Matusek v. Murad

Filed 7/5/06 Matusek v. Murad CA2/3

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION THREE

APPEALS from orders and judgment of the Superior Court of Los Angeles County, Elihu M. Berle and Warren L. Ettinger, Judges. Affirmed in part, reversed in part and remanded with directions.

Law Office of Henry John Matusek II and Henry John Matusek II for Plaintiff, Cross-Defendant and Appellant.

Rothken Law Firm, Ira P. Rothken; Tannenbaum, Helpern, Syracuse & Hirschtritt and Yolanda Kanes for Defendants, Cross-Complainants and Appellants.

Law Office of John G. Warner and John G. Warner for Defendants and Respondents.

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INTRODUCTION

The Murad defendants (Murad, Inc., Murad Skin Research Laboratories, Inc., Murad DRTV, Inc. and Richard Murad), and the Benn defendants (Rodney Benn Productions, Inc. and Rodney Benn), contracted to create an infomercial about a Murad skin product, called Murad Acne Complex. The defendants hired an actor, plaintiff and appellant Leeanne Matusek (Matusek), to appear in and host the infomercial. Eventually, Matusek filed suit against the Murad and Benn defendants in relation to the infomercial, alleging, among other causes of action, breach of contract and intentional misrepresentation. The Murad defendants filed a cross-complaint against Matusek, as well as a number of entities, CA Talent and Mark Talent, and an individual, Gail Marx (collectively Marx), all three of whom purported to serve as Matusek's talent manager.^[1]

Following trial, a jury returned a general verdict in favor of Matusek, awarding her total compensatory damages in the amount of $50,160 and total punitive damages in the amount of $330,000. The trial court, however, granted post-trial motions filed by the Murad and Benn defendants. The trial court granted the Murad defendants' motion for judgment notwithstanding the verdict (JNOV) and, alternatively, motion for new trial. The trial court granted the Benn defendants' motion to reduce the jury verdict and, alternatively, a motion for new trial.

In its judgment, the trial court found in favor of the Murad defendants on all of Matusek's causes of action. In addition, the trial court reduced the damages against the Benn defendants and awarded Matusek compensatory damages in the amount of $296 (solely against Rodney Benn Productions), and punitive damages in the amount of $1,200 (also solely against Rodney Benn Productions). Matusek appeals from the trial court order granting defendants' post-trial motions.

The trial court also granted Marx's motion for non-suit on the cross-complaint filed by the Murad defendants. The Murad defendants appeal from this ruling.

We reverse in part and affirm in part. We reverse the order granting JNOV in favor of the Murad defendants. Matusek presented substantial evidence in support of the breach of contract and intentional misrepresentation causes of action.^[2] In addition, Matusek presented substantial evidence to support an award of punitive damages against Murad, Inc. We also conclude that Matusek's first cause of action for breach of contract is not preempted by federal law.

We reverse the trial court order granting new trial motions on behalf of all defendants. The trial court failed to comply with Code of Civil Procedure section 657. We affirm the trial court order finding that defendant Richard Murad was not personally liable to Matusek. In addition, we affirm the trial court order reducing the amount of punitive damages against Rodney Benn Productions. Finally, we affirm the trial court order granting the motion for non-suit in favor of Matusek and Marx on the cross-complaint filed by the Murad defendants.

FACTUAL AND PROCEDURAL BACKGROUND^[3]

1. The Murad Defendants and the Benn Defendants

In September 1999, Richard Murad was the vice-president of operations, vice-president of legal affairs and general counsel for the Murad defendants. The Murad defendants were in the business of manufacturing and selling skin care products.

Richard Murad's responsibilities included reviewing and approving contracts to be entered into by the Murad defendants. Richard Murad was responsible for reviewing and approving any contracts with Rodney Benn Productions in relation to the creation of infomercials. He was also responsible for reviewing and approving contracts with the American Federation of Television and Radio Artists (AFTRA), the labor union representing Matusek for her work in the infomercial at issue.

Rodney Benn was the sole owner, CEO and President of Rodney Benn Productions, Inc., which was in the business of producing and creating infomercials. Rodney Benn had the sole authority and decision-making power on behalf of Rodney Benn Productions to bind the company and enter into contracts.

Prior to the creation of the infomercial in this case, Rodney Benn had participated in the creation of 27 other infomercials governed by AFTRA contractual obligations. However, with respect to each of these 27 infomercials, the Benn defendants did not contract with AFTRA. Instead, the Benn defendants created the infomercials governed by AFTRA obligations pursuant to contractual relationships with AFTRA entered into by other entities involved in the creation of the infomercials. Rodney Benn had no knowledge of the relationship between a producer, an agent, the talent (i.e., the actor), and AFTRA in relation to contributions to AFTRA health and pension plans.

While the Benn defendants had created other infomercials for the Murad defendants, Rodney Benn had not worked with Richard Murad prior to the infomercial at issue in this case. During the negotiations with Richard Murad, Benn did not know which Murad entity had hired him to create the infomercial.

2. The Murad Defendants Contract with the Benn Defendants to Produce

an Infomercial Subject to the AFTRA Rules and Regulations with Respect to the Obligations to the Actor

In September 1999, defendant Murad DRTV^[4] entered into a contract with Rodney Benn Productions for the creation of the infomercial about the Murad acne product. The contract provided that Murad DRTV was responsible for entering into all appropriate agreements with AFTRA and the talent.^[5] At the time, Richard Murad had no knowledge of the infomercial business.

Richard Murad testified that the written contract with the Benn defendants was a Murad form contract used in earlier productions. He also testified that he â€