Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
Los Angeles County Super. Ct. No. BC 250732
ORDER MODIFYING OPINION AND DENYING PETITIONS FOR REHEARING
COOPER, P. J.
GOOD CAUSE APPEARING, the opinion filed on November 14, 2007, is modified as follows:
1. Starting on page 23, delete the last paragraph that begins with the phrase “Neither logic nor a reasonable interpretation” and the following paragraph on page 24 that begins “Nor is there any support.”
2. On page 23, insert the following three paragraphs after the last full paragraph on that page that ends with the phrase “broadcast by Playboy”:
It is important to understand that the relevant consideration is whether Spice continued as an independent entity after the merger, not whether the merged entity succeeded to the obligations of the two corporations that merged. If Spice continued as an independent entity and operated the explicit programming as Spice, it retained its status as an “EMI affiliate.” This, however, was not the case. The record is clear that Spice was acquired by Playboy. The essence of that acquisition, as far as the record reveals, was that Spice’s infrastructure, described as its broadcasting operation, was spun off to Directrix and that Spice shareholders received Playboy stock, cash and 100 percent of Directrix stock.
Playboy was not interested in infrastructure.
Indeed, whether the transaction is characterized as a merger or an acquisition, neither logic nor the facts of record support the claim that Spice continued as an independent entity after its merger or acquisition by Playboy in March 1999. Logically, if Spice was acquired by Playboy, or merged into Playboy, it did not continue as an independent entity. Factually, the record indicates that Spice did not continue as an independent entity after its acquisition by Playboy. Logix’s claim that Playboy actually became Spice after the merger/acquisition is not supported by the record. Indeed, it is refuted by the record. In another context, the parties have referred us to the testimony of English, who stated at trial that Playboy was operating these channels as of May 2004.
In addition to the foregoing, we find no support in the text of the Logix-EMI agreement for the proposition that Playboy was also an EMI affiliate. The agreement contains no such provision.
3. On page 34, delete the last full paragraph beginning with the phrase “In sum” and insert in lieu thereof the following paragraph:
In sum, Logix, having abandoned the cause of action for fraud that is alleged in the complaint, has attempted to manufacture anew cause of action on appeal. We are not persuaded by this effort for several reasons. It is settled that amendments proposed by the pleader must be consistent with the theory of the case set forth in the superseded pleading. (Hillsboro Properties v. City of Rohnert Park (2006) 138 Cal.App.4th 379, 394.) The theory of that pleading in this case was that Faherty and others fraudulently induced Logix/Howingtons to enter into the Logix-EMI agreement. As we noted, this theory was abandoned for one that the renegotiations of January 1998 were infected by fraud. Thus, there are three reasons why the trial court was correct in denying leave to amend. First, since Logix abandoned the theory that it alleged (fraudulent inducement to enter into the Logix-EMI agreement), leave to amend would have served no purpose. Second, the theory that it was not the original agreement of January 1997 but the renegotiations one year after the agreement, in January 1998, that were infected with fraud is not consistent with the original theory. It is, in effect, an entirely new claim. Third, even the new claim was time-barred. Under these circumstances, leave to amend was appropriately denied.
4. On page 35, under subheading 8, after the sentence “The question whether Spice Hot was primarily explicit programming is remanded with directions for a new trial on this issue,” add in the same paragraph the following:
In the event the new trial as to Spice Hot results in a finding that requires a reduction, that reduction must be applied to the judgment as we have affirmed it in this decision. We wish to make clear that in such an event the trial court may modify the judgment that we have affirmed in this decision.
This above modification requires renumbering the footnotes.
The petitions for rehearing are denied.
There is no change in the judgment.
RUBIN, J. FLIER, J.