This case was last updated from Los Angeles County Superior Courts on 03/31/2020 at 16:06:08 (UTC).

BEATS ELECTRONICS LLC ET AL VS MONSTER LLC ET AL

Case Summary

On 09/15/2017 BEATS ELECTRONICS LLC filed a Contract - Other Contract lawsuit against MONSTER LLC. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are WILLIAM F. FAHEY, DEBRE K. WEINTRAUB and RAFAEL A. ONGKEKO. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****5937

  • Filing Date:

    09/15/2017

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

WILLIAM F. FAHEY

DEBRE K. WEINTRAUB

RAFAEL A. ONGKEKO

 

Party Details

Plaintiffs, Petitioners and Cross Defendants

BEATS ELECTRONICS INTERNATIONAL LIMITED

BEATS ELECTRONICS INTERNATIONAL

BEATS ELECTRONICS LLC

BEATS ELECTRONICS LLC A DELAWARE LIMITED LIABILITIY COMPANY

BEATS ELECTRONICS INTERNATIONAL FKA BEATS ELECTRONICS INTERNATIONAL LIMITED AN IRISH CORPORATION

ROES 1 THROUGH 50

Defendants, Respondents and Cross Plaintiffs

MONSTER LLC

MONSTER CABLE INTERNATIONAL LIMITED

MONSTER INC.

MONSTER TECHNOLOGY INTERNATIONAL LIMITED

APPLE INC NON-PARTY

MONSTER LLC A NEVADA LIMITED LIABILITY CORPORATION

MONSTER CABLE INTERNATIONAL LIMITED AN IRISH CORPORATION

KELLER CHRIS NON-PARTY

MONSTER TECHNOLOGY INTERNATIONAL LIMITED AN IRISH CORPORATION

MONSTER INC. A CALIFORNIA CORPORATION

KELLER NON-PARTY CHRIS

Other and Not Classified By Court

PRICEWATERHOUSECOOPERS LLP

Attorney/Law Firm Details

Plaintiff and Petitioner Attorneys

ISAACSON WILLIAM A.

TAKASHIMA EDWARD H.

BOIES SCHILLER FLEXNER LLP [CA]

BOIES SCHILLER FLEXNER LLP [DC]

TAKASHIMA EDWARD H

DOREN RICHARD J.

WALLACE BROOKE MYERS ESQ.

WALLACE BROOKE MYERS

ROBB ANDREW

Defendant and Respondent Attorneys

NURIK MARC S.

BROWNE GEORGE ROSS LLP

HALLAM KIRK M.

HOFFMAN NICHOLAS JOHN

HOFFMAN NICHOLAS J.

Defendant and Cross Plaintiff Attorneys

BROWNE GEORGE ROSS LLP

HALLAM KIRK M.

HOFFMAN NICHOLAS J.

Plaintiff and Cross Defendant Attorneys

BOIES SCHILLER FLEXNER LLP [CA]

BOIES SCHILLER FLEXNER LLP [DC]

DOREN RICHARD J.

WALLACE BROOKE MYERS

ROBB ANDREW

ROBB ANDREW WILLIAM

Not Classified By Court Attorneys

DURNING R. PETER JR.

WALD PETER A.

 

Court Documents

Notice of Case Reassignment and Order for Plaintiff to Give Notice

1/10/2020: Notice of Case Reassignment and Order for Plaintiff to Give Notice

Minute Order - Minute Order (Informal Discovery Conference (IDC))

1/31/2019: Minute Order - Minute Order (Informal Discovery Conference (IDC))

Proof of Service (not Summons and Complaint)

3/23/2020: Proof of Service (not Summons and Complaint)

Motion in Limine - MOTION IN LIMINE NO. 7 TO EXCLUDE DOCUMENTS PRODUCED 11 MONTHS AFTER THE DISCOVERY CUTOFF ROBB DECLARATION AND [PROPOSED] ORDER FILED IN SUPPORT

3/5/2020: Motion in Limine - MOTION IN LIMINE NO. 7 TO EXCLUDE DOCUMENTS PRODUCED 11 MONTHS AFTER THE DISCOVERY CUTOFF ROBB DECLARATION AND [PROPOSED] ORDER FILED IN SUPPORT

Opposition - OPPOSITION TO BEAT'S MOTION FOR PROTECTIVE ORDER AND ATTORNEY DISQUALIFICATION

11/19/2018: Opposition - OPPOSITION TO BEAT'S MOTION FOR PROTECTIVE ORDER AND ATTORNEY DISQUALIFICATION

Declaration - DECLARATION OF JOHN WONG

5/30/2019: Declaration - DECLARATION OF JOHN WONG

Objection - OBJECTION TO MONSTERS ADDITIONAL EVIDENCE FILED IN SUPPORT OF MONSTERS OPPOSITION TO BEATS MOTION FOR SUMMARY JUDGMENT SUMMARY ADJUDICATION PROPOSED ORDER

8/8/2019: Objection - OBJECTION TO MONSTERS ADDITIONAL EVIDENCE FILED IN SUPPORT OF MONSTERS OPPOSITION TO BEATS MOTION FOR SUMMARY JUDGMENT SUMMARY ADJUDICATION PROPOSED ORDER

Proof of Service (not Summons and Complaint)

8/9/2019: Proof of Service (not Summons and Complaint)

Notice of Lodging - NOTICE OF LODGING NOTICE OF LODGING ADDITIONAL THUMB DRIVE PURSUANT TO THE COURTS REQUEST

8/30/2019: Notice of Lodging - NOTICE OF LODGING NOTICE OF LODGING ADDITIONAL THUMB DRIVE PURSUANT TO THE COURTS REQUEST

Declaration - DECLARATION OF KIRK M. HALLAM IN SUPPORT OF OPPOSITION TO BEATS' EX PARTE APPLICATION TO QUASH MONSTER'S MOTIONS IN LIMINE AS UNTIMELY

9/23/2019: Declaration - DECLARATION OF KIRK M. HALLAM IN SUPPORT OF OPPOSITION TO BEATS' EX PARTE APPLICATION TO QUASH MONSTER'S MOTIONS IN LIMINE AS UNTIMELY

ORDER APPOINTING COURT APPROVED REPORTER AS OFFICIAL REPORTER PRO TEMPORE

2/1/2018: ORDER APPOINTING COURT APPROVED REPORTER AS OFFICIAL REPORTER PRO TEMPORE

BEATS' NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED CROSS-COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF

2/23/2018: BEATS' NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED CROSS-COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF

BEATS OPPOSITION TO MONSTER'S EX PARTE APPLICATION FOR THE IMMEDIATE APPOINTMENT OF A

3/20/2018: BEATS OPPOSITION TO MONSTER'S EX PARTE APPLICATION FOR THE IMMEDIATE APPOINTMENT OF A

DECLARA11ON OF KIRK M. HALLAM AND EXHIBIT IN SUPPORT OF EX PARTE APPLICATION TO CONTINUE THE TRIAL DATE

7/18/2018: DECLARA11ON OF KIRK M. HALLAM AND EXHIBIT IN SUPPORT OF EX PARTE APPLICATION TO CONTINUE THE TRIAL DATE

Motion for Order - Motion for Order To Seal Portions of Reply

10/31/2018: Motion for Order - Motion for Order To Seal Portions of Reply

JOINT STIPULATION AND ORDER TO EXTEND TIME FOR PLAINTIFFS TO RESPOND TO CROSS-COMPLAINT

12/6/2017: JOINT STIPULATION AND ORDER TO EXTEND TIME FOR PLAINTIFFS TO RESPOND TO CROSS-COMPLAINT

Minute Order -

10/30/2017: Minute Order -

Proof of Service -

10/17/2017: Proof of Service -

473 More Documents Available

 

Docket Entries

  • 04/22/2020
  • Hearing04/22/2020 at 08:30 AM in Department 76 at 111 North Hill Street, Los Angeles, CA 90012; Hearing on Motion to Strike Monster's Proposed Jury Instructions Nos. 352, 352, and 364 on special damages, lost profits, and reliance damages

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  • 04/22/2020
  • Hearing04/22/2020 at 08:30 AM in Department 76 at 111 North Hill Street, Los Angeles, CA 90012; Hearing on Motion to Seal Exhibits in Support of Motion re Certain of Monster's Jury Instructions

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  • 04/22/2020
  • Hearing04/22/2020 at 08:30 AM in Department 76 at 111 North Hill Street, Los Angeles, CA 90012; Trial Setting Conference

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  • 03/26/2020
  • Docketat 08:30 AM in Department 76; Hearing on Motion to Strike (Monster's Proposed Jury Instructions Nos. 352, 352, and 364 on special damages, lost profits, and reliance damages) - Not Held - Continued - Court's Motion

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  • 03/23/2020
  • Docketat 08:30 AM in Department 76; Jury Trial ((3-5 days)) - Not Held - Vacated by Court

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  • 03/23/2020
  • Docketat 08:30 AM in Department 76; Trial Setting Conference - Not Held - Continued - Court's Motion

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  • 03/23/2020
  • DocketProof of Service (not Summons and Complaint); Filed by Monster, LLC (Defendant); Monster, Inc. (Defendant); Monster Technology International Limited (Defendant) et al.

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  • 03/23/2020
  • DocketResponse (TO BEATS' OBJECTIONS TO ENTRY OF PROPOSED ORDER RE COURT'S DETERMINATION OF CONTRACT CONSTRUCTION ISSUES); Filed by Monster, LLC (Defendant); Monster, Inc. (Defendant); Monster Technology International Limited (Defendant) et al.

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  • 03/23/2020
  • DocketProof of Service (not Summons and Complaint); Filed by Monster, LLC (Defendant); Monster, Inc. (Defendant); Monster Technology International Limited (Defendant) et al.

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  • 03/23/2020
  • DocketResponse (MONSTER?S RESPONSE TO BEATS? OBJECTIONS TO ENTRY OF PROPOSED ORDER RE COURT?S DETERMINATION OF CONTRACT CONSTRUCTION ISSUES); Filed by Monster Cable International Limited (Cross-Complainant); Monster, LLC (Cross-Complainant); Monster Technology International Limited (Cross-Complainant) et al.

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686 More Docket Entries
  • 10/02/2017
  • DocketNOTICE OF FILING OF PROOFS OF SERVICE

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  • 09/18/2017
  • DocketMotion; Filed by Beats Electronics, LLC (Plaintiff); Beats Electronics International (Plaintiff); Beats Electronics International Limited (Legacy Party)

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  • 09/18/2017
  • DocketDeclaration; Filed by Beats Electronics, LLC (Plaintiff); Beats Electronics International (Plaintiff); Beats Electronics International Limited (Legacy Party)

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  • 09/18/2017
  • DocketNOTICE OF MOTION AND MOTION OF PLAINTIFFS BEATS ELECTRONICS, LLC AND BEATS ELECTRONICS INTERNATIONAL TO SEAL CERTAIN EXHIBITS TO COMPLAINT FOR BREACH OF CONTRACT

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  • 09/15/2017
  • DocketComplaint; Filed by null

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  • 09/15/2017
  • DocketCOMPLAINT FOR: 1. BREACH OF CONTRACT - DISTRIBUTION AGREEMENT

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  • 09/15/2017
  • DocketSUMMONS

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  • 09/15/2017
  • DocketNotice of Related Cases

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  • 09/15/2017
  • DocketNotice of Related Case; Filed by Beats Electronics, LLC (Plaintiff)

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  • 01/26/2017
  • DocketProof of Service (not Summons and Complaint); Filed by Beats Electronics, LLC (Plaintiff); Beats Electronics International (Plaintiff); Beats Electronics International Limited (Legacy Party)

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Tentative Rulings

Case Number: BC675937    Hearing Date: August 20, 2020    Dept: 76

Plaintiff Beats Electronics alleges that Defendant Monster breached its obligations under a Distribution Agreement to pay amounts determined by a third-party auditor, PriceWaterhouseCoopers, to be owed by Monster to Beats in connection with the termination of a License Agreement between the two companies pertaining to the sale of Beats by Dr. Dre headphone products.

Defendant Monster filed a Cross-Complaint alleging that Beats owes Monster sums under the Distribution Agreement, the Termination Agreement, the Royalty Agreement, and the Sales Representative Agreement between the parties.

Defendants/Cross-Complainants Monster, LLC, Monster, Inc., Monster Technology International and Monster Cable International move for summary adjudication as to two of Beats’ affirmative defenses.

TENTATIVE RULING

Defendants/Cross-Complainants Monster, LLC, Monster, Inc., Monster Technology International and Monster Cable International’s motion for summary adjudication as to Issue No. 1 re: the second affirmative defense and Issue No. 2 re: the sixth affirmative defense is DENIED.

ANALYSIS

Documents Lodged Conditionally Under Seal

The documents lodged under seal in support of its Motion For Summary Adjudication were previously lodged by Monster in support of its July[1] 30, 2019 Opposition for Beats’ Motion for Summary Judgment, and were ordered sealed by the Court on September 30, 2019. The Court has confirmed that these documents were subject to the Court’s September 30, 2019 sealing order. On that basis, these documents will against be ordered sealed.

The Court notes that Beats’ motion to seal documents submitted as exhibits to the Appendix of Exhibits pursuant to the Declaration of Jason C. Lo in Support of Beats’s Opposition to the Motion for Summary Adjudication is set for an October 2, 2020 hearing. As such, those documents lodged conditionally under seal shall remain so until the Court rules upon motion to seal.

Request For Judicial Notice

Monster requests that the Court take judicial notice of the following: (1) The proper conversion rate of Euro Dollars to U.S. Dollars which should be used to calculate the total in U.S. Dollars of the various amounts at issue in this Motion, i.e. Beginning-Term Inventory and Dealer Program Costs, is 1.31:1.00 (131 Euros to 100 U.S. Dollars); (2) The proper historic prime rate of interest (“Prime Rate”) to be used in calculating the Late Payment Charge incurred by Beats and earned by Monster under Section 6.5 of the Distribution Agreement (the “Late Payment Charge”) for Beats’ late payment to Monster of its share of the Dealer Program Costs, is/are as such rate(s) is/are set forth on the attached Exhibit A to the deposition of James Crossland, the contractual Late Payment Charge based on the interest rate equal to the Prime Rate plus 2%.

Requests Nos. 1 and 2 are DENIED. These rates are based upon information taken from websites. (See RJN, Ps and As, Pages 3-5.) “The contents of the Web sites . . . are “plainly subject to interpretation and for that reason not subject to judicial notice.” (Citation omitted.)” (Ragland v. U.S. Bank National Assn. (2012) 209 Cal.App.4th 182, 194.)

However, the Court will consider evidence submitted by Monster regarding the applicable conversion rate and prime rate of interest, subject to any evidentiary objections asserted by Beats.

Defendant’s Evidentiary Objections

Pursuant to CCP § 437c(q), the Court only rules upon the following objections to evidence which the Court deems material to the disposition of this motion.

Request For Judicial Notice

No. 22: OVERRULED. Relevant.

No. 23: OVERRULED. Relevant.

Motion For Summary Adjudication

Defendants/Cross-Complainants Monster, LLC, Monster, Inc., Monster Technology International and Monster Cable International move for summary adjudication as to two of Beats’ affirmative defenses.

(f)

(1) A party may move for summary adjudication as to . . . one or more affirmative defenses, . . . if the party contends . . . that there is no merit to an affirmative defense as to any cause of action, . . .. A motion for summary adjudication shall be granted only if it completely disposes of . . . an affirmative defense. . . ..

(Code Civ. Proc., § 437c (f)(1).)

When a plaintiff moves for summary adjudication on an affirmative defense, the court shall grant the motion “only if it completely disposes” of  [*900]  the defense. (Code Civ. Proc., § 437c, subd. (f)(1), italics added.) The plaintiff bears the initial burden to show there is no triable issue of material fact as to the defense and that he or she is entitled to judgment on the defense as a matter of law. In so doing, the plaintiff must negate an essential element of the defense, or establish the defendant does not possess and cannot reasonably obtain evidence needed to support the defense. (See Securitas Security Services USA, Inc. v. Superior Court, supra, 197 Cal.App.4th at pp. 119–120; Code Civ. Proc., § 437c, subd. (f); see also Westlye v. Look Sports, Inc. (1993) 17 Cal.App.4th 1715, 1726–1727 [22 Cal. Rptr. 2d 781].)

If the plaintiff does not make this showing, “ ‘it is unnecessary to examine the [defendant's] opposing evidence and the motion must be denied.’ ” (Rehmani v. Superior Court (2012) 204 Cal.App.4th 945, 950 [139 Cal. Rptr. 3d 464].) “ ‘However, if the moving papers establish a prima facie showing that justifies a [ruling] in the [plaintiff's] favor, the burden then shifts to the [defendant] to make a prima facie showing of the existence of a triable material factual issue.’ ” (Ibid.)

(See's Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889, 899-900.)

1. Issue No. 1: “Monster is entitled to summary adjudication as to Beats’ Second Affirmative [Defense] (‘No Damages’) which alleges that ‘Monster suffered no damages from any conduct by Beats’ and therefore ‘Monster is barred from the recovery of any such damages against Beats.’ Monster’s entitlement to summary adjudication is based on the indisputable facts and proper legal interpretation and application of the provisions of the Distribution and Termination Agreements establishing that the credits and offsets Monster is legally entitled to exceed the credits and offsets Beats is legally entitled to, and Monster is entitled to damages from Beats as a matter of law.”

AND

2. Issue No. 2: “Monster is entitled to summary adjudication as to Beats Sixth Affirmative Defense (‘Offset and Recoupment’) which alleges that ‘Any monies found owing by Beats to Monster should be offset by the monies Monster owes to Beats as set forth in Beats’ Complaint in this action.’ Monster’s entitlement to summary adjudication as to Beats’ Sixth Affirmative Defense is based on the indisputable facts and proper legal interpretation and application of the provisions of the Distribution and Termination Agreements establishing that the credits and offsets Monster is legally entitled to exceed the credits and offsets Beats is legally entitled to, and the money owing to Monster is not offset by monies Monster owes to Beats as a matter of law.”

The Court will address Issues Nos. 1 and 2 together, as they both rely on the concept that money owed to Monster exceeds money owed to Beats, after taking into accounts the credits and offsets between the two parties.

Beats’ second affirmative defense in the Answer to the Second Amended Cross Complaint (“2ACC”) is that: “Monster suffered no damages from any conduct by Beats and the damages alleged in Monster’s Second Amended Cross-Complaint are impermissibly remote and speculative, and, therefore, Monster is barred from the recovery of any such damages against Beats.” (Answer filed 9/25/18, ¶ 2.)

" 'It is fundamental that [contractdamages which are speculativeremote, imaginary, contingent, or merely possible cannot serve as a legal basis for recovery.' " ( McDonald v. John P. Scripps Newspaper (1989) 210 Cal. App. 3d 100, 104 [257 Cal. Rptr. 473].) Absent a definable loss, a party is entitled only to nominal damages. ( Ericson v. PlaygirlInc. (1977) 73 Cal. App. 3d 850, 859 [140 Cal. Rptr. 921, 96 A.L.R.3d 427].

(Scott v. Pacific Gas & Electric Co. (1995) 11 Cal.4th 454, 473.)

Beats’ sixth affirmative defense in the Answer to the 2ACC is that: “Any monies found owing by Beats to Monster should be offset by the monies Monster owes to Beats as set forth in Beats’ Complaint in this action.” (Answer filed 9/25/18, ¶ 6 [bold emphasis added].)

Where cross-demands for money have existed between persons at any point in time when neither demand was barred by the statute of limitations, and an action is thereafter commenced by one such person, the other person may assert in the answer the defense of payment in that the two demands are compensated so far as they equal each other, notwithstanding that an independent action asserting the person’s claim would at the time of filing the answer be barred by the statute of limitations. If the cross-demand would otherwise be barred by the statute of limitations, the relief accorded under this section shall not exceed the value of the relief granted to the other party. The defense provided by this section is not available if the cross-demand is barred for failure to assert it in a prior action under Section 426.30. Neither person can be deprived of the benefits of this section by the assignment or death of the other. For the purposes of this section, a money judgment is a “demand for money” and, as applied to a money judgment, the demand is barred by the statute of limitations when enforcement of the judgment is barred under Chapter 3 (commencing with Section 683.010) of Division 1 of Title 9.

(Code Civ. Proc., § 431.70.)

Because the pleadings frame the issues, Monster is limited to proving that the relief sought in Beats’ Complaint will not completely offset the relief Monster is seeking in its Cross-Complaint. In that regard, Monster’s claim for damages is limited to what it pled in the Cross-Complaint.

As this Court ruled in its July 13, 2020 order denying Monster’s motion to bifurcate contract interpretation issues, the scope and status of the claims asserted in the 2ACC which remain to be tried are as follows:

In this action, Beats’ Complaint alleges that the Transition Agreements—a Distribution Agreement, Royalty Agreement and Sales Representative Agreement (Complaint, ¶ 2)—called for a variety of payments between Monster and Beats, some flowing from Beats to Monster and others in the opposition direction. (Complaint, ¶ 5.) Beats’ Complaint asserts a single cause of action for breach of contract (regarding the Distribution Agreement only[2]) alleging that PricewaterhouseCoopers (“PwC”) conducted an audit pursuant to Paragraph 6.7 of the Distribution Agreement, which audit determined that under the Distribution Agreement, Monster owed Beats $71,220,915 (U.S. dollars); €20,065,036 (Euros); and $716,107 (Canadian dollars) for a combined amount of approximately $95 million. Complaint, ¶¶ 8, 39 – 41. Beats alleges that Monster breached the Distribution Agreement by failing to make payments due to Beats under the Distribution Agreement within 5 days of the conclusion of PwC’s audit. (Id. at ¶ 42.) Monster also allegedly breached the Distribution Agreement by failing to (jointly with Beats) instruct the escrow agent, JPMorgan Chase Bank, NA (“JPMC”), to release escrow amounts due to Beats from the JPMC Escrow Account. (Id. at ¶ 43.)

In the 2ACC, Monster alleges that Monster is entitled to approximately $88 million in offsets for inventory Beats purchased from Monster which was wrongfully excluded from PwC’s final inspection report under the Distribution Agreement, which amount is due and owing to Monster. (2ACC, ¶ 34.) Monster alleges that Beats also breached the Distribution agreement by failing to pay or reimburse certain dealer costs (“Dealer Payments”) it was obligated to repay Monster that total approximately $9 million. (Id., at ¶ 41.) Monster claims that Beats thus owes Monster a total of $97 million under the Distribution and the Termination Agreement. (Id., at ¶ 34.)

Monster also alleges that Beats claimed that Monster[3] was not entitled to Credits and Offsets for Dealer Payments ($9 million) or the cost the Inventory Beats ordered and purchased from Monster ($88 million) when this action was filed in September 2017. (2ACC, ¶¶ 47, 49.) Monster alleges that Beats failed to disclose until the filing of this lawsuit that it had no intention to pay for Inventory, and did not intend to accept or honor the Credit Memos and the Offsets, but instead intended to repudiate its obligations to pay for such Inventory in the manner and at the times called for in the parties’ Agreements. (Id. at ¶ 46.) Monster alleges that Beats refused to offset against the Net Sales Remittances due to Beats from Monster the $9 million in Dealer Payment reimbursement and the $88 million of Inventory purchased by Beats due under the Termination Agreement. (Id. at ¶¶ 49, 53.) Beats did not assert until July 2016 that Monster was in breach of the Distribution Agreement for Monster’s alleged failure to pay to Beats the Net Sales Remittances purportedly due Beats. (Id. at ¶ 54.)

The first cause of action asserted in Monster’s 2ACC is for breach of the Distribution Agreement, the alleged obligations of which are set forth above.

The fourth cause of action is for breach of the Termination Agreement, seeking to recover payment from Beats for the Inventory Beats bought back from Monster under the terms of the Agreement, in the amount of excess of $88 million. (2ACC, ¶¶ 70, 71.) The Termination Agreement allegedly required Beats to purchase all of the Products in Monster’s inventory (with some specified exceptions) on July 1, 2012, in the agreed amount not to exceed $21,810,305 (for Products in American facilities), €1,673,208 (for Products in Canadian facilities), and €8,466,457 (for products in European facilities). Beats was required to remit payment to Monster on or before 75 days after July 1, 2012. (Id. at ¶ 21.)

The fifth cause of action is a common count for goods rendered with respect to the Inventory delivered to Beats. (2ACC, ¶ 74.)

The sixth cause of action is a common count for account stated in the amount of $97 million, based upon the Purchase Orders issued by Beats, and the corresponding Invoices and Credit Memos issued by Monster, for the inventory purchased by Beats from Monster, as well as for the Dealer Payments made by Monster on behalf of Beats and Beats’ agreement to credit Monster therefor, and the products sold and distributed by Monster on behalf of Beats and the Sales Remittance Payments due Beats as a result thereof. (2ACC, ¶¶ 79, 85.)

The seventh cause of action is for assumpsit based upon the alleged $97 million debt owed from Beats to Monster ($88 million in inventory plus $9 million in Dealer Payments made by Monster on behalf of Beats). (2ACC, ¶¶ 91, 92.)

Monster’s Notice of Motion at Page 2:2-12 identifies the following issues to support Monster’s position that it is entitled to summary adjudication as to Beats’ second and sixth affirmative defenses: (1) Whether Monster as a matter of law is entitled to an Incremental Noncash Credit of $7,657,193; (2) Whether Monster as a matter of law is entitled to credit for Beats’ beginning-term purchases of Monster inventory in an amount totaling $54,706,347; (3) Whether Monster as a matter of law is entitled to $9,712,988, as reimbursement of Beats’ portion of Monster’s Dealer Program Costs, along with interest for Late Payment in the amount of $2,284,576, for a total credit to Monster of $11,997,564; (4) Whether Beats failed to demand of Monster that Monster issue joint instructions to JP Morgan providing for JP Morgan to release the Distribution Escrow funds to Beats, and Beats’ has suffered no damage from any acts of Monster in relation to those funds in escrow ($3.2 million).

The 2ACC alleges at ¶ 21—and thus admits—that the Termination Agreement specifies that the aggregate amount of the purchases made by Beats consist of $21,810,305 (for Products in American facilities), €1,673,208[4] ($1,892,749.62)(for Products in Canadian facilities), and €8,466,457[5] ($9,577,340.82)(for products in European facilities), for an approximate total of $33,280,395.40. Accordingly, under the doctrine of judicial admissions (Thurman v. Bayshore Transit Management, Inc.  (2016) 244 Cal.App.4th 175, 187), Monster has admitted that “the aggregate amount of the purchases made by Beats would not exceed the foregoing amounts for Products in American, Canadian and European facilities.

“An admission in a pleading is conclusive on the pleader. [Citation.] ‘He cannot offer contrary evidence unless permitted to amend, and a judgment may rest in whole or in part upon the admission without proof of the fact.’ [Citation.] While a court has inherent power to relieve a party from the effects of judicial admissions by amendment to the pleadings  [citation], [the respondent] never sought to amend his answer to the cross-complaint.” (Id. at p. 1272.)

(Thurman v. Bayshore Transit Management, Inc. (2012) 203 Cal.App.4th 1112, 1156, disapproved on other grounds in ZB, N.A. v. Superior Court (Lawson)(2019) 8 Cal.5th 175, 196.)

The trial court here articulated yet another independent basis for dismissal. Appellants made judicial admissions in their pleadings in Bucur I that FedEx did nothing wrong in connection with termination of the line-haul contracts, but Appellants merely named FedEx as a party to facilitate proper rescission of the Wasarhelyi/FedEx contract. “The admission of fact in a pleading is a ‘judicial admission.’” (Valerio v. Andrew Youngquist Construction (2002) 103 Cal.App.4th 1264, 1271 [127 Cal. Rptr. 2d 436].) A judicial admission in a pleading is not merely evidence of a fact; it is a conclusive concession of the truth of the matter. (Addy v. Bliss & Glennon (1996) 44 Cal.App.4th 205, 218 [51 Cal. Rptr. 2d 642].) “Well pleaded allegations in the complaint are binding on the plaintiff at trial.” (4 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 455, p. 587.) “[T]he trial court may not ignore a judicial admission in a pleading, but must conclusively deem it true as against the pleader.” (Thurman v. Bayshore Transit Management, Inc. (2012) 203 Cal.App.4th 1112, 1155 [138 Cal. Rptr. 3d 130].) Because Appellants alleged in Bucur I that FedEx did nothing wrong in connection with the loss they incurred, the doctrine of judicial admissions bars them from taking an inconsistent position in their attempt to relitigate the same case.

(Bucur v. Ahmad (2016) 244 Cal.App.4th 175, 187.)

Accordingly, Monster’s attempt to introduce evidence of $6.2 million[6] in inventory outside the U.S., Europe and Canada, to include inventory either in transit (on ships), in factories (in China) or in Mexico, is unavailing. (See Ps & As, Page 13:21-14:2.) Monster’s argument that Beats agreed pursuant to the Termination Agreement to purchase all $54.7 million in Beginning-Term Inventory is not persuasive. As noted, the 2ACC alleges at ¶ 21—and thus admits—that the Termination Agreement specifies that the aggregate amount of the purchases made by Beats consist of $21,810,305 (for Products in American facilities), €1,673,208[7] ($1,892,749.62)(for Products in Canadian facilities), and €8,466,457[8] ($9,577,340.82)(for products in European facilities), for an approximate total of $33,280,395.40. As such, Monster is limited to this amount in proving that the amount of offsets in favor of Beats does not exceed the damages recoverable by Monster.

On motion for summary judgment the pleadings define the issues; thus "'[In] the absence of some request for amendment there is no occasion to inquire about possible issues not raised by the pleadings.'" (Citations omitted.)

(Metromedia, Inc. v. San Diego (1980) 26 Cal.3d 848, 885[bold emphasis added], revd. on other grounds in Metromedia, Inc. v. San Diego (1981) 453 U.S. 490.)

It is axiomatic that “[t]he pleadings establish the scope of an action and, absent an amendment to the pleadings, parties cannot introduce evidence about issues outside the pleadings.” (Emerald Bay Community Assn. v. Golden Eagle Ins. Corp. (2005) 130 Cal.App.4th 1078, 1091 [31 Cal. Rptr. 3d 43].) When evidence is not pertinent to the issues raised by the pleadings, the evidence is irrelevant and it is proper to preclude the introduction of such evidence. (Page v. Page (1962) 199 Cal. App. 2d 527, 532–533 [18 Cal. Rptr. 897].)

(Schweitzer v. Westminster Investments, Inc. (2007) 157 Cal.App.4th 1195, 1214.)

Planned Parenthood[9] could not use a motion for summary judgment to expand the scope of the complaint. ( Keniston v. American Nat. Ins. Co. (1973) 31 Cal.App.3d 803, 812 [107 Cal.Rptr. 583]; Dorado v. Knudsen Corp. (1980) 103 Cal.App.3d 605, 611 [163 Cal.Rptr. 477].)  This is so because the pleadings defined the issues for  [*691]  summary judgment and summary adjudication. ( Metromedia, Inc. v. City of San Diego (1980) 26 Cal.3d 848, 885 [164 Cal.Rptr. 510, 610 P.2d 407]; Hejmadi v. AMFAC, Inc. (1988) 202 Cal.App.3d 525, 536-537 [249 Cal.Rptr. 5].)

(Planned Parenthood v. City of Santa Maria (1993) 16 Cal.App.4th 685, 690-91.)

At Page 3 of its Reply, Monster cites case law which holds that the contents of an incorporated document will take precedence over and supersede any inconsistent or contrary allegations set out in the pleadings. Each case cited by Monster applies to the standard of review on demurrer,[10] whereby a plaintiff or cross-complainant pleads facts which are contradicted by an exhibit attached to the complaint. However, this motion is not a demurrer where the demurring party is attempting to avail itself of exhibits which contradict the allegations of the complaint. The instant motion for summary adjudication where the moving party’s contentions are contradicted by judicial admissions in its own pleading. Monster is therefore making a mistaken apples-to-oranges comparison in its citations to caselaw.

In the 2ACC Monster does not plead the entitlement to recover Incremental Noncash Credit in the amount of $7.6 million. The only allegations in the 2ACC of credits pursuant to the Distribution Agreement are those in connection with Dealer Payments. (See, e.g., 2ACC, ¶ 47, Page 9:7; ¶ 48, Page 9:24-25.) As this Court previously concluded in its July 13, 2020 Ruling on Submitted Matter, “the issue of Incremental Noncash Credit is outside the scope of the operative pleadings and cannot be tried.” (July 13, 2020 Ruling, Page 8.)

Monster did, however, plead that it was entitled to recover Dealer Program Costs in its 2ACC.[11] Monster alleges at ¶¶ 34, 41 of the 2ACC that Beats failed to pay or reimburse certain dealer costs it was obligated to repay Monster that total approximately $9 million. This is sufficient to encompass recovery of Dealer Program Costs.

At most, however, assuming for purposes of this motion for summary adjudication only, if Monster’s position is correct that Beats’ share of the Dealer Program Costs is $4,515,155 and €3,968,574 (approx. $4.7 m) for a total of $9,712,988 (Ps & As, Pages 18:12-14, 23-25, 19:3-4), this would still not exceed the amount of approximately $95 million in damages sought by Beats in its Complaint. (Complaint, ¶ 8.)

Again, for purposes of this motion for summary adjudication only, even allowing Monster to recover Late Payment Charge—which was not pled in the 2ACC—of $2,284,576 (Ps and As, Page 19:5-19), the total credit for Dealer Program Costs and Late Payment Charge would be $11,886,269. (Id. at 19:19.) This would still not exceed the amount of approximately $95 million in damages sought by Beats in its Complaint. (Complaint, ¶ 8.)

Further, even assuming, for purposes of this motion for summary adjudication only, that Monster is correct that Beats did not suffer damages from Monster’s alleged refusal to issue joint instruments to JP Morgan for release of the Distribution Fees in Escrow, Monster only claims that this would reduce Beats’ claimed damages by the $3.2 million in escrow. (Ps & As, Page 20:3-13.) This would reduce Beats’ damages to some $91.8 million, which still exceeds the $11,886.269 in credit for the Dealer Program Costs and Late Payment Charge in favor of Monster.[12]

Accordingly, Monster has not met its initial burden to demonstrate that it is entitled to summary adjudication as to the second and sixth affirmative defenses. The burden does not shift to Beats to demonstrate that a triable issue of material fact exists. (Wilson v. County of San Joaquin (2019) 38 Cal.App.5th 1, 9 [citing the rule that if a party moving for summary adjudication fails to make the initial showing, it is unnecessary to examine the opposing evidence, and the motion must be denied].)

The motion for summary adjudication as to Issue No. 1 re: the second affirmative defense and Issue No. 2 re: the sixth affirmative defense is DENIED.


[1] Erroneously referred to as June 30, 2019 in Monster’s Notice of Lodging.

[2] Complaint, ¶ 6.

[3] Erroneously referred to as Beats at ¶ 47, Page 9:16 of the 2ACC.

[4] Approximately $1,892,749.62 depending upon the daily exchange rate of Euros to US Dollars.

[5] Approximately $9,577,340.82 depending upon the daily exchange rate of Euros to US Dollars.

[6] See. e.g., Ps & As, Page 6:17½

[7] Approximately $1,892,749.62 depending upon the daily exchange rate of Euros to US Dollars.

[8] Approximately $9,577,340.82 depending upon the daily exchange rate of Euros to US Dollars.

[9] Planned Parenthood was the party moving for summary judgment/summary adjudication.

[10] (Building Permit Consultants, Inc. v. Mazur (2004) 122 Cal.App.4th 1400, 1408-09 [reviewing judgment dismissing a complaint after the granting of a demurrer without leave to amend]); (Holland v. Morse Diesel Internat., Inc. (2001) 86 Cal.App.4th 1443, 1447 [discussing standard on demurrer], superseded by statute on other grounds as stated in White v. Cridlebaugh (2009) 178 Cal.App.4th 506, 521); (Freeman v. San Diego Assn. of Realtors (1999) 77 Cal.App.4th 171, 178, n.3: “When examining the sufficiency of a complaint against a general demurrer, we treat as true all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation omitted.] However, we disregard allegations that are contrary to law or to facts that may be judicially noticed [citation omitted] or are contradicted by the express terms of an exhibit incorporated into the complaint. [Citation omitted.]”); (Peak v. Republic Truck Sales Corp. (1924) 194 Cal. 782, 790 [reviewing a demurrer to answer].); (Stoddard v. Carter (1864) 26 Cal. 294, 302-03 [reviewing whether a demurrer was properly overruled]); (Building Permit Consultants, Inc. v. Mazur (2004) 122 Cal.App.4th 1400, 1408-09 [reviewing a judgment dismissing a complaint after granting of a demurrer without leave to amend.)

[11] The Court agrees with Monster that Code Civ. Proc., § 437c(f)(2) does not bar Monster from bringing a motion for summary adjudication as to this issue, as subdivision (f)(2) bars a subsequent motion for summary judgment based on issues asserted in a prior motion for summary adjudication.

[12] Monster acknowledges that there are triable issues as to whether Beats owes Monster $11.2 million for Beats’ Mid-Term inventory purchases and $41 million for Beats’ End-of-Term Inventory Purchases, but is not seeking adjudication of these claims in this motion for summary adjudication. (Ps & As, Page 6:19-26.) Even if Monster proves this $52.2 million in damages, adding this to the $9.7 million and $11.9 million ($21.6 million), yields $73.8 million, which would not exceed the $91.8 million sought by Beats.

Case Number: BC675937    Hearing Date: June 23, 2020    Dept: 76

STATEMENT OF FACTS

Plaintiff Beats Electronics alleges that Defendant Monster breached its obligations under a Distribution Agreement to pay amounts determined by a third-party auditor, PriceWaterhouseCoopers, to be owed by Monster to Beats in connection with the termination of a License Agreement between the two companies pertaining to the sale of Beats by Dr. Dre headphone products.

Defendant Monster filed a Cross-Complaint alleging that Beats owes Monster sums under the Distribution Agreement, the Termination Agreement, the Royalty Agreement, and the Sales Representative Agreement between the parties.

Defendants/Cross-Complainants Monster, LLC, Monster, Inc., Monster Technology International and Monster Cable International move to bifurcate contract interpretation issues for determination by the Court and to seal excerpts of the memorandum of law pertaining to this motion.

Plaintiffs/Cross-Defendants Beats Electronics, LLC and Beats Electronics International move to strike Monster’s proposed jury instructions Nos. 351, 352 and 361 and to seal certain exhibits attached to the Declaration of Brooke Myers Wallace In Support of the Motion To Strike.

Plaintiffs/Cross-Defendants Beats Electronics, LLC and Beats Electronics International bring an unreserved motion to strike the motion for summary adjudication filed by Monster.

The Monster Defendants/Cross-Complainants bring an unreserved motion for modification of the order denying the preliminary injunction.

TENTATIVE RULING

Defendants/Cross-Complainants Monster, LLC, Monster, Inc., Monster Technology International and Monster Cable International’s motion to bifurcate the contract interpretation issues for determination by the Court is DENIED as to Issues Nos. 1 and 2, as set forth in the notice of motion, and GRANTED as to Issue No. 2, as set forth in the notice of motion.

Plaintiffs/Cross-Defendants Beats Electronics, LLC and Beats Electronics International’s motion to strike Monster’s proposed jury instructions Nos. 351 (special damages), 352 (lost profits) and 361 (reliance damages) is DENIED without prejudice to Beats bringing motions in limine as appropriate.

Plaintiff/Cross-Defendant Beats Electronics, LLC and Beats Electronics International’s unreserved motion to strike Monster’s motion for summary adjudication is placed OFF-CALENDAR AS MOOT.

Defendants/Cross-Complainants Monster, LLC, Monster, Inc., Monster Technology International and Monster Cable International’s unreserved motion for the issuance of an order modifying the Court’s May 19, 2020 Order denying Monster’s Motion for Permanent Injunction is DENIED.

ANALYSIS

Motion To Bifurcate Contract Interpretation Issues

Defendants/Cross-Complainants Monster, LLC, Monster, Inc., Monster Technology International and Monster Cable International move to bifurcate the following contract interpretation issues for determination by the Court:

(1) Whether, as Beats contends, Monster is obligated under the Distribution Agreement to reimburse Beats for the Incremental Noncash Credit received by Monster during the Term ($7.6 million), or, as Monster contends, Monster is entitled to that Credit in calculating the money due between the parties.

(2) Whether, as Monster contends, Beats is obligated under the Termination Agreement to reimburse Monster for the entirety of the beginning-term Inventory which is expressly identified in the Termination Agreement ($54.7m), or, as Beats contends, the provisions of the Termination Agreement cap Beats’ obligation to purchase beginning-term inventory at $48.5 million.

(3) Whether, as Beats now contends, the Dealer Program provisions in the Distribution Agreement entitle Monster only to reimbursement of certain “out of pocket” costs paid directly by Monster, or, as Monster contends, those pertinent provisions entitle Monster to reimbursement of all Dealer Program Costs indirectly paid by Monster through the Dealers’ deduction of those costs from amounts paid to Monster.

In the opposition, Beats argues that the issues raised by Monster may be rendered moot by Beats’s Motions In Limine Nos. 6 and 7. Beats argues that Monster wants to avoid a ruling on Motions In Limine Nos. and 7 because Monster knows that the primary issues presented in this motion—claims seeking inventory amounts that exceed the contractual caps and dealer program payments—were not in Monster’s pleadings and were not disclosed by Monster during discovery.

Beats argues that the issues which Monster seeks to bifurcate were never pled in the operative Second Amended Cross-Complaint (“2ACC”). Beats argues that Monster is presenting a new theory which contradicts what it did plead in the 2ACC: that the aggregate amount of purchases made by Beats would not exceed the dollar caps set forth in the contract, totaling approximately $33 million. (2ACC, ¶ 21.)

Moreover, Beats argues that, as discussed in Beats’s Motions In Limine Nos. 6 and 7, Monster did not disclose these new claims in discovery and still has not produced all relevant discovery regarding these claims.

The Scope and Status of the Parties’ Claims/Cross-Claims

In this action, Beats’ Complaint alleges that the Transition Agreements—a Distribution Agreement, Royalty Agreement and Sales Representative Agreement (Complaint, ¶ 2)—called for a variety of payments between Monster and Beats, some flowing from Beats to Monster and others in the opposition direction. (Complaint, ¶ 5.)

In the Complaint, Beats asserts a single cause of action for breach of contract (regarding the Distribution Agreement only[1]) alleging that PricewaterhouseCoopers (“PwC”) conducted an audit pursuant to Paragraph 6.7 of the Distribution Agreement, which audit determined that under the Distribution Agreement, Monster owed Beats $71,220,915 (U.S. dollars); €20,065,036 (Euros); and $716,107 (Canadian dollars). Complaint, ¶¶ 39 – 41. Beats alleges that Monster breached the Distribution Agreement by failing to make payments due to Beats under the Distribution Agreement within 5 days of the conclusion of PwC’s audit. (Id. at ¶ 42.) Monster also allegedly breached the Distribution Agreement by failing to (jointly with Beats) instruct the escrow agent, JPMorgan Chase Bank, NA (“JPMC”), to release escrow amounts due to Beats from the JPMC Escrow Account. (Id. at ¶ 43.)

By way of its October 3, 2019 Ruling On Submitted Matter, the Court denied Beats’ motion for summary judgment as to Beats’ Complaint for breach of the Distribution Agreement. By way of its December 19, 2019 Amended Ruling, the Court denied Monster’s motion for summary adjudication as to Beats’ Complaint for breach of the Distribution Agreement. Accordingly, the claim for breach of the Distribution Agreement asserted in Beats’ Complaint remains to be tried.

In the 2ACC, Monster alleges that Beats is entitled to approximately $88 million in offsets for inventory Beats purchased from Monster which was wrongfully excluded from PwC’s final inspection report under the Distribution Agreement, which amount is due and owing to Monster. Monster alleges that Beats also breached the Distribution agreement by failing to pay or reimburse certain dealer costs (“Dealer Payments”) it was obligated to repay Monster that total approximately $9 million. (2ACC, ¶¶ 34, 41.) Monster claims that Beats thus owes Monster a total of $97 million under the Distribution and the Termination Agreement. (2ACC, ¶ 34.) Moreover, PwC determined that Beats owes Monster $20,094,666 under the Royalty Agreement, which amount Beats has not paid. (Id. at ¶ 35.) Further PwC determined that Beats owes $11,00,802 million to Monster under the Sales Representative Agreement. (Id. at ¶ 36.) Monster alleges that, in total, Beats owes Monster in excess of $32 million under the Distribution Agreement, the Termination Agreement, the Royalty Agreement and the Sales Representative Agreement, as calculated by PwC. (Id. at ¶ 37.)

Monster also alleges that the first time that Beats claimed that Monster[2] was not entitled to Credits and Offsets for Dealer Payments ($9 million) or the cost the Inventory Beats ordered and purchased from Monster ($88 million) was when this action was filed in September 2017. (2ACC, ¶¶ 47, 49.) Monster alleges that Beats failed to disclose until the filing of this lawsuit that it had no intention to pay for Inventory, and did not intend to accept or honor the Credit Memos and the Offsets, but instead intended to repudiate its obligations to pay for such Inventory in the manner and at the times called for in the parties’ Agreements. (Id. at ¶ 46.) Monster also alleges that Beats refused to offset against the Net Sales Remittances due to Beats from Monster the $9 million in Dealer Payment reimbursement and the $88 million of Inventory purchased by Beats due under the Termination Agreement. (Id. at ¶¶ 49, 53.) Beats did not assert until July 2016 that Monster was in breach of the Distribution Agreement for Monster’s alleged failure to pay to Beats the Net Sales Remittances purportedly due Beats. (Id. at ¶ 54.)

The first cause of action asserted in Monster’s 2ACC is for breach of the Distribution Agreement, the alleged obligations of which are set forth above.

By way of its October 3, 2019 Ruling On Submitted Matter, the Court denied Beats’ motion for summary adjudication as to Monster’s first cause of action for breach of the Distribution Agreement in the Cross-Complaint. By way of its December 19, 2019 Amended Ruling, the Court denied Monster’s motion for summary adjudication as to Monster cross-claim for breach of the Distribution Agreement. Accordingly, the claim for breach of the Distribution Agreement asserted in Monster’s Cross-Complaint remains to be tried.

The second cause of action is for breach of the Royalty Agreement, seeking royalties due under the agreement in the amount of approximately $20 million (2ACC, ¶¶ 60, 61.) Pursuant to the Royalty Agreement, Beats allegedly agreed to pay Monster royalties in consideration of the expenditures made by Monster in connection with the development of the Products. (Id. at ¶ 14.) The Royalty Agreement provides that Beats “shall pay and [Monster] shall earn all Royalties in the United States and [Beats] shall pay and [Monster] shall earn all royalties outside the United States.” (Id. at ¶ 15.) Pursuant to the Royalty Agreement, Beats was to deposit all royalties owed to Monster into the Escrow Account. (Id.)

By way of the Court’s December 19, 2019 Amended Ruling on Cross-Motions For Summary Judgment, Or In The Alternative, Summary Adjudication, Monster’s motion for summary adjudication as to this cause of action was granted. Accordingly, the claim for breach of the Royalty Agreement will not be tried.

The third cause of action is for breach of the Sales Representative Agreement, seeking to recover commissions due under the Agreement, in the amount of approximately $11 million. (2ACC, ¶¶ 65, 66.) Beats allegedly agreed to pay Monster a commission, calculated as a percentage of net sales of the Products, as consideration for Monster helping to manage the sales relationship and develop sales opportunities for Beats with specified dealers in specified territories. (Id. at ¶ 18.)

By way of the Court’s December 19, 2019 Amended Ruling on Cross-Motions For Summary Judgment, Or In The Alternative, Summary Adjudication, Monster’s motion for summary adjudication as to this cause of action was granted. Accordingly, the claim for breach of the Sales Representative Agreement will not be tried.

The fourth cause of action is for breach of the Termination Agreement, seeking to recover payment from Beats for the Inventory Beats bought back from Monster under the terms of the Agreement, in the amount of excess of $88 million. (2ACC, ¶¶ 70, 71.) The Termination Agreement allegedly required Beats to purchase all of the Products in Monster’s inventory (with some specified exceptions) on Jul 1, 2-12, in the agreement amount not to exceed $21,810,305 (for Products in American facilities), €1,673,208 (for Products in Canadian facilities), and €8,466,457 (for products in European facilities). Beats was required to remit payment to Monster on or before 75 days after July 1, 2012. (Id. at ¶ 21.)

By way of its December 19, 2019 Amended Ruling, the Court denied Monster’s motion for summary adjudication as to Monster cross-claim for breach of the Termination Agreement. Accordingly, the claim for breach of the Termination Agreement asserted in Monster’s Cross-Complaint remains to be tried.

The fifth cause of action is a common count for goods rendered with respect to the Inventory delivered to Beats. (2ACC, ¶ 74.)

By way of its October 3, 2019 Ruling On Submitted Matter, the Court denied Beats’ motion for summary adjudication as to Monster’s fifth cause of action to the extent derivative of the first cause of action in the Cross-Complaint. By way of its December 19, 2019 Amended Ruling, the Court denied Monster’s motion for summary adjudication as to Monster cross-claim for goods rendered. Accordingly, the claim for common count for goods remains to be tried.

The sixth cause of action is a common count for account stated in the amount of $97 million, based upon the Purchase Orders issued by Beats, and the corresponding Invoices and Credit Memos issued by Monster, for the inventory purchased by Beats from Monster, as well as for the Dealer Payments made by Monster on behalf of Beats and Beats’ agreement to credit Monster therefor, and the products sold and distributed by Monster on behalf of Beats and the Sales Remittance Payments due Beats as a result thereof. (2ACC, ¶¶ 79, 85.)

By way of its October 3, 2019 Ruling On Submitted Matter, the Court denied Beats’ motion for summary adjudication as to Monster’s sixth cause of action to the extent derivative of the first cause of action in the Cross-Complaint. By way of its December 19, 2019 Amended Ruling, the Court denied Monster’s motion for summary adjudication as to Monster cross-claim for account stated. Accordingly, the claim for common count for account stated remains to be tried.

The seventh cause of action is for assumpsit based upon the alleged $97 million debt owed from Beats to Monster ($88 million in inventory plus $9 million in Dealer Payments made by Monster on behalf of Beats). (2ACC, ¶¶ 91, 92.)

By way of its October 3, 2019 Ruling On Submitted Matter, the Court denied Beats’ motion for summary adjudication as to Monster’s seventh cause of action to the extent derivative of the first cause of action in the Cross-Complaint. By way of its December 19, 2019 Amended Ruling, the Court denied Monster’s motion for summary adjudication as to Monster cross-claim for assumpsit. Accordingly, the claim for assumpsit remains to be tried.

Issues

Given the foregoing synopsis of the operative pleadings, the Court addresses the issues specified by Monster in the notice of motion to bifurcate:

Issue No. 1: Whether, as Beats contends, Monster is obligated under the Distribution Agreement to reimburse Beats for the Incremental Noncash Credit received by Monster during the Term ($7.6 million), or, as Monster contends, Monster is entitled to that Credit in calculating the money due between the parties.

Beats’ Complaint, Monster’s Amended Answer[3] to the Complaint, Monster’s 2ACC, and Beats’ Answer to the 2ACC, do not mention the incremental noncash credit. While Monster’s Amended Answer asserts offset as the seventh affirmative defense, alleging that any amount found owing by Monster should be offset by the money Beats owes Monster, affirmative relief cannot be obtained by way of the affirmative defense of offset. (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 192.)

Included within this issue is the question of what exactly a setoff claim is and whether a setoff claim can result in affirmative relief against the plaintiff (as can a cross-complaint) or is limited to reducing the plaintiff's recovery. We conclude that a section 431.70 setoff claim cannot result in affirmative relief.

(Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 192.)

Notably, the issue presented by Monster is framed as whether Monster is entitled to retain the Incremental Noncash Credit received during the term, or instead, is required to reimburse Beats for that Credit. This does not constitute offset, as offset constitutes payment to Beats which equals Beats’s demand for money.

Where cross-demands for money have existed between persons at any point in time when neither demand was barred by the statute of limitations, and an action is thereafter commenced by one such person, the other person may assert in the answer the defense of payment in that the two demands are compensated so far as they equal each other,. . . .

(Code Civ. Proc., § 431.70.)

Accordingly, unless Monster demonstrates that the Incremental Noncash Credit is framed by the operative pleadings, it appears that the issue of Incremental Noncash Credit is outside the scope of the operative pleadings and cannot be tried.

Monster’s Reply does not address this problem.

Thus, bifurcation of this issue is unnecessary.

It is axiomatic that “[t]he pleadings establish the scope of an action and, absent an amendment to the pleadings, parties cannot introduce evidence about issues outside the pleadings.” (Emerald Bay Community Assn. v. Golden Eagle Ins. Corp. (2005) 130 Cal.App.4th 1078, 1091 [31 Cal. Rptr. 3d 43].) When evidence is not pertinent to the issues raised by the pleadings, the evidence is irrelevant and it is proper to preclude the introduction of such evidence. (Page v. Page (1962) 199 Cal. App. 2d 527, 532–533 [18 Cal. Rptr. 897].)

(Schweitzer v. Westminster Investments, Inc. (2007) 157 Cal.App.4th 1195, 1214.)

Issue No. 2: Whether, as Monster contends, Beats is obligated under the Termination Agreement to reimburse Monster for the entirety of the beginning-term Inventory which is expressly identified in the Termination Agreement ($54.7m), or, as Beats contends, the provisions of the Termination Agreement cap Beats’ obligation to purchase beginning-term inventory at $48.5 million.

The 2ACC alleges at ¶ 21—and thus admits—that the Termination Agreement specifies that the aggregate amount of the purchases made by Beats would not exceed $21,810,305 (for Products in American facilities), €1,673,208[4] ($1,892,749.62)(for Products in Canadian facilities), and €8,466,457[5] ($9,577,340.82)(for products in European facilities), for an approximate total of $33,280,395.40. Accordingly, under the doctrine of judicial admissions (Thurman v. Bayshore Transit Management, Inc.  (2016) 244 Cal.App.4th 175, 187), Monster has admitted that it is not entitled to $54.7 million in reimbursement of Inventory, which is far above the approximate $33 million pled in the 2ACC.

Monster’s Reply does not address this problem.

Accordingly, this issue, as framed by Monster, need not be bifurcated.

“An admission in a pleading is conclusive on the pleader. [Citation.] ‘He cannot offer contrary evidence unless permitted to amend, and a judgment may rest in whole or in part upon the admission without proof of the fact.’ [Citation.] While a court has inherent power to relieve a party from the effects of judicial admissions by amendment to the pleadings  [citation], [the respondent] never sought to amend his answer to the cross-complaint.” (Id. at p. 1272.)

(Thurman v. Bayshore Transit Management, Inc. (2012) 203 Cal.App.4th 1112, 1156, disapproved on other grounds in ZB, N.A. v. Superior Court (Lawson)(2019) 8 Cal.5th 175, 196.)

The trial court here articulated yet another independent basis for dismissal. Appellants made judicial admissions in their pleadings in Bucur I that FedEx did nothing wrong in connection with termination of the line-haul contracts, but Appellants merely named FedEx as a party to facilitate proper rescission of the Wasarhelyi/FedEx contract. “The admission of fact in a pleading is a ‘judicial admission.’” (Valerio v. Andrew Youngquist Construction (2002) 103 Cal.App.4th 1264, 1271 [127 Cal. Rptr. 2d 436].) A judicial admission in a pleading is not merely evidence of a fact; it is a conclusive concession of the truth of the matter. (Addy v. Bliss & Glennon (1996) 44 Cal.App.4th 205, 218 [51 Cal. Rptr. 2d 642].) “Well pleaded allegations in the complaint are binding on the plaintiff at trial.” (4 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 455, p. 587.) “[T]he trial court may not ignore a judicial admission in a pleading, but must conclusively deem it true as against the pleader.” (Thurman v. Bayshore Transit Management, Inc. (2012) 203 Cal.App.4th 1112, 1155 [138 Cal. Rptr. 3d 130].) Because Appellants alleged in Bucur I that FedEx did nothing wrong in connection with the loss they incurred, the doctrine of judicial admissions bars them from taking an inconsistent position in their attempt to relitigate the same case.

(Bucur v. Ahmad (2016) 244 Cal.App.4th 175, 187.)

Issue No. 3: Whether, as Beats now contends, the Dealer Program provisions in the Distribution Agreement entitle Monster only to reimbursement of certain “out of pocket” costs paid directly by Monster, or, as Monster contends, those pertinent provisions entitle Monster to reimbursement of all Dealer Program Costs indirectly paid by Monster through the Dealers’ deduction of those costs from amounts paid to Monster.

Monster alleges at ¶¶ 34, 41 of the 2ACC that Beats failed to pay or reimburse certain dealer costs it was obligated to repay Monster that total approximately $9 million. This is sufficient to encompass this Issue No. 3, as framed by Monster.

Monster argues that Section 4.7 of the Distribution Agreement relating to Dealer Program Costs contains language which sets forth the proper method to calculate Beats’ share of these Costs ($9.7 million per Monster and PwC’s calculations):

The Company [Beats] shall have responsibility for that portion of the costs of such Dealer programs equal to the percentage that gross sales to Beats Authorized Dealers during the Distribution Period bears to gross sales to Beats Authorized Dealers for calendar year 2012, as determined pursuant to the audit and reconciliation set forth in Exhibit B.

(Hallam Decl., Exh. 3.)

Monster argues that there is no provision in this sentence, nor other language in the Distribution Agreement, which states that Beats’ share of the Dealer Program Costs was limited to costs directly paid by Monster and which excluded costs incurred by Dealers, then passed on to Monster in the form of deductions from the amounts owed to Monster. Monster points out that the definition of “Net Sales[6]” in the Distribution Agreement includes the “total of all gross amounts directly invoiced or charged by Distributor to Dealers.” (Italics added.) Accordingly, Monster argues, the deductions from the invoiced amounts taken by Dealers to recover their approved Program Costs, effectively transfer these Costs to Monster, entitling Monster to recover 50% of these Costs from Beats, as provided by Section 4.7.

In the opposition, Beats does not offer any argument or evidence which would require that a jury weigh the credibility of extrinsic evidence toward the determination of this issue. (City of Hope National Medical Center v. Genentech, Inc. (2008) 43 Cal.4th 375, 395.) Accordingly, the interpretation of Section 4.7 of the Distribution Agreement is question of law for the Court to decide. (Alki Partners, LP v. DB Fund Services, LLC (2016) 4 Cal.App.5th 574, 599; In re Marriage of Nassimi (2016) 3 Cal.App.5th 667, 688 n. 33.)

Accordingly, bifurcation of Issue No. 3 for determination by the Court as a question of law is appropriate. On the other hand, whether or not Monster has met its discovery obligations with regard to evidence in support of this claim is more properly the subject of Motions In Limine No. 6 and 7.

Interpretation of a written contract is a question of law for the court unless that interpretation depends upon resolving a conflict in properly admitted extrinsic evidence. (City of Hope National Medical Center v. Genentech, Inc. (2008) 43 Cal.4th 375, 395 [75 Cal.Rptr.3d 333, 181 P.3d 142] (Genentech).) Here, the trial court interpreted the Agreement without considering any extrinsic evidence. Therefore, we exercise our independent judgment in interpreting the indemnity provision, giving no deference to the trial court's ruling. (Rideau v. Stewart Title of California., Inc. (2015) 235 Cal.App.4th 1286, 1295 [185 Cal. Rptr. 3d 887] (Rideau).)

(Alki Partners, LP v. DB Fund Services, LLC (2016) 4 Cal.App.5th 574, 599.)

If the trial court finds an ambiguity (two or more reasonable interpretations of contractual language), it may receive parol evidence to aid in determining the parties' intentions. (Winet v. Price (1992) 4 Cal.App.4th 1159, 1165 [6 Cal. Rptr. 2d 554].) When no parol evidence is introduced or when the evidence is not conflicting, “construction of the instrument is a question of law, and the appellate court will independently construe the writing.” (Id. at p. 1166.) In other words, we defer to the trial court's interpretation of a contract only where an ambiguity exists, parol evidence is admitted, and the parol evidence is in conflict. (Wolf v. Superior Court (2004) 114 Cal.App.4th 1343, 1351 [8 Cal. Rptr. 3d 649]; Morey v. Vannucci (1998) 64 Cal.App.4th 904, 913 [75 Cal. Rptr. 2d 573].) Here no parol evidence was admitted. Thus, we independently interpret the parties' agreement by applying the relevant principles of contract interpretation. (California National Bank v. Woodbridge Plaza LLC (2008) 164 Cal.App.4th 137, 143–145 [78 Cal. Rptr. 3d 561].)

(In re Marriage of Nassimi (2016) 3 Cal.App.5th 667, 688 n. 33.)

Juries are not prohibited from interpreting contracts. Interpretation of a written instrument becomes solely a judicial function only when it is based on the words of the instrument alone, when there is no conflict in the extrinsic evidence, or when a determination was made based on incompetent evidence. (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865 [44 Cal. Rptr. 767, 402 P.2d 839]; Estate of Platt (1942) 21 Cal.2d 343, 352 [131 P.2d 825].) n5 But when, as here, ascertaining the intent of the parties at the time the contract was executed depends on the credibility of extrinsic evidence, that credibility determination and the interpretation of the contract are questions of fact that may properly be resolved by the jury (Warner Constr. Corp. v. City of Los Angeles (1970) 2 Cal.3d 285, 289 [85 Cal. Rptr. 444, 466 P.2d 996] [“since the interpretation of the crucial provisions turned on the credibility of expert testimony, the court did not err in submitting the construction of the contract to the jury”]).

(City of Hope National Medical Center v. Genentech, Inc. (2008) 43 Cal.4th 375, 395.)

Conclusion

Accordingly, the motion to bifurcate contract interpretation is DENIED as to Issues Nos. 1 and 2 and GRANTED as to Issue No. 3.

Motion To Strike Proposed Jury Instructions Nos. 351, 352 and 361

Plaintiffs/Cross-Defendants Beats Electronics, LLC and Beats Electronics International (collectively, “Beats”) move to strike Monster’s proposed jury instructions Nos. 351 (special damages), 352 (lost profits) and 361 (reliance damages).

A. Re: Barred By Contract.

Beats moves to strike these jury instructions on the ground that these types of damages are expressly barred by the agreements at issue and thus are irrelevant as a matter of law.

Beats cites the following provisions in the relevant contracts:

u Distribution Agreement § 12, Page 20 (Wallace Decl., Exh. 1):

LIMITATION OF REMEDIES

TO THE MAXIMUM EXTENT PERMISSIBLE UNDER APPLICABLE LAW, EXCEPT FOR THE EXPRESS OBLIGATIONS OF EITHER PARTY TO INDEMNIFY THE OTHER HEREUNDER AND FOR CLAIMS ARISING FROM OR RELATING TO FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, NEITHER PARTY SHALL HAVE ANY LIABILITY TO THE OTHER PARTY, ANY DEALER OR ANY OTHER THIRD PARTY FOR LOST PROFITS OR OTHER CONSEQUENTIAL, SPECIAL, INDIRECT OR INCIDENTAL DAMAGES, BASED UPON A CLAIM OF ANY TYPE OR NATURE ARISING OUT OF THIS AGREEMENT. THIS SECTION 12 SHALL NOT LIMIT THE PARTIES’ LIABILITY FOR CLAIMS ARISING OUTSIDE OF THIS AGREEMENT.

(Bold emphasis added.)

u Sale Representative Agreement, § 9.2, Page 12 (Wallace Decl., Exh. 2):

Limitation of Liability. TO THE MAXIMUM EXTENT PERMISSIBLE UNDER APPLICABLE LAW, EXCEPT FOR THE EXPRESS OBLIGATIONS OF EITHER PARTY TO INDEMNIFY THE OTHER HEREUNDER AND FOR CLAIMS ARISING FROM OR RELATING TO FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, NEITHER PARTY SHALL HAVE ANY LIABILITY TO THE OTHER PARTY, ANY CUSTOMER OR ANY OTHER THIRD PARTY FOR LOST PROFITS OR OTHER CONSEQUENTIAL, SPECIAL, INDIRECT OR INCIDENTAL DAMAGES, BASED UPON A CLAIM OF ANY TYPE OR NATURE ARISING OUT OF THIS AGREEMENT. THIS SECTION 9.2 SHALL NOT LIMIT THE PARTIES’ LIABILITY FOR CLAIMS ARISING OUTSIDE OF THIS AGREEMENT.

(Bold emphasis added.)

u Royalty Agreement, § 8, Page 7 (Wallace Decl., Exh. 3):

LIMITATION OF REMEDIES

TO THE MAXIMUM EXTENT PERMISSIBLE UNDER APPLICABLE LAW, EXCEPT FOR THE EXPRESS OBLIGATIONS OF EITHER PARTY TO INDEMNIFY THE OTHER HEREUNDER AND FOR CLAIMS ARISING FROM OR RELATING TO FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, NEITHER PARTY SHALL HAVE ANY LIABILITY TO THE OTHER PARTY, ANY CUSTOMER OR ANY OTHER THIRD PARTY FOR LOST PROFITS OR OTHER CONSEQUENTIAL, SPECIAL, INDIRECT OR INCIDENTAL DAMAGES, BASED UPON A CLAIM OF ANY TYPE OR NATURE ARISING OUT OF THIS AGREEMENT. THIS SECTION 8 SHALL NOT LIMIT THE PARTIES’ LIABILITY FOR CLAIMS ARISING OUTSIDE OF THIS AGREEMENT.

(Bold emphasis added.)

B. Re: Failure To Disclose In Discovery.

Beats also argues that Monster’s purported claims for special or reliance damages, including lost profits, were never disclosed during discovery and are further unsupported by any fact evidence or expert witness testimony.

C. Re: No Expert Designated To Testify As To Special Or Reliance Damages.

Beats argues that Monster only designated Jim Crossland as an expert witness to testify as to six topics, none of which were special damages/lost profits or reliance damages.

The general substance of this expert’s testimony was specified as:

(i) Accounting practices of using offsets or credits in accountings between owner/operators and distributors;

(ii) The accounting equivalence of payments for inventory with cash versus credits/offsets;

(iii) The inquiry and confirmation of offset amounts by receiving party as customary part of offset accounting procedure;

(iv) The use of offsets as a customary/appropriate means for managing cash resources;

(v) The application of payment provisions to an offset accounting procedure; and

(vi) The application of the appropriate accounting/auditing disclosure standard to PwC’s original calculations and its original Draft Inspection Report versus PwC’s Final Inspection Report.

Wallace Decl., Exh. 8, Page 3.

D. Re: Failure To Plead Special or Reliance Damages.

Beats argues that Monster did not satisfy the pleading standard that special damages be pled with particularity because they are inherently unforeseeable. Moreover, Beats argues, it would be unfair for Monster to fail to disclose and actively prevent non-privileged information related to Monster’s financial condition from coming into the record, and then be allowed to present the same evidence at trial. Further, it will only confuse the jury and waste time to permit Monster to prove up its theory to a reasonable certainty, as required.

The Court agrees with the position taken by Monster in the Opposition that this motion to strike is not authorized by code. CCP § 436 sets forth the proper grounds for a motion to strike.

The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper:

(a) Strike out any irrelevant, false, or improper matter inserted in any pleading.

(b)

(Code Civ. Proc., § 436 (Deering).)

The motion to strike may not be utilized for an unauthorized purpose. (Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 528-29.) In this regard, Beats does not cite a statutory section which authorizes the use of motions to strike jury instructions.

The standard of review, however, is complicated by respondents' chosen means of challenging appellant's complaint. They filed a motion to strike, which ordinarily invokes the trial court's discretion and a correspondingly deferential standard of review. (See Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 612, 614 [107 Cal. Rptr. 2d 489].) A motion to strike, however, was not the proper vehicle for the kind of challenge they mounted. The governing statute authorizes such a motion in two situations. The first is where a party challenges “irrelevant, false, or improper matter inserted in any pleading.” (Code Civ. Proc., § 436, subd. (a).) This does not describe respondents' attack on appellant's complaint. They did not attack “matter inserted” in that pleading, but the pleading as a whole. The cited subdivision does not authorize attacks on entire causes of action, let alone entire pleadings. (Quiroz v. Seventh Ave. Center (2006) 140 Cal.App.4th 1256, 1281 [45 Cal. Rptr. 3d 222].) Its purpose is to authorize the excision of superfluous or abusive allegations. “[M]atter that is essential to a cause of action should not be struck and it is error to do so.” (Ibid.)

Nor did respondents' motion properly fall within subdivision (b) of Code of Civil Procedure section 436 (section 436(b)), which authorizes a challenge to “all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” While this language might be broadly construed to reach any deficiency in a pleading, including substantive ones, that is not its purpose or effect. Rather it authorizes the striking of a pleading due to improprieties in its form or in the procedures pursuant to which it was filed. This provision is commonly invoked to challenge pleadings filed in violation of a deadline, court order, or requirement of prior leave of court. (E.g., Leader v. Health Industries of America, Inc.supra, 89 Cal.App.4th 603, 613 [“plaintiffs' failure to file an amended complaint within the time allowed by the court subjected any subsequently filed pleading to a motion to strike, either by defendants or on the court's own motion”].)

(Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 528 [bold emphasis added].)

Rather, the challenges asserted by Beats may be asserted by way of motions in limine.

A motion in limine is made to exclude evidence before it is offered at trial on the ground that the evidence is either irrelevant or subject to  [*1481]  discretionary exclusion as unduly prejudicial. (Ulloa v. McMillin Real Estate & Mortgage, Inc. (2007) 149 Cal.App.4th 333, 337–338 [57 Cal. Rptr. 3d 1]; Condon-Johnson & Associates, Inc. v. Sacramento Municipal Utility Dist. (2007) 149 Cal.App.4th 1384, 1392 [57 Cal. Rptr. 3d 849].)

Generally, a trial court's ruling on the admissibility of evidence is reviewed for an abuse of discretion. (People v. Waidla (2000) 22 Cal.4th 690, 717 [94 Cal. Rptr. 2d 396, 996 P.2d 46].) Accordingly, an in limine ruling to keep particular items of evidence from the jury is subject to reversal only where the trial court exceeded the bounds of reason. (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478 [243 Cal. Rptr. 902, 749 P.2d 339].) In other words, the appellate court will not disturb the trial court's decision unless the trial court exceeded the limits of legal discretion by making an arbitrary, capricious or patently absurd determination. (In re Raymundo B. (1988) 203 Cal.App.3d 1447, 1456 [250 Cal. Rptr. 812].) Moreover, when two or more inferences can reasonably be deduced from the facts, the appellate court cannot substitute its decision for that of the trial court. (Shamblin v. Brattain, supra, 44 Cal.3d at pp. 478–479.)

(Ceja v. Department of Transportation (2011) 201 Cal.App.4th 1475, 1480-81 [bold emphasis added].)

If such evidence is deemed excluded pursuant to a motion in limine, the appropriate means of challenging jury instructions regarding excluded evidence is to object and resolve informally which jury instructions will be presented to the jurors.

2. [14:204] Chambers Conference to Settle Jury Instructions: After all proposed jury instructions have been submitted, and before final argument, the judge and counsel meet outside the presence of jurors (normally in chambers) to resolve which jury instructions will be given. [L.A. Sup.Ct. Rule 3.172]

a. [14:205] Initial informal discussions: Usually, the first part of the conference is “off the record” (no reporter present). The judge and counsel discuss informally:

— whether any proposed instructions are “patently inappropriate” and will be withdrawn voluntarily by counsel;

— whether any appropriate instructions have been omitted and may be given without objection; and

— whether the parties will stipulate to any other modifications. [L.A. Sup.Ct. Rule 3.172]

The purpose, of course, is to try to narrow the instructions in dispute upon which the court will have to rule.

Wegner, Fairbank, Epstein & Chernow, California Practice Guide: Civil Trials and Evidence ¶ 14:204 – 14:205 (The Rutter Group 2019).

Given the foregoing, Beats’ Reply does not render the motion to strike meritorious, although its position may have merit as a motion in limine or request that Monster’s jury instructions Nos. 351, 352 and 361 not be given to the jury.

Accordingly, the motion to strike Monster’s proposed jury instructions Nos. 351 (special damages), 352 (lost profits) and 361 (reliance damages) is DENIED without prejudice to Beats bringing motions in limine and/or objections to jury instructions at the time of trial.

Motion To Strike Motion For Summary Adjudication [Unreserved]

Although it does not appear that a hearing date for this motion was reserved, due to the unavailability of the Court Reservation System due to the COVID-19 emergency orders, in the interest of judicial economy[7] the Court will address this motion, as it was served in accordance with the notice required by CCP § 1005(b).

Plaintiff/Cross-Defendant Beats moves to strike Monster’s motion for summary adjudication filed on May 15, 2020 [and the “Errata” served on May 17, 2020] on the following grounds: (1) none of Monster’s “elements” of damages fully resolves a cause of action; (2) Monster’s first, second, third and fourth “elements” exceed the scope of its second amended cross-complaint; (3) Monster already raised (and lost) its third “element” in its previous motion for summary adjudication; (4) Monster’s separate statement is insufficient; (5) Monster’s filing is duplicative of seven earlier filings all requesting similar relief.

After this motion to strike was filed on June 1, 2020, Monster filed another motion for summary adjudication on June 5, 2020, and on June 8, 2020, filed a notice of withdrawal of the motion for summary adjudication filed on May 15, 2020.

Accordingly, the motion to strike is placed OFF-CALENDAR AS MOOT.

The arguments on the merits raised in Beats’ Reply may be raised in opposition to the re-filed motion for summary adjudication.

Motion For Modification [Unreserved]

On May 29, 2020, Monster filed a Notice of Lodging Under Seal Exhibits to the Declaration of Kirk Hallam and Excerpts From Monster’s Motion For Modification Previously Filed Under Seal By Order of the Court Dated August 9, 2019. Monster identifies Exhs. 1 – 3 to the Hallam Declaration, which are PwC’s Final Inspection Reports for the Royalty Agreement, the Sales Representative Agreement, and the Distribution Agreement. Monster also refers to excerpts in the memorandum of points and authorities, which contain excerpts from the above-identified exhibits. To the extent the Court had previously ordered excerpts of these PwC Reports sealed by way of the Order dated August 9, 2019, such excerpts shall remain under seal.

Although it does not appear that a hearing date for this motion was reserved, due to the unavailability of the Court Reservation System due to the COVID-19 emergency orders, in the interest of judicial economy the Court will address this motion, as it was served in accordance with the notice required by CCP § 1005(b).

Defendants/Cross-Complainants Monster, LLC, Monster, Inc., Monster Technology International and Monster Cable International move for the issuance of an order modifying the Court’s May 19, 2020 Order denying Monster’s Motion for Permanent Injunction, to remove dictum and incorrect suggestions or conclusions of fact and law that are unfairly and unnecessarily contained within such Order[8].

Specifically, Monster presents the following arguments in support of its motion to modify the order denying the motion for permanent injunction:

1) The Court’s Order denying Monster’s Motion for a Permanent Injunction unnecessarily and unfairly addresses factual and legal issues which the Order also finds are not raised by the pleadings, are not a part of this case, and therefore are not raised by the Motion.

2) The Order and its conclusion that the amount of money in the Escrow Fund for Royalties and Sales Commissions due Monster, and the manner and order for distributing the Escrow Funds, cannot adequately be determined, is both factually and legally incorrect.

3) The Order erroneously characterizes Beats’ argument as “plausible” that the Distribution Audit has not yet been completed, and therefore, Beats is not yet obligated to issue the Joint Instructions to release Monster’s Royalties and Sales Commission in escrow.

4) The Order mistakenly suggests that Beats is not contractually obligated to issue the Joint Instructions until a final, nonappealable court order is issued.

However, even if the Court’s order denying the motion contains dictum and unfair or unnecessary suggestions or conclusions of fact and law, as Monster claims, a ruling will be upheld on appeal if the ruling is correct. (Ward Mfg. Co. v. Miley (1955) 131 Cal. App. 2d 603, 605; Perlin v. Fountain View Management, Inc. (2008) 163 Cal.App.4th 657, 663-664.)

“[F]aulty reasoning, though disclosed by the record, does not destroy a correct ruling. (Hayutin v. Rudnick, 115 Cal.App.2d 138, 141 [251 P.2d 707].)” (Ward Mfg. Co. v. Miley (1955) 131 Cal. App. 2d 603, 605 [Cal. App. 2d Dist. 1955].)

“ ‘The fact that the action of the court may have been based upon an erroneous theory of the case, or upon an improper or unsound course of reasoning, cannot determine the question of its propriety. No rule of decision is better or more firmly established by authority, nor one resting upon a sounder basis of reason and propriety, than  [*664]  that a ruling or decision, itself correct in law, will not be disturbed on appeal merely because given for a wrong reason. If right upon any theory of the law applicable to the case, it must be sustained regardless of the considerations which may have moved the trial court to its conclusion.’ [Citation.]” (D'Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 18–19 [112 Cal. Rptr. 786, 520 P.2d 10]; see In re Marriage of Burgess (1996) 13 Cal.4th 25, 32 [51 Cal. Rptr. 2d 444, 913 P.2d 473] [“We are required to uphold the ruling if it is correct on any basis, regardless of whether such basis was actually invoked.”].)

(Perlin v. Fountain View Management, Inc. (2008) 163 Cal.App.4th 657, 663-664.)

On the other hand, as Beats points out in its opposition, independent reasons given for a decision are not dictum. (People v. Mackey (2015) 233 Cal.App.4th 32, 96.)

Where “‘two independent reasons are given for a decision, neither one is to be considered mere dictum, since there is no more reason for calling one ground the real basis of the decision than the other. The ruling on both grounds is the judgment of the court and is of equal validity.’” (Southern Cal. Ch. of Associated Builders etc. Com. v. California Apprenticeship Council (1992) 4 Cal.4th 422, 431, fn. 3 [14 Cal. Rptr. 2d 491, 841 P.2d 1011]; accord, Varshock v. Department of Forestry & Fire Protection (2011) 194 Cal.App.4th 635, 646, fn. 7 [125 Cal. Rptr. 3d 141].)

(People v. Mackey (2015) 233 Cal.App.4th 32, 96.)

Further, a motion seeking to modify an order is governed by CCP § 1008. (Baldwin v. Home Savings of America (1997) 59 Cal.App.4th 1192, 1200; Morite of California v. Superior Court (1993) 19 Cal.App.4th 485, 490.)

CCP § 1008 provides in pertinent part:

(a) When an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order. The party making the application shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown.

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(Code Civ. Proc., § 1008 [bold emphasis added].)

Monster fails to identify new or different facts, circumstances or law which justify reconsideration, as required by CCP § 1008(a) & (b).

Monster claims that “certain factual information (documents) [was] not . . . sufficiently presented to the Court for its consideration of the Motion and its Opposition i.e., complete copies of the PwC Final Inspection Reports for the Royalty, Sales Representative and Distribution Agreements, and copies of those three Agreements.” (Motion, Page 2:4-7.) Monster argues that if the Court reviews the complete PwC Inspection Reports, it will find that: (1) PwC clearly and unquestionably determined in its Audit Reports the precise amount in it Escrow Fund of Royalties and Sales Commissions due Monster, as well as the timing and manner of such dispersal relative to the Distribution Fees also in escrow; (2) The Distribution Agreement Audit called for in Ex. B to the Distribution Agreement and referenced in the Royalty and Sales Representative Agreements was completed in 2016, and PwC based its calculations of Royalties and Commissions due Monster in those Inspection Reports on its earlier calculations of Actual Net Remittances as contained in its Final Inspection Report for the Distribution Agreement, Ex. B.; and (3) Beats’ contractual obligation to issue the Joint Instructions for release of the Escrow Funds (the unpled obligation Monster was seeking to enforce through this Motion) was not conditioned on Monster first obtaining a final, nonappealable court order to that effect, or any court order at all, only conditioned on the findings and conclusions of PwC.

Although the Declaration of Kirk. M. Hallam states at ¶¶ 7 and 8 that the copies of PwCs’s Final Inspection Reports for the Royalty, Sales Representative and Distribution Agreements (Exhs. 1, 2 and 3), which were not previously submitted in support or in opposition to Monster’s motion, should cause the Court to modify its order, there is no explanation why this evidence, i.e., complete copies, was not submitted to the Court in connection with the initial motion. (New York Times Co. v. Superior Court (2005) 135 Cal.App.4th 206, 212-15.)

Section 1008, subdivision (a) requires that a motion for reconsideration be based on new or different facts, circumstances, or law. A party seeking reconsideration also must provide a satisfactory explanation for the failure to produce the evidence at an earlier time. (Garcia v. Hejmadi (1997) 58 Cal.App.4th 674, 689 [68 Cal. Rptr. 2d 228].)

(New York Times Co. v. Superior Court (2005) 135 Cal.App.4th 206, 212.)

Moreover, even if Monster is deemed to have presented “new” evidence which it did not know would be pertinent to the Court’s analysis until after the ruling was issued (so as to satisfy the requirements of CCP § 1008), and if the Court were to reconsider its ruling to address Monster’s concerns, the Court would reaffirm its May 19, 2020 Order denying Monster’s Motion for Permanent Injunction. “If the requirements [of CCP § 1008] have been met to the satisfaction of the court but the court is not persuaded the earlier ruling was erroneous, the proper course is to grant reconsideration and to reaffirm the earlier ruling. (Citation omitted.)” (Corns v. Miller (1986) 181 Cal.App.3d 195, 202.) The reason is that there is no need to omit dicta from the Court’s Order.

Hallam indicates in his Declaration that Beats and JP Morgan already have asserted this Court’s order and its conclusions and suggestions as a legal basis to estop Monster from asserting ownership of or entitlement to such royalties and commissions in escrow. (Hallam Decl., ¶ 9.) However, accepting as true for the sake of argument Monster’s assertion that the Court’s conclusions and suggestions are mere dicta, such dicta does not have collateral estoppel effect. (People v. Neely (1999) 70 Cal.App.4th 767, 783; County of Santa Clara v. Deputy Sheriffs' Assn. (1992) 3 Cal.4th 873, 879, n.7; Branson v. Sun-Diamond Growers (1994) 24 Cal.App.4th 327, 348; First N.B.S. Corp. v. Gabrielsen (1986) 179 Cal.App.3d 1189, 1196.) Thus, such dicta need not be omitted from the ruling.

“Neither the ‘law of the case’ nor collateral estoppel . (Wixson v. Devine (1889) 80 Cal. 385, 388 [22 P. 224].)” (People v. Neely (1999) 70 Cal.App.4th 767, 783.)

n.7 Although the trial court's statement of decision contains some broad comments regarding the powers of the county and the director, these were unnecessary to the judgment and cannot support a claim of collateral estoppel. (In re Marriage of Rabkin (1986) 179 Cal.App.3d 1071, 1082-1083 [225 Cal.Rptr. 219]; Rest.2d Judgments, § 27, com h).

(County of Santa Clara v. Deputy Sheriffs' Assn. (1992) 3 Cal.4th 873, 879, n.7.)

As a result, its statements on those matters were dicta and have no res judicata effect on the subsequent litigation. In order for collateral estoppel to apply the issue in question "must have been necessarily decided in the former proceeding." (Lucido v. Superior Court, supra, 51 Cal.3d at p. 341.) Consequently, "[w]hen determination of an issue was entirely unnecessary to the former judgment, it will not have collateral estoppel effect." ( First N.B.S. Corp. v. Gabrielsen (1986) 179 Cal.App.3d 1189, 1196 [225 Cal.Rptr. 254]; see also County of Santa Clara v. Deputy Sheriffs' Assn. (1992) 3 Cal.4th 873, 879, fn. 7 [13 Cal.Rptr.2d 53, 838 P.2d 781].)

(Branson v. Sun-Diamond Growers (1994) 24 Cal.App.4th 327, 348.)

When determination of an issue was entirely unnecessary to the former judgment, it will not have collateral estoppel effect. (Estate of Simmons (1966) 64 Cal.2d 217, 222-223 [49 Cal.Rptr. 369, 411 P.2d 97]; Berry v.   of Santa Barbara (1967) 248 Cal.App.2d 438, 444-445 [56 Cal.Rptr. 553]; see Wilson v. . (1982) 32 Cal.3d 229, 234 [185 Cal.Rptr. 280, 649 P.2d 922]; see also 7 Witkin, Cal. Procedure (3d ed. 1985) Judgment, § 268, pp. 710-711.)

(First N.B.S. Corp. v. Gabrielsen (1986) 179 Cal.App.3d 1189, 1196.)

The overarching basis for Monster’s motion appears to be that it disagrees with the Court’s reasoning and that the Court committed error as expressed in its dicta. This is an insufficient basis to justify reconsideration of an order. (Crotty v. Trader (1996) 50 Cal.App.4th 765, 770-71:

We agree a motion for reconsideration, unlike a motion for a new trial, cannot correct judicial error. We question the reasoning set forth in Blue Mountain Development Co. to the extent it based its holding on relating a motion for a new trial to a motion for reconsideration. In Gilberd v. AC Transit (1995) 32 Cal. App. 4th 1494 [38 Cal. Rptr. 2d 626], our division  [*771]  delineated the limited role of a motion for reconsideration. In Gilberd, supra, at p. 1500, we explained Code of Civil Procedure section 1008 gives the court no authority when deciding whether to grant a motion to reconsider to "reevaluate" or "reanalyze" facts and authority already presented in the earlier motion. Instead, the court may grant reconsideration only if presented with " 'new or different facts, circumstances, or law.' " In contrast, when considering a motion for a new trial, the court does not examine " 'new or different facts,' " but determines whether the court committed error. We, therefore, disagree with Blue Mountain Development Co. when it compared a motion for a new trial to a motion for reconsideration and find California Rules of Court, rule 3 does not apply to a postjudgment motion for reconsideration.

(Crotty v. Trader (1996) 50 Cal.App.4th 765, 770-71 [bold emphasis and underlining added].)

Respondent's first contention is utterly specious. What respondent essentially argues is that section 1008 does not apply when the litigant disagrees with the trial court's ruling. Since in almost all instances, the losing party will believe that the trial court's "different" interpretation of the law or facts was erroneous, to interpret the statute as the respondent urges would be contrary to the clear legislative intent to restrict motions to reconsider to circumstances where a party offers the court some fact or authority that was not previously considered by it.

Second, we cannot accept respondent's implicit interpretation of section 1008 that a "new" or "different" fact or circumstance wholly collateral to the merits of the initial motion is sufficient to warrant reconsideration. While not denigrating the assistance that oral argument can provide to a court, the fact that respondent intended to request that the court entertain oral argument with respect to the initial motions is clearly collateral to the merits of the motions. Again, respondent did not present any facts or authorities relating to the merits of the underlying motion that were not considered by the trial court when it issued its initial orders.

(Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1500 [bold emphasis added].)

Respondent's first contention is utterly specious. What respondent essentially argues is that section 1008 does not apply when the litigant disagrees with the trial court's ruling. Since in almost all instances, the losing party will believe that the trial court's "different" interpretation of the law or facts was erroneous, to interpret the statute as the respondent urges would be contrary to the clear legislative intent to restrict motions to reconsider to circumstances where a party offers the court some fact or authority that was not previously considered by it.

Second, we cannot accept respondent's implicit interpretation of section 1008 that a "new" or "different" fact or circumstance wholly collateral to the merits of the initial motion is sufficient to warrant reconsideration. While not denigrating the assistance that oral argument can provide to a court, the fact that respondent intended to request that the court entertain oral argument with respect to the initial motions is clearly collateral to the merits of the motions. Again, respondent did not present any facts or authorities relating to the merits of the underlying motion that were not considered by the trial court when it issued its initial orders.

FOOTNOTES

n3 At the hearing on the motion to reconsider, the trial court remarked that it had hoped for oral argument to assist it in deciding the appellant's motions, which it believed presented difficult issues. The trial court, of course, has the power to order the parties to appear for oral argument prior to issuing an order and should exercise that power if it believes argument would be helpful.

(Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1500 [bold emphasis added].)

Nothing in Monster’s Reply brief persuades the Court to change the above analysis.

For the foregoing reasons, the motion to modify the May 19, 2020 Order denying Monster’s Motion for Permanent Injunction is DENIED.

[1] Complaint, ¶ 6.

[2] Erroneously referred to as Beats at ¶ 47, Page 9:16 of the 2ACC.

[3] On September 18, 2018, the Court granted Monster’s motion for leave to file an amended answer. However, it does not appear that a stand-alone copy was filed. A copy of the amended answer is attached to the Declaration of Kirk M. Hallam.

[4] Approximately $1,892,749.62 depending upon the daily exchange rate of Euros to US Dollars.

[5] Approximately $9,577,340.82 depending upon the daily exchange rate of Euros to US Dollars.

[6] The 2ACC alleges at ¶ 54 that in July 2016, Beats alleged that Monster was in breach of the Distribution Agreement for failure to pay the Net Sales Remittances due to Beats.

[7] The parties are warned that this is an exception and the parties should not attempt to schedule hearings on motions without obtaining a reserved hearing, or filing it with a hearing date “TBD.”

[8] Monster admits that it:

is not seeking reconsideration of the Court’s decision to deny Monster’s Motion for a Permanent Injunction, nor is Monster seeking reconsideration or modification of the Court’s ruling that Monster’s breach of contract claim for Beats’ refusal to issue the Joint Instructions is not pled in its Second Amended Cross Complaint and therefore is not a valid basis for Monster’s request for a permanent injunction. Nor is Monster seeking reconsideration or modification of the Court’s determination that Monster’s Motion sought mandatory injunctive relief, nor challenging the Court’s proper exercise of its discretion to deny such mandatory injunction in the absence of sufficient or convincing proof of irreparable harm.

Motion, Page 1:2-9.

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