Opinion
E073189
08-18-2021
ANSON CHHOUY CHAO, Plaintiff and Appellant, v. CHHOEUTH CHHOUR et al., Defendants and Appellants.
Chandler Law Firm, Robert C. Chandler and Carla R. Kralovic for Defendants and Appellants. Lo & Lo, Kelvin J. Lo, Jonathan J. Lo and Mikhail Liberzon for Plaintiff and Appellant.
NOT TO BE PUBLISHED
APPEAL from the Superior Court of Riverside County. No. RIC1718857 Daniel A. Ottolia, Judge. Affirmed.
Chandler Law Firm, Robert C. Chandler and Carla R. Kralovic for Defendants and Appellants.
Lo & Lo, Kelvin J. Lo, Jonathan J. Lo and Mikhail Liberzon for Plaintiff and Appellant.
OPINION
FIELDS J.
I. INTRODUCTION
In 2000, defendants and appellants Chhoeuth Chhour and Chanly Ke (defendants) opened a business on Pierce Street, in the City of Riverside (Pierce store), selling donuts under the name “Linda's Donuts.” In 2015, they sold the Pierce store to plaintiff and appellant Anson Chao (plaintiff) and signed a written sale of business agreement (agreement) as part of that transaction. The agreement contained a covenant not to compete and further provided that defendants would give up the fictitious business name “Linda's Donuts.”
In May 2017, defendants opened a new business selling donuts on Arlington Avenue in the City of Riverside (Arlington store) and used the name “Linda's Donuts” in the operation of that business. As a result, plaintiff filed a civil complaint against defendants, asserting causes of action for injunctive relief, breach of contract, unfair competition in violation of Business and Professions Code section 17200 et seq. (UCL), intentional interference with prospective economic relations, trademark infringement, and trade dress infringement.
Following trial, a jury returned a verdict for plaintiff on the causes of action for breach of contract and intentional interference with prospective economic relations and awarded him a total of $187,035 in damages. Thereafter, the trial court also granted plaintiff equitable relief and enjoined defendants from using the name “Linda's Donuts” or any similar name in the operation of the Arlington store.
Both defendants and plaintiff have appealed from the judgment. On appeal, defendants claim: (1) the judgment should be reversed because the trial court erred in ruling on evidentiary issues; (2) the trial court erred in refusing to give a requested jury instruction; (3) opposing counsel engaged in prejudicial misconduct; (4) multiple aspects of the jury's verdict are not supported by substantial evidence; (5) the trial court's award of equitable relief is against the law; and (6) the trial court erred in denying a request for a settled statement. For his part, plaintiff has filed a cross-appeal, arguing the trial court erred in directing a verdict on his cause of action for trademark infringement. Additionally, plaintiff has moved to dismiss defendants' appeal and has requested sanctions against defendants, and defendants have also requested sanctions against plaintiff. We find no merit in any of the claims of error, deny the motion to dismiss, deny the requests for sanctions, and affirm the judgment.
II. FACTS AND PROCEDURAL HISTORY
A. Facts and Complaint
In 2000, defendants opened the Pierce store. The business sold donuts and operated under the name “Linda's Donuts.” In November 2015, defendants sold the Pierce store to plaintiff. The parties executed a written sale of business agreement (agreement), which included a covenant not to compete and a provision requiring defendants to surrender the fictitious business name “Linda's Donuts” to plaintiff.
In May 2017, defendants opened the Arlington store and sold donuts using the name “Linda's Donuts” in the operation of that business. As a result, plaintiff filed a civil complaint against defendants asserting causes of action for injunctive relief, breach of contract, a UCL claim, intentional interference with prospective economic relations, trademark infringement, and trade dress infringement.
B. Relevant Evidence at Trial
1. Stipulated Facts
The parties stipulated that plaintiff purchased the Pierce store from defendants and that plaintiff currently operates the Pierce store. They further stipulated that plaintiff and defendants executed the agreement in relation to the sale of the Pierce store. The agreement included a covenant not to compete precluding defendants from operating a competing business within a five mile “radius” of the Pierce store for a period of 10 years, as well as a provision that defendants will abandon the fictitious business name “Linda's Donuts.” Finally, the parties stipulated that defendants currently operate the Arlington store.
2. Plaintiff's Testimony
a. Direct testimony
Plaintiff testified that, in 2015, he met with defendant Chhour at the Pierce store after learning that defendants were interested in selling the business. During this meeting, Chhour confirmed his desire to sell the Pierce store and stated he wanted to take a break from the donut business. When plaintiff asked Chhour what Chhour planned to do following a break, Chhour represented that defendants had previously sold a similar business in Los Angeles for a similar reason and, after taking a break, opened a new store several cities away.
At defendants' request, plaintiff contacted an escrow company to facilitate the sale of the Pierce store. In November 2015, plaintiff, plaintiff's girlfriend, and defendants met with an escrow agent to provide information regarding the terms of the sale and to request preparation of a contract for sale of the Pierce store. The terms they discussed included a covenant not to compete precluding defendants from opening a competing business within a five mile radius of the Pierce store for a period of 10 years. According to plaintiff, the parties also agreed to include a provision stating that defendants would give up the fictitious business name “Linda's Donuts.” Plaintiff stated the purchase price included $32,890 for the goodwill and trade name of the Pierce store, and $30,000 as consideration for the covenant not to compete.
Plaintiff testified that he wanted to continue to operate the Pierce store using the name “Linda's Donuts” because the business had been operating under that name for a lengthy period of time; he believed customers who hear the name “Linda's Donuts” associate it with the Pierce store; and the Pierce store was promoted as the “ ‘Best Donut in Town.' ” At the time, plaintiff also believed the Pierce store had longtime customers who knew the business by the name “Linda's Donuts.”
According to plaintiff, the escrow company prepared the agreement pursuant to the parties' instructions following their first meeting, and the parties returned to the escrow company's office several days later for a second meeting. During this second meeting, the escrow agent explained the terms in the agreement; plaintiff and defendants were given time to review the agreement; and plaintiff and defendants executed the agreement. Plaintiff testified that he witnessed all parties execute the agreement at this time.
After the agreement was executed, plaintiff spent three weeks with defendants in the Pierce store to observe how the store was operated and to learn how to make donuts. During this time, Chhour indicated to plaintiff that he knew the purpose of a covenant not to compete and further indicated that he understood the term “radius” by drawing a circle on his hands. Chhour also disclosed that his average monthly profit operating the Pierce store was $18,000.
Two or three months after plaintiff purchased the Pierce store, defendants visited the store and told plaintiff they had found a new location to operate a new donut business. When plaintiff asked where this new business would be located, Chhour responded that it was “far away.”
In early 2017, Chhour visited the Pierce store with some contractors. Chhour told plaintiff that the contractors needed to see a hose connector to a coffee machine, but plaintiff observed the contractors measuring everything in the store including the tables, the counter, and the showcase. In April 2017, another contractor visited the Pierce store without Chhour. This contractor disclosed the intended address of defendants' new business, indicated the new location appeared less than five miles away from the Pierce store, and disclosed that defendants intended to use the name “ ‘Linda's Donuts' ” in the operation of their new store. The contractor told plaintiff that defendants had disclosed they were seeking out and informing prior customers of their new business. Following this disclosure, plaintiff observed Chhour come to the Pierce store and speak with customers outside the store.
In May 2017, defendants opened the Arlington store. Plaintiff entered the address of the new store into an application on his phone and determined that defendants new store was only 4.12 miles from the Pierce store. Plaintiff also visited the Arlington store and observed that defendants were using the name “Linda's Donuts” to operate the business. Plaintiff testified to the accuracy of multiple pictures that appeared to show similarities in the designs of the Pierce store and the Arlington store.
Following the opening of the Arlington store, plaintiff experienced “a lot” of situations in which customers would place orders by telephone but would never arrive to pick up the orders. Customers began asking plaintiff if he opened a second location, and the Pierce store began receiving many calls asking if it had a second location. Plaintiff testified that he established two social media accounts for the Pierce store, and many customers began posting reviews that appeared to confuse his store with the Arlington store. Thirty-eight customer reviews were published to the jury, and plaintiff claimed nine of these reviews expressed some level of confusion between the two stores. Plaintiff also recalled an incident in which an individual called the Pierce store to complain about an order picked up from the Arlington store. Finally, plaintiff testified that, on one occasion, a supplier mixed up orders between the two stores.
Over defendants' objection, plaintiff recounted a conversation with a customer named Laser. Laser told plaintiff he had received text messages from Ke inviting Laser to patronize the Arlington store and encouraging Laser to tell other customers that defendants had opened the Arlington store. Plaintiff also described a conversation with a second customer in which the customer represented that Ke had told him that her new store was within five miles of the Pierce store.
Plaintiff estimated that, on average, a customer would spend $7 at the Pierce store, and he had lost about five customers per day since the opening of the Arlington store. He generally recognized customer faces and formed his estimate of lost customers on that basis. Additionally, he had occasionally encountered former customers who told him they were now patronizing the Arlington store.
Plaintiff explained that his profit margin from gross sales was about 75 percent. Thus, based upon his estimate of lost customers and lost sales, plaintiff estimated he would lose $109,760 in lost profits over the course of the 10-year period provided in the agreement's covenant not to compete. Plaintiff further estimated the value of his time and labor to clear up customer confusion would amount to $20,000.
b. Cross-examination
On cross-examination, plaintiff admitted that during their first meeting at the escrow office, the parties filled out a form referred to as a bulk escrow open order. Both he and defendants provided various information to the escrow agent on this form. While the form included information regarding a covenant not to compete, it stated the geographic limit would be five miles, without the term “radius.” With respect to the duration of the covenant not to compete, the form had a handwritten notation indicating a duration of one year, but the initial notation had been scratched out and ultimately replaced with a handwritten notation of 10 years. Plaintiff explained that the one year notation was on the form at the time he arrived at the escrow office, but the escrow agent changed it to 10 years following negotiation by the parties in the presence of the agent. Plaintiff acknowledged that the agreement published to the jury did not contain his signature, but he explained that the escrow agent gave each party his own copy of the agreement to execute.
Plaintiff admitted he never worked in a business selling donuts prior to purchasing the Pierce store and never reviewed any bookkeeping sheets or profit and loss statements from defendants. However, prior to agreeing to purchase the Pierce store, he visited the business five days a week for two or three weeks to observe the customer traffic. He also reviewed a calendar defendants used to keep track of daily sales and reviewed receipts related to supply costs. Plaintiff admitted he did not personally prepare the bookkeeping for the Pierce store, but he maintained he could still provide an estimate of monthly sales based upon the numbers on his income tax return. He admitted that he brought no documents to support his estimates.
Plaintiff could not provide specific names for any of the customers he believed the Pierce store had lost since the opening of the Arlington store, admitted he did not know the reason for any specific customer's decision to stop patronizing the Pierce store, and admitted there were other businesses selling donuts located between the Pierce store and the Arlington store. Plaintiff did not know the sales or the costs associated with the Arlington store.
3. Testimony of Defendant Ke
Defendant Ke testified she first came to the United States in 1985. English is not her first language, and she has never taken classes in speaking or reading English. She adopted the given name “Linda” after moving to the United States, and she had her name legally changed in 2008.
In 2000, Ke and her husband, defendant Chhour, opened the Pierce store. They operated the Pierce store continuously from 2000, using the name “Linda's Donuts, ” until 2015 when they decided to sell the business. Her husband wanted to sell the store because he needed a break from working and wanted to spend time visiting relatives in Cambodia.
In October 2015, plaintiff showed up at the Pierce store and inquired about purchasing the business. Ke recalled she told plaintiff that she and her husband were looking to sell the business, she had reservations about selling the business, and they were looking to sell the business for $70,000. After that initial meeting, plaintiff visited and observed the operation of the Pierce store for about a month before deciding to purchase it.
Once plaintiff confirmed his desire to purchase the Pierce store, Ke and her husband requested that plaintiff find an escrow company to facilitate the sale. She recalled visiting an escrow office in November 2015; confirmed that her husband filled out initial escrow forms that included a covenant not to compete; and further confirmed that her husband initially provided the geographic limit of “5 miles” and a handwritten notation indicating a duration of one year for the covenant not to compete. Ke acknowledged that the parties discussed the terms of the covenant not to compete while at the escrow office but maintained defendants did not agree to change the terms initially indicated by her husband.
Ke testified the parties never discussed whether defendants would give up the name “Linda's Donuts.” Instead, she recalled that plaintiff asked if he could continue to use the name “Linda's Donuts” in the operation of the Pierce store, and the parties agreed that he could with the understanding that defendants intended to open a new business in the future and also use that name. Ke informed plaintiff on multiple occasions during these negotiations that defendants intended to open a new business in the future.
Ke denied returning to the escrow office a second time to execute the agreement. According to Ke, plaintiff brought the agreement to the Pierce store for defendants' review and signature. At the time, Ke orally asked plaintiff if any terms had been changed since their meeting at the escrow office and, in response, plaintiff stated all the terms remained the same. Because she was busy with a customer, Ke did not read the agreement before signing and initialing the agreement.
On cross-examination, Ke admitted she and her husband entered into a transaction with plaintiff to sell the Pierce store and admitted her initials appeared on the agreement. She claimed that she does not read English and signed the agreement because her husband instructed her to do so. Ke admitted she never requested a copy of the agreement in her native language to review. Ke also claimed her husband did not read the agreement prior to signing it. When asked to explain why her husband did not read the agreement, Ke simply stated they were both “busy.”
Ke admitted that, at the time the Pierce store was sold to plaintiff, it was the only business using the name “Linda's Donuts” in the City of Riverside, and it had an established customer base in the community. She denied ever trying to solicit business from customers of the Pierce store, but she admitted that her son texted a friend known as Laser in order to invite Laser to a promotional event at the Arlington store. Ke denied that customers ever contacted the Arlington store to ask if it was related to the Pierce store, but she was impeached with her verified responses to requests for admissions on this point.
Finally, Ke maintained the Arlington store was located more than five miles from the Pierce store when measured by driving distance. She did not believe there were any driving routes less than five miles between the two stores.
4. Testimony of Defendant Chhour
Defendant Chhour testified that, in 2000, he opened the Pierce store and named the business “Linda's Donuts” after his wife, defendant Ke. He stated the name was personally important to him, and he never agreed to give up the name during negotiations to sell the Pierce store. Chhour initially agreed to meet with plaintiff to discuss the sale of the Pierce store because plaintiff represented he had previous experience working at a donut store. This was personally important to Chhour because he wanted the Pierce store to continue operating “forever, ” even after any sale of the store.
During their negotiations, plaintiff visited the Pierce store for about a month in order to take notes regarding customer traffic and sales and asked to review a copy of the Pierce store's lease agreement, but he did not ask to review any accounting. Chhour admitted that, at some point, he had a conversation with plaintiff in which he stated the Pierce store earned $18,000 a month, but he explained that number represented gross sales and not profits. Chhour stated he never provided plaintiff with any additional figures regarding sales or profits for the Pierce store.
Chhour acknowledged that he filled out and signed the initial bulk order escrow form detailing the parties' terms for sale of the Pierce store. He admitted that he understood the meaning of a covenant not to compete, and he filled in the initial terms of the covenant not to compete contained within the bulk order escrow form. Chhour stated he intended “5 miles” to be measured by street miles. He further admitted signing the escrow form during the initial meeting at the escrow office but claimed that the “5 mile” and “one year” terms he initially wrote in the forms were unchanged at the time he left the escrow office.
Chhour never returned to the escrow office to sign the agreement but recalled that plaintiff brought the agreement to the Pierce store for defendants' review and signature. At the time, plaintiff represented that no terms had been changed in the agreement and “ ‘everything [was] the same.' ” Chhour did not read the agreement before signing it.
On cross-examination, Chhour admitted he initialed each page of the agreement, but maintained that he never read the agreement. He was asked to read the covenant not to compete provision aloud to the jury and was able to do so. Chhour further admitted he understood what the term “radius” meant, but he never discussed the matter with plaintiff. He adamantly denied meeting at the escrow office for a second time to review and sign the agreement.
Chhour admitted that, after opening the Arlington store, he received calls from customers, as well as inquiries from customers physically walking into the Arlington store, inquiring as to whether the Arlington store and the Pierce store shared owners.
5. Testimony of Rebuttal Witness
In rebuttal, plaintiff called the commercial property leasing manager for the Arlington store. The leasing manager testified it was her practice to make cold calls to prospective business to fill expected vacancies, and she made cold calls to several local donut stores in 2015 for this purpose. She further recalled that, in December 2015, Chhour visited her leasing office.
C. Verdict and Judgment
During the course of trial, plaintiff voluntarily dismissed the cause of action for trade dress infringement and, following the presentation of evidence, the trial court granted a motion for directed verdict in favor of defendants on the cause of action for trade mark infringement.
The jury returned a special verdict in favor of plaintiff on his causes of action for breach of contract and intentional interference with prospective economic advantage. The jury awarded plaintiff $62,890 in past economic damages and $20,000 in future economic damages for the breach of contract claim, and it further awarded $16,748 in past economic damages and $64,759 in future economic damages for the intentional interference claim.
Following the jury's verdict, the trial court granted equitable relief in plaintiff's favor on the request for injunctive relief and UCL claim, ordering that defendants refrain from using the name “ ‘Linda's Donuts' ” or similar names likely to cause confusion in the operation of the Arlington store.
Judgment was entered on May 15, 2019, and both defendants and plaintiff have appealed from the judgment.
III. DISCUSSION
On appeal, defendants challenge almost every aspect of the trial, claiming: the trial court erred in making evidentiary rulings and in instructing the jury; opposing counsel engaged in prejudicial misconduct; the jury's verdict is unsupported by substantial evidence; the trial court erred in granting equitable relief; and the trial court erred in denying a post-judgment request for a settled statement. Plaintiff has also appealed from the judgment, claiming the trial court erred in granting a directed verdict on the cause of action for trademark infringement. Finally, plaintiff moved for dismissal of defendants' appeal, and plaintiff and defendants have dueling requests for sanctions, which we reserved for consideration with the merits of the appeal. As we explain, post, we find no merit in any of the parties' claims of error, deny plaintiff's motion to dismiss, deny the requests for sanctions, and affirm the judgment.
A. We Find No Prejudicial Error in the Trial Court's Evidentiary Rulings
We first address defendants' various claims of error in the trial court's evidentiary rulings. Specifically, defendant claims the trial court erred when it (1) allowed plaintiff to testify regarding a customer's statements that defendants had attempted to solicit that customer's business; (2) allowed plaintiff to present evidence of social media reviews from customers; and (3) permitted the jury to review, during deliberation, requested demonstrative evidence that was displayed during plaintiff's closing argument. We disagree that any of these claims constitute prejudicial error.
1. General Legal Principles and Standard of Review
“We review a trial court's decision to admit or exclude evidence under an abuse of discretion standard.” (Litinsky v. Kaplan (2019) 40 Cal.App.5th 970, 988 (Litinsky); Aljabban v. Fontana Indoor Swap Meet, Inc. (2020) 54 Cal.App.5th 482, 505.) “The abuse of discretion standard is not a unified standard; the deference it calls for varies according to the aspect of a trial court's ruling under review. The trial court's findings of fact are reviewed for substantial evidence, its conclusions of law are reviewed de novo, and its application of the law to the facts is reversible only if arbitrary and capricious.” (Haraguchi v. Superior Court (2008) 43 Cal.4th 706, 711-712 (Haraguchi).)
“ ‘ “The burden is on the party complaining to establish an abuse of discretion, and unless a clear case of abuse is shown and unless there has been a miscarriage of justice a reviewing court will not substitute its opinion and thereby divest the trial court of its discretionary power.”' ” (Litinsky, supra, 40 Cal.App.5th at p. 988 .) “A miscarriage of justice from the alleged erroneous admission of evidence is found only when ‘the appellate court, after examining all the evidence, is of the opinion that “ ‘it is reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error.' ”' ” (Ibid.)
2. Admission of Defendants' Communication with Customers Was Not Prejudicial
Defendants claim the trial court erred when it permitted plaintiff to recount a conversation with a customer in which the customer indicated defendants had encouraged him to patronize defendants' new store. The only argument asserted on appeal is that this evidence was hearsay and, therefore, per se inadmissible. Even assuming admission of this testimony was erroneous, defendants have not established resulting prejudice warranting reversal.
First, this testimony was cumulative of other testimony unchallenged by defendants. Notably, plaintiff testified to a substantially similar conversation with one of defendants' contractors, who represented to plaintiff that defendants had been soliciting business from plaintiff's customers. Defendants did not assert any hearsay objection to this testimony. Even if erroneous, admission of evidence that is merely cumulative of other, unchallenged testimony is not prejudicial. (People v. Smithey (1999) 20 Cal.4th 936, 972 [admission of testimony over defendant's objection harmless where such testimony cumulative of other testimony already in record]; People v. Houston (2005) 130 Cal.App.4th 279, 300 [no prejudice where objectionable testimony cumulative of other evidence unchallenged by appellant].)
Second, the testimony regarding a customer's statement was, at best, only relevant to plaintiff's claims for intentional interference and unfair competition. However, plaintiff presented evidence of numerous other acts upon which these two claims could have been premised, including defendants' misrepresentation of their intent to open a competing store, plaintiff's observation of defendants speaking with customers directly outside plaintiff's store, defendants' use of the same name to operate the Arlington Store, and defendant's use of the same design in the construction of the Arlington store. Given this record, we cannot conclude that admission of plaintiff's testimony regarding a single customer's conversation, even if erroneous, constitutes prejudicial error. Defendants have not established that “this testimony was so damaging that in its absence, a different result was probable.” (IIG Wireless, Inc. v. Yi (2018) 22 Cal.App.5th 630, 655-656.) In the absence of prejudice, reversal is not warranted.
Such testimony would not have been relevant to the breach of contract claims since no provision of the disputed contract purported to bar solicitation of customers and such a statement could not be used to prove any essential element of plaintiff's trademark infringement claim.
3. Admission of Social Media Review
Defendants also claim the trial court erred in permitting evidence of reviews posted on two social media websites plaintiff operated to market the Pierce store. Again, defendants' only argument is that such writings constitute inadmissible hearsay. However, “[w]hen evidence that certain words were spoken or written is admitted to prove that the words were uttered [or written] and not to prove their truth, the evidence is not hearsay.” (Hart v. Keenan Properties, Inc. (2020) 9 Cal.5th 442, 447; People v. Ervine (2009) 47 Cal.4th 745, 775 [“Out-of-court statements that are not offered for their truth are not hearsay under California law.”].) A statement is not hearsay where it is “capable of serving its nonhearsay purpose regardless of whether the jury believes the matters asserted to be true.” (Hart, at p. 447.)
Here, plaintiff alleged a trademark infringement claim as well as a UCL claim, based in part on the defendants' use of a similar name in the operation of the Arlington store. In order to prove these claims, plaintiff was required to show the likelihood of confusion by consumers and can do so by presenting evidence of actual confusion. (Mallard Creek Indus. v. Morgan (1997) 56 Cal.App.4th 426, 434-435 [“Liability for trademark infringement and unfair competition exists under California law when an appreciable number of reasonable buyers are likely to be confused by the similarity of the plaintiff's and defendant's marks.”].) Thus, evidence of statements made by consumers tending to demonstrate such confusion were directly relevant to disputed issues in this action. Such statements are not hearsay because the statements themselves can be relied upon to support a reasonable inference that customers were confused, regardless of whether the jury believes the truth of any specific representations contained within any specific statement. As such, the trial court did not abuse its discretion in admitting this evidence.
For example, one customer review stated: “I believe this is the second location. Not 100% sure. But there is another Linda's donuts off of Pierce.” The jury need not believe any of the factual representations in this statement in order to conclude the customer making the statement had some level of confusion when making the statement.
4. Permission to Review Demonstrative Evidence During Deliberation
Finally, defendants contend the trial court erred in permitting the jury to consult a demonstrative exhibit published by plaintiff's counsel during closing argument. Specifically, plaintiff's counsel published an exhibit setting forth suggested amounts the jury should consider awarding as damages during closing argument. When the jury asked to review this exhibit during deliberation, the trial court permitted the jury to reenter the courtroom, review the exhibit in the presence of the court and counsel, and take notes if they desired to do so. On appeal, defendants contend this was erroneous because the exhibit was not evidence.
The Code of Civil Procedure explicitly provides that, “[u]pon retiring for deliberation[, ] the jury may take with them all papers which have been received as evidence...; and they may also take with them any exhibits which the court may deem proper....” (Code Civ. Proc., § 612, italics added.) Additionally, even in the absence of such statutory authority, the California Supreme Court has held that “ ‘[a] trial court's inherent authority regarding the performance of its functions includes the power to order argument by counsel be reread to the jury or to be furnished to that body in written form. The exercise of such power must be entrusted to the court's sound discretion. ' ” (People v. Peoples (2016) 62 Cal.4th 718, 784.) Thus, the mere fact an exhibit has not been admitted into evidence does not preclude the trial court from granting a request by the jury to review such exhibit during deliberation.
Unlike the Code of Civil Procedure, the parallel provision of the Penal Code does not provide the trial court with discretionary authority to permit the jury to take any exhibits that the trial court may deem proper to use in deliberation. (See Pen. Code, § 1137.) Nevertheless, in People v. Peoples, supra, 62 Cal.4th at p. 784, the high court concluded a trial court had inherent authority to permit the jury to review demonstrative exhibits used only during counsel's closing argument, even absent explicit statutory authority permitting such discretion.
Defendants' reliance on CACI 5020 as authority for their claim of error is unavailing. “ ‘Pattern jury instructions... [, ]while designed to accurately reflect the law, are not the law itself.' ” (Petitpas v. Ford Motor Co. (2017) 13 Cal.App.5th 261, 299.) While this instruction is an appropriate advisement to the jury that jurors will generally be unable to view demonstrative evidence during deliberation, such advisement does not restrain the trial court's authority to otherwise permit review of such materials when a request is properly made. Moreover, it is difficult to imagine any prejudice arising from the court's exercise of its discretion to permit the jury to see a demonstrative exhibit it had already seen and heard about during plaintiff's counsel's closing argument. Thus, defendants' contention that the trial court abused its discretion in permitting the jury to review an exhibit simply because the exhibit had not been admitted into evidence is without merit.
CACI 5020 states: “During the trial, materials have been shown to you to [help explain testimony or other evidence in the case].... [¶] You will not be able to review them during your deliberations because they are not themselves evidence or proof of any facts. You may, however, consider the testimony given in connection with those materials.”
Defendants' reliance on Conger v. White (1945) 69 Cal.App.2d 28 is also misplaced. The case involved a claim of juror misconduct when a juror took a piece of demonstrative evidence into the jury room without the trial court's permission. (Id. at pp. 41-42.) Nothing in that opinion purports to restrict the trial court's authority to permit review of materials previously published to the jury upon request.
B. Any Alleged Misconduct by Plaintiff's Counsel Was Not Prejudicial
Defendants also argue the judgment must be reversed because plaintiff's counsel allegedly engaged in misconduct. Specifically, defendants contend that plaintiff's counsel engaged in two instances of misconduct when counsel referenced the existence of an audio recording that the trial court had previously excluded when ruling on motions in limine prior to trial. We find no prejudice warranting reversal.
“Attorney misconduct is an irregularity in the proceedings and a ground for a new trial. [Citation.] Although it is common practice to urge that attorney misconduct is an error of law justifying the grant of a motion for a new trial, a party is not required to move for a new trial before raising attorney misconduct as an issue on appeal.” (Garcia v. ConMed Corp. (2012) 204 Cal.App.4th 144, 148.) The appropriate standard of review to determine whether attorney misconduct has, in fact, occurred appears unsettled. (See Id. at p. 149.) Despite this uncertainty, it is settled that any misconduct must be prejudicial to warrant reversal, and any determination of prejudice is subject to our independent review. (Ibid.; Martinez v. Department of Transportation (2015) 238 Cal.App.4th 559, 568; Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 296, fn. 16.)
Initially, we question whether the record in this case could support a finding of misconduct. While the trial court granted defendants' motion in limine to exclude the recording at issue, “[a] ruling on a pretrial motion in limine is necessarily tentative because subsequent evidentiary developments may change the context.” (Rufo v. Simpson (2001) 86 Cal.App.4th 573, 608.) We observe that during the discussions regarding defendants' motion in limine, the trial court expressed, on at least one occasion, that recordings might be admissible for impeachment purposes depending on the nature of defendants' testimony on the stand, and the two instances of alleged misconduct here occurred when plaintiff's counsel argued a recording should be permitted as impeachment in light of Chhour's testimony during cross-examination. Nevertheless, even assuming for the sake of argument that counsel's actions in this case might constitute misconduct, we find no prejudice warranting reversal.
Specifically, counsel's reference to a recording occurred on only two, brief occasions. Following defendants' objection, the trial court immediately admonished the jury and instructed it to disregard any mention of a recording. “ ‘ “It is only in extreme cases that the court, when acting promptly and speaking clearly and directly on the subject, cannot, by instructing the jury to disregard such matters, correct the impropriety of the act of counsel and remove any effect his conduct or remarks would otherwise have.”' ” (Sabella v. Southern Pac. Co. (1969) 70 Cal.2d 311, 318.) Thus, even assuming misconduct, we cannot conclude defendants were prejudiced where the trial court immediately and directly admonished the jury to disregard any mention of a recording. Absent prejudice, any alleged misconduct does not warrant reversal.
C. Substantial Evidence Supports the Jury's Verdict
Defendants also claim on appeal that the jury's verdict is not supported by substantial evidence. Specifically, defendants argue there was insufficient evidence to support the jury's determination that a contract existed and the amount awarded by the jury in damages. We disagree.
1. General Legal Principles and Standard of Review
“ ‘Substantial evidence is evidence sufficient to “deserve consideration by the jury, ” that is, evidence that a reasonable jury could find persuasive.' [Citation.] It is ‘evidence which is reasonable, credible, and of solid value.' [Citation.] The testimony of a single person is substantial evidence.” (King v. U.S. Bank National Assn. (2020) 53 Cal.App.5th 675, 699-700.) “As in all substantial evidence challenges, the appellate court's power of review commences and ceases with the location of any substantial evidence, contradicted or uncontradicted, which will support the determination.” (Las Palmas Associates v. Las Palmas Center Associates (1991) 235 Cal.App.3d 1220, 1239.)
2. Substantial Evidence Supports Formation of a Contract
The law is well established that “[i]n the absence of fraud, mistake, or another vitiating factor, a signature on a written contract is an objective manifestation of assent to the terms set forth there, ” and “[i]f the terms are unambiguous, there is ordinarily no occasion for additional evidence of the parties' subjective intent. [Citation.] Their ‘actual intent,' for purposes of contract law, is that to which they manifested assent by executing the agreement.” (Rodriguez v. Oto (2013) 212 Cal.App.4th 1020, 1027.)
Here, the parties stipulated that defendants sold the Pierce store to plaintiff and further stipulated that the parties executed the agreement with respect to that transaction. Plaintiff testified that all parties were present when an employee of the escrow office explained the terms of the agreement, and all parties executed the agreement. Both defendants admitted their signatures appeared on the agreement. Thus, there was more than sufficient evidence in this case for the jury to conclude that a contract existed, and to conclude that the terms of the contract were those represented in the agreement actually executed by defendants.
While defendants offered various reasons why they did not understand or did not subjectively agree to the specific conditions in the agreement, the jury was not required to believe defendants' testimony. “Where the existence of a contract is at issue and the evidence is conflicting or admits of more than one inference, it is for the trier of fact to determine whether the contract actually existed” (Bustamante v. Intuit, Inc. (2006) 141 Cal.App.4th 199, 208), and “[u]nder all but the most limited circumstances, credibility of witnesses is a question of fact to be resolved by the jury” (Vorse v. Sarasy (1997) 53 Cal.App.4th 998, 1001). The undisputed existence of a written agreement, signed by the parties to be bound by its terms, is itself substantial evidence sufficient to support a finding that a contract existed, and we find no merit in defendants' argument to the contrary.
3. Substantial Evidence Supports the Jury's Award of Damages
Defendants also argue the amount awarded by the jury in damages is unsupported by substantial evidence. Again, we disagree.
a. The jury's award of contract damages is supported by substantial evidence
“Damages awarded to an injured party for breach of contract ‘seek to approximate the agreed-upon performance.' [Citation.] The goal is to put the plaintiff ‘in as good a position as he or she would have occupied' if the defendant had not breached the contract. [Citation.] In other words, the plaintiff is entitled to damages that are equivalent to the benefit of the plaintiff's contractual bargain.” (Lewis Jorge Construction Management, Inc. v. Pomona Unified School Dist. (2004) 34 Cal.4th 960, 967 (Lewis Jorge Construction).) Thus, “ ‘[d]amages for breach of contract include general (or direct) damages, which compensate for the value of the promised performance, and consequential damages, which are indirect and compensate for additional losses incurred as a result of the breach.' ” (Speirs v. BlueFire Ethanol Fuels, Inc. (2015) 243 Cal.App.4th 969, 989.)
Here, plaintiff testified that the consideration paid for the goodwill and trade name of the Pierce store was $32,890, and the consideration paid for the covenant not to compete was $30,000. Defendants did not dispute this characterization in their own testimony. The jury could award these amounts in damages for the purpose of restoring plaintiff to a position he would have been in had he purchased the Pierce store without the benefit of the trade name or covenant not to compete. Thus, the jury's award of past economic damages in the amount of $62,890 for breach of contract was supported by substantial evidence.
Nor is such an award inconsistent with the trial court's subsequent grant of an injunction pursuant to plaintiff's UCL claim. While the injunction restrained defendant's use of the name “Linda's Donuts” in the operation of their new store, it did not enforce the terms of the covenant not to compete, declining to grant plaintiff's request to enjoin defendants' operation of the store or order the store be moved outside the geographic limits of the contract provision.
Further, plaintiff testified that the estimated value of the time and effort he would need to devote to correct ongoing customer confusion would amount to $20,000. Compensation of this nature is recoverable as general damages because it is sufficiently predictable that defendants' act of opening the Arlington store-in violation of the contractual covenant not to compete and use of the same trade name-would require plaintiff to devote time to address at least some instances of customer confusion. (See Lewis Jorge Construction, supra, 34 Cal.4th at p. 968 [general damages include costs that are reasonably predictable as a result of breach].) Clearly, plaintiff has personal knowledge sufficient to offer an opinion regarding the monetary value of his own time. Defendants were free to cross-examine plaintiff on the accuracy of this estimate and the jury was free to weigh the credibility of this estimate. However, if the jury chose to believe plaintiff, it was entitled to rely on this testimony as evidence of future damages, and its award of $20,000 in future damages for breach of contract is supported by substantial evidence.
b. The damages for intentional interference with prospective economic advantage are supported by substantial evidence
“The measure of damages for intentional interference with contractual relations or prospective economic advantage is ‘an amount that will reasonably compensate plaintiff for all loss or harm....' ” (Sole Energy Co. v. Petrominerals Corp. (2005) 128 Cal.App.4th 212, 232.) This includes “ ‘the diminution of the value of the business traceable to the wrongful act, as reflected by loss of profits, expenses incurred, or similar concrete evidence of injury.' ” (Diodes, Inc. v. Franzen (1968) 260 Cal.App.2d 244, 257.)
Here, plaintiff estimated that the Pierce store lost about five customers every day since defendants opened the competing Arlington store; on average, each customer spent $7; and, as a result, the Pierce store would experience a total of $109,760 in lost sales that it would not otherwise have experienced had defendants not opened their competing business. Plaintiff also testified his profit margin on donut sales was approximately 75 percent. If the jury considered plaintiff's estimates to be credible, such testimony would support a conclusion that plaintiff will experience a total of $82,320 in lost profits. In light of this testimony, the jury's actual award of $81,507, representing $16,748 in past economic damages and $64,759 in future economic damages, is supported by substantial evidence.
Defendants claim that plaintiff's testimony is entirely speculative is without merit. Plaintiff operated the Pierce store for more than a year prior to defendants' opening of the Arlington store, and he further operated the Pierce store in competition with the Arlington store for more than a year by the time he testified at trial. This established sufficient personal knowledge from which plaintiff could estimate changes in his gross sales, as well as profit margins for those sales. The fact that plaintiff did not provide these estimates with mathematical precision is of no importance. “ ‘[L]ost profits to an established business may be recovered if their extent and occurrence can be ascertained with reasonable certainty; once their existence has been so established, recovery will not be denied because the amount cannot be shown with mathematical precision.' [Citation.] The extent of such damages may be measured by ‘the past volume of business and other provable data relevant to the probable future sales.' ” (Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 889-890.) The jury was not required to believe plaintiff's testimony, but if the jury chose to do so, such testimony was substantial evidence upon which it could rely to reach its award of damages on the claim for intentional interference with prospective economic relations.
Further, we cannot conclude on this record that the damages awarded on this cause of action are duplicative of those awarded for the breach of contract claim as defendants now suggest on appeal. Plaintiff's testimony provided evidence that defendants engaged in acts independent of any breach of contract that could form the basis of an intentional interference claim, such as contacting former customers and physically visiting the Pierce store to solicit customers. The jury could reasonably award plaintiff the amount of consideration paid for the breached contract provisions as contract damages, while simultaneously awarding lost profits to plaintiff on the claim for intentional interference based upon acts that did not technically breach any contract provision. In the absence of a clear indication in the record that the damages are duplicative, reversal is not warranted where the jury's award is otherwise supported by substantial evidence.
D. We Find No Instructional Error on This Record
Defendants further contend the judgment must be reversed because the trial court engaged in instructional error by refusing to give the standard jury instruction pertaining to contract formation (CACI 302). We conclude the claim is forfeited for failure to preserve an adequate record for review, and we further conclude the claim is without merit even in the absence of forfeiture.
CACI 302 provides: “[Plaintiff] claims that the parties entered into a contract. To prove that a contract was created, [plaintiff] must prove all of the following: (1) That the contract terms were clear enough that the parties could understand what each was required to do; (2) That the parties agreed to give each other something of value...; (3) That the parties agreed to the terms of the contract.... [¶] [¶] If [plaintiff] did not prove all of the above, then a contract was not created.”
1. The Record Is Inadequate to Review Defendants' Claim of Instructional Error
“An appellant arguing instructional error must ensure that the appellate record includes the instructions given and refused and the court's rulings on proposed instructions.... [I]f the record does not show whether an instruction was refused or ‘withdrawn, abandoned, or lost in the shuffle,' the reviewing court must presume that the appellant withdrew the instruction. [Citation.] ‘[I]t is incumbent upon... appellant... to make certain that the trial court has ruled [on a requested instruction] and that the record on appeal discloses that ruling before the alleged ruling may be assigned as error.' ” (Bullock v. Philip Morris USA, Inc. (2008) 159 Cal.App.4th 655, 678-679.) This is because, “ ‘ “if the record is inadequate for meaningful review, the appellant defaults and the decision of the trial court should be affirmed.”' ” (Jameson v. Desta (2018) 5 Cal.5th 594, 609; Yield Dynamics, Inc. v. TEA Systems Corp. (2007) 154 Cal.App.4th 547, 557 [“[E]rrors not reflected in the trial record will not, and indeed cannot, sustain a reversal on appeal.”].)
Here, defendants allege the trial court erred by denying their request to give CACI 302. However, the record on appeal is clearly inadequate to review this claim. Nothing in the trial record shows defendants ever requested this instruction or the trial court's ruling on such a request. Defendants did not submit their proposed instruction in writing in advance of trial as required by statute. (Code Civ. Proc., § 607a; Green v. County of Riverside (2015) 238 Cal.App.4th 1363, 1370 (Green).) Moreover, while defendants claim they requested the instruction at the time of an unreported chambers conference, they did not seek to make a record following this conference, despite following this very practice on other issues during the course of the trial.
The only evidence that a request to give CACI 302 was ever made appears in the declaration of counsel prepared months after trial had concluded in support of an untimely request for a settled statement. This is not an appropriate record for purposes of appellate review and, absent an adequate record on review, the issue must be resolved against defendants.
2. We Find No Error Even Assuming CACI 302 Was Requested and Refused
Additionally, even assuming the record had disclosed defendants requested the giving of CACI 302 and the trial court denied that request, such a decision would not be erroneous in the context of this case.
“A party in a civil case is, upon request, entitled to correct jury instructions on every theory of the case that is supported by substantial evidence.” (Olive v. General Nutrition Centers, Inc. (2018) 30 Cal.App.5th 804, 813.) However, “[t]he court may, in a civil case where a portion of the proffered instruction is clearly and concededly inapplicable, refuse the instruction completely.” (Hazelwood v. Gordon (1967) 253 Cal.App.2d 178, 182.)
CACI 302 is an instruction intended to be given when the issue of contract formation is contested. However, despite the characterization of counsel, the evidence in this case shows the issue of contract formation was not truly in dispute. The parties did not dispute their intent to enter into a transaction for sale of the Pierce store or the fact that they signed a written agreement pertaining to that transaction. Defendants did not even dispute that they understood and intended the agreement to include a covenant not to compete. Thus, the existence of a contract was not actually disputed in this case, and an instruction on the issue of contract formation was simply not applicable.
The true dispute was whether the terms of the covenant not to compete had been modified following negotiations by the parties in their initial meeting with the escrow agent. However, the fact that defendants dispute the terms contained within an otherwise undisputed contract is not a question of formation. (Patel v. Liebermensch (2008) 45 Cal.4th 344, 351 [subsequent dispute over terms of contract did not show parties failed to reach “meeting of the minds on all essential terms” since “few contracts would be enforceable if the existence of subsequent disputes were taken as evidence that an agreement was never reached”]; Dubarry Internat. v. Southwest Forest Indus. (1991) 231 Cal.App.3d 552, 567 [“Disputes as to the terms of a contract or the meaning or legal effect of those terms do not constitute a denial of contract existence.”]; DeLeon v. Verizon Wireless, LLC (2012) 207 Cal.App.4th 800, 814 [performance objectively demonstrates existence of contract even if terms disputed].) As these authorities make clear, defendants do not place contract formation at issue where they seek to excise and repudiate only one or two provisions of an otherwise undisputed written agreement.
A trial court is not required to give an instruction that is clearly inapplicable to the evidence produced at trial. Nor is the trial court in a civil case required to modify a proposed instruction to correct it or to propose a more appropriate instruction that has not been requested by the parties. (Green, supra, 238 Cal.App.4th at p. 1370; Ernest W. Hahn, Inc. v. Sunshield Insulation Co. (1977) 68 Cal.App.3d 1018, 1024.) Because the issue of contract formation was not truly disputed, the trial court would not have erred in refusing to give CACI 302, even if the record disclosed defendants had properly requested it.
Arguably, a more appropriate instruction in this case would have been CACI 313, which instructs the jury on the issue of modification. CACI 313 provides: “[Name of party claiming modification] claims that the original contract was modified or changed. [Name of party claiming modification] must prove that the parties agreed to the modification. [Name of other party] denies that the contract was modified. [¶] The parties to a contract may agree to modify its terms. You must decide whether a reasonable person would conclude from the words and conduct of the parties that they agreed to modify the contract. You cannot consider the parties' hidden intentions.” However, defendants do not claim they offered this instruction or a modified version of it appropriate to their theory of the case.
E. The Trial Court Did Not Abuse Its Discretion in Issuing an Injunction
Defendants also contend the trial court erred when it granted injunctive relief in favor of plaintiff. Specifically, the trial court issued an injunction precluding defendants from using the name “ ‘Linda's Donuts' ” or any similar name in the operation of the Arlington store. Defendants argue in a cursory manner that such relief is unauthorized where a plaintiff has an adequate remedy at law. We find no error on this record.
“After a trial court has exercised its equitable powers, the appellate court reviews the judgment under the abuse of discretion standard.” (Valley Crest Landscape Development, Inc. v. Mission Pools of Escondido, Inc. (2015) 238 Cal.App.4th 468, 482.) However, “[t]he abuse of discretion standard is not a unified standard; the deference it calls for varies according to the aspect of a trial court's ruling under review. The trial court's findings of fact are reviewed for substantial evidence, its conclusions of law are reviewed de novo, and its application of the law to the facts is reversible only if arbitrary and capricious.” (Haraguchi, supra, 43 Cal.4th at pp. 711-712.)
While it is true that, in an action for breach of contract, equitable relief is precluded where a plaintiff has an adequate legal remedy in the form of monetary damages (Wilkison v. Wiederkehr (2002) 101 Cal.App.4th 822, 834), plaintiff's complaint in this case was not limited to a claim for breach of contract. Notably, plaintiff also asserted a cause of action under the UCL. The trial court has clear authority to issue an injunction as a form of equitable relief pursuant to this claim and such a remedy is considered distinct from recovery of any contract damages. (See Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1150 [An action under the UCL is not a substitute for a tort or contract action to obtain monetary damages.]; Zhang v. Superior Court (2013) 57 Cal.4th 364, 371 [“[T]he equitable remedies of the UCL are subject to the broad discretion of the trial court.”].) Thus, defendants' argument that the trial court was without power to issue an injunction once monetary damages were awarded for breach of contract is without merit.
Defendants claim on appeal that the trial court did not issue its injunction pursuant plaintiff's UCL claim. However, on its face, the judgment states that the injunction was issued “[o]n plaintiff's causes of action for declaratory relief and unfair competition.” Nor do we find any support in defendants' characterization that the trial court “adopted” the view that its injunction was issued pursuant to the breach of contract claim. While it is true that plaintiff's counsel argued that injunctive relief was “simply based on the breach of contract, ” there is no indication that the trial court adopted this argument or reasoning. Instead, after the conclusion of argument by counsel for all parties, the trial court merely stated: “The Court would allow the injunction language as presently proposed.”
Moreover, “[a] judgment of a trial court ‘is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness. [Citations.]' [Citation.] This is particularly true when the appellant ‘did not request a statement of decision or findings of fact,' ” and “ ‘we must assume that the trial court made whatever findings are necessary to sustain the judgment.' ” (Escamilla v. Department of Corrections & Rehabilitation (2006) 141 Cal.App.4th 498, 514.) Here, defendants did not request a statement of decision with respect to the trial court's resolution of equitable issues. Thus, in the absence of a statement of decision indicating otherwise, we presume the trial court exercised its equitable powers under its valid authority to do so under the UCL.
Causes of action under the UCL are equitable in nature and are to be tried by the court and not the jury. (Nationwide Biweekly Administration, Inc. v. Superior Court (2020) 9 Cal.5th 279, 324-327.) Where an issue is tried by the court, a party is entitled to a statement of decision upon request. (Code Civ. Proc., § 632.)
Finally, we disagree with defendants' argument that the trial court could not have issued an injunction under the UCL because it directed a verdict in favor of defendants on the claim for trademark infringement. “[U]nfair competition can exist in cases in which there exists no infringement of trademarks.” (Cytanovich Reading Ctr. v. Reading Game (1984) 162 Cal.App.3d 107, 113.) As explained by the California Supreme Court, “the rules of unfair competition are based, not alone upon the protection of a property right existing in the complainants, but also upon the right of the public to protection from fraud and deceit.” (Academy of Motion Picture Arts & Sciences v. Benson (1940) 15 Cal.2d 685, 690-691.) Thus, the trial court may enjoin the use of a mark as unfair competition, even if it is not a protectable trademark. (Id. at p. 690 [Injunction for unfair competition may extend to claims involving the use of “generic, descriptive, personal, and geographical names.”]; Yellow Cab Co. v. Sachs (1923) 191 Cal. 238, 242-243 [A trial court may enjoin “appropriation and use of trade names other than trademarks” for unfair competition.]; MacSweeney Enterprises, Inc. v. Tarantino (1951) 106 Cal.App.2d 504, 511 [A defendant may be enjoined from using his own name under unfair competition law even if normally not considered a protectable trademark.].)
Because defendants failed to request a statement of decision, we need not presume the trial court based a finding of unfair competition solely on the use of a similar trade name. Moreover, because the purpose of the UCL is to protect the public and not to provide for recovery of damages by a competitor, the fact that plaintiff may not hold an enforceable trademark is not necessarily inconsistent with the issuance of injunctive relief under the UCL. Thus, the trial court's directed verdict on the trademark infringement cause of action alone does not establish error warranting reversal. Since the trial court has clear, statutory authority to issue an injunction pursuant to plaintiff's UCL claim, we find no abuse of discretion in its decision to do so.
The evidence in this case included multiple acts separate and apart from use of the name “Linda's Donuts” that the trial court could have deemed unfair or fraudulent under the UCL, such as the use of similar designs in the construction of defendants' new business, the alleged misrepresentations regarding defendants' intent to open a competing business, and the alleged solicitation of business from former customers.
F. We Have No Jurisdiction to Review the Trial Court's Order Denying A Request for Settled Statement
Finally, defendants contend the trial court abused its discretion in denying their “request for permission to prepare a settled statement.” As we explain, we have no jurisdiction to review this claim on a direct appeal from the judgment.
A request for a settled statement can be made in an appellant's notice designating the record or upon a motion filed at the time the appellant files his notice designating the record on appeal. (Cal. Rules of Court, rule 8.137.) However, defendants have not cited to, and we are not aware of, any authority endorsing the procedure utilized by defendants in this case to request a settled statement.
1. Relevant Facts
During trial, the trial court held an unreported conference in chambers to review proposed jury instructions. Defendants claim that during this conference, they requested an instruction on contract formation, and the trial court denied this request. Judgment was entered on May 15, 2019, and defendants filed their notice of appeal from the judgment on July 10, 2019. On July 12, 2019, defendants filed their notice designating the record on appeal but did not designate or request a settled statement as part of the record on appeal. Thereafter, the record was filed with this court on October 18, 2019.
On February 11, 2020, defendants filed an application with the trial court seeking a settled statement with respect to the unreported chambers conference. After hearing, the trial court denied the request, stating that it did not recall the substance of any off- record discussions regarding jury instructions and could not even recall if such a discussion occurred in this case. Defendants now seek review of this order in their direct appeal from the judgment.
2. This Court Is without Jurisdiction to Review the Claim on Direct Appeal
“A reviewing court has jurisdiction over a direct appeal only when there is (1) an appealable order or (2) an appealable judgment.” (Griset v. Fair Political Practices Com. (2001) 25 Cal.4th 688, 696.) “A trial court's order is appealable when it is made so by statute” (ibid.), and “[t]he primary statutory basis for appealability in civil matters is limited to the judgments and orders described in section 904.1 of the Code of Civil Procedure.” (Art Movers, Inc. v. Ni West, Inc. (1992) 3 Cal.App.4th 640, 645.) An order denying a request for a settled statement is not among the orders listed as subject to appeal. (Code Civ. Proc., § 904.1.)
While the statute provides for appeals from a post-judgment order (Code Civ. Proc., § 904.1.), “[t]o be appealable, a posjudgment order ‘ “must either affect the judgment or relate to it by enforcing it or staying its execution.”' ” (Howeth v. Coffelt (2017) 18 Cal.App.5th 126, 133.) Thus, an order denying a settled statement would not fall under this provision.
Defendants have not cited to a single case for the proposition that this court has jurisdiction to review alleged error in the denial of a request for a settled statement on direct appeal from the judgment. Nor have we independently located any such authority. In fact, the long-established rule appears to be that “[m]andamus is the proper and exclusive remedy when a trial judge refuses to settle a statement which it is his duty to settle; that is to say, in a case where the moving party has strictly and fully complied with the requirements of the statute in proposing and presenting the statement for settlement. [Citations.]... [A] wrongful refusal to settle a statement is not the subject of appeal, but is to be corrected by a writ of mandate.” (Murphy v. Stelling (1903) 138 Cal. 641, 642-643 (Murphy).)
We acknowledge that in Randall v. Mousseau (2016) 2 Cal.App.5th 929, the Court of Appeal stated, “To preserve the issue of the denial [of a request for settled statement] for appeal, the appellant may seek writ review at the time of the denial, or raise the denial in the opening brief on appeal, ” citing to Western States Const. Co. v. Municipal Court of San Francisco (1951) 38 Cal.2d 146 (Western States Const.) and Keller v. Superior Court of Los Angeles County (1950) 100 Cal.App.2d 231 (Keller) (id. at pp. 935-936, italics added). However, the appellant in Randall did not raise the issue of wrongful denial in her opening brief, and neither of the cases cited in Randall actually addresses the prospect of raising the issue on direct appeal. Thus, the suggestion in Randall is dictum.
Western States Const., supra, 38 Cal.2d 146, was an appeal from denial of a writ of mandate. (Id. atp. 147.) Keller, supra, 100 Cal.App.2d 231, was itself a mandamus proceeding. Thus, neither addressed the propriety of raising the issue on direct appeal from a judgment.
Additionally, even if the statement in Randall was not intended as dictum, it could not be controlling authority on this issue. As already detailed, our Supreme Court has explicitly held that the exclusive remedy for a wrongful refusal to settle a statement is mandamus (Murphy, supra, 138 Cal. at pp. 642-643), and this court is bound by that precedent even if a sister Court of Appeal may have concluded otherwise. (Auto Equity Sales, Inc. v. Superior Court of Santa Clara County (1962) 57 Cal.2d 450, 455-456.)
Finally, even in the absence of binding precedent, we would decline to adopt any judicially fashioned rule permitting an appellant to wait until filing his opening brief to raise the issue. “The purpose of the rule allowing a record upon appeal to be presented by a settled statement is to reduce the cost of litigation as much as possible.” (Western States Const., supra, 38 Cal.2d. at p. 151.) This purpose would be entirely frustrated by waiting until an appeal is fully briefed to resolve any claim the trial court wrongfully refused to settle a statement. By the time briefing in the appellate court is completed, significant time would have elapsed since any unreported hearing, increasing the effort and expense to the parties and the trial court to prepare a settled statement in the event the trial court erroneously refused a request to do so.
Further, in those situations in which an appellate court concludes the trial court erred in refusing to settle a statement, the entire appeal would have to be briefed anew upon augmentation of the record with a settled statement. In our view, a rule permitting the issue to be raised for the first time in an appellant's opening brief does not promote the interests of justice and would be contrary to the very purpose of permitting the use of a settled statement. In light of these considerations, we believe writ relief is the appropriate remedy where a party claims the trial court has erroneously refused to settle a statement. The order denying defendants request for settled statement is not appealable, and we are without jurisdiction to review any error in relation to that order in this present appeal.
While “[a]n appellate court does have discretion to treat a purported appeal from a nonappealable order as a petition for writ of mandate...‘ “we should not exercise that power except in unusual circumstances.”' ” (Doran v. Magan (1999) 76 Cal.App.4th 1287, 1294.) Such circumstances must be “ ‘ “ ‘compelling enough to indicate the propriety of a petition for writ... in the first instance....' ”' ” (Ibid.) Issuance of a writ in the first instance is justified “ ‘ “only when petitioner's entitlement to relief is so obvious that no purpose could reasonably be served by plenary consideration of the issue....”' ” (Lewis v. Superior Court (1999) 19 Cal.4th 1232, 1241.) However, it is far from clear defendants are entitled to relief in this case. There is no statute authorizing defendants to request a settled statement in the manner they did here (Cal. Rules of Court, rule 8.137); it is unclear whether the trial court's duty to settle a statement extends to untimely requests (see Murphy, supra, 138 Cal. at p. 643 [trial court's duty arises when party has “strictly and fully complied with the requirements of the statute”]; and it is unclear whether good cause would have existed for this court to permit augmentation of the record on appeal even if the trial court had acceded to defendants untimely request for settled statement (see Russi v. Bank of America National Trust & Savings Assn. (1945) 69 Cal.App.2d 100, 102 [request to augment record not intended to allow appellant to switch from one form of record to another form not originally designated]; Toenninges v. Griffeth (1959) 169 Cal.App.2d 717, 722-724 [same]).
Additionally, even if the trial court's order were subject to direct appeal, we would be without jurisdiction to entertain it for an entirely independent reason. “ ‘Our jurisdiction on appeal is limited in scope to the notice of appeal and the judgment or order appealed from.' [Citation.] We have no jurisdiction over an order not mentioned in the notice of appeal.” (Faunce v. Cate (2013) 222 Cal.App.4th 166, 170.) “ ‘ “ ‘[W]here several judgments and/or orders occurring close in time are separately appealable..., each appealable judgment and order must be expressly specified-in either a single notice of appeal or multiple notices of appeal-in order to be reviewable on appeal.' ”' ” (Nellie Gail Ranch Owners Assn. v. McMullin (2016) 4 Cal.App.5th 982, 1007-1008.) Thus, when a party wishes to challenge both a final judgment and a postjudgment order, the normal procedure is to file two separate appeals-one from the final judgment, and a second from the postjudgment order. (Ibid.) Here, defendants filed a notice of appeal from the judgment but failed to file a separate notice of appeal from order denying their request for a separate statement. Thus, the order is outside the scope of this appeal.
G. Plaintiff's Cross Appeal is Without Merit
In addition to the claims raised by defendants on appeal, plaintiff has filed a cross appeal, claiming the trial court erred in directing a verdict in favor of defendants on his cause of action for trademark infringement. We disagree.
1. General Legal Principles and Standard of Review
“ ‘ “ ‘[T]he power of the court to direct a verdict is absolutely the same as the power of the court to grant a nonsuit.' [Citation.] ‘A motion for a directed verdict “is in the nature of a demurrer to the evidence, and is governed by practically the same rules, and concedes as true the evidence on behalf of the adverse party, with all fair and reasonable inferences to be deduced therefrom.”' ”' [Citation.] ‘ “ ‘A defendant is entitled to a... directed verdict... if the trial court determines that, as a matter of law, the evidence presented by plaintiff is insufficient to permit a jury to find in his favor.' ”' ” (Acqua Vista Homeowners Assn. v. MWI, Inc. (2017) 7 Cal.App.5th 1129, 1139.) The trial court's order granting a directed verdict is subject to our independent review. (Fariba v. Dealer Services Corp. (2009) 178 Cal.App.4th 156, 174; Kinda v. Carpenter (2016) 247 Cal.App.4th 1268, 1279-1280.)
2. General Principles of Trademark Law
“A trademark distinguishes one producer's goods or services from another's.” (United States PTO v. Booking.com B.V. (2020) ___U.S.___, ___[140 S.Ct. 2298, 2302].) “ ‘[F]ederal law does not create trademarks.' [Citation.] Trademarks and their precursors have ancient origins, and trademarks were protected at common law and in equity at the time of the founding of our country.” (Matal v. Tam (2017) ___U.S.___, ___[137 S.Ct. 1744, 1751].) In our current system, a trademark, whether registered or not, can be afforded various levels of protection under federal and state statutes, as well as under common law. (Id. at pp. 1752-1753.) Where a plaintiff seeks to proceed on common law principles to protect an unregistered trademark, California courts will often look to federal authority for guidance. (See North Carolina Dairy Foundation, Inc. v. Foremost-Mckesson, Inc. (1979) 92 Cal.App.3d 98, 106-111.)
Additionally, we observe that while a trademark is technically a word, name, symbol, or device used to identify a product (Wal-Mart Stores v. Samara Bros. (2000) 529 U.S. 205, 209 (Wal-Mart Stores)), and the phrase “ ‘trade dress' ” refers generally to the physical appearance of the product itself (Publications Int'l, Ltd. v. Landoll, Inc. (7th Cir. 1998) 164 F.3d 337, 338), “in the context of claimed infringement, there is ‘probably no substantive difference between' trademark and trade dress.” (El-Com Hardware, Inc. v. Fireman's Fund Ins. Co. (2001) 92 Cal.App.4th 205, 214; Two Pesos, Inc. v. Taco Cabana, Inc. (1992) 505 U.S. 763, 773 [“There is no persuasive reason to apply different analysis to the two.”]; Publications Intern, Ltd. at p. 338 [The two are “treated the same way by the Lanham Act and the cases interpreting it.”].) Thus, while authorities may use either term depending on the context of a case, the principles with respect to establishing infringement are the same.
“A trademark may be protected under the common law or the Lanham Act if it is either inherently distinctive or has acquired distinctiveness. [Citation.]... [T]rademarks that are not inherently distinctive-such as descriptive words or symbols-are protected only if they have acquired secondary meaning, i.e., they ‘ “h[ave] become distinctive of the [owners'] goods [or services] in commerce.”' [Citation.] Generally, ‘personal names are regarded as in the same category as descriptive terms' and ‘are placed by the common law into that category of noninherently distinctive terms which require proof of secondary meaning for protection.' ” (Franklin Mint Co. v. Manatt, Phelps & Phillips, LLP (2010) 184 Cal.App.4th 313, 337 (Franklin Mint Co.).)
“[S]econdary meaning ‘occurs when, “in the minds of the public, the primary significance of a [mark] is to identify the source of the product rather than the product itself.”' ” (Franklin Mint Co., supra, 184 Cal.App.4th at p. 338; see Wal-Mart Stores, supra, 529 U.S. at p. 211.) “Secondary meaning can be established in many ways, including (but not limited to) [(1)] direct consumer testimony; [(2)] survey evidence; [(3)] exclusivity, manner, and length of use of a mark; [(4)] amount and manner of advertising; [(5)] amount of sales and number of customers; [(6)] established place in the market; and [(7)] proof of intentional copying by the defendant.” (Filipino Yellow Pages, Inc. v. Asian Journal Publs., Inc. (9th Cir. 1999) 198 F.3d 1143, 1151 (Filipino Yellow Pages); see Nola Spice Designs, L.L.C. v. Haydel Enters. (5th Cir. 2015) 783 F.3d 527, 544; see also Leapers, Inc. v. SMTS, LLC (6th Cir. 2018) 879 F.3d 731, 740-741 [listing same considerations as a “seven-factor test”].) While “ ‘[n]o single factor is determinative and every one need not be proven,' ” the “ ‘evidentiary burden necessary to establish secondary meaning is substantial.' ” (Leapers, at p. 741.) Where a descriptive mark is “especially ‘weak,' [courts] require a ‘strong showing of strong secondary meaning.' ” (Japan Telecom, Inc. v. Japan Telecom Am. Inc. (9th Cir. 2002) 287 F.3d 866, 873 (Japan Telecom).)
On appeal, plaintiff frames his arguments almost entirely on the language set forth in the Ninth Circuit's model jury instructions. However, “jury instructions, whether published or not, are not themselves the law, and are not authority to establish legal propositions or precedent. They should not be cited as authority for legal principles in appellate opinions. At most, when they are accurate... they restate the law.” (People v. Morales (2001) 25 Cal.4th 34, 48, fn. 7.) As we explain, plaintiff's reliance on the language of the model instructions in this case is misleading. While some of plaintiff's evidence appears to superficially meet the factors based upon the language of these instructions, the evidence largely fails to address the actual concerns expressed by the case authorities underlying these instructions.
Here, plaintiff alleged he held a protectable trademark in the name “Linda's Donuts.” The phrase “Linda's Donuts” is indisputably a descriptive mark and, therefore, plaintiff was required to present evidence sufficient to sustain a finding that the mark acquired secondary meaning in order avoid a directed verdict. As we explain, plaintiff failed to do so in this case and, as such, the trial court did not err in directing a verdict in favor of defendants on this cause of action.
3. Application
Initially, we point out that plaintiff did not offer any evidence on at least four of the relevant factors: (1) defendant offered no surveys to suggest the general public associates the mark “Linda's Donuts” with any specific business; (2) defendant offered no evidence regarding the extent or nature of advertising to suggest any significant number of persons within the community would recognize the name “Linda's Donuts” as associated specifically with the Pierce store; (3) defendant offered no specific information suggesting the volume of his sales or customer base within the relevant community to suggest any appreciable number of consumers have been exposed to the mark “Linda's Donuts;” and (4) defendant offered no evidence of his market share to suggest any appreciable number of consumers have been exposed to the mark “Linda's Donuts.” We proceed to consider whether plaintiff's evidence offered in support of the remaining factors permits a reasonable inference that any of the factors weigh in plaintiff's favor on the issue of secondary meaning.
a. Evidence of direct consumer confusion
Plaintiff argues he presented evidence of actual confusion by consumers in the form of nine reviews posted on one of the Pierce store's social media websites that suggest the authors of the reviews were confused. However, this evidence is almost identical to that found insufficient to show consumer confusion in Japan Telecom, supra, 287 F.3d at p. 866. In that case, the plaintiff presented six declarations from customers, stating they were confused by the defendant's use of a similar name in the defendant's advertising. (Japan Telecom, atp. 874.) In upholding summary judgment, the Ninth Circuit Court of Appeal concluded such evidence did not support a finding of secondary meaning, explaining: “Every small business with a descriptive name can point to at least a few former customers who remember its name, and every small business owner can point to some acquaintances familiar with what he does for a living. None of that means that the relevant buying public makes the same associations.” (Id. at pp. 874-875.) Thus, the fact that plaintiff presented a handful of selected reviews in which customers expressed some level of confusion is not enough to show that any appreciable portion of the general public has come to associate the mark “Linda's Donuts” with the Pierce store.
This distinction appears particularly apt in this case. There was no evidence that plaintiff or defendants used the mark “Linda's Donuts” in the packaging of any products or that they sold or distributed any products in locations other than their respective stores. In this context, common sense dictates that a customer would understand the source of any product he or she purchased is the store he or she physically visited in order to purchase that product. The fact that a customer might form a mistaken belief that the two stores share a single owner or are operated by related family members does not, on its own, suggest that customer also mistakenly believes the coffee she purchased from one store was brewed in the other store. We also note merely showing that a customer held some general level of confusion is not necessarily probative to the existence of secondary meaning. In the context of trademark claims, secondary meaning refers to “a ‘mental recognition in buyers' and potential buyers' minds' between [plaintiff's] trade name and a single source.” (Japan Telecom, supra, 287 F.3d at p. 873; see Warner Bros., Inc. v. Gay Toys, Inc. (2nd Cir. 1983) 724 F.2d 327, 333, fn. 5 [“[A] mark that has some referential sense but whose primary purpose is independent of its source-identifying character has not acquired sufficient secondary meaning to warrant protection.”].) The fact that some consumers might be generally confused about some aspect of plaintiff's business does not necessarily mean the consumer is confused regarding the source of the product he or she is purchasing.
b. Evidence of exclusive use
While plaintiff presented evidence that the mark “Linda's Donuts” has been used in conjunction with the Pierce store since 2000, the relevant factor is “exclusivity, manner, and length of use of a mark.” (Filipino Yellow Pages, supra, 198 F.3d at p. 1151, italics added.) Evidence of the manner of use is critical in order for this factor to have any relevance because the focus of any secondary meaning analysis is whether a mark has gained meaning within the mind of the general public. It is “[e]vidence of use and advertising over a substantial period of time” that assists to establish secondary meaning. (Clamp Mfg. Co. v. Enco Mfg. Co. (9th Cir. 1989) 870 F.2d 512, 517.) In contrast, mere use, without a showing that the manner of use actually exposed the public to the mark, is not sufficient. (Japan Telecom, supra, 287 F.3d at p. 875 [Exclusive use of a mark for two decades does not suggest secondary meaning where “there is no evidence that [plaintiff] has used it in such a way that any more than a small set of buyers has gained any familiarity with it.”].) Absent evidence to suggest the manner of the mark's use was such that an appreciable number of consumers might have been exposed to it, the fact that it has been in use since 2000 has limited relevance.
Plaintiff acknowledges the mark “Linda's Donuts” was only used “at its physical location” until he began advertising on the internet after purchasing the store. Even if we were to assume that plaintiff's internet advertising reached an appreciable number of consumers, his exclusive use of the mark in this regard would have lasted only one year before defendants opened their competing business, which also advertised in a similar manner.
c. Evidence of intentional copying
Finally, it is undisputed that defendants also used the mark “Linda's Donuts” in the operation of the Arlington store. Plaintiff asserts that this evidence strongly supports an inference of secondary meaning because the act of copying alone can support such a finding.
While the Ninth Circuit has on more than one occasion suggested that “in appropriate circumstances, deliberate copying may suffice to support an inference of secondary meaning” (Clicks Billiards, Inc. v. Sixshooters, Inc. (9th Cir. 2001) 251 F.3d 1252, 1264; see Fuddruckers, Inc. v. Doc's B.R. Others, Inc. (9th Cir. 1987) 826 F.2d 837, 844), it does not appear to have clarified what those appropriate circumstances might be. Regardless, we are not bound by the Ninth Circuit's view on this point. (Barrett v. Rosenthal (2006) 40 Cal.4th 33, 58 [State courts are not bound by decisions of lower federal courts, even on federal questions.]; People v. Cummings (1974) 43 Cal.App.3d 1008, 1019 [same].)
In at least one case, the Ninth Circuit has suggested such circumstance might be appropriate where there is “[p]roof of exact copying, without any opposing proof.” (Transgo, Inc. v. Ajac Transmission Parts Corp. (9th Cir. 1985) 768 F.2d 1001, 1016.) That is clearly not the situation presented here. Given the fact that defendant Ke's legal name was “Linda, ” defendants had an opposing, otherwise legitimate reason to operate a business under the name “Linda's Donuts” that would be unrelated to any desire to confuse consumers.
The predominant view in the federal circuit courts appears to be that the act of copying a mark cannot, on its own, show secondary meaning but rather that “[c]opying is only evidence of secondary meaning if the defendant's intent in copying is to confuse consumers and pass off his product as the plaintiff's.” (Thomas & Betts Corp. v. Panduit Corp. (7th Cir. 1995) 65 F.3d 654, 663.) We find this majority view persuasive and adopt it here. While defendants clearly used the mark “Linda's Donuts” in the operation of their new business, there is no evidence to suggest they did so for the purpose of confusing consumers.
See Yankee Candle Co. v. Bridgewater Candle Co. (1st Cir. 2001) 259 F.3d 25, 45 [“[T]he relevant intent is not just the intent to copy, but to ‘pass off' one's goods as those of another.”]; Fun-Damental Too, Ltd. v. Gemmy Indus. Corp. (2nd Cir. 1997) 111 F.3d 993, 1005 [“It cannot automatically be inferred that intentionally copying a plaintiff's trade dress is for the purpose of deceiving or confusing consumers as to the source of the product.”]; Versa Prods. Co. v. Bifold Co. (Mfg.) (3rd Cir. 1995) 50 F.3d 189, 206 [articulating an “intent-to-confuse” rule in contrast to the “broader rule holding that a defendant's intent to copy strongly supports an inference of likelihood of confusion”]; Viacom Int'l, Inc. v. IJR Capital Invs., L.L.C. (5th Cir. 2018) 891 F.3d 178, 195 [It is the defendant's “intent to confuse, ” which may alone be sufficient to justify an inference that there is a likelihood of confusion.]; Groeneveld Transp. Efficiency, Inc. v. Lubecore Int'l (6th Cir. 2013) 730 F.3d 494, 514 [“[T]he appropriate ‘intent' to focus on is not the intent to copy but rather the intent to deceive or confuse.”]; Co-Rect Prods.v. Marvy! Adver. Photography, Inc. (8th Cir. 1985) 780 F.2d 1324, 1332 [“Intentional copying... is not conclusive.”]; Water Pik, Inc. v. Med-Systems, Inc. (10th Cir. 2013) 726 F.3d 1136, 1157 [“[T]he intent in copying the mark should be ‘the intent to derive benefit from the reputation or goodwill of plaintiff.' ”]; Compare Yellowfin Yachts, Inc. v. Barker Boatworks, LLC (11th Cir. 2018) 898 F.3d 1279, 1293 [“There is a difference between intentional copying and intentional copying with intent to cause confusion.... If a defendant intentionally copies..., but not with intent to confuse consumers, then the defendant's intent has little bearing on the ultimate question.”] with M. Kramer Mfg. Co.v. Andrews (4th Cir. 1986) 783 F.2d 421, 448 [“[E]vidence of intentional, direct copying established a prima facie case of secondary meaning.”].
As observed by one district court, the logic behind a rule that deliberate copying can itself give rise to an inference of secondary meaning is questionable because “[t]o derive secondary meaning from deliberate copying, the court must forge a circular chain of inferences: (1) the plaintiff's product mark or design has secondary meaning; (2) the defendant knew about this secondary meaning; (3) the defendant copied the mark or design to exploit this secondary meaning and confuse consumers; and (4) thus the mark or design has secondary meaning.” (Continental Lab. Prods. v. Medax Int'l, Inc. (S. D. Cal. 2000) 114 F.Supp.2d 992, 1009.)
Indeed, the evidence strongly suggests that defendants wanted consumers to realize the Pierce store and Arlington store were different businesses. According to plaintiff's own testimony, defendants actively solicited business from customers of the Pierce store by informing those customers defendants had opened a competing business. Such acts do not suggest defendants wanted to confuse customers in believing the two businesses were the same but instead wanted longtime customers to realize the two businesses were different and encourage those customers to patronize the Arlington store as a result of that realization.
When viewed in the context of the principles that the Ninth Circuit's model jury instructions were intended to summarize, it becomes apparent that plaintiff's evidence was not sufficient to support a finding of secondary meaning. Absent sufficient evidence to support such a finding, the trial court did not err in granting a directed verdict on the cause of action for trademark infringement.
H. Plaintiff's Motion to Dismiss and the Parties' Respective Requests for Sanctions are Denied
Finally, we address plaintiff's renewed motion to dismiss defendants' appeal and the parties' respective requests for sanctions. Generally, “[a]n appeal should be held to be frivolous only when it is prosecuted for an improper motive-to harass the respondent or delay the effect of an adverse judgment-or when it indisputably has no merit-when any reasonably attorney would agree that the appeal is totally and completely without merit.' ” (Roberson v. City of Rialto (2014) 226 Cal.App.4th 1499, 1513.) Here, plaintiff argues that dismissal is appropriate on both grounds. We disagree.
First, we do not believe this appeal presents a situation in which dismissal is appropriate on the ground that defendants' claims are frivolous. “[T]he power to dismiss an appeal must be used with extreme rarity....” (People ex rel. Lockyer v. Brar (2004) 115 Cal.App.4th 1315, 1319.) Generally, “determination of whether an appeal is frivolous entails at least a peek at the merits-if not, as is usually the case, a thorough review of the record-and, having taken that look, the appellate court is in a position to affirm whatever was appealed rather than dismiss the appeal.” (Ibid.) Thus, where review of the record is necessary, it is “ ‘appropriate to affirm the judgment rather than to dismiss the appeal as frivolous. Once the record has been reviewed thoroughly, little appears to be gained by dismissing the appeal rather than deciding it on its merits.' ” (Ibid.) As relevant here, this court initially denied plaintiff's motion to dismiss because the merits of dismissal were not readily apparent absent a review of the record. Having reviewed the record, it is more appropriate for us to decide the appeal on the merits and as such, we again decline to exercise our discretion to dismiss the appeal as frivolous.
Second, we cannot conclude on this record that the appeal was filed solely to delay enforcement of the judgment. This is particularly true given plaintiff's own act of filing an appeal from the same judgment challenged by defendants. In filing his own appeal on an independent issue, plaintiff equally prevented enforcement of the judgment. (Code Civ. Proc., § 916.) Further, in appealing from the judgment, plaintiff affirmatively signaled his desire to forego any enforcement action during the pendency of the appeal. (Guho v. San Diego (1932) 124 Cal.App.680, 682 [“As a general rule, a party may not accept the fruits of a judgment and at the same time appeal from the same”]; Epstein v. DeDomenico (1990) 224 Cal.App.3d 1243, 1247; Templeton Feed & Grain v. Ralston Purina Co. (1968) 69 Cal.2d 461, 468 (Templeton Feed).) Thus, we cannot conclude that defendants in this case appealed solely to delay enforcement of the judgment. Enforcement of the judgment would have been stayed regardless as a result of plaintiff's own appeal from the same judgment. We conclude this case does not present a situation in which dismissal is warranted and deny plaintiff's request.
While an exception exists where portions of a judgment are independent and severable (Templeton Feed, supra, 69 Cal.2d. at p. 468), that is not the situation presented in this case. Had plaintiff prevailed on his cross-appeal, it would have resulted in reversal of the judgment. Additionally, any retrial would likely involve retrial of the entire cause instead of simply the claim for trademark infringement. Retrial on a limited issue is appropriate only where “that issue is sufficiently distinct and severable from the others that a limited retrial would not result in an injustice.” (Valentine v. Baxter Healthcare Corp. (1999) 68 Cal.App.4th 1467, 1478.) “But where a limited retrial might be prejudicial to either party, failure to grant a new trial on all related issues is an abuse of discretion.” (Curties v. Hill Top Develpers, Inc. (1993) 14 Cal.App.4th 1651, 1656-1657.) Here, plaintiff seeks monetary damages for trademark infringement that overlap with the damages requested and awarded on his other causes of action, such as lost reputation or goodwill, lost sales or revenue, lost profits, and expenses preventing customer confusion. Thus, retrial of only the cause of action for trademark infringement risks significant prejudice to defendants. A new jury would not know which items of evidence the prior jury already considered in awarding damages for breach of contract and intentional interference claims, raising the prospect of double recovery by the plaintiff absent a retrial on all causes of action.
Finally, we deny the respective parties' requests for sanctions. Here, plaintiff and defendants appealed from the same judgment and, upon consideration of the merits, we have concluded that all of their arguments are without merit. If, as the parties claim, the assertion of an unmeritorious argument can itself justify sanctions, sanctions would be appropriate against both plaintiff and defendants. However, that is not the standard. Instead, “sanctions should be ‘used most sparingly to deter only the most egregious conduct' [citation], and that an appeal lacks merit does not, alone, establish it is frivolous.” (In re Marriage of Gong & Kwong (2008) 163 Cal.App.4th 510, 518.) Thus, the mere assertion of an argument ultimately deemed unmeritorious is not sufficient in itself to establish it was frivolous for purposes of awarding sanctions and we decline to sanction any party in this case.
IV. DISPOSITION
Plaintiff's request to dismiss defendants' appeal is denied. The parties' requests for sanctions are denied. The judgment is affirmed. The parties are to bear their own costs on appeal.
We concur: McKINSTER Acting P. J.MILLER J.