March 24, 2010
In June 2005, these Burnham Brown partners successfully defended a major U.S. electronics company against claims that it breached its contract with a former exclusive distributor in China. Plaintiff's claims of breach of contract and breach of the covenant of good faith and fair dealing were denied on the grounds that Plaintiff failed to prove compliance with the material obligations under the contract. Burnham Brown proved that Plaintiff's failure to obtain a business license in China was a material breach of the agreement. The verdict followed several years of active litigation which required Messrs. Verber and Bodzin to travel to Hong Kong to depose several witnesses who resided in Mainland China. During discovery, Plaintiff's $11,000,000 settlement demand was rejected, as was the $8,000,000 amount which was sought at trial.
Prior to trial, Burnham Brown won several key motions, including summary adjudication dismissing all fraud, tort and punitive damages claims and a motion to strike which precluded Plaintiff from seeking over $4,000,000 in alleged lost earnings. During motions in limine, the Court granted a motion for judgment on partial findings and dismissed the Unfair Competition Law Claims (UCL) Business Practices Act Claims brought by Plaintiff pursuant to Business and Professions Code Sections 17200 and 17500. The substantive basis of the latter motion was that after the completion of all fact and expert discovery, because Plaintiff possessed no evidence that he was deprived of his money and/or property, he could not prevail on his UCL claim. Thus, under California law, Plaintiff could make no claim for restitutionary discouragement and was therefore unable to prove a claim under the UCL. See Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1149 (2003).
On appeal, Plaintiff alleged that he had been wrongfully denied the opportunity to present his UCL claims at trial and claimed the district court committed reversible, procedural error under Federal Rule of Civil Procedure 52(c). In its February 28, 2008 decision, the Ninth Circuit rejected this claim, holding that Plaintiff had been provided the opportunity to present all his evidence and that at trial, he had proven neither his own performance under the contract nor any improper conduct by the company. The appellate justices further held that the latter factual findings precluded any award under Business and Professions Code Section 17200.
Mr. Verber and Mr. Bodzin continue to handle UCL cases as members of Burnham Brown's Business and Commercial Practice Group. Mr. Verber is Burnham Brown's managing partner and functions as personal counsel for several corporations. Mr. Bodzin is a frequent author on Unfair Business Practices and provides national consulting services on the subject. Mr. Verber can be reached at (510) 835-6817 and jverber@burnhambrown.com. Mr. Bodzin can be reached at (510) 835-6833 and rbodzin@burnhambrown.com.