Opinion
Defendants William L. Gunter, Robert B. Russell and Robert B. Russell & Associates, a copartnership, appeal from a damage judgment in the amount of $416,666 in favor of plaintiff Ted Leff entered after a jury verdict which found defendants liable for unfair competition by reason of a *511 breach of a fiduciary duty. Defendants challenge two jury instructions pertaining to the unfair competition theory upon which plaintiff prevailed. They also assert the insufficiency of the evidence to support the verdict. Plaintiff cross-appeals from the trial court’s denial of prejudgment interest on his recovery.
We conclude that defendants’ appeal lacks merit, and that plaintiff should have been awarded prejudgment interest.
Statement of the Case
Viewed in a light most favorable to plaintiff, who prevailed, the evidence at trial established the following:
In 1969 plaintiff, who had been a real estate developer for 30 years, became aware that the United States government was soliciting bids for the construction of an Internal Revenue Service (IRS) Center in Fresno, to be leased by the federal government. Bids for the proposed project were to be negotiated. While the contract did not have to be awarded to the lowest bidder, it was required that the bidder have control over any site proposed for the center. Sometime thereafter, plaintiff and Henry Sender, an architectural engineer plaintiff had known for about 17 years and who was then president and chairman of the board of National Building Corporation (NBC), agreed to enter a joint bid on the project. At that time, Sender already had submitted a joint bid with defendants for the construction of a similar IRS Center in Memphis, Tennessee.
On or about January 28, 1970, plaintiff and Sender met in Los Angeles to discuss the Fresno project. Because of the similarity of the requirements of the Fresno and Memphis projects, it occurred to Sender that it would be advantageous to have defendants join plaintiff and Sender in bidding on the Fresno project. During the meeting in Los Angeles, Sender telephoned defendant Gunter, whom he also had known for about 17 years, introduced plaintiff to Gunter as his associate and suggested the joint bid. Gunter thereupon orally agreed, but on condition that he and his other associates retain a two-thirds share in the venture, leaving a one-third interest for plaintiff and Sender. Plaintiff and Sender, in turn, orally agreed to that term. Because Sender’s previous joint ventures with Gunter, including the initial agreement on the Memphis project, had always been oral until a contract was awarded, there was nothing unusual about the telephone agreement among Gunter, Sender and plaintiff.
Thereafter, plaintiff kept Sender fully informed concerning developments on the Fresno project, providing him with extensive information relating to building site proposals, engineering data, labor market statistics, water and utility availability, and the like; and plaintiff and Sender worked together to establish the amount of their bid. In similar fashion, Sender forwarded to *512 Gunter all information relevant to the Fresno project, including the figures for a proposal for construction of the IRS center on property known as the Pilobos site (for its owner). No other developer had included this site in any initial bid on the Fresno project. (Plaintiff believed, apparently erroneously, that he had the exclusive right to an option on the Pilobos site, which option was then held by Pearson Realty Company, a Fresno realtor.)
Sometime after the proposed final bid and related information had been forwarded to Gunter, the latter advised Sender that he and his associates wished to withdraw from the Fresno joint venture. That announcement of withdrawal occurred between late February and late March 1970. Gunter indicated that the reason for this action was the possibility that he and his associates might receive the government contract on the Memphis Center, as to which their earlier bid was still pending, and that they did not want to become financially involved in two major projects at the same time. Gunter did not intimate that either he or his associates contemplated bidding on the Fresno project independently of Sender and plaintiff.
Plaintiff met with a government representative on March 27, 1970, to discuss the joint bid. He was not then aware that Gunter and his associates had withdrawn from the joint venture. That meeting did not go well for plaintiff. However, communication continued between plaintiff and Sender and the government and, on April 24, 1970, the government representative advised plaintiff that the Pilobos site had been selected for the Fresno Center. Plaintiff and Sender were then asked if they would reduce the annual rent to be charged the government pursuant to their bid. Sender indicated they could not.
What plaintiff and Sender were not told was that on April 10, 1970, defendants, together with one Monroe Tapper, had submitted their own joint bid for the same Pilobos site. That bid was tendered in the name of “Russell & Associates,” and was signed by defendant Russell. Apparently, Pearson, the realtor holding the option on the Pilobos site, had offered it on a nonexclusive basis to whichever bidder ultimately obtained the contract.
On April 28, 1970, Russell & Associates reduced the rent to be charged pursuant to its bid to an amount significantly lower than that contained in the offer of plaintiff and Sender, and on May 28, 1970, Russell & Associates was awarded the government contract to construct the Fresno IRS Center on the Pilobos site. It was later disclosed that the joint venture composed of defendants Gunter and Russell and Tapper which had made the successful bid in the name of Russell & Associates was created by an oral agreement reached sometime in mid-January of 1970. Until the contract was awarded, neither plaintiff nor Sender was aware of the existence of that association, the bid of which deprived plaintiffs joint venture of the contract.
*513 Plaintiff then sued, alleging five causes of action. (Sender did not join as plaintiff because the board of directors of NBC, which operated nationally and which continued its business relationship with defendant Gunter, voted against it.) Success on the first four counts of the complaint was posited on plaintiff’s establishing, inter alia, that Pearson Realty Company breached an agency agreement to hold the option on the Pilobos site for the exclusive benefit of plaintiff. The fifth count more generally alleged that defendants had breached their fiduciary duty to their joint venturers, plaintiff and Sender; and that defendants had competed unfairly with them by secretly bidding against plaintiff and Sender after defendants had withdrawn from the venture, and also by using for defendants’ own advantage information acquired during defendants’ participation in that joint venture.
The trial was bifurcated. After the jury found defendants liable only on the fifth count, and following a hearing on the issue of damages, the trial court awarded plaintiff $416,666, representing one-sixth share of the profits lost on the Fresno project as a result of defendants’ conduct. Plaintiff’s motion for prejudgment interest was denied.
Defendants’ Appeal
Defendants challenge jury instructions Nos. 44 and 45. No. 44 stated; “You are instructed that where one partner secretly enters into a contract sought to be contracted by the partnership which another partner is negotiating on behalf of the partnership such partner is in violation of his fiduciary duty to the excluded partner.” No. 45 directed; “You are further instructed that such fiduciary duty continues for so long as the other party is negotiating on behalf of the original partnership. ”
Defendants assert that these instructions misstate the law by acknowledging a previously unrecognized cause of action for breach of fiduciary duty through fair competition by a former partner after termination of the partnership. Although conceding that it would be improper for one partner to engage in “secret preemptive activities” while the partnership is still in existence, defendants claim that any such taint of impropriety was removed by their withdrawal from the joint venture before Russell & Associates made its independent bid on the Fresno project. In addition, they argue that any negotiation by plaintiff and Sender after Gunter’s announcement of defendants’ withdrawal from the joint venture cannot have been “on behalf of the original partnership,” but rather must have been for plaintiff and Sender alone. Under such circumstances defendants deny any impropriety in their secret competitive bid and negotiations. Defendants further contend that to the extent that these instructions may be construed as asserting only defendants’ illegality in competing with a partnership while still members thereof, the instructions were erroneous because there was no evidence of such activity.
*514 We do not agree with these contentions. The instructions advise the jury that a partner’s duty not to compete with his partnership with respect to a partnership opportunity which is actively being pursued by the partnership survives his withdrawal therefrom. Defendants have cited no contrary authority. Nor do defendants assert any persuasive reason in logic or principle which relieves a partner from such continuing duty. There is an obvious and essential unfairness in one partner’s attempted exploitation of a partnership opportunity for his own personal benefit and to the resulting detriment of his copartners. It may be assumed, although perhaps not always easily proven, that such competition with one’s own partnership is greatly facilitated by access to relevant information available only to partners. Moreover, it is equally obvious that a formal disassociation of oneself from a partnership does not change this situation unless the interested parties specifically agree otherwise. It is no less a violation of the trust imposed between partners to permit the personal exploitation of that partnership information and opportunity to the prejudice of one’s former associates by the simple expedient of withdrawal from the partnership.
The foregoing reasoning has been well established, and the underlying ethical principles firmly and consistently supported by precedent. In
Page
v.
Page
(1961)
Similarly, many years ago, in reversing a judgment entered upon a nonsuit in an action by one partner seeking to impose a constructive trust upon his copartner who purchased for his own account property which the partnership sought, we noted: “The existence of the partnership between them placed them in confidential relations toward each other, with respect to the property which was the subject of the agreement. Each occupied the position of a trustee to the other with regard to all the partnership transactions, including the transactions
contemplated
by the firm and constituting the object or purpose for which the partnership was formed.”
(Koyer
v.
Willmon
(1907)
Even more pertinent to the precise issue before us, we noted further in
Page, supra,
The notion of a continuing fiduciary duty between former partners is not new. Shortly after
Koyer, supra,
an appellate court in
Donleavey
v.
Johnston
(1914)
The
Donleavy
court relied in part upon cases from other states, including
Mitchell
v.
Read
(1874)
In similar fashion, and more recently, in
Lavin
v.
Ehrlich
(1974)
The foregoing principles were echoed in
Fouchek
v.
Janicek
(1950)
While it is true that in
Lavin
and
Fouchek
the withdrawing partner had commenced his negotiations in competition with the partnership during his membership therein, and only completed them after its dissolution, the rationale of these cases is equally applicable to the situation before us. From the evidence in the instant matter, the jury could well have concluded that defendants secretly began work on their independent bid during their participation in the joint ven
*517
ture with plaintiff and Sender, utilizing, at least in part, information acquired by virtue of that participation. After defendants announced their withdrawal from that joint venture, they continued preparation for submission of their independent bid. While their formal bid and direct negotiations with the government representative apparently did not occur until after their withdrawal, their conduct was not thereby immunized. Defendants’ attempt to rely upon the technicality of that withdrawal prior to submission of their formal bid strikes us as being “sadly lacking in equity.” (See
Lavin, supra,
It would be self-deceptive to tolerate defendants’ activities by focusing upon the fact alone that they no longer were members of the joint venture on the date on which they undertook formal competitive bidding. Like the withdrawing partners in Lavin and Fouchek, defendants here sought to appropriate a partnership opportunity for themselves. Their hands are no cleaner because of a more careful orchestration of their clandestine competition.
While no statute precisely controls the issue before us, our foregoing conclusions are fully consistent with existing legislation. Corporations Code section 15021, subdivision (1), for example, provides: “Every partner must account to the partnership for any benefit, and hold as trustee for it any profits derived by him without the consent of the other partners from any transaction connected with the formation, conduct, or liquidation of the partnership or from any use by him of its property.” (Italics added.) In addition, section 15030 of that code provides: “On dissolution the partnership is not terminated, but continues until the winding up of partnership affairs is completed.”
In
Cotten
v.
Perishable Air Conditioners
(1941)
Because of our conclusion sustaining the validity of jury instructions Nos. 44 and 45, and the jury’s verdict on liability, we do not explore plaintiff’s alternative theory based on the duration of a partnership formed for a particular purpose.
*518
In our view, enforcement of the fiduciary obligations of joint venturers within this context does not, as defendants claim, violate any superior public policy which is designed to encourage competitive bidding on public projects. While such latter policy undoubtedly is important and has been cited to invalidate collusive bidding (see, e.g.,
McMullen
v.
Hoffman
(1899)
Defendants’ challenge to the sufficiency of the evidence to support the jury verdict warrants little discussion. “[W]here the findings are attacked for insufficiency of the evidence, our power begins and ends with a determination as to whether there is
any
substantial evidence to support them; ... we have no power to judge of the effect or value of the evidence, to weigh the evidence, to consider the credibility of the witnesses, or to resolve conflicts in the evidence or in the reasonable inferences that may be drawn therefrom. ”
(Overton
v.
Vita-Food Corp.
(1949)
Considered in the light most favorable to plaintiff, who prevailed, the evidence at trial supported the conclusion that an oral agreement for a partnership or joint venture existed between plaintiff, Sender and defendants formed for the sole purpose of submitting a successful bid on the Fresno IRS Center project. Useful background information was exchanged between plaintiff and his fellow venturers. It was not denied that defendants withdrew from the joint venture and shortly thereafter, without either the knowledge or approval of the other coventurers, began ultimately successful independent negotiations for construction of the IRS Center on the identical building site which had been proposed by plaintiff’s joint venture. Although there was some conflict in the testimony as to whether plaintiff’s bid would have been successful in the absence of defendants’ secret competitive bid, “Where the evidence is in conflict, the appellate court will not disturb the verdict of the jury . ...” (6 Witkin, op. cit. supra, at p. 4236, italics in original.) We thus reject defendants’ challenge to the sufficiency of the evidence.
Plaintiff’s Cross-appeal
Plaintiff claims that the trial court erred in denying him prejudgment interest on his recovery. In support of that claim, plaintiff relies upon Civil Code section 3287, subdivision (a), which provides in relevant part: “Every person *519 who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled also to recover interest thereon from that day . . .
Plaintiff argues, and defendants do not deny, that his $416,666 recovery was determined by simple mathematics. He asserts that the conceded amount of a mortgage on the completed Fresno IRS Center ($17 million) was subtracted from the fair market value of the center upon its completion in November 1972, as established by the uncontested testimony of plaintiff’s appraiser ($19.5 million). The trial court then took the $2.5 million balance between the approved value and the debt, multiplied it by plaintiff’s conceded one-sixth share in the original joint venture to arrive at the $416,666 damages awarded. This formula for the computation of plaintiffs damages, while not the only one which the trial court could have utilized, is not challenged by the parties. Based upon its use, plaintiff claims that the clear words of the statute demonstrate his entitlement to interest. We agree.
The trial court did not articulate its reason for denying plaintiff prejudgment interest. In seeking to justify that ruling, defendants assert that plaintiff’s damages were not “certain or capable of being made certain by calculation” within the meaning of section 3287. Apparently, defendants concede that if the damages did satisfy this certainty requirement, plaintiff would be entitled to prejudgment interest, just as successful plaintiffs have been permitted similar recovery in a wide variety of other causes of action. (See
Tripp
v.
Swoap
(1976)
We do not find persuasive defendants’ objection which is based upon the alleged uncertainty of plaintiff’s damages. “Damages are deemed certain or capable of being made certain within the provisions of subdivision (a) of section 3287 where there is essentially no dispute between the parties concerning the basis of computation of damages if any are recoverable but where their dispute centers on the issue of liability giving rise to damage. [Citation.]”
(Esgro Central, Inc.
v.
General Ins. Co.
(1971)
In interpreting the certainty requirement of section 3287 in
Tripp
v.
Swoap, supra,
Here, also, once plaintiff’s entitlement to damages for defendants’ breach of fiduciary duty was established, the amount of those damages was calculable—and, apparently, actually calculated—mechanically, on the basis of uncontested and conceded evidence of the value of the IRS Center upon its completion, the balance due on the indebtedness to which it was subject, and the extent of plaintiffs interest in the original joint venture. Defendants offered no evidence to contradict these valuations.
We note the additional requirement for prejudgment interest under section 3287 that plaintiff’s entitlement to damages vest “upon a particular day . . . . ” Defendants do not claim this vesting requirement was not met. Nor do they challenge the trial court’s finding that November 1972—apparently when the Fresno IRS Center was completed—was an appropriate date for assessing the amount of damages suffered by plaintiff. Accordingly, we do not seize upon the trial court’s unaccountable failure to designate the precise day in November 1972 when plaintiff’s right to damages vested to preclude an award of prejudgment interest in this case.
In our view, “Since the requirement of Civil Code section 3287 regarding certainty of damages was met, [plaintiff was] entitled, as a matter of right, to recover prejudgment interest on the sum awarded from the time such sum became due. [Citations.]”
(Leaf v. Phil Rauch, Inc.
(1975)
Conclusion
The trial court’s judgment is affirmed, except insofar as it failed to award plaintiff prejudgment interest. The case is remanded to the trial court for the *521 purpose of calculating and awarding plaintiff appropriate prejudgment interest. Plaintiff is to recover his costs on both appeals.
Bird, C. J., Mosk, J., Kaus, J., Broussard, J., Reynoso, J., and Grodin, J., concurred.
The petition of defendants and appellants for a rehearing was denied April 27, 1983.
