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Newwest Mortgage Company v. Home Loan Mortgage Company6/27/2002
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
Plaintiff and appellant NewWest Mortgage Company (NewWest) appeals from the judgment entered following a jury trial that resulted in a special verdict finding defendant and respondent Home Loan Mortgage Company ("Home Loan") had breached certain duties to NewWest, but awarding no damages for that breach. NewWest contends the trial court prejudicially erred: (1) in excluding evidence, including NewWest's expert witness from opining regarding NewWest's lost profits, and (2) in refusing NewWest's request that the jury be instructed on nominal damages. After review, we reverse the judgment and remand with instructions.
FACTUAL AND PROCEDURAL BACKGROUND
Prior to 1998, NewWest was a Nevada-based mortgage banking company with no offices in California. In 1998, William Winberg, his daughter and his son-in-law, David Samak, purchased the company, whereupon, it became a closely held, family owned company with its main office in Downey, California. At all relevant times, Winberg was president of NewWest, Samak was vice-president and, beginning in October 1999, Dean Bensten was national branch production manager in retail.
Prior to April 1998, NewWest was engaged primarily in the retail mortgage banking business. Nexus was a wholesale mortgage banking company with a branch office near Los Angeles International Airport that it desired to sell. In April 1998, NewWest entered the wholesale aspect of the mortgage banking business with its purchase of that Nexus branch office (the LAX branch). NewWest also retained the services of co-defendant Arthur Basile, who had been managing the branch for Nexus. Basile became a Vice President of NewWest, making him the only officer that was not a member of the family. The day-to-day operations of the LAX branch were thereafter left to Basile, under Samak's general oversight.
Basile resisted signing a written employment agreement and resisted NewWest's efforts to commit the agents working in his branch to written employment agreements. Shortly before the lease on the LAX branch space was due to expire in 1999, NewWest considered consolidating that office's operations with the main headquarters in Downey. Basile adamantly opposed the consolidation. NewWest told Basile that it would sign a new long term lease for the LAX branch only if Basile agreed to sign an employment agreement promising to remain with NewWest through the end of a new lease term on the LAX branch. Based on Basile's representation that he intended to retire from the mortgage banking industry in three years, NewWest agreed to a three-year commitment from Basile, and entered into a five-year, $400,000 lease for the LAX branch office. Both agreements were signed on August 23, 1999. Basile's agreement with NewWest provided that Basile would refrain from soliciting NewWest's customers or employees for six months if he left NewWest prior to the expiration of the three-year contract term.
Respondent Home Loan competed with NewWest in the wholesale mortgage banking business, but did not have a branch office near the Los Angeles airport. While Basile was still employed by NewWest, he initiated discussions with Home Loan regarding Home Loan purchasing the LAX branch from NewWest, as well as NewWest branches in San Bernardino and Utah, which Basile was also managing at that time. Basile provided information about New
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