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Appellant Reverses Alter Ego Judgment

Challenge to Extraordinarily Large $25M Mesothelioma Verdict Rejected on Appeal Because Challenge Not Based on "Minutes of the Court"

Tim Kowal     November 8, 2021

When a jury returns a large verdict, the unhappy defendant has to file a motion for new trial to reduce the verdict. (You can't just appeal directly, or else you'd waive the excessive-damages issue.) One way to argue the damages are excessive is to demonstrate the amount is the result of passion or prejudice. And one way to demonstrate that might be to compare verdicts in similar cases.

That is what the defendant-appellant tried after it was hit with a $25 million noneconomic verdict in the mesothelioma case of Phipps v. Copeland Corp. (D2d7 May 18, 2021) 278 Cal.Rptr 3d 688 (2021 WL 1973560). The appellant compiled 15 comparable cases into a report, and submitted that with a declaration in support of its motion for a new trial. But the trial court excluded the report as irrelevant and denied the motion. On appeal, the appellant argued the trial court erred in this ruling because verdicts in other cases were relevant.

Held: The compilation of other cases was not based on "the minutes of the court" under Code of Civil Procedure section 658, and thus could not be considered as a basis to reduce damages on a motion for new trial. Affirmed.

This analysis seems harsh, but it is based on the statutes. Do not rely on declarations in a new trial motion. Support your motion based on the court minutes.

New Trials May Be Granted Only Based on the Grounds Identified in the Statutes:

The Court of Appeal did not directly consider whether the appellant's compilation was relevant — the ground the trial court cited. Instead, the court explained that the compilation did not fall into one of the statutory grounds on which a new trial may be granted:

Sections 657 and 658 establish seven grounds for a new trial, which fall into two groups. Motions seeking a new trial on the first four grounds [irregularity in the proceedings, misconduct of the jury, accident or surprise, and newly discovered evidence] ‘must be made upon affidavits’ .... [¶] In contrast, motions relying on the remaining three grounds [excessive or inadequate damages, insufficiency of the evidence, and error in law] ‘must be made on the minutes of the court.’ [Citation.] Here, ‘[t]he “minutes of the court” include the records of the proceedings entered by the judge or courtroom clerk, showing what action was taken and the date it was taken [citation] and may also include depositions and exhibits admitted into evidence and the trial transcript.’ ” (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1192; see §§ 657658660.)

"In moving for a new trial on the ground of excessive damages, Copeland was required to do so “on the minutes of the court.” (§ 658.) The survey Copeland prepared and submitted in support of its motion were not among the minutes of the court. Therefore, the trial court could not consider that material. (See Maroney v. Iacobsohn (2015) 237 Cal.App.4th 473, 484-485 [“ ‘[b]ecause new trial motions are creatures of statute, “ ‘the procedural steps ... for making and determining such a motion are mandatory and must be strictly followed’ ” ’ ” ”]; People v. Southern Cal. Edison Co. (1976) 56 Cal.App.3d 593, 601 [“ ‘It is well established that the proceedings on a motion for new trial are strictly statutory, and the procedure for seeking relief must conform strictly to the statutory mandate.’ ”].)"

The Second District concluded that, for these reasons, the trial court "would have erred had it considered" the appellant's compilation.

Comment: I am not entirely persuaded by the court's approach here, simply because it appears as though the thrust of the compilation here was simply a discussion of other cases, most of which it would have been perfectly acceptable for the trial court to have considered in ruling on the new trial motion. True, the compilation included information from additional sources pulled from a deep Lexis-Nexis verdicts database search. And perhaps the compilation could have been excluded for that reason. But the holding here that it is improper to consider information about other cases — the kind of thing attorneys routinely put into their briefs — is a little unsettling.

A Second Comment: I was a little surprised the appellate court did not dispose of the excessive damages argument by finding it waived. The $25 million verdict was only half of what the plaintiff asked for at closing argument — the plaintiff asked the jury to award $50 million. Did the defendant object that $50 million (or $25 million) was excessive?) No. The defendant made no response to that, and did not argue that this amount would be improper. Instead, the defendant focused entirely on liability, and told the jury: “I'm not going to get into the issue of damages because I don't think you get there." [Obviously some tactical decisions were made here, which I suspect made appellate counsel very nervous.] While raising excessive damages in a new trial motion is a prerequisite to raising it on appeal, that does not mean that is sufficient. If the basis for the objection is clear during oral argument, the defendant should raise the objection at that time to avoid the possibility of waiver. 'One of the primary purposes of admonition at the beginning of an improper course of argument is to avoid repetition of the remarks and thus obviate the necessity of a new trial.' [Citation.]" (Garcia vConMed Corp. (2012) 204 Cal.App.4th 144, 148.) Failure to object forfeits a claim of excessive damages based on the improper argument. (Saret-Cook vGilbertKellyCrowley & Jennett (1999) 74 Cal.App.4th 1211, 1230.)

I find it noteworthy the court decided this case the way it did. The court apparently did as well, as it published the opinion. This signals a bigger uphill climb for defendants challenging large jury verdicts. This is an important reason to have appellate counsel present at trial.

Tim Kowal is an appellate specialist certified by the California State Bar Board of Legal Specialization. Tim helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at CALpodcast.com, and publishes summaries of cases and appellate tips for trial attorneys. Contact Tim at [email protected] or (949) 676-9989.
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