Filed 2/23/05
CERTIFIED FOR PARTIAL PUBLICATION*
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
THE OAKLAND RAIDERS,
B163115
Plaintiff, Cross-defendant and
Appellant,
(Los Angeles County
Super. Ct. No. BC206388)
v.
NATIONAL FOOTBALL LEAGUE,
Defendant, Cross-complainant and
Appellant;
PAUL TAGLIABUE et al.,
Defendants and Respondents.
APPEALS from a judgment and orders of the Superior Court of Los Angeles
County. Richard C. Hubbell, Judge. Affirmed in part and reversed in part.
Kaye Scholer, Larry R. Feldman, Robert M. Turner; Arnold & Porter, John J.
Quinn, Laurence J. Hutt; and Jeffrey E. Birren for Plaintiff, Cross-defendant and
Appellant The Oakland Raiders.
Covington & Burling, Gregg H. Levy; Ruby & Schofield, Allen J. Ruby; Skadden,
Arps, Slate, Meagher & Flom and Douglas B. Adler for Defendant, Cross-complainant
*
Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for publication with
the exception of parts A.3 through B.2 of the Discussion.
1
and Appellant National Football League and for Defendants and Respondents Paul
Tagliabue and Neil Austrian.
******
Defendant, cross-complainant and appellant the National Football League (NFL)
appeals from an order granting a new trial following a six-week jury trial. The jury
returned a verdict in favor of the NFL on the Raiders’ claims involving their move to
Oakland, and the trial court granted a new trial on the ground of juror misconduct.
Plaintiff, cross-defendant and appellant the Oakland Raiders (Raiders) cross-appeal from
a pretrial order granting summary adjudication in favor of individual defendants and
respondents Paul Tagliabue (the NFL commissioner) and Neil Austrian (the NFL
president) on the Raiders’ cause of action for breach of fiduciary duty. The Raiders also
appeal from a statement of decision following a bench trial on the Raiders’ declaratory
relief cause of action.
We reverse the order granting a new trial and affirm the judgment in all other
respects. Because the order granting a new trial failed to comply with Code of Civil
Procedure section 657 by omitting a statement of reasons, we have independently
reviewed the grounds asserted in the motion. We conclude that neither the conflicting
evidence of juror misconduct nor any asserted instructional error justifies a new trial. As
to the cross-appeal, we conclude that the trial court correctly determined that, as a matter
of law, there is no fiduciary relationship between NFL officials and the Raiders, and that
substantial evidence supports the trial court’s conclusion that the NFL was not estopped
to rely on the NFL constitution’s revenue sharing requirements.
FACTUAL AND PROCEDURAL BACKGROUND
A.
Facts Leading to the Raiders’ Move From Los Angeles.
The Raiders are a member club of the NFL, an unincorporated association
governed by the NFL constitution and bylaws. After the Raiders relocated to Los
2
Angeles from Oakland in 1982, they played their home games at the Los Angeles
Memorial Coliseum until 1995. Unlike newer stadiums, the Coliseum did not permit any
revenue to be derived from items such as luxury suites, club seats, naming rights or other
sponsorships.
Throughout the end of 1994 and the first half of 1995, the Raiders negotiated with
individuals representing Hollywood Park for the construction of a new, state-of-the-art
stadium in Inglewood, reaching an agreement in principle in March 1995. That
agreement required the Raiders to secure from the NFL a contribution in the amount of
$20 million and a commitment that at least two Super Bowls would be played in the
stadium between 2000 and 2004. The NFL offered to support construction of the
Hollywood Park stadium, though not to the extent sought by the Raiders. It agreed to
schedule one Super Bowl during the requested time period, to provide the Raiders with a
certain number of Super Bowl tickets and to invest some money into the project. It
further agreed to provide additional assistance on the condition that a second NFL team
be permitted to play at the stadium for several years.
Ultimately, the NFL memorialized its commitment at a meeting in May 1995,
where it adopted 1995 Resolution FC-7 which, among other things, awarded two Super
Bowls to the Hollywood Park stadium conditioned on two NFL teams playing there, and
created a committee to negotiate with both the Raiders and Hollywood Park concerning a
second NFL team.1 The Raiders voted in favor of Resolution FC-7, though they
remained opposed to the notion of a second team playing at the Hollywood Park stadium.
The committee created by Resolution FC-7 developed terms for the provision of a
second NFL team that were inconsistent with the Raiders’ goals and that the Raiders
perceived as favoring the second team. As a result, the Raiders—who had
simultaneously been negotiating with Oakland officials to relocate the team there—
entered into an agreement with Oakland in June 1995 to move to the renovated Oakland
Coliseum. The agreement included an up-front $64 million payment to the Raiders,
1
The NFL makes its decisions by way of resolutions voted on by the membership.
3
immediately enhanced revenue streams and assurances from Oakland officials that
personal seat licenses and game tickets were already sold out.
In July 1995, the NFL adopted 1995 Resolution G-7, approving the Raiders’
relocation to Oakland and reaffirming that “the League’s member clubs collectively own
and will control any League franchise opportunity in the greater Los Angeles area . . . .”
B.
Pleadings and Trial
In March 1999, the Raiders filed a complaint for damages against the NFL and
myriad other defendants, alleging eleven causes of action: Breach of contract (first,
seventh and eighth causes of action); breach of the implied covenant of good faith and
fair dealing (second, sixth and tenth causes of action); unjust enrichment (third cause of
action); tortious interference with prospective business advantage (fourth cause of
action); breach of fiduciary duty (fifth cause of action); declaratory relief (ninth cause of
action); and civil conspiracy (eleventh cause of action).2 The NFL, in turn, answered and
filed a cross-complaint for declaratory relief against the Raiders.
In August 2000, the trial court granted the NFL’s motions for summary
adjudication on the fourth, seventh, eighth and tenth causes of action, and denied its
summary adjudication motions on the third, fifth and sixth causes of action. The court
also granted summary adjudication motions brought by individual defendants
Mr. Tagliabue and Mr. Austrian on the fourth through seventh, tenth and eleventh causes
of action.
The trial began on March 13, 2001 and lasted approximately six weeks. The jury
heard testimony and received documentary evidence on five causes of action. The first
through third causes of action involved the Raiders’ claim that, by moving to Oakland,
they left the NFL with an “opportunity” to put another team in Los Angeles and that the
NFL’s constitution and bylaws implicitly required that the Raiders be compensated for
2
The parties subsequently stipulated to dismiss all NFL teams and their holding
companies named as defendants. They also stipulated to dismiss the eleventh cause of
action for civil conspiracy.
4
providing the NFL with that opportunity (sometimes referred to as the “Los Angeles
opportunity”). The fifth and sixth causes of action addressed the NFL’s failure to offer
the Raiders more support with the development of the Hollywood Park stadium.
The jury deliberated for 15 days, though it began deliberations anew on the fifth
day after one juror was excused due to a scheduling conflict. During the deliberations,
the jurors asked several specific questions about the evidence and instructions. On
May 21, 2001, the jury returned a 9 to 3 verdict in favor of the NFL.
Following a subsequent bench trial, the trial court entered its statement of decision
on the ninth cause of action on June 3, 2002. It denied the Raiders’ request for a
declaration that they were not required to share certain stadium revenues, because the
NFL constitution and bylaws obligated the Raiders to share and the NFL had not
modified or waived the sharing requirement.
On July 26, 2002, the trial court entered judgment on all matters tried before the
jury and the court.
C.
Posttrial Motions
Also on July 26, 2002, the Raiders filed their motion for judgment notwithstanding
the verdict and motion for new trial. The Raiders premised their new trial motion on
grounds of juror misconduct, erroneous jury instructions, erroneous admission of
evidence and insufficiency of evidence.
With respect to juror misconduct, the Raiders asserted that one juror, Mr. Abiog,
harbored a bias against the Raiders and concealed that bias during voir dire. They further
asserted that another juror, attorney Ms. Hillman, had an unconcealed, preexisting bias
against the Raiders, infected the deliberations with her own view of the law, and engaged
in private deliberations with another juror. They also suggested that a third juror,
Ms. Paulino, had difficulty understanding English.
To demonstrate this misconduct, the Raiders submitted five juror declarations, as
well as declarations of counsel averring that counsel were unaware of any jury
misconduct occurring during the trial or deliberations. According to the juror
5
declarations, Mr. Abiog stated several times during deliberations that he hated the
Raiders and their owner, Al Davis, and that he would never award any money to the
Raiders or find for them in this case. One juror confronted Mr. Abiog, telling him that it
was improper for him to make such a statement and that he had a duty to disclose in his
juror questionnaire his hostility toward the Raiders. Mr. Abiog responded that the
questionnaire had only asked what his favorite team was and did not ask whether he
disliked the Raiders. Two other jurors, including the jury foreman, told Mr. Abiog that
concealing his bias against the Raiders could cause a mistrial.
With respect to Ms. Hillman, the declarations stated that she “exercised an
unofficial leadership position,” dominated the deliberations and instructed the jurors on
the law. One example of Ms. Hillman’s dominance repeated throughout the declarations
was that she “told the jury that if they voted one way on one of the claims, they had to
vote the same way on another claim, because ‘that was the law.’” Another example cited
in three declarations was that Ms. Hillman told the jury that there could be no fiduciary
relationship between the NFL and the Raiders as a matter of law. Ms. Hillman also wrote
out statements of the law and taped them to the jury room walls; her statements were not
quotations from the jury instructions “but were her own words of what she claimed the
law was.” Some jurors also observed Ms. Hillman having private conversations with
another juror during deliberations.
Finally, the declarations stated that Ms. Paulino, an alternate juror who replaced an
excused juror during deliberations, appeared to have trouble understanding English.
According to the jurors: “She would say to us, ‘I don’t understand,’ and, several times,
that she wanted to re-read material.”
Independent of any juror misconduct, the Raiders asserted that a new trial was
warranted because the jury received several erroneous and prejudicial jury instructions.
The NFL opposed the motion for new trial and submitted eight juror declarations
in support of its opposition, including one declaration from an alternate juror who did not
participate in the deliberations, one declaration from a juror who was excused before the
jury reached a verdict, and a supplemental declaration from one of the five jurors who
6
submitted declarations in support of the motion. It also filed evidentiary objections to the
Raiders’ juror declarations. According to Mr. Abiog’s declaration, at some point well
into the deliberations, Mr. Abiog joked that he “hated the Raiders” because he had lost a
small bet on them in Las Vegas. Mr. Abiog declared that he harbored no bias against the
Raiders or Mr. Davis. In four other declarations, the jurors stated they could not recall
Mr. Abiog stating that he hated the Raiders or Al Davis; nor could they recall any other
jurors responding to such a statement. The declarations further stated that Mr. Abiog did
not give the jurors any reason to believe that he harbored a preexisting bias against the
Raiders. The juror who submitted the supplemental declaration stated that he could not
tell whether Mr. Abiog had formed an unfavorable impression of the Raiders before or
during trial.
Ms. Hillman submitted a declaration in which she denied dominating the
deliberations; stated that she told her fellow jurors to follow the instructions given by the
court and did not tell the jury what the law was; and explained that she wrote out the jury
instructions verbatim, with the exception of an inadvertent error where she wrote
“fiduciary duty” instead of “fiduciary relationship.” She denied expressing legal opinions
as to the validity of any claim or the effect of any evidence. The other juror declarations
stated that Ms. Hillman did not dominate the deliberations. To the contrary, the jurors
declared that Ms. Hillman repeatedly stated that the jury’s decision must be based on the
instructions given and that any questions about the instructions should be directed to the
judge. The declarations further stated that Ms. Hillman helped write out the jury
instructions verbatim on butcher paper, and that many jurors also wrote on the paper by
summarizing the evidence helpful to particular instructions.
The NFL’s declarations also stated that Ms. Paulino fully participated in the
deliberations; on the occasions when she asked for help, she did so because she was
unfamiliar with points that had been addressed in the deliberations prior to her arrival.
The NFL also responded to the claim that a new trial was warranted because of
erroneous jury instructions, arguing that the evidence supported giving the challenged
7
instructions, that the supporting evidence obviated the need to plead defenses relating to
the instructions, and that the instructions correctly stated the law.
The Raiders filed their reply, together with six reply declarations, on September 5,
2002. According to those declarations—including one from Ms. Paulino in well-written
English—Mr. Abiog’s demeanor indicated that his comment about the Raiders was not a
joke and Ms. Hillman repeatedly instructed the jury on her knowledge of the law. The
NFL moved to strike the declarations on the ground they were untimely filed and,
alternatively, objected to the declarations’ contents.
On September 11, 2002, the trial court heard argument on the motions for new
trial and judgment notwithstanding the verdict, and took the matters under submission.
On September 23, 2002, the court issued a minute order granting the motion for new trial
and denying the motion for judgment notwithstanding the verdict. In ruling on the
motion for new trial, the trial court stated only: “The motion for new trial is granted.
The Court finds that the objectively ascertainable acts of Juror misconduct were
prejudicial to the Oakland Raiders’ right to a fair trial.” With respect to the other grounds
raised by the motion, the court further stated: “While some of the objections in the
motion for new trial premised on erroneous and/or prejudicial jury instructions raise
serious questions concerning their use, and having given the Court some pause, having
granted the motion for new trial on other grounds, we have not reached these issues.”
The minute order did not rule on any of the evidentiary objections.
The NFL appealed from the order granting a new trial and the Raiders appealed
from the judgment.
DISCUSSION
A.
The NFL’s Appeal.
The NFL’s appeal challenges solely the trial court’s grant of a new trial.
Generally, we review an order granting a new trial for abuse of discretion. (Lane v.
Hughes Aircraft Co. (2000) 22 Cal.4th 405, 412; Bell v. State of California (1998) 63
Cal. App.4th 919, 930-931.) Here, however, the NFL not only challenges the result of
8
the trial court’s order, but also contends that the order itself is deficient for failing to
specify the reasons for granting a new trial. (See Code Civ. Proc., § 657.)3 According to
the NFL, this deficiency requires us to apply a less deferential standard of review in
evaluating the trial court’s decision.
We conclude that the order failed to comply with section 657 because it did not
adequately specify “the court’s reason or reasons for granting the new trial upon each
ground stated.” (§ 657.) We further find that this deficiency renders the order defective
and requires us to independently review whether a new trial was warranted on the ground
of juror misconduct or any other ground raised by the motion.4 (Thompson v. Friendly
Hills Regional Medical Center (1999) 71 Cal.App.4th 544, 550.) On the basis of that
review, we must reverse the order granting a new trial, as neither juror misconduct nor
instructional error materially affected the substantial rights of the Raiders.
1.
The New Trial Order is Defective Because it Does Not Specify the Court’s
Reasons for Granting a New Trial.
A trial court may grant a new trial only by following the applicable statutory
procedures. (Sanchez-Corea v. Bank of America (1985) 38 Cal.3d 892, 899.)
Section 657 governs the manner of making and entering an order granting a new trial and
provides in relevant part: “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.” The court’s specification
of reasons need not be contained within the order granting the new trial. Section 657
further provides: “If an order granting such motion does not contain such specification of
3
Unless otherwise indicated, all further statutory references are to the Code of Civil
Procedure.
4
Though the Raiders asserted that a new trial was required on the ground of
insufficiency of the evidence, we cannot review that ground because it was not stated in
the order granting the new trial and, therefore, we cannot affirm the order on that basis.
(See § 657 [“the order [‘granting a new trial’] shall not be affirmed upon the ground of
the insufficiency of the evidence to justify the verdict or other decision, . . . unless such
ground is stated in the order granting the motion”].)
9
reasons, the court must, within 10 days after filing such order, prepare, sign and file such
specification of reasons in writing with the clerk.”
Here, the order granting a new trial specified “Juror misconduct” as the ground
upon which it was based. This specification was adequate, as it reasonably approximated
the language of section 657, permitting a new trial on the ground of “[m]isconduct of the
jury.” (See Treber v. Superior Court (1968) 68 Cal.2d 128, 131 [new trial order using
statutory language adequately stated ground]; Mercer v. Perez (1968) 68 Cal.2d 104, 111
[new trial order’s specification of the ground on which it is based should use statutory
language or a reasonable approximation thereof].)
In the same sentence in which the trial court set forth the ground upon which its
grant of the new trial was based, the court also set forth its “reason” for the grant: “The
Court finds that the objectively ascertainable acts of Juror misconduct were prejudicial to
the Oakland Raiders’ right to a fair trial.” We conclude that this statement fails
adequately to specify the trial court’s reason for granting the new trial motion.
“[S]ection 657 places on the trial courts a clear and unmistakable duty to furnish a
timely specification of both their grounds and their reasons for granting a new trial . . . .”
(Treber v. Superior Court, supra, 68 Cal.2d at p. 136.) Requiring a specification of
reasons serves the dual purpose of “encouraging careful deliberation by the trial court
before ruling on a motion for new trial, and of making a record sufficiently precise to
permit meaningful appellate review.” (Scala v. Jerry Witt & Sons, Inc. (1970) 3 Cal.3d
359, 363, citing Mercer v. Perez, supra, 68 Cal.2d at p. 113.) A specification of reasons
satisfies these purposes “if the judge who grants a new trial furnishes a concise but clear
statement of the reasons why he finds one or more of the grounds of the motion to be
applicable to the case before him.” (Mercer v. Perez, supra, at p. 115; see also Meiner v.
Ford Motor Co. (1971) 17 Cal.App.3d 127, 136 [trial court granting a new trial should
consider “‘whether his proposed specification of reasons will fairly serve the legislative
purposes elucidated in Mercer’”].)
As Mercer further explained, “[n]o hard and fast rule can be laid down as to the
content of such a specification, and it will necessarily vary according to the facts and
10
circumstances of each case.” (Mercer v. Perez, supra, 68 Cal.2d at p. 115.) But despite
the absence of any rule governing the specification of reasons’ content, courts have
articulated one clear guideline, explaining that a reason must do more than simply restate
the ground on which the order granting the new trial is based. (Scala v. Jerry Witt &
Sons, Inc., supra, 3 Cal.3d at pp. 366-367; Mercer v. Perez, supra, at p. 112; Van Zee v.
Bayview Hardware Store (1968) 268 Cal.App.2d 351, 359.) While this guideline had
been applied principally in cases involving the grant of a new trial on the ground of
insufficiency of evidence (see, e.g., Scala v. Jerry Witt & Sons, Inc., supra, at pp. 363364), it applies with equal force to new trial orders based on any statutorily authorized
ground. For example, in Stevens v. Parke, Davis & Co. (1973) 9 Cal.3d 51, the court
reversed an order granting a new trial on the ground of excessive damages. The order
contained a specification of reasons stating “that the ‘verdict is excessive, that it is not
sustained by the evidence’”; the court found that these reasons did “not go beyond a
statement of the ground for the court’s decision.” (Id. at pp. 61-62; accord, Treber v.
Superior Court, supra, 68 Cal.2d at p. 131 [holding that where new trial is granted on the
ground of “errors in law,” § 657 requires the trial court “to briefly specify the errors that
are the basis for his ruling”]; Thompson v. Friendly Hills Regional Medical Center,
supra, 71 Cal.App.4th at pp. 549-550 [holding that adequate specification of reasons is
required where new trial is granted on the ground of juror misconduct]; see also
Mercer v. Perez, supra, at p. 115 [noting by way of example that “if the ground is
‘misconduct of the jury’ through their resorting to chance, the judge should specify this
improper method of deliberation as the basis of his action”].)
Evaluated under these principles, the trial court’s specification of reasons for
granting the motion is inadequate. Deeming the “objectively ascertainable acts” of juror
misconduct prejudicial does nothing more than restate the elements necessary to grant a
new trial on the ground of juror misconduct. Under Evidence Code section 1150, a
verdict may be impeached by “proof of overt acts . . . objectively ascertainable,”
i.e., those that are “‘open to sight, hearing, and the other senses and thus subject to
corroboration.’” (Hasson v. Ford Motor Co. (1982) 32 Cal.3d 388, 413; Jones v. Sieve
11
(1988) 203 Cal.App.3d 359, 366.) By the same token, the trial court may grant a motion
for a new trial on the ground of juror misconduct only where that misconduct prejudiced
the losing party’s right to a fair trial. (§ 657; Enyart v. City of Los Angeles (1999) 76
Cal.App.4th 499, 507.) Thus, specifying that the reasons for granting the new trial
motion were prejudicial, objectively ascertainable acts of misconduct “borders on the
tautological” and “simply reiterates the ground of the ruling itself.” (Scala v. Jerry Witt
& Sons, Inc., supra, 3 Cal.3d at p. 367.)
The specification of reasons likewise fails to satisfy either of the two purposes of
the requirement. On its face, the order does not indicate that it is the “product of a mature
and careful reflection on the part of the judge.” (Mercer v. Perez, supra, 68 Cal.2d at
p. 113.) The mere fact that the order was issued 12 days after the hearing on the new trial
motion is not indicative of the type of judicial deliberation sought to be promoted by the
specification of reasons requirement. (See ibid.) To the contrary, the issuance of a onesentence order after that period of time makes it appear as if the decision to grant a new
trial was “hasty or ill-considered.” (Ibid.)
Nor is the specification of reasons sufficiently precise for the purpose of
meaningful appellate review. (Scala v. Jerry Witt & Sons, Inc., supra, 3 Cal.3d at p. 363;
see also Johns v. City of Los Angeles (1978) 78 Cal.App.3d 983, 987.) As the Scala court
explained, “the need ‘to make the right to appeal from the order more meaningful’
[citation] is perhaps the more useful yardstick to an appellate court for measuring the
adequacy of the specification.” (Scala v. Jerry Witt & Sons, Inc., supra, at p. 366.) The
specification of reasons does not satisfy this purpose. The order’s references to
“objectively ascertainable acts” could refer to any two or more of the several acts of
misconduct raised by the new trial motion, including Mr. Abiog’s remark about the
Raiders and their owner as demonstrating a concealed bias; Ms. Hillman’s telling the jury
they had to vote the same way on related claims; Ms. Hillman’s telling the jury that a
fiduciary relationship between the parties could not exist as a matter of law;
Ms. Hillman’s writing her own version of the jury instructions on butcher paper taped to
the wall; or Ms. Hillman’s having private deliberations with another juror. We cannot
12
agree with the Raiders that the reference to “acts” necessarily means that the court found
that the conduct of both Mr. Abiog and Ms. Hillman prejudiced them. In particular, the
declarations asserted that Ms. Hillman committed multiple acts of misconduct. Without a
more precise specification of reasons, we are left to speculate about the trial court’s bases
for granting a new trial.
These circumstances are no different than those in McLaughlin v. City Etc. of San
Francisco (1968) 264 Cal.App.2d 310. There, the specification of reasons provided that
the new trial granted on the ground of insufficient evidence to support an $8,000 verdict
was “‘based upon the failure of the Plaintiff to prove by a preponderance of the evidence
reasonable total damages, both general and special . . . [in excess of $5,117.50] . . .’” (Id.
at p. 315, italics omitted.) Though the appellate court could have speculated as to how
the trial court reached its conclusion that there was insufficient proof of approximately
$3,000 in damages, it declined to do so, explaining that the specification of reasons
requirement “was designed to put an end to speculation of this nature, and we are not
permitted to infer the trial court’s reasons where we have not been told what they are.”
(Id. at p. 317, citing Mercer v. Perez, supra, 68 Cal.2d at p. 117.)
In sum, the specification of reasons merely restates the ground on which the new
trial order was based. Moreover, it neither indicates it was the product of careful
deliberation nor provides a basis for meaningful appellate review. “The failure to supply
an adequate specification of reasons renders the new trial order defective, but not void.”
(Thompson v. Friendly Hills Regional Medical Center, supra, 71 Cal.App.4th at p. 550.)
Where a new trial order is defective, “[t]he reviewing court remains under an express
statutory duty to affirm such an order if the record will support any ground listed in the
motion.” (Treber v. Superior Court, supra, 68 Cal.2d at p. 134.) But before we address
the grounds raised by the motion, we turn first to the appropriate standard of review.
13
2.
Because the New Trial Order Fails to Provide an Adequate Specification
of Reasons, We Must Independently Review the Grounds Advanced in the New Trial
Motion.
As we acknowledged earlier, when a new trial order complies with the
requirements of section 657, we review that order for an abuse of discretion. (Lane v.
Hughes Aircraft Co., supra, 22 Cal.4th at p. 412.) At the other end of the spectrum, a
defective new trial order—i.e., one that contains an inadequate specification of reasons—
premised only on the ground of insufficient evidence or excessive or inadequate damages
must be reversed as a matter of law. (§ 657; Mercer v. Perez, supra, 68 Cal.2d at p. 119.)
The situation here, involving a defective new trial order premised on jury misconduct,
lies somewhere in the middle. We conclude that independent review is an appropriate
middle ground by which to determine whether there is any basis to affirm the new trial
order in this case.
Our conclusion is based in large part on Thompson v. Friendly Hills Regional
Medical Center, supra, 71 Cal.App.4th 544, which also involved an appeal from a new
trial order granted on the ground of jury misconduct that lacked an adequate specification
of reasons. There, the court stated: “We independently review all the grounds advanced
for the new trial motion and will sustain the order ‘if it should have been granted upon
any ground stated in the motion, whether or not specified in the order or specification of
reasons . . . .’ (Code Civ. Proc., § 657.) That review includes searching the record, with
the assistance of the party for whom the new trial was granted, ‘to find support for any
other ground stated in the motion . . . .’ (Mercer v. Perez, supra, 68 Cal.2d at p. 119.)
While we give ‘considerable weight to the expressed opinion of the trial court’
(Malkasian v. Irwin (1964) 61 Cal.2d 738, 749 [40 Cal.Rptr. 78, 394 P.2d 822]), we
nonetheless exercise our own judgment, following our review of the record, to determine
whether a new trial is legally required.” (Thompson v. Friendly Hills Regional Medical
Center, supra, at p. 550, fn. omitted.) In a footnote, the Thompson court distinguished
the situation “where there is a specification of reasons for a new trial order based on jury
14
misconduct,” explaining that such an order would be reviewed only for an abuse of
discretion. (Id. at p. 550, fn. 6.)
Though earlier decisions did not articulate the appropriate standard of review as
clearly as the Thompson court did, it is apparent that courts repeatedly have exercised
their independent judgment to review defective new trial orders. (E.g., Sanchez-Corea v.
Bank of America, supra, 38 Cal.3d at p. 905 [“If an order granting a new trial does not
effectively state the ground or the reasons, . . . an order granting the motion will be
affirmed if any such other ground legally requires a new trial”]; Treber v. Superior Court,
supra, 68 Cal.2d at p. 136 [“the scope of review in such circumstances [where there is an
inadequate specification of reasons] will encompass the entire record”].) As Thompson
held and earlier decisions implied, independent review is essential to comply with the
requirement of section 657 that a new trial order should be affirmed on any ground raised
by the motion, “whether or not specified in the order or specification of reasons . . . .”
(§ 657.) In addition to allowing the appellate court to address each ground raised by the
new trial motion, independent review permits the appellate court to conduct a meaningful
assessment of each ground in the absence of any guidance from the trial court as to its
reasoning.
We do not agree with the NFL that a standard of review even less deferential than
independent review is warranted under these circumstances. The NFL suggests that the
trial court’s failure to provide an adequate specification of reasons compels the Raiders,
as the party moving for a new trial, to demonstrate on appeal that a new trial is required
as a matter of law. To formulate this standard, the NFL relies on authority providing
“‘[w]here no grounds or reasons are specified in the order the burden is on the movant to
advance any grounds upon which the order should be affirmed, and a record and
argument to support it.’” (Sanchez-Corea v. Bank of America, supra, 38 Cal.3d at pp.
900, 906.) But this authority must be taken literally—that is, courts decline to review a
ground not reached by the trial court where the moving party fails to offer any type of
record on appeal that would permit the appellate court to affirm the order on that ground.
15
To illustrate, in Gaskill v. Pacific Hosp. of Long Beach (1969) 272 Cal.App.2d
128, the trial court granted a new trial motion on several grounds, but provided no
specification of reasons. The appellant challenged the order for its failure to meet the
requirements of section 657, providing only a clerk’s transcript and no other record of the
proceedings. (Gaskill, supra, at p. 129.) Reversing the order, the court explained the
respondent’s burden when a defective new trial order is challenged: “We hold that when
the court states a ground or grounds for ordering a new trial but states no reason or a
wholly insufficient reason for adopting the ground, the order must fail of validity unless
the record on appeal shows the existence of some valid ground for a new trial which is
stated in the motion. We also hold that in the present case a proper application of
amended section 657 places the burden upon the respondents to furnish a reporter’s
transcript and that without a transcript we are forced to the conclusion that no valid
ground for the order existed.” (Gaskill, supra, at p. 133; see also Tagney v. Hoy (1968)
260 Cal.App.2d 372, 376-377 [same].) We decline to transmute a respondent’s
evidentiary burden into a burden of proof on appeal. The Raiders have provided an
ample record and argument that will enable us to address the new trial grounds raised by
the motion.
On the other hand, we do not agree with the Raiders that a standard more
deferential than independent review should be applied to evaluate a defective new trial
order. Applying an abuse of discretion standard of review to both new trial orders
containing and lacking an adequate specification of reasons suggests that there should be
no consequence for a trial court’s failure to provide a specification of reasons and would
effectively render that requirement meaningless. Though we acknowledge that
comments in both Treber v. Superior Court, supra, 68 Cal.2d 128 and Hand Electronics,
Inc. v. Snowline Joint Unified School Dist. (1994) 21 Cal.App.4th 862 suggest that an
16
abuse of discretion standard of review applies even when the order fails to provide a
specification of reasons, we are not persuaded by this authority.5
In Treber v. Superior Court, supra, the court had no occasion to apply the abuse of
discretion standard, as it denied a petition for writ of mandate to compel the trial court to
vacate its new trial order and issued an alternative writ to construe the specification of
reasons requirement in section 657. (68 Cal.2d at pp. 130-131.) Declaring that a
specification of reasons need not include an explanation of why the trial court found an
error prejudicial, the court observed that the factual question of prejudice must be
reviewed for an abuse of discretion and that, therefore, “whether the particular
explanation offered by the trial court supports the finding of prejudice” would not be
determinative of the prejudice issue. (Id. at pp. 131-132.) The court thus discussed the
abuse of discretion standard of review in the context of a hypothetical order containing a
statement of reasons. We are not bound by dicta in a higher court opinion. (E.g., County
of San Bernardino v. Superior Court (1994) 30 Cal.App.4th 378, 388.)
The court in Hand Electronics, Inc. v. Snowline Joint Unified School Dist., supra,
affirmed a defective new trial order—one that failed to specify grounds—on the ground
of erroneous jury instructions. (21 Cal.App.4th at pp. 867-868.) In doing so, the court
recited the abuse of discretion standard of review. (Id. at p. 871.) However, the cases
cited as authority for applying that standard all involved new trial orders containing
adequate specifications of reasons.6 (Ibid.; compare Thompson v. Friendly Hills Regional
Medical Center, supra, 71 Cal.App.4th at p. 550, fn. 6 [applying independent standard of
5
The NFL also relies on Malkasian v. Irwin, supra, 61 Cal.2d 738, 747-749, where
the court affirmed a new trial order that failed to specify grounds so as not to disturb the
trial court’s exercise of discretion. But the Malkasian decision construed the prior
version of section 657, which did not contain the specification of reasons requirement.
(See Malkasian at p. 744; see also Cal. Stats. 1939, ch. 713, p. 2234.) Therefore,
Malkasian is of little assistance.
6
See Seimon v. Southern Pac. Transportation Co. (1977) 67 Cal.App.3d 600, 604;
Miller v. National American Life Ins. Co. (1976) 54 Cal.App.3d 331, 345; Christian v.
Bolls (1970) 7 Cal.App.3d 408, 415.
17
review to defective new trial order and expressly differentiating a case involving a new
trial order containing an adequate specification of reasons].) Indeed, Hand Electronics
illustrates the difficulty of applying an abuse of discretion standard to an order lacking a
specification of reasons. There, following a detailed examination of the jury instruction
at issue, the court stated: “Here, we find that the challenged instruction was ambiguous
and likely misled the jury into awarding improper damages based on the replacement cost
of the equipment. We find no abuse of discretion in the trial court’s order granting a new
trial on the basis of error in law.” (21 Cal.App.4th at p. 871.) In essence, the Hand
Electronics court appears to have conducted an independent review of the challenged
instruction and thereafter found that there was no abuse of discretion because the trial
court’s conclusion mirrored its own.
Consistent with the reasoning of Thompson v. Friendly Hills Regional Medical
Center, supra, 71 Cal.App.4th 544, we conclude that independent review is the
appropriate standard of review for a new trial order containing an inadequate
specification of reasons.7
3.
The New Trial Order Cannot be Affirmed on the Ground of Juror
Misconduct.
After examining the record, we conclude that a new trial was not required on the
ground of juror misconduct.8 On the basis of the conflicting juror declarations before us,
7
We are mindful of the Supreme Court’s recent decision in People v. Ault (2004)
33 Cal.4th 1250, 1271-1272, which held that an order granting a new trial on the ground
of prejudicial juror misconduct must be reviewed for an abuse of discretion, disapproving
several cases that had held the question of prejudice should be independently reviewed.
In Ault, however, there was no question about the sufficiency of the trial court’s order
granting the new trial, and thus the Supreme Court had no occasion to address the
appropriate standard of review where an order lacks an adequate specification of reasons.
(See id. at p. 1270 [trial court “rendered detailed factual findings leading to its
determination that misconduct had occurred, and carefully analyzed the issue of
prejudice”].)
8
We note at the outset that we have confined our review of the juror declarations to
those submitted with the moving and opposition papers. We consider those declarations
18
we cannot find that the conduct of Mr. Abiog, Ms. Hillman or Ms. Paulino—considered
either in isolation or combination—constituted misconduct warranting a new trial.
a.
Misconduct in the form of concealed bias.
According to the Raiders, Mr. Abiog’s comment during deliberations that he
“hated the Raiders,” coupled with his response to a jury questionnaire during voir dire
that he had no opinion about the Raiders, constituted evidence of a concealed bias against
the Raiders. To warrant granting a new trial on the ground of a concealed bias, the court
must “find that at the outset of the trial the juror as a ‘demonstrable reality’ [citation]
was, because of a general bias against the plaintiff [citation] irrevocably committed to
vote against the plaintiff regardless of the facts that might emerge in the trial [citation].”
(Johns v. City of Los Angeles, supra, 78 Cal.App.3d at p. 996.) To enable the court to
make this finding, the party moving for a new trial has the burden of establishing “that
the controverted statements were made and that the juror[] who made them had in fact
committed perjury on voir dire.” (Id. at p. 991.)
The Raiders met their burden to show that Mr. Abiog made the statement
purporting to reflect his concealed bias. Mr. Abiog admitted that during deliberations
that he said he “hated the Raiders.” Beyond that, however, the evidence was in sharp
conflict. On the basis of this conflicting evidence, we conclude that the Raiders did not
to the extent permissible under Evidence Code section 1150, which precludes the
admission of evidence of jurors’ subjective reasoning processes. (See Tahoe National
Bank v. Phillips (1971) 4 Cal.3d 11, 23, fn. 18 [even where evidence is admitted without
objection, its legal effect is a matter for the appellate court]; see also Tramell v.
McDonnell Douglas Corp. (1984) 163 Cal.App.3d 157, 171-172 [“Proof relating to the
subjective reasoning process of any individual juror is not admissible and cannot be so
considered”].) The failure of both the NFL and the Raiders to secure rulings on their
respective evidentiary objections has waived any other evidentiary challenge to those
declarations on appeal. (E.g., Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th
666, 673, fn. 1; Dodge, Warren & Peters Ins. Services, Inc. v. Riley (2003) 105
Cal.App.4th 1414, 1421.) Further, we have not considered the declarations submitted by
the Raiders on reply, as they were untimely filed beyond the mandatory statutory time
limit of 30 days following the filing of the notice of intent to move for a new trial. (§
659a; Erikson v. Weiner (1996) 48 Cal.App.4th 1663, 1672 [“trial court has no discretion
to admit affidavits submitted . . . [¶] [after] [t]he express limitation of section 659a”].)
19
meet their burden to show that Mr. Abiog was irrevocably committed to vote against the
Raiders—in other words, that he committed perjury when he promised to be fair. (See
Johns v. City of Los Angeles, supra, 78 Cal.App.3d at pp. 991, 995.)
The declarations submitted by the Raiders stated that, in the presence of the entire
jury, Mr. Abiog said that he hated both the Raiders and their owner, Al Davis, and that he
would never award the Raiders any money. One declarant qualified his statement,
explaining: “[D]uring deliberations Mr. Abiog expressed strong opinions that were
unfavorable to the Raiders. I could not tell whether he had formed these opinions before
his jury service began, or whether he formed them from listening to the evidence and
arguments during the trial.” Also according to the Raiders’ declarations, Mr. Abiog’s
statement resulted in another juror verbally confronting Mr. Abiog about the impropriety
of his statement; this confrontation, too, occurred in the presence of the entire jury. In
contrast, an approximately equal number of declarations submitted by the NFL stated that
the jurors remembered neither Mr. Abiog’s statement nor the confrontation. Those
declarations stated that Mr. Abiog participated in the deliberations, supported his
positions with reference to the evidence, and on occasion made jokes to relieve tension
during the deliberations.
According to Mr. Abiog’s declaration, he made “jokes or silly comments” during
the deliberations when he “saw people yelling at each other or getting angry.” Mr. Abiog
declared that during one of these moments, “I said jokingly that I hated the Raiders
‘because I lost my bet.’ I mentioned that years earlier, I had gone to Las Vegas and
placed a small, legal bet on the Raiders in a playoff game, which they lost.” Mr. Abiog
further declared that no one confronted him about this statement. He added that he did
not make any negative comment—joking or otherwise—about the Raiders’ owner.
When faced with such conflicting evidence, courts generally deny motions for a
new trial. For example, in Hasson v. Ford Motor Co., supra, 32 Cal.3d 388, defendant
Ford moved for new trial, supported in part by two juror declarations stating that during
deliberations jurors read and discussed newspaper articles concerning the case. The
plaintiff submitted other juror declarations denying the presence of the articles and any
20
related discussions. (Id. at pp. 409-410.) Finding the denial of Ford’s new trial motion
proper under these circumstances, the court stated: “It does not appear that Ford met its
burden of establishing misconduct due to the improper reception of evidence. Although
the two affidavits it presented constitute a prima facie showing of misconduct, they are
directly rebutted in all important respects by a number of counterdeclarations. The trial
court correctly declined to settle this ‘battle of the juror declarations’ in Ford’s favor by
granting a new trial.” (Id. at p. 410; see also Thompson v. Friendly Hills Regional
Medical Center, supra, 71 Cal.App.4th at pp. 550-551 [motion for new trial should have
been denied where contradictory juror declarations, taken as a whole, failed to show that
jurors expressly or impliedly agreed to inflate the verdict to include attorney fees];
DiRosario v. Havens (1987) 196 Cal.App.3d 1224, 1237-1238 [motion for new trial
properly denied where the jury foreman and fellow jurors discussed the damage award
being reduced by the judge, but the affidavits conflicted as to what role the foreman
played in the discussion and what was said]; Tillery v. Richland (1984) 158 Cal.App.3d
957, 972-977 [motion for new trial properly denied where affidavits describing
statements amounting to juror misconduct and concealed bias were rebutted by affidavits
submitted by the accused jurors and where trial court would have been required to
speculate as to whether the alleged statements were indicative of any preexisting bias].)
Guided by this authority, we decline to settle the conflicts in the admissible
evidence in favor of granting a new trial. We are not persuaded by the authority cited by
the Raiders, as each of those cases involved uncontradicted evidence establishing juror
misconduct. (See Enyart v. City of Los Angeles, supra, 76 Cal.App.4th at pp. 510-511
[declarations established that negative attitudes expressed by majority jurors were based
on bias where those jurors responded with “imperfect denials”]; Province v. Center for
Women’s Health & Family Birth (1993) 20 Cal.App.4th 1673, 1679-1680 [new trial
required where there was “no doubt juror misconduct occurred” on the basis of multiple,
unrefuted juror declarations stating that one juror discussed a newspaper article about the
case with other jurors], overruled on other grounds in Heller v. Norcal Mutual Ins. Co.
(1994) 8 Cal.4th 30, 41; Smith v. Covell (1980) 100 Cal.App.3d 947, 952-954 [jury
21
misconduct established on the basis of “uncontradicted” juror declarations]; Clemens v.
Regents of University of California (1971) 20 Cal.App.3d 356, 365 [juror declaration
submitted in response to multiple declarations charging bias not a “complete and
categorical denial of all of the charges”]; People ex rel. Dept. of Pub. Wks. v. Curtis
(1967) 255 Cal.App.2d 378, 391-392 [“evidence before the trial court was
uncontradicted” that juror concealed on voir dire that he had an opinion which could tend
to prejudice his judgment of the case and that during deliberations he provided the jury
with outside information concerning an expert witness’s qualifications]; Deward v.
Clough (1966) 245 Cal.App.2d 439, 443 [no counteraffidavit filed in response to
affidavits outlining misconduct].)
Here, in contrast, several juror declarations categorically refuted any charge of
misconduct. Construing the juror declarations as a whole, we cannot conclude that
Mr. Abiog perjured himself during voir dire and was irrevocably committed to vote
against the Raiders regardless of the evidence presented at trial. (See Johns v. City of Los
Angeles, supra, 78 Cal.App.3d at p. 995.) According to Mr. Abiog’s declaration, the
comment against the Raiders was made as part of a joke. Other jurors confirmed that Mr.
Abiog would occasionally make jokes to ease the tension during deliberations. Though
some declarations stated that Mr. Abiog’s comment resulted in a dramatic confrontation
witnessed by the entire jury, several jurors declared that they neither heard Mr. Abiog’s
comment nor witnessed any type of confrontation.9 The failure of some jurors either to
hear or to recall the comment or any reaction to it is consistent with it being made in an
offhand manner, as part of a joke. Moreover, even one of the Raiders’ declarants who
stated that “Mr. Abiog did not hide the fact that he was biased against the Raiders” later
tempered his statement by adding that he “could not tell whether he [Mr. Abiog] had
9
Similar to the court in Hasson v. Ford Motor Co., supra, which expressed surprise
at the fact that no one involved in the trial reported or noticed the purported juror
misconduct, we find it curious that no juror reported the confrontation where a juror
contended that Mr. Abiog’s concealing his bias against the Raiders could result in a
mistrial. (32 Cal.3d at p. 411, fn. 6.)
22
formed these opinions before his jury service began, or whether he formed them from
listening to the evidence and arguments during the trial.”
On the basis of this record, we find that the Raiders failed to establish that a new
trial was required because Mr. Abiog concealed a preexisting bias against the Raiders.
b.
Misconduct in the form of outside information.
The Raiders’ juror declarations charged Ms. Hillman, an attorney, with several
related acts of misconduct. Specifically, they claimed that she wrote out statements of
the law that differed from the jury instructions and taped them to the wall. They further
claimed she told the jurors what could and could not be considered as evidence in the
case, that there could be no fiduciary relationship between the NFL and the Raiders as a
matter of law, that Resolution FC-7 could not be a contract as a matter of law, and that if
the jurors voted one way on a claim they had to vote the same way on a different claim.
Juror declarations submitted by the NFL refuted each of these charges.
A juror should not “‘discuss an opinion explicitly based on specialized
information obtained from outside sources. Such injection of external information in the
form of a juror’s own claim to expertise or specialized knowledge of a matter at issue is
misconduct.’ (In re Malone (1996) 12 Cal.4th 935, 963 [50 Cal.Rptr. 281, 911 P.2d
468].)” (McDonald v. Southern Pacific Transportation Co. (1999) 71 Cal.App.4th 256,
263.) By the same token, extraneous law entering the jury room—“i.e., a statement of
law not given to the jury in the instruction by the court”—constitutes misconduct.
(Young v. Brunicardi (1986) 187 Cal.App.3d 1344, 1350.) Thus, a new trial would be
required if the Raiders established that Ms. Hillman used her professional expertise to
instruct the jury in a manner contrary to the court’s instructions to the jury.
Again, however, the evidence sharply conflicts with respect to Ms. Hillman’s
conduct. In response to three jurors’ charge that Ms. Hillman wrote and taped to the wall
statements of the law that were not quotations from the jury instructions, three other
jurors (including Ms. Hillman) declared that she and other jurors wrote out verbatim
23
pertinent phrases and sentences from the instructions.10 Though the Raiders contend that
there could be no possible reason for Ms. Hillman simply recopying the jury instructions,
another juror explained the process in detail: “After the instructions were copied onto the
butcher paper, the jury, as a group, went through the documents and the testimony and
tried to write beneath each instruction information from those materials that seemed to be
helpful in deciding a particular instruction.”
Similarly, in response to two jurors’ assertion that Ms. Hillman stated what
evidence could and could not be considered admissible, Ms. Hillman declared that she
neither used her “position as an attorney to make pronouncements about the evidence”
nor “opine[d] whether certain facts were or were not in evidence ‘as a matter of law.’”
Likewise, while three jurors asserted that Ms. Hillman told the jury that Resolution FC-7
could not be a contract as a matter of law and that there could be no fiduciary relationship
between the NFL and the Raiders as a matter of law, Ms Hillman responded: “At no time
during deliberations did I say that Resolution FC-7 could not be a contract ‘as a matter of
law,’ nor did I express an opinion as to whether a fiduciary duty could have been created
‘as a matter of law.’” Consistent with this response, three other jurors declared that
Ms. Hillman repeatedly stated that the verdict must be based on the instructions given
and the evidence in the case, while a fourth declared that Ms. Hillman did not try to tell
the jury what the law was. With respect to the fiduciary duty claim, one juror specifically
recalled that Ms. Hillman stated that the jury should get written clarification from the
court and, as a result, sent a written question to the court. Finally, Ms. Hillman denied
the charge by four jurors that she said the jury had to vote the same way on all the
Raiders’ claims, stating that she and other jurors wrote out verbatim language from the
jury instructions identifying the elements of each claim so that all claims could be
considered.
10
The Raiders contend that even if Ms. Hillman only excerpted pertinent portions of
the jury instructions, she committed misconduct by using her professional expertise to
highlight what she considered significant. But at least one declaration indicated that the
jurors collectively decided what was pertinent and that several jurors in addition to
Ms. Hillman helped to copy the instructions.
24
That the evidence of misconduct is controverted distinguishes this case from each
of those relied on by the Raiders, which, again, all involved uncontroverted evidence of
misconduct. For example, McDonald v. Southern Pacific Transportation Co., supra, 71
Cal.App.4th 256, involved a personal injury action against a railroad company. In
support of the plaintiff’s new trial motion, a juror declared that another juror who was a
transportation expert opined during deliberations that it would have been impractical to
install security gates at the location of the accident because they would trigger sensors.
No evidence of sensors, however, had been introduced. (Id. at p. 262.) Specifically
noting that each of the other declarations submitted both in support of and opposition to
the motion confirmed the juror’s statement to some extent and none contradicted it, the
court held that the juror committed misconduct by interjecting an expert opinion about a
matter that was not based on the evidence presented at trial. (Id. at pp. 262-263; see also
People v. Honeycutt (1977) 20 Cal.3d 150, 154-155 & fn. 1 [misconduct warranting new
trial based on uncontradicted evidence that foreman discussed case with attorney during
deliberations]; Jones v. Sieve, supra, 203 Cal.App.3d at pp. 366-367 [misconduct
warranting new trial based on an uncontradicted declaration establishing that one juror
communicated to the other jurors her own experience concerning a pivotal issue and that
another juror defined a relevant term by reference to an outside source rather than the
evidence produced at trial]; Young v. Brunicardi, supra, 187 Cal.App.3d at p. 1349
[misconduct warranting new trial based on juror declarations stating that juror who was a
retired police officer said that jurors needed to see the police report in order to determine
negligence; declarations deemed unrefuted by officer’s counterdeclaration conceding that
“‘[s]ome jury members, including myself, also felt that important evidence had not been
produced, including a police report’”]; Smith v. Covell, supra, 100 Cal.App.3d at p. 952
[misconduct warranting new trial based on uncontradicted juror declarations detailing
several acts of misconduct, including an account of one juror’s experience with a medical
condition similar to the plaintiff’s].)
Unlike the declarations submitted in In re Stankewitz (1985) 40 Cal.3d 391, the
conflicting declarations here cannot be reconciled. There, two jurors declared that
25
another juror advised that he had been a police officer for over 20 years; that as a police
officer he knew the law; that the law provides a robbery takes place as soon as a person
forcibly takes personal property from another person, whether or not he intends to keep
it; and that therefore the petitioner committed a robbery when he took property at
gunpoint, regardless of whether he intended to keep it. (Id. at p. 396.) The court found
that subsequent declarations submitted by the same two jurors failed to undermine the
determination that serious misconduct had occurred, as they addressed only what the
juror might have meant by his comments and attempted to put his comments in a factual
context. (Id. at pp. 400-401.) Significantly, the court commented that the declarations
established that the juror “made the statements, and neither evidence nor argument is
offered to show that he did not.” (Id. at p. 401.)
Here, in contrast, the evidence conflicts as to whether Ms. Hillman actually made
the statements amounting to misconduct. In view of this conflicting evidence, we do not
believe that the Raiders met their burden to establish misconduct. (See, e.g., Hasson v.
Ford Motor Co., supra, 32 Cal.3d at p. 410; Thompson v. Friendly Hills Regional
Medical Center, supra, 71 Cal.App.4th at pp. 550-551.) While we need not resolve these
evidentiary conflicts in order to conclude that a new trial is unwarranted, we note that we
find the Raiders’ juror declarations less persuasive in view of their remarkable similarity.
(See Estate of Vetter (1930) 110 Cal.App. 597, 601 [trial court could skeptically view
testimony that related facts in almost identical words and with the same level of detail].)
We further note that statements in the NFL’s juror declarations regarding Ms. Hillman’s
directing the jury to send questions to the court to obtain clarification are corroborated by
the multiple, detailed written questions that the jury submitted during deliberations.
Consistent with two of the NFL’s juror declarations, two of those questions directly
addressed the issue of whether a fiduciary obligation can run between more than two
parties. Accordingly, we conclude that the Raiders’ submission of contradicted,
uncorroborated evidence of misconduct on the part of Ms. Hillman does not justify a new
trial.
26
c.
Misconduct in the form of language difficulty and private
conversations.
Several of the Raiders’ juror declarations indicated that Ms. Paulino, a juror who
was brought in to replace an excused juror, had difficulty understanding English and
engaged in private conversations with other jurors during deliberations. In contrast, juror
declarations submitted by the NFL stated that Ms. Paulino actively participated in the
jury deliberations and that, on occasion, she would ask jurors for help to understand items
that had been discussed before she joined the jury. Those conversations, however, were
open to all jurors.
We need not consider whether this evidence established misconduct, as the
Raiders have not asserted in their brief that any action on Ms. Paulino’s part amounted to
misconduct.11 They have therefore waived this claim on appeal. (See, e.g., Bonshire v.
Thompson (1997) 52 Cal.App.4th 803, 808, fn. 1.) But even if we were to consider the
Raiders’ claim on the merits, we would conclude that they failed to meet their burden to
establish misconduct. Though the evidence seemingly conflicted as to whether
Ms. Paulino spoke fluent English, the weight of the evidence—including the NFL’s
declarations and Ms. Paulino’s juror questionnaire and voir dire examination—
established her English fluency. Moreover, the evidence concerning private
conversations between Ms. Paulino and other jurors fell short of establishing misconduct.
As the court in People v. Majors (1998) 18 Cal.4th 385, 425, explained: “Absent
concrete evidence as to the content of the jurors’ discussions or the nature of their
opinions, the record fails to establish misconduct. . . . ‘[W]hen jurors are observed to be
talking among themselves it will not be presumed that the act involves impropriety, but in
order to predicate misconduct of the fact it must be made to appear that the conversation
had improper reference to the evidence, or the merits of the case.’”
11
We attribute the Raiders’ failure to challenge Ms. Paulino’s language competency
to their desire to rely on her untimely declaration submitted in reply to the motion for
new trial.
27
Because the Raiders did not meet their burden to establish juror misconduct, the
new trial order cannot be affirmed on that ground.
4.
The New Trial Order Cannot be Affirmed on the Ground of Erroneous
Jury Instructions.
In their motion for a new trial, the Raiders also asserted that several erroneous jury
instructions prejudiced their right to a fair trial. First, the Raiders challenged Instruction
73-A, which permitted the jury to find that a March 1989 settlement agreement and
release covered the Raiders’ claims to rights in Los Angeles. They contended that the
release did not extend to matters occurring after its execution, that interpretation of the
release was a question of law that should not have been submitted to the jury, that the
release should not have been put in issue because the NFL did not raise it as an
affirmative defense, and that, even if applicable, the release expressly exempted the
Raiders’ claims raised by this action. Second, the Raiders asserted that the court
misstated the law when it instructed the jury (Instruction 86) that lost profits could be
awarded to the Raiders only if they proved that they were “ready, willing and able” to
complete the proposed transaction but for the NFL’s breach. Third, the Raiders asserted
that Instruction 45-A, which permitted the jury to determine whether 1995 Resolution
FC-7 constituted a binding contract, was prejudicially erroneous because the resolution
was a contract as a matter of law and the NFL was estopped to claim otherwise. Finally,
the Raiders contended that the trial court should not have given an unclean hands
instruction (Instruction 73) because the NFL did not raise unclean hands as an affirmative
defense and because the instruction was an incomplete statement of the law.
According to section 657, an order granting a new trial “shall be affirmed if it
should have been granted upon any ground stated in the motion, whether or not specified
in the order or specification of reasons . . . .” Thus, we are required to determine whether
the new trial order may be affirmed on the ground of instructional error. (See SanchezCorea v. Bank of America, supra, 38 Cal.3d at p. 905.)
“‘The grant of a new trial is a proper remedy for the giving of an erroneous jury
instruction when the improper instruction materially affected the substantial rights of the
28
aggrieved party. [Citation.]’” (Maher v. Saad (2000) 82 Cal.App.4th 1317, 1325.)
Whether an instruction is erroneous presents a question of law that we independently
review. (Conner v. Southern Pacific Co. (1952) 38 Cal.2d 633, 637.) An instruction that
correctly states the law affords no basis for a new trial. (Ibid.; accord, Brandelius v. City
& County of S.F. (1957) 47 Cal.2d 729, 747; Dabis v. San Francisco Redevelopment
Agency (1975) 50 Cal.App.3d 704, 710.) We conclude that each of the challenged
instructions correctly stated the law, and therefore presents no basis for reversal. In view
of our conclusion, we need not reach the issue of whether any of the instructions was
prejudicial.12
a.
Instruction 73-A concerning the effect of a prior release and
settlement agreement correctly stated the law.
In Instruction 73-A, the trial court instructed the jury as follows: “A release is the
abandonment, relinquishment, or surrender of a known right or claim. A release
extinguishes any claim that is within its scope. Releases are binding contracts and may
be enforced in the same way as other contracts. [¶] In this case, there is a release
contained within Trial Exhibit 1051, that is the March 4, 1989 Settlement Agreement and
Special Release. If you find that the release covered the Raiders’ claims to rights in Los
Angeles, you may find that the Raiders released their claims against the NFL, in which
case the Raiders would not be entitled to recover damages on their Los Angeles
Opportunity claims, [sic] of breach of contract and violation of implied covenant.” In
essence, the instruction permitted the jury to find that the Raiders had previously released
the NFL from liability for the Los Angeles opportunity claims.
12
Where an instruction is erroneous, a new trial may be ordered only if the
erroneous instruction prejudicially affected the verdict. To ascertain prejudice, courts
consider several factors, including “‘(1) the state of the evidence, (2) the effect of other
instructions, (3) the effect of counsel’s argument, and (4) any indications by the jury itself
that it was misled.’” (Rutherford v. Owens-Illinois, Inc. (1997) 16 Cal.4th 953, 983.)
Because the trial court did not exercise its discretion to grant the new trial motion on the
ground of prejudicial instructional error, we would be required to examine the question of
prejudice independently. (See Sanchez-Corea v. Bank of America, supra, 38 Cal.3d at
p. 907.)
29
The release referenced in Instruction 73-A was part of a March 1989 settlement
agreement between the Raiders and the NFL that resolved all disputes and controversies
raised by a prior action entitled Los Angeles Memorial Coliseum Commission v. National
Football League, et al., No. CV 78-3523-TJH (GHKx) (C. D. Cal.). In pertinent part, the
release provided: “The Raiders hereby forever release and discharge the National
Football League, . . . from any and all causes of action, actions, money judgments (but
not the injunction entered in the Action on June 14, 1982), liens, indebtedness, damages,
losses, claims, liabilities and demands of whatever kind and character, including, but not
limited to, any claims in any manner whatsoever arising from or attributable to, the
Action, the Raiders’ move from Oakland to Los Angeles, or to any other matter or event
occurring prior to the date hereof . . . .” The release also contained a waiver of Civil
Code section 1542.13
The Raiders contend that the giving of Instruction 73-A was erroneous for four
separate reasons; they further assert that each of the errors prejudicially affected the
verdict.
First, the Raiders argue that, as a matter of law, the release could not have barred
the claims raised in this action because they arose subsequent to the execution of the
release. To the contrary, nothing bars parties from releasing each other from liability for
future conduct. (See, e.g., Randas v. YMCA of Metropolitan Los Angeles (1993) 17
Cal.App.4th 158, 162-163.) For example, in Winet v. Price (1992) 4 Cal.App.4th 1159,
the parties “release[d] each other from all claims, known or unknown, suspected or
unsuspected, arising from” the facts of a settled case. The court held that this release
barred an action brought 15 years later that involved claims arising from the partnership
agreement at issue in the settled case. (Id. at pp. 1166-1169.) The only judicially
imposed limitation on such releases precludes exculpatory provisions in contracts that
13
Civil Code section 1542 provides: “A general release does not extend to claims
which the creditor does not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have materially affected his or
her settlement with the debtor.”
30
affect the public interest. (Tunkl v. Regents of University of California (1963) 60 Cal.2d
92, 96.) There is no suggestion here that the release in any way affected the public
interest. (See id. at pp. 98-101.) Accordingly, the Raiders and the NFL were free to enter
into a release that involved “any claims,” including future claims, “in any manner
whatsoever arising from or attributable to” the prior action or the earlier Raiders’ move to
Los Angeles.
Second, the Raiders argue that the release is void as against public policy under
Civil Code section 1668, which states: “All contracts which have for their object,
directly or indirectly, to exempt anyone from responsibility from his own fraud, or willful
injury to the person or property of another, . . . are against the policy of the law.” Courts
have construed Civil Code section 1668 to preclude a party from entering into a release
of liability for fraudulent or intentional acts, or violations of statutory law. (Baker Pacific
Corp. v. Shuttles (1990) 220 Cal.App.3d 1148, 1153; Blankenheim v. E. F. Hutton & Co.
(1990) 217 Cal.App.3d 1463, 1471; compare, YMCA of Metropolitan Los Angeles v.
Superior Court (1997) 55 Cal.App.4th 22, 27 [“‘[N]o public policy opposes private,
voluntary transactions in which one party, for a consideration, agrees to shoulder a risk
which the law would otherwise have placed upon the other party . . . .’”].) Though the
Raiders try to characterize their Los Angeles opportunity claims as those that cannot be
released according to Civil Code section 1668 by arguing that the NFL’s conduct was
‘intentional,” the record belies their efforts. The Raiders alleged claims for breach of
contract and breach of the implied covenant related to the Los Angeles opportunity.
Moreover, the trial court instructed the jury on claims for breach of contract and breach
of the implied covenant in connection with the Los Angeles opportunity dispute. The
Raiders did not bring a claim for fraud or any other type of intentional conduct related to
the Los Angeles opportunity. Because Instruction 73-A permitted the jury to apply the
release only to the Los Angeles opportunity claims, Civil Code section 1668 has no
application to the challenged instruction. (See Baker Pacific Corp. v. Shuttles, supra, at
p. 1156.)
31
Third, the Raiders assert that Instruction 73-A was erroneous because the scope of
the release was a question of law that the trial court—not the jury—should have resolved.
We acknowledge that “[c]ontract principles apply when interpreting a release, and
‘normally the meaning of contract language, including a release, is a legal question.’”
(Benedek v. PLC Santa Monica (2002) 104 Cal.App.4th 1351, 1356.) But contract
principles also dictate that where a release is ambiguous, extrinsic evidence is admissible
to aid in its interpretation. (Appleton v. Waessil (1994) 27 Cal.App.4th 551, 554.) “An
ambiguity exists when a party can identify an alternative, semantically reasonable,
candidate of meaning of a writing.” (Solis v. Kirkwood Resort Co. (2001) 94 Cal.App.4th
354, 360; accord, Benedek v. PLC Santa Monica, supra, at p. 1357.) In the event that
extrinsic evidence does not eliminate the ambiguity or if the evidence is contested, an
issue of fact arises. (Solis v. Kirkwood Resort Co., supra, at p. 361; cf. Vine v. Bear
Valley Ski Co. (2004) 118 Cal.App.4th 577, 590 [denial of summary judgment correct
where release was ambiguous]; Hohe v. San Diego Unified Sch. Dist. (1990) 224
Cal.App.3d 1559, 1568 [“Where the intention of the parties on the face of the releases is
ambiguous, a triable factual issue is presented”].)
Here, the release was ambiguous on its face to the extent it did not explicitly
include or exclude all future claims concerning the Los Angeles opportunity. It is
semantically reasonable to construe language releasing the NFL from liability for “any
claims in any manner whatsoever arising from or attributable to” the prior action
involving the Raider’s move to Los Angeles to encompass future claims involving the
Los Angeles opportunity. On the other hand, it is also reasonable to construe that
language together with the phrase immediately following—“or to any other matter or
event occurring prior to the date hereof”—as reflecting an intent to limit the release to
preexisting claims. Though the Raiders’ Civil Code section 1542 waiver weighs in favor
of the former construction, the parties’ failure expressly to release future claims renders
the release ambiguous on the point. (Compare Winet v. Price, supra, 4 Cal.App.4th at
p. 1163.)
32
Moreover, the extrinsic evidence failed to resolve the ambiguity. According to the
Raiders, the release could not be construed to extend to claims concerning the Los
Angeles opportunity because, by way of the settlement agreement containing the release,
the Raiders paid the NFL for the Los Angeles opportunity. In other words, the same
document that created the Raiders’ right to the Los Angeles opportunity could not be
construed to simultaneously release all claims stemming from that opportunity.
Mr. Davis, the Raiders’ owner, testified that the payment was consistent with the NFL’s
custom and practice either to provide or receive compensation when teams move to
smaller or larger markets, respectively. On the other hand, Mr. Tagliabue, the NFL
commissioner, testified that the parties intentionally drafted the release broadly to
extinguish any claims related to the Raiders’ move to Los Angeles. He disputed that the
settlement involved a payment for the Los Angeles opportunity, asserting that the
difference between the settlement payment and tentative award to the Raiders was the
result of multiple factors that went into the settlement negotiations and the settlement of
multiple claims. Consistent with this testimony, the Raiders’ financial statements for the
years 1988 and 1989 did not reflect any payment for a franchise opportunity. As this
evidence did not resolve the scope of the release, Instruction 73-A properly asked the jury
to determine the release’s effect. (See Solis v. Kirkwood Resort Co., supra, 94
Cal.App.4th at pp. 360-361.)
Finally, the Raiders maintain that the trial court erroneously gave Instruction 73-A
because the NFL failed to plead the release as an affirmative defense. But the Raiders’
complaint expressly relied on the release as the predicate to their right to the Los Angeles
opportunity. The release was therefore not “new matter” required to be alleged as an
affirmative defense. (Code Civ. Proc., § 431.30, subd. (b)(2); Marich v. MGM/UA
Telecommunications, Inc. (2003) 113 Cal.App.4th 415, 424.) In any event, the Raiders
maintained at trial that their claim to the benefit of the Los Angeles opportunity stemmed
from the settlement agreement and release. Mr. Davis specifically testified that he
believed that the $46 million difference between the judgment and the NFL’s settlement
payment equaled the Raiders’ payment for the Los Angeles opportunity. Thus, even if
33
the NFL were required to plead the release as an affirmative defense, the trial court
effectively permitted the NFL to amend its answer to conform to proof by allowing the
jury to determine the effect of the release. (Stoner v. Williams (1996) 46 Cal.App.4th
986, 989; see also Buxbom v. Smith (1944) 23 Cal.2d 535, 543.)
We conclude that the trial court did not err in giving Instruction 73-A concerning
the release.
b.
Instruction 86 concerning damages for future lost profits
correctly stated the law.
In their fifth and sixth causes of action for breach of fiduciary duty and breach of
the implied covenant of good faith and fair dealing, respectively, the Raiders sought to
recover damages in the form of lost profits resulting from their inability to play at a new
Hollywood Park stadium. Following other instructions concerning the lost profits sought
in connection with those claims, the trial court also instructed the jury (Instruction 86):
“If future loss of profits are sought with respect to a proposed contract or business
venture, a plaintiff must prove that it was ready, willing and able to complete the
proposed transaction but for the alleged breach of contract or breach of fiduciary duty by
Defendant.”
The Raiders complain that this instruction erroneously imposed the additional
element that they be “ready, willing and able” to perform on their breach of fiduciary
duty and implied covenant claims. But this instruction addressed damages, not liability.
The trial court did not instruct the jury that the Raiders’ being ready, willing and able to
perform was required to establish liability for either breach of fiduciary duty or breach of
the implied covenant of good faith and fair dealing.14 Rather, the “ready, willing and
14
With respect to the elements of the Raiders’ breach of fiduciary duty claim, the
trial court instructed that the Raiders had the burden to establish: “The existence of a
fiduciary relationship; a breach of that [fiduciary] relationship; and damage to plaintiff
legally caused by that breach.” The trial court further instructed the jury that, in order to
prove their claims for breach of the implied covenant of good faith and fair dealing, the
Raiders had the burden of showing: “The existence and terms of the contract; that the
Oakland Raiders performed all material obligations under the contract; that the NFL
34
able” requirement was limited to the Raiders’ ability to recover damages flowing from a
prospective contract or business venture.
Instruction 86 correctly stated the law. The Supreme Court in Grupe v. Glick
(1945) 26 Cal.2d 680, 692-693, explained that the recovery of prospective lost profits is
contingent on the plaintiff’s ability to establish such loss with reasonable certainty:
“[A]nticipated profits dependent upon future events are allowed where their nature and
occurrence can be shown by evidence of reasonable reliability.” Thus, “‘lost prospective
net profits may be recovered if the evidence shows, with reasonable certainty, both their
occurrence and extent. [Citation.] It is enough to demonstrate a reasonable probability
that profits would have been earned except for the defendant’s conduct. [Citations.]’”
(Kids’ Universe v. In2Labs (2002) 95 Cal.App.4th 870, 884.)
In applying this standard, courts conclude that plaintiffs seeking recovery of
prospective lost profits must demonstrate, to a level of reasonable certainty, that they
would have been able to earn such profits. For example, in Kerner v. Hughes Tool Co.
(1976) 56 Cal.App.3d 924, the court affirmed an award of lost profits resulting from
breach of a contract to produce a musical where the “[p]laintiff an experienced
entertainer, agent, and producer established his ability to complete his obligations under
the contract.” (Id. at p. 937; see also A & M Produce Co. v. FMC Corp. (1982) 135
Cal.App.3d 473, 494.) On the other hand, courts find that plaintiffs are not entitled to
lost profits awards where they fail to show they could have performed. (See, e.g., S. C.
Anderson, Inc. v. Bank of America (1994) 24 Cal.App.4th 529, 537; Engle v. City of
Oroville (1965) 238 Cal.App.2d 266, 274.) According to this authority, the jury should
find that a plaintiff is ready, willing and able to perform in order to award damages in the
form of prospective lost profits.
Moreover, in determining whether a jury instruction is erroneous, we must
consider the instructions as a whole. (Smith v. Brown-Forman Distillers Corp. (1987)
violated a covenant of good faith and fair dealing implied in the contract; that the NFL’s
failure to perform was the actual and substantial cause of the Oakland Raiders’ asserted
injury; and the nature and extent of the Oakland Raiders’ damages.”
35
196 Cal.App.3d 503, 514.) Instruction 86 plainly did not address the NFL’s liability for
either breach of fiduciary duty or breach of the implied covenant of good faith and fair
dealing. Rather, it appeared toward the end of the damage instructions—which the jury
was instructed to consider only if it found for the Raiders on one or more of the causes of
action—and followed several other instructions concerning the Raiders’ ability to recover
damages in the form of lost profits. Thus, both on its face and particularly when placed
in the context of the instructions as a whole, Instruction 86 accurately stated the law
concerning the recovery of prospective lost profits.
c.
Instruction 45-A concerning the effect of 1995 Resolution FC-7
correctly stated the law and was supported by the evidence.
In the midst of several jury instructions addressing contract formulation and
interpretation, the trial court instructed the jury with Instruction 45-A, which provided:
“If parties agree that the terms of a proposed contract are to be reduced to writing and
signed by them before it is to be effective, there is no binding agreement until that written
contract is signed. [¶] In this case, there is a dispute as to whether 1995 Resolution FC-7
(Trial Exhibit 219) required the parties to reduce the terms of their agreement to a written
contract before it would become binding. If you find that the parties intended that 1995
Resolution FC-7 would not be binding until they reached a written agreement on the
contractual terms, then you may not find that the NFL owed any obligations under this
resolution. [¶] Whether it is the intention of the parties that the agreement should be
binding at once, or when later reduced to writing, or to a more formal writing, is an issue
of fact, and is to be determined by reference to the words the parties used, as well as upon
all of the surrounding facts and circumstances.”
The Raiders contend that this instruction was erroneous because it misstated the
law and was unsupported by the facts. We reject both contentions. The instruction
correctly stated the law and the evidence—including the text of Resolution FC-7 and
Mr. Davis’s testimony—supported the giving of the instruction.
Because the Raiders’ contentions are necessarily intertwined, we address them
together. The Raiders first assert that Instruction 45-A misstated the law as it related to
36
Resolution FC-7 because that resolution constituted a contract as a matter of law. They
rely on the proposition that “‘“[t]he constitution, rules, and by-laws of a voluntary
unincorporated association constitute a contract between the association and its
members.”’” (American Society of Composers, Authors & Publishers v. Superior Court
(1962) 207 Cal.App.2d 676, 689; accord, DeMille v. American Fed. of Radio Artists
(1947) 31 Cal.2d 139, 147.) While that is a correct statement of the law, Instruction 45-A
did not address the binding nature of the NFL’s constitution or bylaws. Rather, the
question before the jury involved the parties’ intent with respect to Resolution FC-7,
which the NFL enacted in accordance with the manner in which it makes decisions
pursuant to its bylaws.
In this regard, the concluding language of Resolution FC-7 is particularly
instructive: “FURTHER RESOLVED, that . . . (4) [If] the foregoing arrangements are
not reduced to fully binding agreements by July 1, 1995 or such later date as the
Commissioner shall determine, all of the foregoing resolutions shall be null and void and
of no force or effect without any further action by the League.” Given this qualification,
Instruction 45-A properly asked the jury to determine whether the parties intended for
Resolution FC-7 to constitute a binding contract. As explained in Harris v. Rudin,
Richman & Appel (1999) 74 Cal.App.4th 299, whether a writing constitutes a final
agreement or instead merely an agreement to enter into an agreement depends primarily
on the intent of the parties. “Where the writing at issue shows ‘no more than an intent to
further reduce the informal writing to a more formal one’ the failure to follow it with a
more formal writing does not negate the existence of the prior contract. [Citation.]
However, where the writing shows it was not intended to be binding until a formal
written contract is executed, there is no contract. [Citation.]” (Id. at p. 307; see also
Frankenheimer v. Frankenheimer (1964) 231 Cal.App.2d 101, 108 [question of fact
whether parties intended that contract exist between them or that contract would not exist
until a writing evidencing its terms was executed].)
The Raiders also complain that Instruction 45-A misstated the law by modifying
BAJI No. 10.58, from which the instruction originated. The omitted second sentence of
37
BAJI No. 10.58 provides: “This rule does not mean that a contract already reduced to
writing, and signed, is of no binding force merely because it contemplates a subsequent
and more formal instrument.” (BAJI No. 10.58.) Below, however, the Raiders did not
object to the giving of Instruction 45-A on this ground and therefore failed to preserve
this contention for appeal. (E.g., Rivera v. Parma (1960) 54 Cal.2d 313, 316; Chapman
v. Enos (2004) 116 Cal.App.4th 920, 927-928.) In any event, other portions of
Instruction 45-A instruction properly informed the jury that it had the option of
determining that FC-7 was a binding agreement even though it contemplated an
additional writing. Omitting the sentence appearing in BAJI No. 10.58 did not render the
instruction either erroneous or misleading.
Finally, the Raiders assert that the evidence did not support giving Instruction 45A because the NFL had treated Resolution FC-7 as a binding agreement. We see nothing
in the record, however, that conclusively demonstrates that either the NFL or the Raiders
viewed Resolution FC-7 as a binding contract. Rather, by its own terms, Resolution FC7 “prescribed the conditions for the award of one or two Super Bowls to be played at the
proposed Hollywood Park stadium.” Moreover, Mr. Tagliabue’s testimony indicated that
the NFL viewed the resolution as prescribing certain conditions necessary for a Super
Bowl award, including that the NFL negotiate with the Raiders and Hollywood Park
concerning the option of a second team playing at the proposed stadium. Mr. Davis
concurred, stating that: “I viewed the resolution as not deciding anything with finality
but, rather, as conditional in every respect and as to every detail.” In response to the
question, “You viewed the resolution as not deciding anything with finality; isn’t that
right?” Mr. Davis further responded: “Yes. And I was hoping that things would change
so that we could go ahead with the Hollywood Park situation.” He believed that by
voting to approve Resolution FC-7 the Raiders were agreeing “to act in good faith and
38
hope that everyone else would act in good faith and that you would negotiate with the
Raider[s] just as you said you would.” 15
In view of the language of Resolution FC-7 and the parties’ testimony concerning
its effect, Instruction 45-A correctly stated the law by permitting the jury to determine
whether the parties intended for FC-7 to be a binding agreement.
d.
Instruction 73 concerning the defense of unclean hands correctly
stated the law.
Instruction 73 informed the jury of the NFL’s unclean hands defense, providing:
The “defendant claims that the Oakland Raiders engaged in misconduct with respect to
their move to Oakland and that, as a result, they are not entitled to be compensated for
moving to Oakland. To establish this defense, the NFL must prove by a preponderance
of the evidence that the Oakland Raiders’ failure to seek compensation at the time they
sought and obtained approval for a move to Oakland was unconscionable and resulted in
prejudice to the NFL.” Though the Raiders wage multiple attacks on this instruction, we
conclude that the instruction correctly stated the law and the trial court did not err in
giving it.
Initially, the Raiders contend that the trial court should not have given Instruction
73 because the NFL did not plead unclean hands as an affirmative defense. But, as
explained in Fibreboard Paper Products Corp. v. East Bay Union of Machinists (1964)
227 Cal.App.2d 675, the defense of unclean hands “must be pleaded or called to the
attention of the trial court in order that it may pass on the defense and also to permit the
person against whom it is sought to be applied the opportunity to present such evidence
as might bear on that issue.” (Id. at p. 726, italics added.) Here, the NFL called the
15
This evidence likewise undermines the Raiders’ claim that the NFL is estopped to
claim that Resolution FC-7 is not a binding contract. Lemat Corp. v. American
Basketball Assn. (1975) 51 Cal.App.3d 267, on which the Raiders rely, is inapposite.
There, the court held that the defendant was estopped to deny that a resolution was a
binding agreement because the vote was invalid. The evidence showed that all parties
had treated the agreement as binding for a number of years and the defendant had
obtained significant benefits from the agreement. (Id. at pp. 275-277.) Here, in contrast,
all parties viewed Resolution FC-7 as conditional in nature and acted accordingly.
39
matter to the trial court’s attention by submitting a jury instruction on the issue
approximately two months before trial began. Thus, the NFL’s failure to plead unclean
hands is not a bar to Instruction 73.16
Next, the Raiders contend that Instruction 73 misstated the law by omitting the
requirement that the Raiders’ unclean hands must be “directly related” to the Raiders’
claims in order to constitute a bar to recovery. (E.g., Smoketree-Lake Murray, Ltd. v.
Mills Concrete Construction Co. (1991) 234 Cal.App.3d 1724, 1742-1743.) We discern
no error. Instruction 73 plainly explained to the jury that the NFL contended the Raiders
“engaged in misconduct with respect to their move to Oakland”; that the asserted
misconduct was “the Oakland Raiders’ failure to seek compensation at the time they
sought and obtained approval for a move to Oakland”; and that, if proven, this conduct
would bar the Raiders from being “compensated for moving to Oakland.” The
instruction properly and sufficiently informed the jury that the unclean hands defense
required the NFL to establish misconduct involving the Raider’s move to Oakland that
was related to the Raiders’ claims for compensation for that same move.17
Finally, the Raiders claim that Instruction 73 was erroneous because it was not
supported by the evidence. To the contrary, the NFL offered ample evidence
demonstrating that the Raiders did not disclose their intention to seek millions in
compensation for their relocation to Oakland before the NFL voted on the move.
According to the NFL’s evidence, the Raiders did not make their claim to be
16
We acknowledge that cases such as Verbeck v. Clymer (1927) 202 Cal. 557, 561,
and Dorn v. Baker (1892) 96 Cal. 206, 209, require the pleading of equitable defenses.
Following those cases, however, the law has developed to extend the defense of unclean
hands to legal actions. (E.g., Unilogic, Inc. v. Burroughs Corp. (1992) 10 Cal.App.4th
612, 620; Pond v. Insurance Co. of North America (1984) 151 Cal.App.3d 280, 290.)
Because the NFL sought to apply the unclean hands defense to an action at law, we need
not rely on authority requiring the pleading of equitable affirmative defenses.
17
If there were any error in the instruction, it would be that it imposed too high a
burden on the NFL by requiring it to establish that the Raiders’ conduct was
unconscionable. The defense of unclean hands applies to conduct that is also wrongful or
inequitable. (See Mattco Forge, Inc. v. Arthur Young & Co. (1997) 52 Cal.App.4th 820,
846-847.)
40
compensated for the Los Angeles opportunity until after the NFL had voted to approve
their move to Oakland; Mr. Davis, however, testified that he informally told the NFL of
his claim before the vote. Given the state of the evidence, it would have been error for
the trial court to refuse an unclean hands instruction. (E.g., Soule v. General Motors
Corp. (1994) 8 Cal.4th 548, 572 [“A party is entitled upon request to correct,
nonargumentative instructions on every theory of the case advanced by him which is
supported by substantial evidence”].)
In sum, because the trial court did not err in giving any of the challenged jury
instructions, we cannot affirm the new trial order on the ground of instructional error.
Considering this, together with our earlier conclusion that the new trial cannot be
affirmed on the ground of juror misconduct, we must reverse the new trial order.
B.
The Raiders’ Appeal.
The Raiders cross-appeal from two rulings made separately from the jury trial.
First, the Raiders challenge the trial court’s grant of summary adjudication on the
Raider’s fifth cause of action for breach of fiduciary duty in favor of the individual
defendants—the NFL commissioner Mr. Tagliabue and president Mr. Austrian. Second,
the Raiders contend that substantial evidence does not support the trial court’s ruling on
the ninth cause of action for declaratory relief, involving the Raiders’ claim that they
should not be required to share certain types of revenue with the NFL. We reject both
contentions. The trial court correctly concluded, as a matter of law, that neither the NFL
commissioner nor its president owes a fiduciary duty to the NFL member clubs.
Moreover, substantial evidence supported the trial court’s determination that the Raiders
were not excused from sharing certain revenues that fall within the definition of “gross
receipts” as that term is used in the NFL constitution and bylaws.
1.
The Commissioner and President of the NFL and the NFL Member
Clubs Do Not Have a Fiduciary Relationship.
a.
Summary adjudication motion.
In their fifth cause of action for breach of fiduciary duty, the Raiders alleged that
the NFL and its commissioner and president breached their fiduciary duty to the Raiders
41
by undermining the development of the Hollywood Park stadium for the Raiders.18 With
respect to the existence of a fiduciary duty, the Raiders alleged that both “the structure of
the League and the relationships between and among the NFL, the Commissioner and
President of the NFL, and the individual member clubs of the NFL,” and the course of
dealing among the parties that had evolved over time, established the existence of a
fiduciary relationship between NFL officials and the Raiders.
The NFL moved for summary adjudication of the fourth through sixth causes of
action. In that motion, it argued that, as a matter of law, the nature and structure of the
NFL precluded any finding that the NFL and its commissioner and president owed a
fiduciary duty to any of the member clubs. In support of that aspect of the motion, the
NFL submitted evidence comprised of the NFL constitution and bylaws to demonstrate
that the NFL commissioner’s and president’s positions were, at times, necessarily
antagonistic to the Raiders’ interests. The Raiders did not dispute the evidence offered in
support of the motion, but rather, argued that the NFL constitution and bylaws should be
interpreted differently; “To the contrary, the NFL Constitution and structure require that
the Raiders repose trust and confidence in the NFL Commissioner and provide secret and
proprietary information and economic data to him.”
Following a hearing, the trial court took the matter under submission and
thereafter granted the motion, ruling: “The individual Defendants do not owe any
fiduciary [duty] to Plaintiff individually as a matter of law. Any duty is owed to the
collective whole which makes up the NFL. If there was any fiduciary relationship
18
Specifically, the Raiders alleged: “By making statements to Hollywood Park
officials that were designed to disrupt the project, by making similar statements to third
parties, by making unreasonable demands on the Raiders and Hollywood Park, by
constantly changing the terms of the proposed agreement, by repeatedly making and
reneging on promised support for the project, by seeking to sacrifice the interests of the
Raiders in favor of another competitor, by delaying action on the project, by seeking to
take advantage of the efforts of the Raiders for their own benefit, and by using
confidential information for personal gain, defendants, and each of them, breached their
fiduciary duties to the Raiders and hindered, impeded, delayed, disrupted, and ultimately
thwarted altogether, the realization of the Hollywood Park project for the Raiders.”
42
between Plaintiff and the individual Defendants, the other member clubs would
necessarily suffer detrimental effects at the hands of Plaintiff given Plaintiff’s unique
relationship with Defendants. This is simply not the nature nor structure of the League as
a matter of law.” The trial court further found that there were no triable issues of material
fact demonstrating any agency relationship or acknowledgements of a fiduciary duty
between the Raiders and the individuals defendants, and that the fact the Raiders shared
confidential information with the individual defendants was the result of their
contractual—not fiduciary—relationship. The trial court concluded that “[a]s no legal
duty exists, there is no disputes [sic] for the Jury to decide.”
b.
Summary adjudication law and the standard of review.
“The trial court properly grants summary judgment or adjudication if there is no
question of fact and the issues raised by the pleadings may be decided as a matter of law.
[Citations.]” (Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 786.)
To secure summary judgment or adjudication, the moving defendant “bears the initial
burden of proving the ‘cause of action has no merit’ by showing that one or more
elements of plaintiff’s cause of action cannot be established or there is a complete
defense. [Citations.] Once the defendant’s burden is met, the burden shifts to the
plaintiff to show that a triable issue of fact exists as to that cause of action.” (Spitzer v.
Good Guys, Inc. (2000) 80 Cal.App.4th 1376, 1385.)
We review the trial court’s grant of summary adjudication “de novo, considering
all of the evidence the parties offered in connection with the motion . . . and the
uncontradicted inferences the evidence reasonably supports. [Citation.]” (Merrill v.
Navegar, Inc. (2001) 26 Cal.4th 465, 476.) “As to conducting de novo review, the
Supreme Court described our duty as follows, ‘In ruling on the motion the court must
“consider all of the evidence” and “all” of the “inferences” reasonably drawn therefrom
([Code Civ. Proc.,] § 437c, subd. (c)), and must view such evidence [citations] and such
inferences [citations] in the light most favorable to the opposing party.’ (Aguilar v.
Atlantic Richfield Co. [(2001)] 25 Cal.4th [826,] 843.)” (Kids’ Universe v. In2Labs,
supra, 95 Cal.App.4th at p. 878.)
43
c.
The relationship between the NFL commissioner and president
and the Raiders is not akin to other legally recognized fiduciary
relationships.
The trial court granted summary adjudication on the basis that the Raiders could
not establish an element of their breach of fiduciary duty claim—that is, the existence of
a fiduciary relationship. The Raiders contend that, at a minimum, a triable issue of fact
existed as to whether the relationship between the NFL commissioner and president and
the Raiders is sufficiently similar to other types of fiduciary relationships. Specifically,
the Raiders contend that their relationship with those individuals is akin to the
relationship between joint venturers, a principal and agent, and a controlling and minority
shareholder. We disagree.
It is undisputed that the NFL is a private, unincorporated association. The parties
have not cited any authority—nor have we located any—standing for the proposition that
an automatic, status-based fiduciary duty exists among members of an unincorporated
association. Rather, “[t]he rights and duties of members of a private voluntary
association, between themselves and in their relation to the association, are measured by
the terms of the association’s constitution and bylaws. [Citation.]” (Oakland Raiders v.
National Football League (2001) 93 Cal.App.4th 572, 581; accord, California Dental
Assn. v. American Dental Assn. (1979) 23 Cal.3d 346, 353; Berke v. Tri Realtors (1989)
208 Cal.App.3d 463, 466.) It is therefore appropriate to turn to the terms of the NFL
constitution and bylaws to determine whether fiduciary duties exist between the NFL
commissioner and president and the member clubs. (See Southern Pacific Thrift & Loan
Assn. v. Savings Assn. Mortgage Co. (1999) 70 Cal.App.4th 634, 638; see also Wolf v.
Superior Court (2003) 107 Cal.App.4th 25, 30-31.)
Generally, “‘[a] mere contract or a debt does not constitute a trust or create a
fiduciary relationship.’ [Citation.]” (Wolf v. Superior Court, supra, 107 Cal.App.4th at
pp. 33-34.) Consistent with this general principle, the NFL constitution and bylaws fail,
as a matter of law, to establish the existence of a fiduciary relationship between the NFL
commissioner and president and the member clubs. Nothing in the NFL constitution
44
imposes a duty on the commissioner or the president “‘“to act with the utmost good faith
for the benefit of the other party”’” or to require them to “‘“take no advantage from his
[or her] acts relating to the interest of the other party without the latter’s knowledge or
consent. . . .”’” (Richelle L. v. Roman Catholic Archbishop (2003) 106 Cal.App.4th 257,
270.) To the contrary, the NFL constitution contains several provisions that are
fundamentally inconsistent with the imposition of a fiduciary duty. For example, the
commissioner has full and complete power to arbitrate disputes among two or more
member clubs; the commissioner has authority to monetarily fine or more severely
discipline any interest holder in a member club; and member clubs are required to be
bound by all commissioner decisions and to “release and indemnify the Commissioner,
the League . . . [and] every member club . . . from and against any and all claims . . .
which they . . . may at any time have or assert in connection with or by reason of any
action taken or not taken by the released/indemnified parties . . . .”
The relationship between NFL officials and members dictated by the NFL
constitution and bylaws is incompatible with the elements that make up a fiduciary
relationship. As explained in Jones v. Stubbs (1955) 136 Cal.App.2d 490, 500, a
“fiduciary owes an undivided duty to his beneficiary, and cannot place himself in any
other position which would subject him to conflicting duties, or expose him to the
temptation of acting contrary to the best interests of [the beneficiary].” That the NFL
commissioner is empowered to arbitrate disputes among NFL members gives rise to the
potential for conflicting duties and demonstrates that the commissioner cannot always act
in the best interest of the Raiders. Similarly, the commissioner’s disciplinary power over
the member clubs demonstrates that the commissioner must consider myriad other
interests beyond the best interests of the Raiders.
The Raiders contend that, despite the rights and duties created by the NFL
constitution and bylaws, the commissioner and president must be held to owe a fiduciary
duty to the member clubs because the structure of the NFL is comparable to other types
of traditionally recognized fiduciary relationships. More specifically, the Raiders point to
several cases seeming to acknowledge that the NFL is a joint venture. (E.g., City of
45
Oakland v. Oakland Raiders (1985) 174 Cal.App.3d 414, 420 [“although the clubs
compete to an important degree, the League is also a joint venture of its members
organized for the purpose of providing entertainment nationwide”]; Los Angeles
Memorial Coliseum Com’n v. N.F.L. (9th Cir. 1984) 726 F.2d 1381, 1389 [noting that the
NFL is similar to an organization described as a joint venture]; St. Louis Convention &
Visitors Com’n v. N.F.L. (8th Cir. 1998) 154 F.3d 851, 853 [“The league was formed in
1966 by a union of the American Football League and the National Football League, and
it functions as the governing body of a joint venture of thirty professional football teams
producing ‘NFL football’”]; North American Soccer v. National Football League (2d Cir.
1982) 670 F.2d 1249, 1252 [“The NFL teams are separate economic entities engaged in a
joint venture”].) But each of these cases described the NFL in connection with legal
issues not raised here, such as whether the NFL is sufficiently involved in interstate
commerce so as to invalidate a city’s effort to acquire a league franchise through eminent
domain (City of Oakland, supra, at pp. 420-422) or whether the NFL is a “single entity”
for the purpose of federal antitrust law (Los Angeles Memorial Coliseum Com’n, supra,
at pp. 1387-1391). None of these cases specifically considered whether NFL officials
and member clubs should be subject to heightened duties to one another imposed by a
traditional joint venture. The Raiders’ cited cases are therefore not authority for the
proposition that the NFL is a joint venture. (E.g., Palmer v. GTE California, Inc. (2003)
30 Cal.4th 1265, 1278 [an opinion is not authority for a proposition which was not
considered].)
Even more importantly, however, the undisputed evidence established that the
NFL does not possess the requisite features of a joint venture, which “requires an
agreement under which the parties have (1) a joint interest in a common business, (2) an
understanding that profits and losses will be shared, and (3) a right to joint control.
[Citations.]” (Ramirez v. Long Beach Unified School Dist. (2002) 105 Cal.App.4th 182,
193.) According to the NFL constitution, “[t]he League is not organized nor to be
operated for profit.” Moreover, the NFL member clubs do not share profits and losses.
As explained in Los Angeles Memorial Coliseum Com’n v. N.F.L., supra, 726 F.2d at
46
page 1390: “Although a large portion of League revenue, approximately 90%, is divided
equally among the teams, profits and losses are not shared, a feature common to
partnerships or other ‘single entities.’ In fact, profits vary widely despite the sharing of
revenue.” (See also North American Soccer v. National Football League, supra, 670
F.2d at p. 1252.) Accordingly, we cannot find that the NFL is analogous to a joint
venture for the purpose of imposing fiduciary duties.
Nor can we find that there was a triable issue of fact as to whether the NFL
commissioner and president owe a fiduciary duty to the Raiders as an agent. “An agency
is proved by evidence that the person for whom the work was performed had the right to
control the activities of the alleged agent.” (Kim v. Sumitomo Bank (1993) 17
Cal.App.4th 974, 983.) “‘Control may not be inferred merely from the fact that one
person’s act benefits another. [Citation.]’” (van’t Rood v. County of Santa Clara (2003)
113 Cal.App.4th 549, 572.) Though the Raiders presented evidence that the
commissioner acts on behalf of the member clubs, they offered no evidence to show that
they had the right to control either the NFL commissioner or president. Indeed, the NFL
constitution demonstrates that, to the contrary, the commissioner has virtually plenary
power to act on behalf of the NFL and its member clubs. Absent evidence of the Raiders’
right to control the NFL commissioner or president, the Raiders’ agency theory failed to
establish the existence of a triable issue of fact. (See, e.g., Violette v. Shoup (1993) 16
Cal.App.4th 611, 620.)
Finally, the Raiders contend that their position should be analogized to that of a
minority shareholder in a closely held corporation and that the NFL commissioner and
president, in the role of majority shareholders or directors and officers, should be held to
owe a fiduciary duty to them. (See Jones v. H. F. Ahmanson & Co. (1969) 1 Cal.3d 93,
108-109.) But the Raiders are not in the position of a minority shareholder, given that
they have the same rights and obligations as any other NFL member club. In any event,
according to the undisputed evidence, the NFL is a private, unincorporated association.
We see no reason to disregard evidence of the NFL’s organization in order to impose the
burdens, but not the benefits, of incorporation. (Cf. Occidental Life Ins. Co. v. State Bd.
47
of Equalization (1982) 135 Cal.App.3d 845, 851 [entity choosing corporate form for its
particular benefits may be fairly and reasonably required to accept the burdens attendant
to that form].)
In sum, the trial court properly determined, as a matter of law, that the relationship
between the NFL commissioner and president and the member clubs created by the NFL
constitution and bylaws does not give rise to fiduciary obligations.19
d.
Evidence concerning the relationship and course of dealing
between the NFL commissioner and president and the Raiders failed to
create a triable issue of fact as to the existence of a fiduciary duty.
Alternatively, the Raiders contend that evidence regarding the NFL
commissioner’s and president’s role within the NFL, access to confidential financial
information and power over the member clubs, including the Raiders, raised a triable
issue as to the existence of a fiduciary duty. At a minimum, they contend that the
specific facts surrounding the negotiations for the proposed Hollywood Park stadium
demonstrated that the commissioner and president acted in a fiduciary capacity with
respect to that transaction. Again, we disagree.
The Raiders offered evidence in the form of the NFL constitution and bylaws,
which showed that the commissioner has broad authority over the NFL and its member
clubs to resolve disputes, formulate policy, impose discipline and appoint and establish
committees for decisionmaking purposes. To demonstrate the practical import of this
broad authority, the Raiders offered testimony from other club owners indicating that the
owners invariably follow the commissioner’s recommendations. They also offered
evidence regarding NFL practice to obtain confidential financial and other information
19
We are not the first court to have reached this conclusion. Pursuant to Evidence
Code sections 452, subdivision (d) and 459, we grant the NFL’s request for judicial
notice of the Santa Clara County Superior Court decision in Oakland Raiders v. National
Football League, case No. CV756194, in which the court ruled on a motion for summary
adjudication that “the [NFL] Commissioner does not have a fiduciary obligation to the
individual member clubs.”
48
from member clubs for various purposes, some of which is not disclosed to other member
clubs.
Relying solely on Cohen v. Kite Hill Community Assn. (1983) 142 Cal.App.3d
642, the Raiders assert that the jury should have been able to determine whether this
evidence gave rise to the same type of fiduciary obligations that are imposed on the
officers and directors of a homeowners’ association. In Cohen, the court explained that
because membership in a homeowners’ association is generally mandatory and the
powers of the association are extensive, “the Association must be held to a high standard
of responsibility: ‘The business and governmental aspects of the association and the
association’s relationship to its members clearly give rise to a special sense of
responsibility upon the officers and directors. . . . This special responsibility is
manifested in the requirements of fiduciary duties and the requirements of due process,
equal protection, and fair dealing.’” (Id. at p. 651.)
Two salient features distinguish the NFL from a homeowners’ association. First,
the homeowners’ association in Cohen was a corporation, and therefore the Corporations
Code expressly imposed fiduciary duties on the association’s officers and directors.
(Cohen v. Kite Hill Community Assn., supra, 142 Cal.App.3d. at p. 645; see Frances T. v.
Village Green Owners Assn. (1986) 42 Cal.3d 490, 513 [“Directors of nonprofit
corporations such as the Association are fiduciaries who are required to exercise their
powers in accordance with the duties imposed by the Corporations Code. [Citation.]”].)
Second, courts have characterized homeowners’ associations as “quasi-governmental”
and compared the associations’ directors to the governing body of a municipality. (E.g.,
Chantiles v. Lake Forest II Master Homeowners Assn. (1995) 37 Cal.App.4th 914, 922;
Cohen, supra, 142 Cal.App.3d at p. 651.) The NFL does not act in a quasi-governmental
capacity. Thus, there is no basis for applying the considerations that warrant the
imposition of a fiduciary duty on homeowners’ association directors to NFL officials.
Finally, the Raiders assert that a triable issue of fact existed as to whether the NFL
commissioner and president acted in a fiduciary capacity specifically with respect to the
proposed Hollywood Park stadium. They assert that they necessarily reposed trust and
49
confidence in the commissioner in connection with those negotiations, thereby giving rise
to a fiduciary obligation. The evidence and the law are to the contrary. Resolution FC-7
expressly directed NFL officials to “negotiate directly with [Hollywood Park] and the
Raiders” regarding the feasibility of the stadium. The declarations and deposition
excerpts offered by the Raiders, which outlined the history of the Hollywood Park
negotiations, did not contradict evidence establishing that the NFL negotiated with—not
on behalf of—the Raiders in connection with the proposed Hollywood Park stadium.20
Generally, a fiduciary relationship does not arise from arms-length negotiations. (See
Recorded Picture Company [Productions] Ltd. v. Nelson Entertainment, Inc. (1997) 53
Cal.App.4th 350, 370; Worldvision Enterprises, Inc. v. American Broadcasting
Companies, Inc. (1983) 142 Cal.App.3d 589, 594.) Yet even if the evidence had shown
that Raiders had reposed trust and confidence in the commissioner in the context of the
Hollywood Park negotiations, that evidence would be insufficient to create a triable issue
of fact. Wolf v. Superior Court, supra, rejected a similar claim, reasoning: “Every
contract requires one party to repose an element of trust and confidence in the other to
perform. For this reason, every contract contains an implied covenant of good faith and
fair dealing, . . . . “‘Being of universal prevalence, [the implied covenant] cannot create a
fiduciary relationship; it affords basis for redress for breach of contract and that is all.’”
(107 Cal.App.4th at p. 31.)
20
Because the evidence did not show that the Raiders retained or relied on NFL
officials as trusted advisors in connection with the Hollywood Park negotiations, the
cases cited by the Raiders for the proposition that the existence of a fiduciary relationship
is a question of fact have no application here. (See In re Daisy Systems Corp. (9th Cir.
1996) 97 F.3d 1171, 1178 [existence of fiduciary relationship between investment banker
and client was a question of fact where the client retained the investment banker to advise
it about a type of transaction in which it had no experience]; Tri-Growth Centre City, Ltd.
v. Silldorf, Burdman, Duignan & Eisenberg (1989) 216 Cal.App.3d 1139, 1151 [question
of fact as to whether limited partner and former attorney owed fiduciary duty in
connection with partnership’s real estate transaction].)
50
Because there is no triable issue of fact regarding the existence of a fiduciary duty
on the part of the NFL commissioner and president, the trial court properly granted their
motion for summary adjudication on the fifth cause of action.
2.
Substantial Evidence Supported the Trial Court’s Finding that the NFL
is Not Estopped to Enforce the Sharing of Gross Receipts.
Following the jury trial, the trial court conducted a bench trial on the Raiders’
ninth cause of action for declaratory relief, in which the Raiders sought a judicial
declaration “that the Raiders are not obligated to share with the League any loan proceeds
or any tax surcharges, personal seat license revenues, club seat premiums, and
maintenance fees, beyond those the Raiders previously committed to share as set forth in
their relocation submission to the League.” During a four-day bench trial, the court
received testimonial and documentary evidence, and thereafter issued a statement of
decision denying the Raiders’ request for declaratory relief.
The Raiders do not challenge the trial court’s finding that the revenues at issue in
their declaratory relief claim are included within the definition of “gross receipts” that are
subject to revenue sharing pursuant to the NFL constitution and bylaws. The NFL
constitution defines “gross receipts” as “all receipts derived from the sale of tickets,
including taxes and special charges but excluding ticket handling charges.” By way of
resolution, the NFL clarified that the term includes “‘monies received, directly or
indirectly, by any party, including any member [club] (a) in excess of the stated ticket
price for any “club” or “premium” seat . . . or (b) from any party’s sale or issuance of any
‘permanent seat licenses’ or other similar instruments that give purchasers the right to
acquire tickets to NFL games.’” According to the trial court, “all of the disputed revenue
streams here—including, but not limited to, PSL [personal seat license] revenues, club
seat premiums, ticket surcharges, and maintenance fees—are ‘gross receipts.’”
Article XIX, section 19.1 of the NFL constitution obligates each member club to share
“gross receipts” with the other member clubs. For a member club to avoid sharing, the
NFL must grant a waiver of the sharing requirement.
51
In support of their declaratory relief claim, the Raiders sought to establish that the
NFL was estopped to rely on the revenue sharing requirement. A plaintiff asserting
equitable estoppel must prove four elements: (1) The defendant must know the facts;
(2) the defendant must engage in conduct intended to be acted upon by the plaintiff;
(3) the plaintiff must be ignorant of the true state of facts; and (4) the plaintiff must
detrimentally rely upon the defendant’s conduct. (E.g., Migliore v. Mid-Century Ins. Co.
(2002) 97 Cal.App.4th 592, 606.) The Raiders challenge the trial court’s finding that they
failed to establish the two latter elements—ignorance and reliance. The court concluded
that the Raiders could not contend that they were ignorant of the NFL’s position that no
waiver of the revenue sharing requirement had been granted; it further concluded that the
Raiders did not reasonably rely to their detriment on any assumption that the NFL had
granted a waiver, given the undisputed evidence concerning the timing of when the
Raiders learned that the NFL did not intend to grant a waiver.
“A judgment or order of a lower court is presumed to be correct on appeal, and all
intendments and presumptions are indulged in favor of its correctness. [Citations.]”
(In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.) The statement of decision,
which provides the trial court’s reasoning, “is our touchstone to determine whether or not
the trial court’s decision is supported by the facts and the law.” (Slavin v. Borinstein
(1994) 25 Cal.App.4th 713, 718.) In reviewing the trial court’s statement of decision, we
must uphold the court’s findings of fact if they are supported by substantial evidence.
(Westfour Corp. v. California First Bank (1992) 3 Cal.App.4th 1554, 1558.) “When a
trial court’s factual determination is attacked on the ground that there is no substantial
evidence to sustain it, the power of an appellate court begins and ends with the
determination as to whether, on the entire record, there is substantial evidence,
contradicted or uncontradicted, which will support the determination, and when two or
more inferences can reasonably be deduced from the facts, a reviewing court is without
power to substitute its deductions for those of the trial court.” (Bowers v. Bernards
(1984) 150 Cal.App.3d 870, 873-874.) “All the evidence most favorable to respondent
must be accepted as true, and that unfavorable discarded as not having sufficient verity to
52
be accepted by the trier of fact. If the evidence so viewed is sufficient as a matter of law,
we must affirm the judgment.” (In re Cheryl E. (1984) 161 Cal.App.3d 587, 598.)
Both of the trial court’s challenged findings are supported by substantial evidence.
According to the evidence on which the trial court relied, the Raiders committed to
relocate to Oakland, knowing that they had not received an exemption from the NFL
revenue sharing requirements.
With respect to the Raiders’ contention that they were unaware of the NFL’s
intention to deny a waiver, the evidence showed that on June 23, 1995, the Raiders
entered into an agreement with the City of Oakland to return to the Oakland Coliseum for
the 1995 season and 15 seasons thereafter. On the same day, they issued a press release
to that effect. Approximately two weeks later, on July 10, 1995, the Raiders submitted a
written relocation proposal to the NFL, the terms of which necessitated that the NFL
grant an exemption from the NFL revenue sharing requirements. On July 19, 1995, the
NFL sent a memorandum to the Raiders indicating that the NFL Finance Committee
would shortly be discussing the Raiders’ proposed relocation and noting that the
proposed agreement raised several issues concerning the sharing of gross receipts that
needed to be resolved.
On July 21, 1995, the NFL Executive Committee met to vote on the Raiders’
proposed relocation. At that meeting, the NFL voted to approve 1995 Resolution G-7,
which permitted the Raiders to relocate permanently to Oakland.21 Resolution G-7 was
silent on the issue of revenue sharing. The following day, a hand-delivered letter from
21
In pertinent part, Resolution G-7 states: “WHEREAS, the Los Angeles Raiders
desire to relocate their home territory from Los Angeles to Oakland, and have made a
submission in support of the proposed relocation, as contemplated by the League’s
Procedures for Proposed Franchise Relocations (the ‘Procedures’); [¶] WHEREAS, the
Executive Committee has determined that in light of all circumstances and factors
relevant to the permanent relocation of the Raiders’ home territory to Oakland, it is in the
best interests of the League, as a collective whole, for such relocation to proceed; [¶]
THEREFORE, BE IT RESOLVED, that the permanent relocation of the Raiders’ home
territory from Los Angeles to Oakland be approved.”
53
the NFL commissioner informed the Raiders that their relocation had been approved and
that the NFL expected the Raiders to comply with all revenue sharing obligations.
Another letter to the Raiders from the NFL president followed on July 24, 1995,
explicitly set forth the NFL’s position: “The Raiders’ sharing obligation exists with
respect to all gross receipts as defined in the League Constitution and By-laws, regardless
of who may own ‘legal title’ to those receipts. As we mentioned during our meetings last
week, those ‘gross receipts’ include all receipts from sales of tickets, including
surcharges as well as club seat premiums and PSLs.” The letter further indicated that the
Raiders could make a written submission requesting nonsharing of club seat premiums
and PSL revenues in accordance with the procedures followed previously by other
member clubs.22
The trial court concluded that the Raiders could not contend they were ignorant of
the NFL’s refusal to grant a waiver on the basis of Resolution G-7’s silence on the
matter: “The plain meaning of the resolution indicates that the NFL clubs voted to allow
the Raiders to move to Oakland; a waiver of their contractual obligation to share gross
receipts, to which no reference is made in the resolution, is a separate issue entirely.”
The court acknowledged that the evidence conflicted as to whether the Raiders knew that
the NFL intended to consider waiver of the revenue sharing provisions separately from
the relocation issue addressed in Resolution G-7. But it expressly weighed that evidence
and concluded: “[T]he overwhelming weight of the evidence supports the conclusion
that the NFL did not intend to and did not waive the Raiders’ revenue sharing obligations
and instead intended to and did consider as entirely separate issues (a) the Raiders’
relocation, which was addressed by Resolution G-7, and (b) the Raiders’ contractual
obligation to share gross receipts, which was not.”
On appeal, the thrust of the Raiders’ argument is that the trial court improperly
weighed the evidence. They assert that the evidence showed they were ignorant of the
22
Shortly thereafter, the Raiders and Oakland officials entered into an agreement to
share responsibility for amounts that the Raiders might be required to pay as part of their
gross receipts obligation.
54
fact that the NFL did not intend to adopt their position on revenue sharing for several
reasons, including that Resolution G-7 can be reasonably read as incorporating all the
relocation terms the Raiders proposed, prior relocation resolutions for other teams
included a decision on revenue sharing, and Mr. Davis informed NFL officials that they
should vote to pass Resolution G-7 only if they agreed with the Raiders’ revenue sharing
proposal. They also emphasize that their lack of knowledge stemmed from the fact that
the NFL Executive Committee conducted a privileged session before the vote on
Resolution G-7, which the Raiders were not permitted to attend, where the committee
discussed revenue sharing.
We reject the Raiders’ argument. The scope of our review is clear. Where an
argument that substantial evidence is lacking rests upon a claim that there was conflicting
evidence, we are guided by the well-settled principle that we resolve all evidentiary
conflicts in favor of the NFL as the prevailing party and affirm so long as the evidence
favoring the NFL is sufficient to support the judgment. (In re Marriage of Mix (1975)
14 Cal.3d 604, 614; Rubin v. Los Angeles Fed. Sav. & Loan Assn. (1984) 159 Cal.App.3d
292, 298.) “The reviewing court may not reweigh the evidence when assessing the
sufficiency of the evidence.” (In re Jasmine C. (1999) 70 Cal.App.4th 71, 75.)
Moreover, when two or more inferences can be reasonably deduced from the facts, we
are without power to substitute our deductions for those of the trial court. (Western
States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 571; see also Howard v.
Owens Corning (1999) 72 Cal.App.4th 621, 631.)
Here, the trial court weighed the evidence relied on by the Raiders against
evidence that, before the meeting to vote on Resolution G-7, the NFL repeatedly
informed the Raiders that they would be required to comply with the NFL constitution
and bylaws, as well as NFL policy, concerning revenue sharing. It also reasonably
inferred that Resolution G-7’s silence on the revenue sharing matter—particularly in light
of the explicit revenue sharing provisions contained in resolutions for other member
clubs—should not have led the Raiders to assume that the matter had been decided in
their favor. Indeed, though the Raiders quote selective excerpts from Resolution G-7 in
55
support of their assertion that they believed the NFL Executive Committee had adopted
their entire relocation submission, the complete text of the resolution is equally (if not
more reasonably) capable of the interpretation given by the trial court. We find that
substantial evidence supports the trial court’s conclusion that the Raiders were not
ignorant of the fact that the NFL did not grant a waiver of the revenue sharing provisions
by voting to approve Resolution G-7.
The Raiders’ second contention—that substantial evidence did not support the trial
court’s finding that the Raiders failed to establish reasonable, detrimental reliance—
needs little discussion. The Raiders contend that the trial court ignored the evidence that
NFL officials and the Raiders attended a press conference immediately after the vote on
Resolution G-7 to announce the approval of the Raiders’ move to Oakland. According to
the Raiders, the evidence showed that they had no choice but to leave Los Angeles after
this public announcement. But the Raiders ignore the evidence on which the trial court
relied, which included that the Raiders had issued a press release one month earlier, on
June 23, 1995, stating that “[t]he Raider organization has chosen to relocate to Oakland”;
that the Raiders undisputedly learned of the NFL’s position on revenue sharing with 24
hours of their later public announcement; and that the Raiders entered into a binding
commitment with Oakland on August 7, 1995, well after it learned that the NFL had not
granted a revenue sharing waiver.
By contending that the trial court failed to consider the July 21, 1995 press
conference as dispositive evidence showing detrimental reliance, the Raiders, again, ask
us simply to reweigh the evidence. We cannot do so. (E.g., Eidsmore v. RBB, Inc.
(1994) 25 Cal.App.4th 189, 195.) Substantial evidence supports the trial court’s
conclusion that the Raiders failed to meet their burden to show reasonable and
detrimental reliance, an essential element of their estoppel claim. Accordingly, we find
no reason to disturb the trial court’s decision to reject the Raiders’ ninth cause of action
for declaratory relief.
56
DISPOSITION
The order granting a new trial is reversed. The trial court is directed to enter
judgment in accordance with the jury verdict. In all other respects, the judgment is
affirmed. The NFL is awarded its costs on appeal.
CERTIFIED FOR PARTIAL PUBLICATION.
_____________________, J.
DOI TODD
We concur:
____________________________, P. J.
BOREN
____________________________, J.
NOTT
57
