts as independent trier of fact on new-trial motions)
- Mercer v. Perez, 68 Cal.2d 104 (Cal.) (trial court may disbelieve witnesses and reweigh evidence)
- Neal v. Farmers Ins. Exchange, 21 Cal.3d 910 (Cal.) (judge sits as a thirteenth juror on new-trial motions)
- Kelly-Zurian v. Wohl Shoe Co., 22 Cal.App.4th 397 (Cal. Ct. App.) (trial court's obligation to weigh evidence acknowledged but not a bar to independent review)
- Liodas v. Sahadi, 19 Cal.3d 278 (Cal.) (limited retrial on damages appropriate only when liability was clearly and correctly determined)
- Porter v. Superior Court, 47 Cal.4th 125 (Cal.) (no evidentiary deference in ruling on new-trial motion in criminal context; judge independently examines evidence)
- Singh v. Southland Stone, U.S.A., Inc., 186 Cal.App.4th 338 (Cal. Ct. App.) (special verdict considerations and duplication of damages)
- Oxford v. Foster Wheeler LLC, 177 Cal.App.4th 700 (Cal. Ct. App.) (special verdicts more prone to reversal due to complexity and risk of defective findings)
- People v. Robarge, 41 Cal.2d 628 (Cal.) (trial court must give benefit of its independent conclusion on new-trial motions)