Opinion
B158551.
7-24-2003
KITTY-ANNE MUSIC CO., et al., Plaintiffs and Appellants, v. DONALD SWAN, Defendant and Respondent.
Dennis V. Greene; Freund & Brackey, Thomas A. Brackey II; Nate G. Kraut for Plaintiffs and Appellant. Gaims, Weil, West & Epstein and Jeffrey B. Ellis for Defendant and Respondent.
Kitty-Anne Music Co., Inc., and Milton Delugg, president of Kitty-Anne Music Co., Inc., appeal a summary judgment in favor of Donald Swan. We affirm.
We refer to the plaintiffs collectively as "Kitty-Anne," except where clarity demands a distinction.
FACTS
Al Stillman was a popular songwriter who wrote the lyrics to many popular songs that are still performed. In 1979, he died, and his widow Pauline inherited his music royalty rights. In 1982, she granted publishers royalty rights to Kitty-Anne in exchange for $ 300,000 plus payment of the "writers share" of future royalties on specified Stillman songs. The 1982 agreement required Kitty-Anne to "keep complete and accurate books and records" regarding the royalties and to allow Stillman and her successors "to audit and inspect such books and records" upon reasonable notice. The agreement also required Kitty-Anne to protect and enforce the Stillman royalty rights by appropriate means, including litigation.
In 1990, defendant Donald Swan inherited the Stillman royalty rights from his aunt Pauline. Swan believed that Kitty-Anne was wrongfully withholding royalties on the Stillman songs. In 1999, he brought an action against Kitty-Anne, alleging breach of contract and fraud, among other causes of action. Kitty-Anne then paid Swan an additional $ 70,000 in revised royalties, and the parties later agreed to settle the lawsuit.
The parties also discussed sale of the Stillman royalty rights to Kitty-Anne. On November 1, 2000, the parties memorialized the "proposed terms" in a two-page letter, later referred to by Kitty-Anne as the "deal memo." The terms provided for sale of the writers royalties for $ 375,000, payable in part on December 15, 2000 ($ 93,750) and in part on January 15, 2001 ($ 281,250). Paragraph 4 reserved Swans right to royalties accruing prior to July 1, 2000, but collected from licensees and users thereafter. Paragraph 6 required "[a] mutual release and dismissal of all existing and potential claims between the parties."
Paragraph 1 of the deal memo also provided for settlement and dismissal of Swans 1999 lawsuit against Kitty-Anne in exchange for Kitty-Annes payment of $ 20,000. Swan promised to execute a release and settlement agreement regarding the lawsuit and to request a dismissal thereof. On November 10, 2000, Swan executed a written release and settlement, Kitty-Anne paid Swan $ 20,000, and Swan thereafter dismissed the lawsuit.
Kitty-Anne then prepared a draft agreement entitled "Purchase of Writers Royalties," formalizing the terms of the deal memo. (In a deposition, Swan testified that the deal memo was "an incomplete document" that contemplated the drafting and execution of further documents.) Swan objected to the draft agreement, however, because it did not comply with paragraphs 4 and 6 of the deal memo, concerning pre-July 2000 royalties and execution of a mutual release. The draft agreement also included an integration clause, thus precluding reliance upon or enforcement of the deal memo. The draft agreement did not provide Swan with auditing rights of pre-July 2000 royalties received by Kitty-Anne.
At times in the trial court and in the appellate briefs, the parties also refer to this document as a "copyright assignment" or a "long-form copyright assignment." To ease the readers task, we refer to the document as a "purchase agreement" or "draft agreement," as clarity demands.
Correspondence between the parties ensued. Swan amended the draft agreement and extended the time for Kitty-Annes first payment. Kitty-Anne did not make payment, however, because the parties did not agree upon and execute a formal agreement. Each party threatened an action for breach of contract. At the end of December 2000, Swan terminated the agreement because he believed Kitty-Anne was in breach.
On January 30, 2001, Kitty-Anne brought an action against Swan for breach of contract, fraud, and defamation, among other causes of action.
Following Swans answer to the complaint, Kitty-Anne moved for summary adjudication of the contract causes of action. Kitty-Anne presented evidence of the deal memo, the correspondence between the parties regarding terms of the draft agreement, and Swans assertion at the end of December 2000, that Kitty-Anne had breached the deal memo.
The trial court denied Kitty-Annes motion for summary adjudication. It found triable issues of material fact regarding Kitty-Annes willingness to perform. The trial courts order referred to evidence that Kitty-Anne may have breached the deal memo and precluded further performance by the parties by demanding that Swan execute a formal agreement with materially different terms.
Swan then brought a motion for summary judgment of all causes of action, including defamation. He relied upon evidence identical or similar to that presented in response to Kitty-Annes earlier motion for summary adjudication. Kitty-Anne resisted Swans motion for summary judgment by relying upon evidence it presented previously. Kitty-Anne also asserted that the trial courts ruling on the previous motion for summary adjudication was "the law of the case."
The trial court concluded that there was no triable issue of material fact regarding any cause of action. It then entered summary judgment in favor of Swan.
Kitty-Anne appeals and contends the trial court improperly granted summary judgment regarding the contract causes of action.
DISCUSSION
I.
In review of a summary judgment, we examine the record independently to determine whether disputed factual issues exist. (Certain Underwriters at Lloyds of London v. Superior Court (2001) 24 Cal.4th 945, 972.) "We review the trial courts decision de novo, considering all of the evidence the parties offered in connection with the motion . . . and the uncontradicted inferences the evidence reasonably supports." (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476.) As a practical matter, we apply the rules and standards of the trial court to determine whether triable factual issues exist. (Zavala v. Arce (1997) 58 Cal.App.4th 915, 925-926 [discussion of summary judgment rules and analysis].) This is what we have done here.
In addition, interpretation of a written instrument is generally a question of law. (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865, 44 Cal. Rptr. 767, 402 P.2d 839.) Contract interpretation "is essentially a judicial function to be exercised according to the generally accepted canons of interpretation so that the purposes of the instrument may be given effect. [Citations.]" (Ibid.) In interpreting a contract, the court considers the language of the contract, the circumstances under which the parties negotiated or entered into the contract, the object, nature and subject matter of the contract, and the subsequent conduct of the parties. (Morey v. Vannucci (1998) 64 Cal.App.4th 904, 912.)
II.
Kitty-Anne argues that Swan is estopped to claim that no triable issues of material fact exist because he asserted the contrary in response to Kitty-Annes previous summary adjudication motion. Kitty-Anne relies upon the rule of judicial estoppel discussed in Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 181-183 ["Judicial estoppel prevents a party from asserting a position in a legal proceeding that is contrary to a position previously taken in the same or some earlier proceeding"].
Judicial estoppel applies where a party takes inconsistent positions that affect the orderly administration of justice. (Jackson v. County of Los Angeles, supra, 60 Cal.App.4th 171, 181.) Requirements for application of the rule include a party taking two positions in judicial or administrative proceedings, success in the assertion of the first position, inconsistency between the two positions, and a lack of ignorance, fraud, or mistake in asserting the first position. (Id., at p. 183.) The doctrine requires that the positions be clearly inconsistent "so that one necessarily excludes the other." (Id., at p. 182.)
Judicial estoppel is an extraordinary remedy that is applied "with caution." (Haley v. Dow Lewis Motors, Inc. (1999) 72 Cal.App.4th 497, 511.) To invoke the rule, a partys inconsistent position must arise from intentional wrongdoing or an attempt to obtain an unfair advantage. (Id., at p. 509-510.) The determination whether judicial estoppel applies is a question of law. (Kelsey v. Waste Management of Alameda County (1999) 76 Cal.App.4th 590, 597.)
The rule does not apply here because Swan did not attempt to obtain an unfair advantage nor were his positions inconsistent. He resisted Kitty-Annes summary adjudication motion by presenting evidence sufficient to raise triable factual issues "at bear [sic] minimum." (Swans argument stated that "at bear [sic] minimum, these circumstances create a triable fact . . . .") Convinced by the evidence presented in favor of and in response to the earlier motion, Swan moved for summary judgment. Swan then bore the burden of proving that he was entitled to judgment as a matter of law. Swans positions in the trial court did not play "fast and loose with the court[.]" (Haley v. Dow Lewis Motors, Inc., supra, 72 Cal.App.4th 497, 509.) As a matter of law, the rule of judicial estoppel does not apply here.
III.
Kitty-Anne asserts that the trial court erred by not reevaluating its motion for summary adjudication. It points out that its evidentiary showing included declarations from intellectual property attorneys who opine that the deal memo is enforceable and that execution of further documents is not required.
Kitty-Anne does not cite authority requiring the trial court to reevaluate its earlier ruling. Moreover, questions regarding the parties intent, the completeness of the deal memo, or its enforceability, are legal issues for the court to resolve. (Parsons v. Bristol Development Co., supra, 62 Cal.2d 861, 865 [interpretation of a contract is a question of law].)
IV.
Kitty-Anne complains that the trial court did not review and consider the responsive evidence before ruling. Kitty-Anne asserts that its failure to refer to evidence in the separate statement of undisputed facts should not preclude consideration of the evidence. (Code Civ. Proc., § 437c, subd. (b) ["Each material fact contended by the opposing party to be disputed shall be followed by a reference to the supporting evidence. Failure to comply with this requirement of a separate statement may constitute a sufficient ground, in the courts discretion, for granting the motion"].) Kitty-Anne points out that its written argument (points and authorities) incorporated and relied upon evidence presented in the previous summary adjudication motion.
Although the trial court chastised Kitty-Anne for evidentiary shortcomings in its responding papers, Kitty-Anne did discuss some responsive evidence during oral argument of the motion. The trial court responded: "I understand all those facts." The trial judge was familiar with the lawsuit because he had ruled upon the earlier summary adjudication motion. We presume the trial court read and considered Kitty-Annes written argument prior to ruling.
Moreover, we have independently reviewed the evidence submitted in support of and in opposition to Swans motion. (Certain Underwriters at Lloyds of London v. Superior Court, supra, 24 Cal.4th 945, 972.) As discussed below, we conclude that summary judgment is proper.
V.
As a matter of law, the trial court properly granted summary judgment. (Merrill v. Navegar, Inc., supra, 26 Cal.4th 465, 476 [standard of review].) Kitty-Anne and Swan intended that they would execute additional documents to carry out the terms of the deal memo. (Bohman v. Berg (1960) 54 Cal.2d 787, 795, 8 Cal. Rptr. 441, 356 P.2d 185 ["The practical construction placed upon [a contract] by the parties before any controversy arises as to its meaning affords one of the most reliable means of determining the intent of the parties"].) Kitty-Anne drafted and forwarded a draft agreement entitled "Purchase of Writers Royalties" that contained terms inconsistent with the deal memo. (Ibid.) The draft agreement also did not contain a mutual release or auditing provisions to which the parties had previously agreed. Although Kitty-Anne professed it was ready to pay the initial payment, it also stated that "it is obvious that the first payment date . .. cannot be met" given Swans objections to the draft agreement. When Kitty-Anne neither tendered the initial payment nor agreed to modification of the draft agreement, Swan properly declared Kitty-Anne in breach and terminated the contract.
The judgment is affirmed. Kitty-Anne shall bear costs on appeal.
We concur: COFFEE, J., PERREN, J