Madison/GrahamColorgraphics v. Graphic Press

Filed 2/15/07  Madison/Graham Colorgraphics v. Graphic Press CA4/3

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CaliforniaRules of Court, rule 977(a), prohibits courts and parties from citing orrelying on opinions not certified for publication or ordered published, exceptas specified by rule 977(b).  This opinion has not been certified forpublication or ordered published for purposes of rule 977.

IN THE COURT OFAPPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATEDISTRICT

DIVISION THREE

                        Appealfrom a judgment of the Superior Court ofOrange County, Thierry Patrick Colaw, Judge.  Reversed in part, affirmed inpart.

                        FosterPepper Tooze, Paul B. George; Buchalter Nemer, Manatt, Phelps & Phillips,Alan J. Kessel, Keli N. Osaki, and Michael Berger for Defendants,Cross-complainants and Appellants.

                        SheppardMullin Richter & Hampton, Gregory A. Long, Polly Towill, and Olivier Theardfor Plaintiff, Cross-defendant and Appellant.

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                        Thislawsuit arose after salesman Paul Good, who was working for one commercialprinting company, Madison/Graham ColorGraphics, Inc. (ColorGraphics), went towork for a competitor, Graphic Press, Inc. (Graphic Press).  Soon thereafter,ColorGraphics realized some of its clients had shifted their business toGraphic Press.  It sued on the theory Graphic Press and its owner, John Zamora,conspired with Good to spy on ColorGraphics, lure away clients, and steal tradesecrets.  Graphic Press and Zamora maintained they were unaware of Good'salleged misconduct and they had noreason to suspect any wrongful conduct.  It was their belief ColorGraphics lostbusiness to Graphic Press for legitimate business reasons, such as itsstate-of-the-art equipment, better connections, and its excellent reputation inthe industry.  They filed a cross-complaint against ColorGraphics.

                        A juryfound Good liable for (1) breach of hisemployment contract ($25,000); (2) breachof fiduciary duty ($182,000); and (3) misappropriationof trade secrets ($161,400).  In addition, it determined Good was not actingwithin the scope of his employment when he intentionally interfered withColorGraphics's prospective economic advantage (intentional interference). 

                        GraphicPress and Zamora were found not liable for intentional interference orany other intentional tort.  However, the jury decided all three (Good, GraphicPress, and Zamora) were liable for negligentinterference with prospective economic advantage (negligent interference),and Good was acting within the scope of his employment at Graphic Press when henegligently interfered.

                        The juryawarded $306,000 for Good's intentional interference and awarded that exactsame sum for the negligent interference claim, which was apportioned betweenthe three defendants as follows:  (1) Good was 50 percent negligent ($153,000);

(2) Graphic Press was 25 percentnegligent ($76,500); and (3) Zamora was 25 percent negligent ($76,500).  Thecourt required ColorGraphics to select only one verdict to avoid doublerecovery. 

                        The juryrejected all claims raised in the cross-complaint. All the parties filed appeals.  Thereafter, Good declared bankruptcy anddismissed his appeal.  Graphic Press appeals from the judgment and orderdenying its motion for judgmentnotwithstanding the verdict (JNOV) based on the argument the negligentinterference cause of action is never viable against a competitor.  It alsoappeals from the denial of its new trial motion based, inter alia, on theargument the jury's special verdict was inconsistent.  We find the latterargument has merit and conclude a new trial should have been granted as to thenegligent and intentional interference claims.

                        Thisopinion also addresses ColorGraphics's appeal from the court's refusal toinstruct the jury Good was acting in the scope of his employment when heintentionally interfered with its customer relationships.  ColorGraphicsmaintains the court should not have forced it to choose between theories ofrecovery and challenges the court's order denying its JNOV based on theargument the evidence clearly supported its other tort claims against Zamoraand Graphic Press.  We conclude these arguments lack merit and the portion ofthe judgment concerning these claims is affirmed.

I

                        ColorGraphicsis a large commercial printer, with offices in Los Angeles, Orange County, San Francisco, and Seattle.  It has won awards in the industry for its work, andmany of its customers are large companies such as Microsoft and Coca-Cola. 

                        GraphicPress is a newer company, which began its operations in 2000 when it purchasedassets, equipment, the â€