Case 3:06-cv-00416-LAB-WMC Document 84 Filed 11/07/07 Page 1 of 8
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
`
`CYNTHIA SIVAK, an individual,
`
`Plaintiff,
`
`vs.
`
`TOM VERSEN; BLUE SKY
`PRODUCTIONS, LLC; and DOES 1 through
`10, inclusive,
`
`Defendants.
`
`CASE NO. 06cv0416-LAB (WMc)
`ORDER:
`(1) DENYING DEFENDANTS'
`MOTION FOR JUDGMENT
`NOTWITHSTANDING THE
`VERDICT;
`(2) DENYING IN PART AND
`GRANTING IN PART
`DEFENDANTS' MOTION FOR
`NEW TRIAL;
`(3) PROPOSING REMITTITUR
`WITH RESPECT TO PUNITIVE
`DAMAGES IN LIEU OF NEW
`TRIAL; AND
`(4) DENYING PLAINTIFF'S
`REQUEST FOR DECLARATORY
`RELIEF
`
`[Dkt Nos. 71, 72, 73]
`On October 15, 2007, the court convened the hearing of post-trial motions following jury
`
`verdicts in this action in favor of plaintiff Cynthia Sivak ("Sivak") on: her breach of contract claim
`against defendant Tom Versen ("Versen"), awarding her $75,250.00 in past economic loss damages;
`her unjust enrichment claim against Versen, awarding her $43,645.00; her unjust enrichment claim
`against defendant Blue Sky Productions, LLC ("Blue Sky"), awarding her $43,645.00; her fraud claim
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`Case 3:06-cv-00416-LAB-WMC Document 84 Filed 11/07/07 Page 2 of 8
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`against Versen and Blue Sky, awarding her $125,000 in past economic loss damages; her punitive
`damages claim against Versen, awarding her $433,000; and her punitive damages claim against Blue
`Sky, awarding her $50,000. Dkt Nos. 60-66. Defendants move pursuant to FED.R.CIV.P. ("Rule")
`50(a) for judgment as a matter of law on the breach of contract claim and on the unjust enrichment
`claim against Versen and for a new trial pursuant to Rule 50(b) and Rule 59(a) contending, among
`other things, the punitive damages awards are excessive as a matter of law. Sivak moved for entry of
`judgment in her favor on the Second Claim for declaratory relief regarding the ownership of copyrights
`to certain interviews she conducted while affiliated with Blue Sky. In addition, the parties identified
`at the hearing a dispute over the accrual of post-judgment interest. The parties have provided the court
`with subsequent letter briefs on that issue. Brian M. Grossman, Esq. appeared on behalf of Sivak.
`Robert S. Besser, Esq. appeared on behalf of Versen and Blue Sky (collectively "Defendants"). The
`court issued rulings on the record, as memorialized herein, but reserved on the declaratory relief and
`the post-judgment interest issues.
`With respect to Defendants' Motion For Judgment As A Matter Of Law (Dkt No. 72), a
`Rule 50 motion can be "renewed" after judgment if a Rule 50 motion was made and denied at the close
`of all evidence in the case.1 The court finds Defendants' Rule 50 motion at the close of evidence was
`stated as applying to the entire case, preserving their right to renew the motion. See Freund v.
`Nycomed Amersham, 347 F.3d 752, 761 (9th Cir. 2003). "In ruling on a renewed motion, the court
`may: (1) if a verdict was returned: (A) allow the judgment to stand, (B) order a new trial, or (C) direct
`entry of judgment as a matter of law; or (2) if no verdict was returned: (A) order a new trial, or (B)
`direct entry of judgment as a matter of law." Rule 50(b).
`Defendants move for Rule 50 relief on the breach of contract and unjust enrichment claims
`against Versen. The post-trial dispute as framed in the Motion on the breach of contract issue is not
`over the amount of damages, but rather over the evidentiary support for a finding Versen was the
`
`1 "(a) Judgment as a Matter of Law. (1) In General. If a party has been fully heard on an issue
`during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis
`to find for the party on that issue, the court may: (A) resolve the issue against the party; and (B) grant a motion
`for judgment as a matter of law against the party on a claim or defense that, under the controlling law, can be
`maintained or defeated only with a favorable finding on that issue." Rule 50(a).
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`Case 3:06-cv-00416-LAB-WMC Document 84 Filed 11/07/07 Page 3 of 8
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`contracting party as opposed to Blue Sky. Viewing the evidence in the light most favorable to Sivak,
`the court finds the existence of a contract with Blue Sky does not exclude the possibility of a side
`agreement existing between Sivak and Versen as alleged in the Complaint, separate from the
`company's contract with her, and a reasonable jury could (and did) so find. On the unjust enrichment
`claim, the court cannot conclude the jury's result should be disturbed without impermissibly
`substituting its own view of the evidence for that of the jury. The court accordingly finds the jury's
`unjust enrichment awards must also remain undisturbed as they were based on substantial evidence.
`All the claims tried were imbued with credibility issues, and the jury exercised its prerogative to credit
`Sivak's version of events. For all the reasons recited on the record and herein, Defendants' Rule 50
`motion is DENIED.
`Defendants also filed a Motion For New Trial on grounds the jury's special verdicts were the
`result of passion and prejudice, the awards of punitive damages are excessive as a matter of law, the
`special verdicts are inconsistent, and they are against the weight of the evidence. Dkt No. 71. The
`court finds it may not consider the jury's calculations attached to the verdict forms for purposes of
`deciding whether a new trial must be granted, as such materials constitute unsolicited marginalia. See
`Tanno v. S.S. President Madison Ves, 830 F.2d 991, 993 (9th Cir. 1987) (holding that statements
`written on the special verdict form in parenthesis to explain damages "is surplusage and must be
`disregarded" for purpose of deciding whether a new trial must be granted, even though those
`statements, if taken into account, established a substantial inconsistency in the jury's damage awards).
`In any event, the court finds the two measures of economic damages the jury applied can be reconciled
`as reflecting different compensable harms, requiring both verdicts be upheld. See Atlantic & Gulf
`Stevedores, Inc. v. Ellerman Lines, Ltd., 369 U.S. 355, 364 (1962) ("Where there is a view of the case
`that makes the jury's answers to special interrogatories consistent, they must be resolved in that way");
`Gallick v. Baltimore & O.R. Co., 372 U.S. 108, 119 (1963) ("We therefore must attempt to reconcile
`the jury's findings by exegesis if necessary, . . . before we are free to disregard the jury's special verdict
`and remand the case for a new trial"); Floyd v. Laws, 929 F.2d 1390, 1396 (9th Cir. 1991) (following
`Gallick). In opposition to the motion, Sivak refers to Jury Instruction Nos. 16 and 17 (damages
`instructions for breach of contract) and No. 29 (damages instruction for fraud) to illustrate the jury was
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`Case 3:06-cv-00416-LAB-WMC Document 84 Filed 11/07/07 Page 4 of 8
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`instructed to use differing methodologies, and therefore could properly award a greater sum for the
`fraud tort ($125,000) than it did for breach of contract ($75,250). The motion is DENIED on all but
`the punitive damages issue.
`With respect to punitive damages, the court GRANTS that portion of Defendants' Motion For
`New Trial. Initially, the court acknowledges the jury has considerable discretion to award punitive
`damages, and its award, if supportable, will not be lightly disturbed. See Browning-Ferris Indus. v.
`Kelco Disposal, Inc., 492 U.S. 257, 279 (1989). "When a jury awards punitive damages based on state
`law, 'the role of the trial judge is to determine whether the jury's verdict is within the confines set by
`state law, and to determine, by reference to federal standards developed under Rule 59, whether a new
`trial or remittitur should be ordered.'" White v. Ford Motor Co., 312 F.3d 998, 1026 (9th Cir. 2002),
`quoting Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 433 (2001) (citation
`omitted). In making this judgment, the court has considered Supreme Court and Ninth Circuit
`authority identifying relevant factors to weigh in determining whether a punitive damages award is
`excessive or inadequate, for purposes of "imposing a sufficiently definite and meaningful constraint
`on the discretion of fact-finders in awarding punitive damages:"
`(a) whether there is a reasonable relationship between the punitive
`damages award and the harm likely to result from the defendant's
`conduct as well as the harm that actually has occurred; (b) the degree
`of reprehensibility of the defendant's conduct, the duration of that
`conduct, the defendant's awareness, any concealment, and the existence
`and frequency of similar past conduct; (c) the profitability to the
`defendant of the wrongful conduct and the desirability of removing that
`profit and of having the defendant also sustain a loss; (d) the "financial
`position" of the defendant; (e) all the costs of litigation; (f) the
`imposition of criminal sanctions on the defendant for its conduct, these
`to be taken in mitigation; and (g) the existence of other civil awards
`against the defendant for the same conduct, these also to be taken in
`mitigation.
`Hopkins v. Dow Corning Corp., 33 F.3d 1116, 1127 (9th Cir. 1994), quoting Pacific Mut. Life Ins. Co.
`v. Haslip, 499 U.S. 1, 21-22 (1991); see also TXO Production Corp. v. Alliance Resources Corp., 509
`U.S. 443, 457 (1993) (punitive damages awards are "the product of numerous, and sometimes
`intangible, factors; a jury imposing a punitive damages award must make a qualitative assessment
`based on a host of facts and circumstances unique to the particular case before it").
`\\
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`Case 3:06-cv-00416-LAB-WMC Document 84 Filed 11/07/07 Page 5 of 8
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`Although, concededly, there was enough evidence presented at trial to support a punitive
`damages award, the court finds the amounts awarded are not warranted either under the evidence or
`by law. When reviewing punitive damages, special principles apply. "For instance, a court is not
`limited to considering the proportionality of the punitive award to actual damages sustained, but may
`also consider the magnitude of the harm that potentially could have occurred and the potential gain to
`the defendant." Hopkins, 33 F.3d at 1127; TXO Production, 509 U.S. at 457 ("while proportionality
`to actual damages sustained is relevant in the analysis, it is only one of several factors to be
`considered"); see also Zaxis Wireless Communications, Inc. v. Motor Sound Corp., 89 Cal.App.4th
`577 (2001):
`
`In determining whether a punitive damages award is excessive,
`the [California] Supreme Court has set forth three factors to guide us:
`(1) the reprehensibility of the defendant's conduct; (2) the actual harm
`suffered; and (3) the wealth of the defendant. (Neal v. Farmers Ins.
`Exchange, 21 Cal.3d [910, 928 (1978)]). An award that is reasonable
`in light of the first two factors may nevertheless be so disproportionate
`to the defendant's ability to pay that the award is excessive for that
`reason alone. (Adams v. Murakami, [54 Cal.3d 105,111 (1991)]).
`Where the award is grossly disproportionate to the defendant's
`wealth, a presumption arises that the jury was influenced by
`passion and prejudice. (Dumas v. Stocker (1976) 59 Cal.App.3d 5,
`18. . . .).
`Zaxis Wireless, 89 Cal. App.3d at 581-82 (emphasis added).
`Based on the evidence presented at trial, the court finds neither defendant has the ability to pay
`punitive damages in an amount approaching the sums the jury awarded in this case. In particular, the
`court is not persuaded by Sivak's analysis purporting to demonstrate Versen has the ability to pay the
`$433,000 in punitive damages the jury awarded against him personally, which would depend on him
`putting virtually everything Sivak projects he has, can earn, or may acquire in the near future,
`including parting with his interest in Blue Sky, towards satisfaction of that portion of the judgment.
`The court finds, in addition, the punitive damages awarded are grossly excessive compared to the
`wrong committed and are neither reasonable nor proportionate to the harm or to the general damages.
`See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003). Accordingly, the court
`GRANTS Defendants' motion for a new trial on the punitive damages issues, unless plaintiff stipulates
`to accept a remittitur in the total, joint and several punitive damages amount of $10,000, as was
`discussed at the hearing.
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`Case 3:06-cv-00416-LAB-WMC Document 84 Filed 11/07/07 Page 6 of 8
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`Sivak moves for judgment on her claim for declaratory relief on her copyright claim. The
`court DENIES her motion. The articulation of that claim was significantly narrowed from its original
`pleading. She lost on the copyright infringement issue when the court granted defendants' Rule 50
`motion on that cause of action. Her post-trial motion frames the declaratory relief she now seeks as
`applying solely to the audio recordings (as opposed to the scripts or the actual radio programs) of those
`Interviews she made "the subject of a Certificate of Registration filed with the U.S. Copyright Office,
`Reg. No. SRu600-692, which registration was admitted in the trial of this action as Plaintiff's Exhibit
`No. 16," dated February 16, 2006. Mot. 2:9-11. That Exhibit is provided as Exhibit A to the
`Grossman Declaration in support of the Motion and lists approximately 60 interviews Sivak
`conducted. She contends "it is immaterial whether Sivak wrote, co-wrote, or did not write the
`questions used in the interview," and emphasizes: her asserted copyright is "in the sound recordings
`which were made by Sivak and Sivak alone;" she raises no issue associated with the authorship of the
`interview questions or answers; and she is "not seeking a copyright interest in the interviews conducted
`by Tom Versen, BeBe Winans or some other person." Reply 3:1-10. She pursued no claim that the
`use of the Interviews was without her permission, nor did she made a claim for damages for their use.
`The issue dispositive of Sivak's declaratory relief claim is whether she was an employee of
`Blue Sky or an independent contractor when she conducted the Interviews. She denies she was ever
`a Blue Sky employee, insisting she was supposed to be made a partner with Versen in the company,
`and operated as an independent contractor in the meantime. The jury appears to have predicated
`certain components of its verdicts on a finding she detrimentally relied on a promise and expectation
`of achieving partner status, which was not fulfilled. The court has considered the multiple factors
`enumerated in agreed Jury Instruction No. 17.9 to assist in making the determination whether the
`works were made for hire by an employee applied to pertinent evidence from the trial to conclude her
`status vis-a-vis Blue Sky at the times she conducted the Interviews at issue was that of an employee
`rather than an independent contractor. The court also finds implicit in the verdicts the jury concluded
`Sivak was an employee of Blue Sky. Sivak never consummated any equity position in the company,
`and evidence was presented that she represented herself to a third party to be an employee.
`Accordingly, Sivak's Motion For Declaratory Relief on the remaining copyright issues is DENIED.
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`Case 3:06-cv-00416-LAB-WMC Document 84 Filed 11/07/07 Page 7 of 8
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`Finally, the parties presented at the hearing a dispute regarding the point from which a
`prevailing party is entitled to recover post-judgment interest. Sivak contends post-judgment interest
`should accrue from the date of the verdict forward. Defendants contend no post-judgment interest
`begins to accrue until a final judgment is entered. "Interest shall be allowed on any money judgment
`in a civil case recovered in a district court. . . . Such interest shall be calculated from the date of the
`entry of the judgment. . . ." 28 U.S.C. § 1961. In federal court, post-judgment interest on federal civil
`money judgments accrues only from the date the court enters a final, appealable judgment. Dishman
`v. UNUM Life Ins. Co., 269 F.3d 974, 990-91 (9th Cir. 2001) ("we hold that 'judgment within the
`meaning of 28 U.S.C. § 19161 means 'final, appealable order'"); see also Tinsley v. Sea-Land Corp.,
`979 F.2d 1382, 1383 (9th Cir. 1992) (interest accrues from date judgment entered, regardless of
`whether judgment itself contains specific award of interest).
`In summary, for all the foregoing reasons, IT IS HEREBY ORDERED:
`Plaintiff's Motion For Declaratory Relief is DENIED, disposing of the remaining
`1.
`copyright claim.
`Defendants' Motion For Judgment Notwithstanding The Verdict is DENIED.
`2.
`Defendants' Motion For New Trial is DENIED on all grounds except with respect to
`3.
`the punitive damages awards.
`4.
`Plaintiff's motion for post-judgment interest beginning from the date of the jury's
`verdicts is DENIED.
`Defendants' Motion For New Trial is GRANTED on the issue of punitive damages.
`5.
`However, no Order setting a new trial on the punitive damages claims will be entered until ten calendar
`days have passed after the filing date of this Order. If within those ten days the parties file a Joint
`Motion accepting a remittitur in the amount of $10,000 in satisfaction of all punitive damages claims
`pursued in this action, jointly and severally as to both defendants, the court will amend its ruling on
`Defendants' Motion For New Trial to reflect that issue is moot and will enter a final judgment in this
`case. The parties shall notify the court in a joint filing if they elect instead to proceed to a new trial
`on the punitive damages claims.
`\\
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`Case 3:06-cv-00416-LAB-WMC Document 84 Filed 11/07/07 Page 8 of 8
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`The parties shall collaborate on the drafting of a [Proposed] Judgment to lodge with the
`6.
`undersigned District Judge incorporating the jury's verdicts. If the parties agree to the proposed
`remittitur, they shall include that resolution and shall lodge their [Proposed] Judgment simultaneously
`with the filing of their Joint Motion.
`IT IS SO ORDERED.
`DATED: November 6, 2007
`
`HONORABLE LARRY ALAN BURNS
`United States District Judge
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