Filet Menu, Inc. v. C.C.L. & G. Inc.

94 Cal. Rptr. 2d 438, 79 Cal. App. 4th 852
CourtCalifornia Court of Appeal
DecidedApril 6, 2000
DocketB124034
StatusPublished
Cited by22 cases

This text of 94 Cal. Rptr. 2d 438 (Filet Menu, Inc. v. C.C.L. & G. Inc.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Filet Menu, Inc. v. C.C.L. & G. Inc., 94 Cal. Rptr. 2d 438, 79 Cal. App. 4th 852 (Cal. Ct. App. 2000).

Opinion

Opinion

MALLANO, J. *

Filet Menu, Inc. (FMI), appeals from a judgment rendered against it, after a jury verdict, on its complaint against C.C.L. & G., Incorporated (CCLG) for breach of a contract to purchase menus, napkins and other restaurant supplies from FMI (the Contract), and against Augusto Salazar, Jr. (Salazar), on his personal guaranty of that obligation. FMI along with its principal shareholder, Michael LeVine (LeVine), also appeal from the judgment against them on CCLG and Salazar’s cross-complaint alleging fraud and other wrongful conduct. FMI and LeVine make two arguments on appeal. First, they contend that the trial court erred in determining that the Contract was not divisible. Second, they argue that the trial court’s finding that LeVine was the alter ego of FMI was not supported by substantial evidence. We conclude that regardless of whether the Contract was divisible, FMI may not enforce any part of it. We also conclude that since the jury found LeVine to be a perpetrator of the alleged wrongdoing, the judgment was properly rendered against him, whether or not he was FMI’s alter ego. We therefore affirm the judgment.

Procedural Background

FMI’s second amended complaint against CCLG and Salazar (collectively cross-complainants), on which this matter proceeded to trial, asserted causes of action for breach of contract for the purchase of restaurant supplies *856 (variously referred to in the complaint as the “Credit Application and Agreement” and “ ‘Purchase Order’ Agreements” and the “contract”), breach by Salazar of his personal guarantee of the transaction, and various common counts.

Cross-complainants filed a cross-complaint against FMI and LeVine 1 alleging causes of action for fraud, intentional and negligent misrepresentation, concealment, breach of contract and unfair business practices against both FMI and LeVine, and identifying LeVine individually as one of the perpetrators of the alleged misconduct. All causes of action were premised on misrepresentations made in connection with the Contract. The cross-complaint also alleged that LeVine was FMI’s alter ego.

The matter proceeded to trial on November 14, 1997, resulting in judgment on the jury’s special verdict in favor of cross-complainants on their unfair business practices cause of action against both FMI and LeVine, in the amount of $34,749, reflecting FMI and LeVine’s profits from their unfair business practices, plus interest and an unspecified amount of attorney fees and costs. The judgment was entered on April 2, 1998, with notice of entry served on April 8, 1998. On May 19, 1998, an “Amended Judgment on Special Verdict” was filed, adding $300,000 of attorney fees and costs and the date from which interest was to be calculated to the original judgment. Notice of entry of the amended judgment was filed and served on May 29, 1998.

A timely notice of appeal was filed on July 14, 1998. 2

Facts

The evidence presented at trial was as follows:

FMI was in the printing and design business catering to the food service industry. CCLG owned and operated two restaurants of a five-restaurant chain of Mexican restaurants, the other three of which were owned by Salazar, an officer of CCLG. In the middle of 1992, FMI’s salesman, Michael Klein (Klein), made a sales solicitation call on Salazar.

FMI conducted its business through the use of various form documents. The first, which was described by Klein as the “most important document,” *857 was the “Credit Application and Agreement Form” (Application). The upper portion included blank lines for basic information about the customer, such as its name, address, business type, principals and bank and trade references. The bottom portion of the form included various preprinted terms. It provided that the “terms and conditions stated below shall be incorporated by reference into every Deposit/Retainer Agreement and Purchase Order . . . .” and that all “intangibles,” which included creativity, concept, design, artwork, logos, slogans and the like, were owned by FMI. The form also included liquidated damages provisions: one was invoked if FMI’s ownership of the intangibles was infringed by the customer, assessing damages of $35,000, and the other if the customer canceled the order after approving the design, assessing damages of $25,000. 3 The form recited that it was the agreement and contained a personal guarantee by the person signing it. Salazar signed an Application on CCLG’s behalf.

The second form document utilized by FMI was a “Deposit Retainer Agreement and Purchase Order” (Retainer Agreement). It recited that it was a purchase order for the creative design, artwork and printing of the item handwritten at the bottom of the form, and required payment of a $500 nonrefundable deposit/retainer “which is not transferable to any other project” but which was to be credited against, and deducted from, the total cost of the completed order. If the order was canceled at any time after signed acceptance of the approved design, the customer was responsible for all lost profits and reasonable expenses of FMI. The Retainer Agreement stated that “[t]he total price of the completed order has not been established and will be dependent upon the design, materials, quantity, etc.” It incorporated by reference the terms of the Application. Thus, deposits were being made for items of unknown price, to be fixed at a later date by FMI. Salazar signed separate Retainer Agreements for menus, place mats, dinner napkins, logo identification, cocktail napkins and matches.

Once a customer approved a design and wanted to proceed, it would sign a “Design Approval & Acceptance” (Approval) which identified the item that was approved. The Approval approved the design (except for minor alterations) and authorized FMI to proceed with the finishing work “pursuant to the terms and conditions of the [Retainer Agreement] and Purchase Order regarding this item.” Upon signing the Approval, the customer was obligated to pay an additional $1,000 or 50 percent of the estimated price. Salazar signed numerous Approvals.

Finally, when the product which had been designed was to be ordered, a purchase order (P.O.) specifying the quantity of the item, its unit price and *858 delivery terms was to be executed. The P.O. provided that once signed, the order could not be canceled. The P.O. was expressly made subject to the terms and conditions contained in the Application, Retainer Agreement and Approval. In February 1993, Salazar signed four P.O.s, one to purchase 4,000 menus at $4 each, one to purchase 5,000,000 place mats at $0.39 each, one to purchase 5,000,000 dinner napkins at $0.39 each and one to purchase 5,000,000 cocktail napkins at $0.09 each, the latter three items to be delivered 250,000 at a time, every 90 days.

The facts presented to the jury revealed an elaborate, fraudulent scheme perpetrated on cross-complainants. Klein testified that he handled the CCLG account while he was with FMI.

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Cite This Page — Counsel Stack

Bluebook (online)
94 Cal. Rptr. 2d 438, 79 Cal. App. 4th 852, Counsel Stack Legal Research, https://law.counselstack.com/opinion/filet-menu-inc-v-ccl-g-inc-calctapp-2000.