Filed 7/27/21

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

HUY FONG FOODS, INC.,

 Plaintiff, Cross-defendant, 

and Appellant,

v.

UNDERWOOD RANCHES, LP,

 Defendant, Crosscomplainant and Appellant;

UNDERWOOD & SON, LLC,

 Cross-Complainant and 

Respondent;

DAVID TRAN,

 Cross-defendant and 

Respondent.

2d Civ. No. B303096

(Super. Ct. No. 56-2017-

00505141-CU-BC-VTA)

(Ventura County)

It has been said that some contracts are not worth the 

paper they are written on. But oral contracts stemming from 

previous written contracts and long-standing business practices 
2.

based on custom and trust are as valid as contracts that are 

worth the paper they are written on. When such a contract is 

breached, there are consequences. 

A pepper farmer sued the manufacturer of a pepper-based 

hot sauce for breach of contract and fraud. A unanimous jury 

found for the farmer, awarding $13.3 million in compensatory 

damages and $10 million in punitive damages. We affirm the 

judgment.

FACTS

David Tran founded Huy Fong Foods, Inc. (Huy Fong), a 

business that produces Sriracha, a jalapeño pepper-based hot 

sauce. In 1988, Huy Fong contracted with Underwood Ranches,

L.P. (Underwood) to purchase 500 tons of jalapeños from 

Underwood. Craig Underwood (Craig) is Underwood’s principal. 

This was the beginning of a relationship that would last for 28 

years. 

For the first 10 years, the parties executed written 

agreements specifying the price per pound and volume to be 

supplied. Thereafter, the parties dealt with each other 

informally with oral agreements. Originally, Huy Fong needed

more peppers than Underwood could supply, so it contracted with 

other farmers as needed.

Underwood’s pepper sales to Huy Fong grew along with the

success of Huy Fong’s business. Craig testified that, by 2005,

Tran was “pushing” Underwood to add more acreage.

In 2006, Tran asked Underwood to significantly increase its 

pepper acreage. Underwood was growing 95 percent of Huy 

Fong’s peppers. But the peppers represented only 25 percent of 

Underwood’s business. Underwood also farmed diverse crops 

such as lemons and vegetables. Craig told Tran that he was 
3.

reluctant to assume the risk of growing more peppers, and 

rejected Huy Fong’s offer. Craig suggested that Huy Fong 

supplement Underwood’s crop with peppers from other sources.

Instead of seeking other sources, Huy Fong proposed that it 

would assume some of the risk. Huy Fong would pay Underwood 

by the acre grown instead of pounds produced. Thus, the risk of a 

disappointing yield would be on Huy Fong. Underwood agreed to 

the arrangement.

In 2007, Huy Fong advised Underwood to increase its 

acreage by 50 percent. To do this, Underwood had to expand its 

operations from Ventura County to Kern County. Craig testified 

that the expansion into Kern County was the biggest thing he 

had ever done, but he needed to do it to meet Huy Fong’s 

increasing needs.

At the same time, Huy Fong was building a 600,000-

square-foot factory in Irwindale. Tran took Craig on a tour of the 

site. Tran told Craig that Underwood “needed to fill it up.” Tran 

told Craig that he should be farming at least 2,000 acres.

Due to Tran’s suggestion and encouragement, Underwood 

invested millions of dollars in acquiring additional acres in Kern 

County and, to a lesser extent, Ventura County. By the end of 

the 2016 growing season, Underwood had acquired over 1,800 

acres in Kern County. It took a year or more to prepare the 

ground for growing peppers. Many of the leases extended into 

the 2020’s, 2030’s, and beyond. By 2016, Huy Fong accounted for 

approximately 80 percent of Underwood’s revenue.

Underwood made these investments because Tran and 

Donna Lam, Huy Fong’s chief operations officer and Tran’s sisterin-law, assured Underwood that Huy Fong would continue to 

purchase the peppers grown by Underwood into the future. Craig 
4.

testified Tran and Lam made sure he knew Huy Fong was going 

to take all the product Underwood would produce. They 

repeatedly told Craig, “You grow it, I’ll sell it.”

Huy Fong Video Records 2016 Harvest

Craig, along with Underwood’s chief operations officer, Jim 

Roberts, developed a mechanical harvester for the peppers. The 

2016 harvest was the first time the entire harvest was performed 

by the harvester. Mechanical harvesting saved substantial 

money.

In October 2016, Tran requested Underwood’s permission 

to take video footage from an aerial drone of Underwood’s 

harvesting and sorting operations. Roberts granted permission 

for Huy Fong’s personal use only. Huy Fong had never before 

requested to record the harvest.

Chilico, LLC

In 2014 or 2015, Tran formed a new company that he later 

called Chilico, LLC. Chilico’s purpose was to obtain peppers for 

Huy Fong. In May 2015, Tran offered Roberts a job. Roberts 

declined the job offer and attributed the offer to a mistake.

Tran officially formed Chilico in 2016. He gave 100 percent 

ownership to his sister-in-law Lam. Tran testified that he 

wanted to give Lam a significant salary increase, but his son and 

wife, who were on Huy Fong’s board, would object.

Huy Fong contracted with Chilico to buy all its chilies

peppers from Chilico. The contract diverted millions of dollars

from Huy Fong to Chilico.

2017 Contract

On November 1, 2016, Craig, Roberts, Tran, and Lam met 

at the Huy Fong factory to plan for the 2017 pepper season. The 

parties discussed ongoing field preparations for the upcoming 
5.

season. Underwood was already preparing the ground. Because 

it is a continuous process, Underwood could not wait.

Underwood and Huy Fong agreed that for the 2017 season

Underwood would plant 1,700 acres for $13,000 per acre. Tran 

also agreed to advance payments of $18 million.

Breach of Contract

On November 9, 2016, Lam asked Roberts to come to the 

Huy Fong factory to pick up some equipment. Lam and Tran 

knew Craig was on vacation and would not accompany Roberts.

When Roberts arrived, Tran told him that he was forming a 

new company. Lam was going to operate the company. Tran told 

Roberts that Roberts would be working for the new company.

When Roberts declined the job offer, Tran was not happy. 

Tran told Roberts that Underwood would have to deliver peppers 

for $500 per ton to compete with Chinese pepper mash that sold 

for $300 per ton. When Roberts told Tran that Craig makes the 

decisions for Underwood, Tran replied that he would make Craig 

take $500 per ton.

Underwood was suddenly facing imminent catastrophic 

financial consequences. It could not grow peppers for $500 a ton. 

Its costs averaged $610 a ton.

Further negotiations with Huy Fong proved unfruitful. 

Lam insisted that Huy Fong needed to purchase peppers for 

under $500 per ton. Tran refused to provide Underwood with 

prepayments needed to finance the crop. Tran also insisted that 

Underwood contract with Chilico rather than Huy Fong. Chilico 

did not have the assets to ensure that Underwood would be paid 

and Huy Fong refused to guarantee the Chilico contract.

Tran made a final attempt to hire Roberts away from 

Underwood.
6.

In early January 2017, Craig sent an e-mail to Tran stating 

that in October 2016 they had an agreement to move ahead with 

production for 2017; subsequently, Huy Fong decided to change 

the agreement; and it is impossible for Underwood to comply with 

the modified terms. The e-mail advised Huy Fong that the start 

date for planting had passed, there were no plants in the nursery,

and Underwood did not plan on delivering any peppers to Huy 

Fong.

Huy Fong contracted with other farmers to provide 

peppers. Tran showed those farmers the drone video of 

Underwood’s 2016 harvest that he had promised to keep 

confidential to show them how to harvest economically.

Consequences of Huy Fong’s Breach

After the relationship with Huy Fong ended, Underwood 

had nothing to plant on the 1,700 acres it had. Nor did 

Underwood have the financing to plant acreage on speculation. It 

tried to get out of its leases, but was largely unsuccessful. It had 

to immediately lay off 40 employees. It was too late in the season

to grow much of anything.

Underwood managed to obtain subcontracts for spring and 

summer, but it lost 8.5 million in 2017. Underwood was having 

difficulties in 2018, and lost over $6 million that year.

Roberts explained that with two or three years’ notice, 

Underwood could have avoided the losses. He testified: “[W]e 

would have compressed the acreage on the peppers. We wouldn’t 

have worried about the [crop] rotation. I could have shed 

property at the same time as growing peppers and generated 

revenue from those. It would have given me–that entire first 

year when we had absolutely nothing to grow, that would have 

been covered. So, that massive loss in the first year would have 
7.

been eliminated. And in the second year, we would be taking on 

new customers. Then if we could work it out, reduce our pepper 

acres, add the new acres of other crops, it might have been

seamless. Might not have had any loss.”

Roberts testified that growing peppers for Huy Fong 

required planning three years ahead of time.

Procedure

Huy Fong brought an action against Underwood seeking a 

$1.4 million refund of payments Huy Fong had made for the 2016 

season.

Underwood cross-complained alleging breach of contract, 

promissory estoppel, and fraud against Huy Fong, and 

intentional interference with prospective economic relations and 

intentional interference with contractual relations again Tran.

The trial court granted Tran judgment of nonsuit on the 

tortious interference claims.

Verdict

The jury unanimously found in Underwood’s favor on 

breach of contract and fraud. The jury awarded Underwood 

$13.32 million in compensatory damages and $10 million in 

punitive damages. The trial court denied Huy Fong’s motion for 

judgment notwithstanding the verdict.1

1 Huy Fong’s motion to supplement the record on appeal, 

filed April 22, 2020, is denied.
8.

DISCUSSION

Huy Fong’s Appeal

I

Fraud

Huy Fong contends it is entitled to judgment on 

Underwood’s fraud claim.

Huy Fong argues that Underwood prevailed on a legally 

impermissible theory of fraudulent concealment. Huy Fong 

mischaracterizes Underwood’s theory. Huy Fong claims 

Underwood’s theory is that “every party to a contract–solely by 

virtue of the contract’s existence–has a freestanding state-law 

duty to disclose to its counterparty any intention to discontinue 

the contractual relationship.” 

Having mischaracterized Underwood’s theory, Huy Fong 

cites Norkin v. United States Fire Ins. Co. (1965) 237 Cal.App.2d 

435, to show why the theory it falsely attributes to Underwood is 

wrong.

In Norkin, plaintiff made a claim against his homeowner’s

insurer. Thereafter, the insurer refused to renew the policy.

Plaintiff brought an action for fraud against the insurer alleging

the insurer failed to disclose it would not do further business with 

plaintiff if he made a claim. The trial court sustained the 

insurer’s demurrer without leave to amend. The Court of Appel 

affirmed, stating the insurer was under no duty to disclose its 

intention not to renew. (Norkin v. United States Fire Ins. Co., 

supra, 237 Cal.App.2d at p. 438.)

Underwood’s theory is not that every contract requires a 

party to disclose an intention not to renew. Instead, Underwood’s 

theory is that Huy Fong induced Underwood to acquire more and 

more land by continually promising Underwood that Huy Fong 
9.

would purchase all the peppers Underwood produced. Huy Fong 

understood that it was inducing Underwood to commit itself into

the future, while at the same time concealing its plan to 

terminate its relationship with Underwood.

Had the insurer in Norkin induced plaintiff to purchase his 

house on the fraudulent promise that it would continue to insure 

it, we are confident the result would have been different. 

More to the point, the question on appeal is not whether

the judgment can be upheld on a particular legal theory, but 

whether the judgment can be upheld on any legal theory. (See, 

e.g., International etc. Workers v. Landowitz (1942) 20 Cal.2d 418, 

423 [judgment entered on grounds that ordinance is 

unconstitutional upheld on other grounds].) 

(a) Fraudulent Concealment

Huy Fong contends it had no duty to disclose that it did not 

intend to continue its contractual relationship with Underwood

Fraudulent concealment requires the “suppression of a fact, 

by one who is bound to disclose it.” (Civ. Code, § 1710, subd. 3.) 

Plaintiff must show that defendant had a duty to disclose. 

(Linear Technology Corp. v. Applied Materials, Inc. (2007) 152 

Cal.App.4th 115, 131.)

A duty to disclose may arise from a confidential

relationship. Where there exists a relationship of trust and 

confidence, it is the duty of one in whom the confidence is reposed 

to make a full disclosure of all material facts within his 

knowledge relating to the transaction in question and any 

concealment of a material fact is a fraud. (Estate of Sanders

(1985) 40 Cal.3d 607, 616.) A confidential relationship can exist 

even though, strictly speaking, there is no fiduciary relationship.

(Id. at p. 615.) A confidential relationship may be founded on
10.

moral, social, domestic, or merely a personal relationship. 

(Barbara A. v. John G. (1983) 145 Cal.App.3d 369, 382.) 

In Bank of America v. Sanchez (1934) 3 Cal.App.2d 238, 

243, the court stated, “[I]t is sufficient to show the existence of 

such friendly relations during a period of several years between 

the parties as would entitle the injured person to place confidence 

in the integrity and honesty of the other party to a contract . . . .” 

The court determined that a customer’s business relationship 

with a bank over a period of years, her husband’s former 

employment with the bank, and her acquaintance with and 

confidence in officers of the bank were substantial evidence of a 

confidential relationship. (Ibid.)

Here the parties’ relationship extended over 28 years. Tran 

testified his relationship with Craig was like a family, that he 

trusted Craig, and saw him as a good friend. Lam described the 

relationship between Underwood and Huy Fong as a “concrete

bond.” The parties shared financial information. Craig obtained 

more land in reliance on Huy Fong’s assurance that it would buy 

what Underwood produced. Perhaps the most compelling 

evidence of a confidential relationship is that for many years the 

parties entered into transactions involving tens of millions of 

dollars without formal written contracts.

Huy Fong points out that the jury was instructed on 

fraudulent concealment, but the instruction did not include 

confidential relationship.

If this was error, it is patently harmless. The evidence that 

Underwood and Huy Fong were in a confidential relationship is 

overwhelming. Even Huy Fong concedes in its opening brief that 

the parties had enjoyed a “close and friendly” relationship, that 

the parties “successfully collaborated for decades,” that the 
11.

relationship grew less formal as the parties “drew closer,” and 

that they “shared the financial burdens and risks of jalapeño

cultivation.” Huy Fong does not even suggest any contrary 

evidence. 

Huy Fong argues the concealed information must be fact 

not intention. But again the authority Huy Fong cites does not

support the argument. The cases Huy Fong cites do involve a 

concealment of fact but none of them hold a concealment of 

intention is not sufficient. (See, e.g., Hoffman v. 162 North Wolfe

LLC (2014) 228 Cal.App.4th 1178 [cited by Huy Fong; does not 

involve concealment of intention].)

Here Huy Fong’s decision to terminate its relationship with 

Underwood was not some inchoate idea. Huy Fong’s business 

required a dependable supply of peppers. Huy Fong made the 

decision to terminate its relationship with Underwood long before 

the end of the 2016 harvest. That decision was a “fact” that Huy 

Fong had a duty to disclose to Underwood. And the jury had 

ample evidence to so find. 

(b) Affirmative Misrepresentation

Huy Fong contends there is no evidence of an affirmative 

misrepresentation.

In viewing the evidence, we look only to the evidence 

supporting the prevailing party. (GHK Associates v Mayer 

Group, Inc. (1990) 224 Cal.App.3d 856, 872.) We discard 

evidence unfavorable to the prevailing party as not having 

sufficient verity to be accepted by the trier of fact. (Ibid.) Where 

the trial court or jury has drawn reasonable inferences from the 

evidence, we have no power to draw different inferences, even 

though different inferences may also be reasonable. (McIntyre v.

Doe & Roe (1954) 125 Cal.App.2d 285, 287.) The trier of fact is 
12.

not required to believe even uncontradicted testimony. (Sprague 

v. Equifax, Inc. (1985) 166 Cal.App.3d 1012, 1028.)

One who willfully deceives another with intent to induce 

him to alter his position to his injury or risk is liable for any 

damage that he thereby suffers. (Civ. Code, § 1709.) A promise 

to do something necessarily implies an intention to perform; 

hence, when a promise is made without such an intention, it is 

fraud. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.)

Huy Fong points out that the only fraud Underwood alleges 

in its complaint is a July 2016 representation that Huy Fong 

would purchase peppers from Underwood for the 2017, 2018, 

2019 pepper seasons and beyond. Huy Fong argues that at best 

there was an implied promise based on vague reassurances of 

good feelings between the parties. Huy Fong cites Lonely Maiden 

Productions, LLC v. Golden Tree Asset Management, LP (2011) 

201 Cal.App.4th 368, 375, for the proposition that California does 

not recognize a fraud claim based on an implied false promise.

But Lonely Maiden cites no authority for the proposition 

that fraud cannot be based on an implied false promise. Where 

the implied promise is certain enough to cause reasonable 

reliance, there is no reason it cannot be a proper basis for fraud. 

Parties may not avoid liability for fraud simply because they

leave to implication what they clearly intend to communicate.

In any event, here there was far more than an implied 

promise based on vague reassurances of good feelings between 

the parties. Huy Fong expressly told Underwood numerous times 

that Huy Fong would purchase all the peppers Underwood could 

produce. These promises were made in the context of Huy Fong’s 

insistence that Underwood obtain more land, a matter that 

required Underwood to undertake long-term financial 
13.

commitments. In addition, Huy Fong expressly agreed to 

purchase the 2017 harvest of 1,700 acres at $13,000 per acre.

The jury could reasonably conclude that Huy Fong had no 

intention of keeping those promises when they were made. There 

is evidence to show that Tran had long planned to cut Huy Fong’s 

ties to Underwood. As far back as 2014, Tran was planning to 

form Chilico, a company that would purchase peppers from 

farmers other than Underwood, allowing Huy Fong to cut its ties 

to Underwood. In 2015, Tran began his campaign to hire Roberts 

away from Underwood. Roberts was the key employee in 

Underwood’s pepper production. Tran informed Roberts that 

Huy Fong was breaching the contract to purchase Underwood’s 

2017 harvest just days after making it. Tran waited until he 

knew Craig was on vacation before informing Roberts. Finally, in 

2016, Tran, who had never before showed an interest in harvest 

operations, used a drone to video Underwood’s harvest. After he 

cut ties with Underwood, he used the video to show other farmers 

how to harvest efficiently.

There is more than ample evidence to support a finding of 

fraud based on affirmative misrepresentation.

II

Alleged Inconsistent Jury Findings

Huy Fong contends the jury made inconsistent findings on 

the parties’ contract.

On the jury’s special verdict form, the jury answered yes to

both the following questions: “Did Underwood Ranches LP and 

Huy Fong Foods, Inc. enter into an ongoing contract (something 

more than annual contracts) whereby Underwood Ranches would 

grow jalapeño peppers for Huy Fong?” “Did Underwood Ranches
14.

LP and Huy Fong Foods, Inc. enter into a contract for the 2017 

jalapeño pepper growing season?”

A special verdict is inconsistent if there is no possibility of 

reconciling its findings with each other. (Singh v. Southland 

Stone U.S.A., Inc. (2010) 186 Cal.App.4th 338, 357.)

Here the jury’s findings are consistent and easily 

reconciled. Read together, the jury found that the parties had an 

ongoing contractual relationship that included the 2017 jalapeño 

growing season.

III

Motion for New Trial

Huy Fong contends the trial court abdicated its 

responsibility to sit as a 13th juror in ruling on its motion for a 

new trial.

Huy Fong made a motion for a new trial on the ground of 

insufficiency of the evidence to justify the verdict. (Code Civ. 

Proc., § 657, subd. 6.)

Code of Civil Procedure section 657 provides, in part: “A 

new trial shall not be granted upon the ground of insufficiency of 

the evidence to justify the verdict or other decision . . . unless 

after weighing the evidence the court is convinced from the entire 

record, including reasonable inferences therefrom, that the court 

or jury clearly should have reached a different verdict or 

decision.” (Italics added.)

Huy Fong’s contention that the trial court abdicated its 

duty is based on the court’s statement: “I may be the 13th juror, 

but I don’t view myself as the super juror where, because I 

disagree with what the jury has returned in the way of a verdict, 

I can just, you know, run over the top of it and substitute my

personal opinion for theirs.”
15.

Huy Fong apparently believes the trial court does have the 

power to substitute the court’s personal opinion for that of the 

jury. Huy Fong relies on Ryan v. Crown Castle NG Networks,

Inc. (2016) 6 Cal.App.5th 775. In Ryan, the Court of Appeal 

reversed the trial court’s denial of the plaintiff’s motion for a new 

trial on the ground of inadequate damages because the trial court 

implied it had no power to question the adequacy of the jury’s 

award and because the trial court did not evaluate the evidence. 

(Id. at pp. 783-786.) 

But here the trial court evaluated the evidence and did not 

say it had no power to question the jury’s verdict. The court said 

it had no power to act as a super juror and substitute its personal 

opinion for that of the jurors. That is a correct statement of the 

law and reflects how all judges are duty bound to act. To do 

otherwise would impoverish our system of justice.

Underwood has a constitutional right to a jury trial. (Cal. 

Const., art I, § 16.) Code of Civil Procedure section 657 empowers

the trial court to grant a new trial only when after independently 

evaluating the evidence the court concludes the jury’s verdict is 

“clearly” wrong. The court cannot grant a new trial simply

because it would have found differently than the jury. 

(Dominguez v. Pantalone (1989) 212 Cal.App.3d 201, 216.) That

is what the trial court said.

The purpose of Code of Civil Procedure section 657 is not to 

give the trial court permission to run roughshod over a party’s 

constitutional right to jury determination. Instead, the purpose 

is to allow the trial court to grant a new trial on those rare 

occasions when the jury’s verdict is so at odds with any 

reasonable view of the evidence that judicial intervention is 
16.

required to avoid a manifest miscarriage of justice. To the extent 

Ryan can be read to the contrary, we decline to follow it.

IV

Punitive Damages

Huy Foods contends that the $10 million punitive damage 

award must be vacated.

Huy Fong argues that punitive damages cannot be awarded 

for breach of contract in the absence of an independent tort. But 

here punitive damages were awarded for fraud, not breach of 

contract. Punitive damages may be awarded for fraud even 

though the fraud incidentally involves breach of contract. (See 

Schroeder v. Auto Driveaway Co. (1974) 11 Cal.3d 908, 921 

[defendants who contracted to transport plaintiffs’ goods are 

liable for punitive damages for fraudulently concealing they were 

not authorized by the Interstate Commerce Commission to 

transport goods].)

Huy Fong’s reliance on Applied Equipment Corp. v. Litton 

Saudi Arabia, Ltd. (1994) 7 Cal.4th 503, 516, is misplaced. In 

that case our Supreme Court held that a party cannot be liable 

for conspiracy to interfere with its own contract. This case 

involves fraud, not interference with contract. If a party could 

interfere with its own contract, every breach of contract would be 

a tort. But not every breach of contract involves fraud.

Huy Fong argues that punitive damages were not proven 

by clear and convincing evidence. (Civ. Code, § 3294, subd. (a) [to 

recover punitive damages, fraud must be proven by clear and 

convincing evidence].) But the jury unanimously found fraud by 

clear and convincing evidence. We stated the evidence that 

supports a finding of fraud by affirmative misrepresentation and 

fraudulent concealment. We viewed the record as a whole and 
17.

determine that the record contains substantial evidence from 

which a reasonable trier of fact could have made the finding of 

the high probability demanded by the clear and convincing 

evidence standard. (Conservatorship of O.B. (2020) 9 Cal.5th 

989, 1005.)

Finally, Huy Fong argues the $10 million punitive damages 

award was so excessive as to violate federal due process. The 

United States Supreme Court has set forth three guideposts for 

reviewing a punitive damages award: “(1) the degree of 

reprehensibility of the defendant's misconduct; (2) the disparity 

between the actual or potential harm suffered by the plaintiff and 

the punitive damages award; and (3) the difference between the 

punitive damages awarded by the jury and the civil penalties 

authorized or imposed in comparable cases.” (State Farm Mutual 

Automobile Insurance Co. v. Campbell (2003) 538 U.S. 408, 418.)

Concerning the first guidepost, the Supreme Court stated: 

“ ‘[T]he most important indicium of the reasonableness of a 

punitive damages award is the degree of reprehensibility of the 

defendant's conduct.’ [Citation.] We have instructed courts to 

determine the reprehensibility of a defendant by considering 

whether: the harm caused was physical as opposed to economic; 

the tortious conduct evinced an indifference to or a reckless 

disregard of the health or safety of others; the target of the 

conduct had financial vulnerability; the conduct involved 

repeated actions or was an isolated incident; and the harm was 

the result of intentional malice, trickery, or deceit, or mere 

accident.” (State Farm Mutual Automobile Insurance Co. v. 

Campbell, supra, 538 U.S. at p. 419.)

Concerning the first guidepost, the degree of 

reprehensibility, it is true that Huy Fong’s fraudulent conduct 
18.

did not directly physically harm anyone. But in addition to the 

mental distress Craig felt, 40 people lost their jobs. The harm 

done by Huy Fong’s deception was not limited to Craig. The 

emotional distress and loss of jobs were entirely foreseeable. Huy 

Fong simply did not care. In addition, Underwood was 

particularly vulnerable. Almost all of Underwood’s production 

was devoted to Huy Fong. Huy Fong encouraged Underwood’s 

dependence by demanding that Underwood obtain more acreage

and by promising to buy all that Underwood produced. Even if 

Huy Fong’s deception may be described as a single incident, Huy 

Fong had been planning the deception for some period of time. It 

did not occur in an aberrant moment. Finally, the harm was the 

result of intentional deceit, not a mere accident. The degree of 

reprehensibility is more than sufficient to support the punitive 

damages award.

The second guidepost, the disparity between the actual 

harm and the punitive damages award, also favors affirming the 

award. The United States Supreme Court has refused to draw a 

bright line. (Simon v. San Paolo U.S. Holding Co., Inc. (2005) 35 

Cal.4th 1159, 1181.) But few awards exceeding a single-digit 

ratio between punitive and compensatory damages will satisfy 

due process. (State Farm Mutual Automobile Insurance Co. v. 

Campbell, supra, 538 U.S. at p. 425.) Past decisions approving 

ratios of three- or four-to-one are “instructive.” (Ibid.)

Here the ratio of punitive to compensatory damages is 0.75-

to-one. Even if we were to consider the reprehensibility factor to 

be in the middle range, the low punitive to compensatory 

damages ratio supports the award.

Finally, the third guidepost is the difference between the 

punitive damages award and the civil penalties authorized or 
19.

imposed in comparable cases. Our Supreme Court has noted that 

the third guidepost is less useful in a case like this where 

plaintiff prevailed only on a cause of action involving common law 

tort duties that do not lend themselves to comparison with 

statutory penalties. (Simon v. San Paolo U.S. Holding Co., Inc.

supra, 35 Cal.4th at pp. 1184-1185.) Nevertheless, “we do note 

that California [statutes] typically impose[] treble damages 

penalties for fraudulent and bad faith conduct.” (Bardis v. Oates

(2004) 119 Cal.App.4th 1, 24.) There is nothing about statutory 

penalties that indicates a 0.75-to-one ratio of punitive to 

compensatory damages is excessive. Far from it. Here the award 

of punitive damages is low. 

Underwood’s Appeal

Underwood appeals the judgment of nonsuit on its claims 

against Tran: intentional interference with prospective economic 

advantage and interference with contract.

Underwood asserts the appeal is protective. If we affirm 

the judgment against Huy Fong, it will be unnecessary for us to 

consider Underwood’s claims against Tran.

Because we affirm the judgment against Huy Fong, it is 

unnecessary for us to consider Underwood’s appeal.

DISPOSITION

The judgment is affirmed. Costs are awarded to 

Underwood.

CERTIFIED FOR PUBLICATION.

GILBERT, P. J.

We concur:

YEGAN, J. TANGEMAN, J.
20.

Henry J. Walsh, Judge

Superior Court County of Ventura

______________________________

Latham & Watkins, Joshua G. Hamilton, Dixie C. Tauber, 

Roman Martinez, Charles S. Dameron, Riley T. Keenan; Pearson, 

Simon & Warshaw, Thomas J. Nolan for Plaintiff, Crossdefendant and Appellant Huy Fong Foods, Inc., and Crossdefendant and Respondent David Tran.

Ferguson Case Orr Paterson, Wendy C. Lascher, John A. 

Hribar, James Q. McDermott, Michael A. Velthoen and Jessica 

M. Wan for Defendant, Cross-Complainant and Appellant

Underwood Ranches and Cross-complainant and Respondent 

Underwood & Son.