Court Opinion

ID: 9408431
Source: CourtListenerOpinion
Date Created: 2023-07-12 19:05:31.502247+00
Date Added: 2024-06-11T17:20:43.886475
License: Public Domain

Filed 7/12/23 Monster v. Beats Electronics CA2/7
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                      DIVISION SEVEN

 MONSTER, LLC et al.,                                             B312570

           Plaintiffs, Cross-                                     (Los Angeles County
           defendants and Appellants,                              Super. Ct. No.
                                                                   BC595235)
           v.

 BEATS ELECTRONICS, LLC,

           Defendant, Cross-
           complainant and Respondent.

         APPEAL from an order of the Superior Court of
Los Angeles County, William Fahey, Judge. Affirmed.
         Law Offices of Kirk M. Hallam and Kirk M. Hallam for
Plaintiffs, Cross-defendants and Appellants Monster, LLC and
Noel Lee.
      Gibson, Dunn & Crutcher, Theodore J. Boutrous, Jr.,
Bradley J. Hamburger, Daniel R. Adler and Madeleine F.
McKenna for Defendant, Cross-complainant and Respondent.
                      ______________________
       Monster, LLC and Noel Lee, its chief executive officer, sued
Beats Electronics, LLC, HTC America Holding, Inc. and Paul D.
Wachter, a member of Beats’s board, in January 2015 alleging
Beats, assisted by HTC and Wachter, engaged in a fraudulent
scheme to deprive Monster and Lee of their interest in Beats and
revenue from its products.1 Beats cross-complained against
Monster and Lee, alleging that by filing suit they had breached
the release provisions in 2012 and 2013 agreements between the
parties. In July 2018 the trial court entered a second amended
judgment in favor of Beats, HTC and Wachter after they
prevailed on summary judgment motions directed to Monster and
Lee’s complaint; a jury returned a verdict awarding Beats
damages on its cross-complaint; and the court granted Beats’s
requests for interest and attorney fees as the prevailing party on
its cross-complaint. We affirmed the judgment and postjudgment
orders. (Monster, LLC v. Beats Electronics, LLC (Aug. 25, 2020,
B285994) [nonpub. opn.] (Monster II).)
       After issuance of our remittitur, Beats moved in the trial
court for additional fees and costs and application of Monster’s
cash deposit to satisfy the judgment. Monster and Lee opposed
Beats’s motion and moved to amend the judgment by vacating

1     The complaint also named the founders of Beats, Andre
Young (popularly known as Dr. Dre) and Jimmy Iovine. Early in
the proceedings the court sustained demurrers by Young and
Iovine without leave to amend, and they were dismissed from the
case.

                                 2
the award of damages, arguing our opinion affirming the
judgment was not final with respect to Beats’s cross-complaint.
The trial court granted Beats’s motion and denied Monster and
Lee’s.
       On appeal Monster and Lee again contend our decision in
Monster II did not finally resolve their liability on Beats’s cross-
complaint and argue the judgment as entered violated their right
to due process and is void on its face. Monster and Lee also
challenge the trial court’s use of California, rather than
Delaware, law to determine the amount of postjudgment interest
owed to Beats. We affirm.
      FACTUAL AND PROCEDURAL BACKGROUND
       1. The Parties’ Business Agreements
       The founders of Beats granted a license to Monster in
January 2008 for the manufacture and sale of “Beats by Dre”
headphones. (Monster, LLC v. Superior Court (2017)
12 Cal.App.5th 1214, 1219 (Monster I).) On August 20, 2009
Beats and Monster entered into an amended license and
promotion agreement, which superseded the January 2008
agreement.
       The 2009 agreement provided it would continue in effect
until terminated. However, Beats was authorized to terminate
the agreement upon the closing of a transaction that resulted in a
“Change of Control.” The parties’ operating agreement defined
that term to include “the acquisition after the date of this
Agreement, directly or indirectly, by any Person or group . . . of
the beneficial ownership of Units of [Beats] possessing more than
50% of the total combined voting power of all outstanding units of
[Beats].” Upon termination Monster was required to transfer its
ownership rights in the industrial designs of all Beats products to

                                 3
Beats or its assignee and to grant Beats or its assignee a
perpetual, royalty-free, worldwide nonexclusive license on all
intellectual property necessary for the continued manufacture
and sale of all Beats-branded products.
       As part of the consideration for the 2009 license agreement,
Beats granted Monster or its designee a 5 percent ownership
interest in the company. Monster designated Lee, through his
living trust, to receive the Beats ownership interest.2 The
separate agreement by which Lee acquired that interest gave Lee
the right to require Beats to repurchase his shares upon
termination of the 2009 license agreement. If termination
occurred because of a change of control and Lee exercised his put
right, he was to be paid “the amount and form of consideration
paid to the other owners” in the change-of-control transaction.
       In mid-2011 Beats agreed with a subsidiary of publicly
traded HTC Corporation for HTC to purchase a 51 percent
interest in Beats for $300 million. Following execution of the
agreement with HTC, Beats notified Monster it was invoking the
termination provision in the 2009 license agreement. The parties
agreed to a June 30, 2012 termination date. Notwithstanding
that effective date, however, the parties agreed that Monster
would retain the right to act as Beats’s sales representative and
distributor through the end of 2012 and also would retain the
right to royalties and commissions through the end of 2013. The
2012 termination agreement included a mutual release of all
claims existing as of June 30, 2012. The agreement also

2     Lee participated in this lawsuit in his individual capacity
and as the sole trustee of the Noel Lee Living Trust. For
simplicity we refer only to “Lee,” whether as a formal matter Lee
acted personally or in his capacity as trustee.

                                 4
contained a provision authorizing the award of costs and
expenses, including reasonable attorney fees, to the prevailing
party in an action to enforce the agreement. (Monster I, supra,
12 Cal.App.5th at p. 1220.)
       In December 2012 Lee partially exercised his put rights
under the parties’ 2009 agreements and sold back a 3.75 percent
interest in Beats, retaining a 1.25 percent ownership stake. The
$300 million price paid by HTC for its 51 percent interest in
Beats was used to determine the price of Lee’s interest. The
December 2012 unit repurchase agreement between Beats and
Lee contained broad mutual releases of all claims and causes of
action. (Monster II, supra, B285994, p. 8.)
       In October 2013 Lee sold back to Beats his remaining
1.25 percent interest in the company for $12.9 million. The terms
of the sale were set forth in a 2013 unit repurchase agreement,
which contained a broad set of mutual releases in language
substantially similar to the releases in the December 2012 unit
repurchase agreement and included an indemnity provision
stating that each party held the other harmless from and against
all claims, losses and expenses, including attorney fees, arising
out of or related to any breach of the agreement. (Monster I,
supra, 12 Cal.App.5th at p. 1220.) The 2013 agreement provided
it would be governed by Delaware law. (Monster II, supra,
B285994, p. 12.)
     2. Monster’s and Lee’s Tort Claims and the Summary
        Judgment Motions
       In late May 2014 Apple acquired Beats for approximately
$3 billion. (Monster II, supra, B285994, p. 12.) Monster and Lee
filed this lawsuit on January 6, 2015. The complaint’s 11 causes
of action were predicated on two theories of fraud: Monster

                                5
alleged Beats, assisted by HTC, defrauded it by relying on a
sham transaction with HTC to improperly trigger the change-of-
control provision in the 2009 license agreement. Lee alleged
Beats and Wachter fraudulently induced him to sell his 5 percent
interest in Beats back to the company in December 2012 and
September 2013 for less than they knew it was worth.
      Beats moved for summary judgment on April 28, 2016,
arguing the contractual releases barred most of the claims
alleged by Monster and Lee. Beats additionally argued the tort
claims based on allegations it had falsely represented a change of
control occurred when HTC acquired its 51 percent interest in
Beats in 2011 failed because the undisputed evidence established
the transaction was not a sham. With respect to Lee, Beats
argued it did not owe him any fiduciary duties and the
statements upon which he purportedly relied when selling back
his remaining interest in the company were true when made.3

3      HTC and Wachter also moved for summary judgment.
HTC’s motion principally argued the undisputed facts established
its acquisition of a 51 percent interest in Beats in 2011 was a
legitimate business transaction and could not provide the basis
for a claim it had aided and abetted any fraud or breach of
fiduciary duty by Beats. Wachter, in addition to pointing to
Monster’s and Lee’s releases, argued there was no evidence his
statements to Lee were false or were anything other than
nonactionable statements about future events and the evidence
indisputably established that Lee did not reasonably rely on his
statements in deciding to sell his interest in Beats.

                                6
      3. The Trial Court’s Ruling Granting Summary Judgment
         and Order That the Issue of Attorney Fees Be Heard by
         Motion
       The trial court granted Beats’s motion on August 29, 2016.4
In its order the court ruled the 2009 license agreement gave
Beats the unfettered right to terminate the agreement upon a
change of control. Monster had no right of approval, and the
change in control did not have to be objectively reasonable. In
addition, Monster and Lee failed to present evidence creating a
triable issue of fact to support the claim the 2011 acquisition was
part of a sham transaction. Accordingly, all claims based on the
purported misrepresentation a change of control had occurred
failed as a matter of law. The court also ruled no fiduciary
relationship existed between Beats, on the one hand, and
Monster or Lee, on the other hand, finding, in part, the 2009
license agreement did not create a joint venture between Monster
and Beats. Finally, the court concluded the releases signed by
Monster in 2012 and by Lee in 2012 and 2013 barred their claims
against Beats and Wachter. (Monster II, supra, B285994, pp. 14-
15.)
       The court’s order granting the motion for summary
judgment dismissed Beats with prejudice from the complaint and
ordered the case to proceed to trial on the first and third causes of
action of Beats’s cross-complaint against Monster and Lee—that
is, Beats’s contention that Monster and Lee breached the release
provisions of the 2012 termination agreement (first cause of
action) and Lee breached the release provisions of the 2013 unit

4     HTC’s and Wachter’s motions were also granted.

                                 7
purchase agreement (third cause of action) by filing the lawsuit.5
Beats alleged those breaches caused it to expend money, time and
other resources to defend against Monster and Lee’s “meritless
and released claims in the litigation.”
       In further proceedings Beats argued its entitlement to
recover attorney fees incurred in defending against Monster’s
complaint was properly heard by the court, rather than a jury,
pursuant to Civil Code section 1717. It asserted the fact it sought
those fees as damages rather than as posttrial costs was
immaterial. Monster responded that Beats was not seeking to
recover its fees as contract damages; as such, Monster was
entitled to a jury determination of the issue. The court agreed
with Beats and on September 13, 2016 ordered that the attorney
fees issue be “heard by way of a noticed motion resolved by the
court.” (Monster I, supra, 12 Cal.App.5th at p. 1223.)
      4. Monster and Lee’s Petition for Writ of Mandate
       On October 17, 2016 Monster and Lee petitioned this court
for a writ of mandate directing the trial court to permit a jury to
hear the issue of attorney fees as contract damages. In their
petition Monster and Lee asserted, “Given that damages sought
as an element of a cause of action is an issue triable to a jury,
Respondent erred in taking that issue away from the jury and
electing, over the objection of Petitioners, to resolve that issue
itself. [¶] Accordingly, writ relief is necessary because
Respondent erred when denying Petitioners a jury trial on the

5       Beats had previously dismissed the second cause of action
of its cross-complaint, which alleged Monster breached a
nondisparagement provision in the 2012 termination agreement.
(Monster I, supra, 12 Cal.App.5th at p. 1222, fn. 2.)

                                 8
issue of Beats’ damages.”6 In their prayer for relief Monster and
Lee asked this court to issue a writ of mandate or prohibition
“directing Respondent to vacate its September 13, 2016 Order
that the issue of Beats’ damages may be made by noticed motion
and denying a jury trial on such issue, and to enter a new order
that the issue of Beats’ damages, pled as an element of Beats’
claims in its Cross-Complaint, be heard by a jury trial.”7 On
November 16, 2016 we issued an alternative writ of mandate
directing the superior court to vacate its September 13, 2016
order and to set a jury trial on “the issue whether real party
[Beats] is entitled to attorney fees and costs as damages on its
cross-complaint” or show cause why this court should not issue a
peremptory writ of mandate requiring the superior court to do so.
      Describing the issue presented in the writ proceeding as
whether the trial court was authorized to act as the trier of fact
in determining the amount of fees Beats was entitled to recover

6     We take judicial notice pursuant to Evidence Code
sections 452 and 459, subdivision (a), of the petition for writ of
mandate and the reply in response to Beats’s return to
alternative writ filed by Monster and Lee in Monster I, supra,
12 Cal.App.5th 1214. In addition, we augment the record on our
own motion pursuant to California Rules of Court,
rule 8.155(a)(1)(A) to include documents filed in the case in
superior court that were part of the record in Monster I and
Monster II but not included by the parties in their appendices in
this appeal.
7      In their reply in response to Beats’s return to the
alternative writ, Monster and Lee again emphasized their
petition sought a jury trial on the issue of damages, not liability
for breaching the 2012 and 2013 agreements as alleged by Beats
in the first and third causes of action of its cross-complaint.

                                 9
as damages on its breach of contract claims (Monster I, supra,
12 Cal.App.5th at p. 1227), this court held Monster (and Lee) had
a right to have a jury decide that issue. We issued a peremptory
writ of mandate as requested by Monster and Lee commanding
the superior court to vacate its September 13, 2016 order and to
“issue a new order directing that Monster and Lee are entitled to
a jury trial to determine the amount of those attorney’s fees.” (Id.
at p. 1232.) Monster and Lee did not seek, and we did not order,
a jury trial (or any trial at all) on the issue of liability for breach
of contract as alleged by Beats in its cross-complaint.8
      5. Trial on Beats’s Damages and Affirmance of the
         Judgment and Postjudgment Orders
       Following our order for issuance of the peremptory writ,
Beats tried the issue of damages on its cross-complaint against
Monster and Lee to a jury in December 2017. The jury returned
a verdict in favor of Beats for slightly more than $11.5 million,
the attorney fees and costs it had incurred in defending against
Monster’s and Lee’s claims through August 31, 2016. (Monster II,
supra, B285994, p. 3.) In its judgment entered January 23, 2018
the trial court also ordered that Beats was entitled to costs and
attorney fees incurred on or after September 1, 2016, as well as
prejudgment and postjudgment interest. The trial court
amended the judgment on several occasions to include an

8     In a footnote rejecting Beats’s contention, made at oral
argument, that it was entitled to attorney fees pursuant to Civil
Code section 1717 as the prevailing party on the breach of
contract claims alleged in its cross-complaint, we explained that
Beats had not yet prevailed on these claims “because there has
been no determination of damages, a necessary element of the
claims.” (Monster I, supra, 12 Cal.App.5th at p. 1227, fn. 4.)

                                  10
additional $2.6 million in fees and costs and specific amounts for
prejudgment and postjudgment interest. Monster and Lee filed a
timely notice of appeal from each iteration of the judgment, and
we ordered the appeals consolidated. (Id. at pp. 3-4.)
       On appeal Monster and Lee argued the trial court had
erred in relying on the release agreements to grant Beats’s
motion for summary judgment, contending both that enforcement
of the releases would violate the anti-waiver provisions of the
Corporate Securities Law and that they had raised triable issues
of fact whether the releases were unenforceable because procured
by fraud. They also contended Monster had viable claims for
fraud and constructive fraud based on the HTC transaction
(because Beats falsely represented it was a bona fide change-of-
control transaction and violated its fiduciary duties arising from
their joint venture) and asserted the trial court’s ruling was
based in part on an erroneous understanding of the scope of the
implied covenant of good faith and fair dealing. Lee similarly
argued he had viable claims for common law fraud based on the
sham change of control and misrepresentations made to him
when he sold his interest in Beats, as well as viable claims under
the Corporate Securities Law.
       In the final section of their opening brief Monster and Lee,
explaining the summary judgment against them was the
predicate for Beats’s recovery of attorney fees and prejudgment
and postjudgment interest, asserted, because summary judgment
“was erroneously entered, these awards must be vacated.”9 As we
emphasized in Monster II, no other, separate challenge was made

9     In their reply brief Monster and Lee simply noted Beats did
not dispute that, if summary judgment were to be reversed, the
award of attorney fees, costs and interest must be vacated.

                                11
to the jury’s award of damages on the cross-complaint or the trial
court’s several postjudgment orders. (Monster II, supra,
B285994, p. 4.)
       We affirmed the judgment and postjudgment orders in full.
(Monster II, supra, B285994, pp. 2, 36.) We first held Monster
and Lee failed to show any triable issue of material fact to
support their claim the HTC transaction did not constitute a
bona fide change of control within the meaning of the
2009 license agreement, explaining, when viewed in light of the
express provisions of the parties’ agreement, the implied
covenant of good faith and fair dealing did not prohibit a
transaction designed by Beats to effect a change in control. (Id.
at p. 16.) We also held Monster had no viable fraud or
constructive fraud claims based on Beats’s representations
concerning the HTC transaction or its failure to disclose its intent
to structure the transaction to accomplish a change in control.
(Id. at pp. 25-26.) We then wrote, “In light of our ruling on the
substance of Monster’s and Lee’s claims concerning the Beats-
HTC transaction, we need not address the parties’ dispute
regarding the enforceability of the releases given by Monster and
Lee as they relate to that transaction.” (Id. at p. 27.)
       Turning to Lee’s separate causes of action, we affirmed the
trial court’s ruling with respect to the fraud and securities law
claims involving Lee’s December 2012 sale of a portion of his
interest in Beats because he had not alleged any false statements
or misrepresentations had been made to him in connection with
that transaction or that Beats (or Wachter) failed to disclose any
material information. (Monster II, supra, B285994, p. 29.) As to
Lee’s contention Beats’s discussion with Apple during fall 2013
should have been disclosed to him prior to the sale of his

                                 12
remaining 1.25 percent in the company, we held under Delaware
law, which the parties had agreed would govern the validity,
interpretation and effect of the 2013 unit repurchase agreement,
Beats was entitled to enforce the agreement’s nonreliance
provision by which it disclaimed any responsibility for any
otherwise actionable omission regarding the status of its
discussions with Apple.10

10     Although unrelated to their argument for reversal of the
order denying the motion to amend the judgment, Monster and
Lee inaccurately assert we affirmed the trial court’s order
granting summary judgment in Monster II on a legal basis that
had not been briefed by the parties on appeal, “i.e. the binding
effect under Delaware law of ‘non-reliance’ clauses in the
Agreements.” In fact, Beats’s respondent’s brief expressly
addressed that issue, which, as discussed, we considered only
when evaluating Lee’s claim of fraud in connection with his
October 2013 sale of a 1.25 percent interest in Beats, not any of
Monster’s causes of action or Lee’s other claims. On page 63 of
its brief Beats argued, “These non-reliance clauses are
enforceable under Delaware law, which governs the 2013 Unit
Repurchase Agreement.” Monster and Lee then devoted a four-
page section of their reply brief to the argument that California,
not Delaware, law governed Lee’s claim and, as a result, the
nonreliance provision in the 2013 unit purchase agreement did
not “immunize” Beats. (See generally Hooked Media Group, Inc.
v. Apple Inc. (2020) 55 Cal.App.5th 323, 336, fn. 1 [although Code
of Civil Procedure section 437c, subdivision (m)(2), provides that,
“[b]efore a reviewing court affirms an order granting summary
judgment or summary adjudication on a ground not relied upon
by the trial court, the reviewing court shall afford the parties an
opportunity to present their views on the issue by submitting
supplemental briefs,” supplemental briefing is not required
where the parties have already briefed the issue]; Goddard v.
Department of Fish & Wildlife (2015) 243 Cal.App.4th 350, 359,

                                13
       Monster and Lee did not seek a rehearing in this court. In
a petition for review in the Supreme Court, filed October 2, 2020
(S264792), Monster argued only that our holding that Beats’s
conduct in connection with the HTC change-of-control transaction
did not breach the implied covenant of good faith and fair dealing
in the 2009 license agreement unduly narrowed the protection
provided by the implied covenant and that we erred in concluding
Beats had not breached any fiduciary duties it might owe as a
joint venturer with Monster. In a separate petition for review
Lee asked the Court to grant review to decide whether we had
improperly applied Delaware law to find the nonreliance clause
in the 2013 unit repurchase agreement enforceable, thereby
affirming the trial court’s ruling on Lee’s common law fraud and
securities law claims. Neither petition addressed our election not
to decide the enforceability of Monster’s and Lee’s releases or our
affirmance of the judgment in favor of Beats on the cross-
complaint.
       The Supreme Court denied the petitions on November 10,
2020. Our remittitur issued on November 19, 2020.
      6. The Motion To Amend the Judgment
      When the case returned to the trial court, Beats moved for
an order releasing to it the cash deposit filed by Monster to stay
enforcement of the judgment pending appeal and for an
additional award of attorney fees and costs incurred in
successfully responding to Monster and Lee’s appeal. In
opposition Monster and Lee, referring to their contemporaneously

fn. 5 [supplemental briefing is not required under Code of Civil
Procedure section 437c, subdivision (m)(2), where the parties
have addressed the issue in their briefs].)

                                14
filed motion to amend the judgment, argued the award of
contract damages plus postjudgment interest had not yet been
subject to any appellate review and, therefore, was not final and
could not be enforced. They also contended postjudgment
interest should be calculated using the lower Delaware rate of
interest, not California’s, pursuant to the Delaware choice of law
provision in the 2013 unit purchase agreement.
       Monster and Lee’s motion to amend the judgment pursuant
to Code of Civil Procedure section 187, filed January 15, 2021,
began by explaining this court in Monster II had affirmed the
summary judgment in favor of Beats without reviewing the trial
court’s ruling that the 2012 and 2013 releases were enforceable.
They then argued, although conceding it was entirely within our
authority to decide the appeal on alternative grounds, “[t]he legal
consequence of the Court of Appeal’s explicit decision not to
review any of the issues regarding the enforceability and effect of
the Releases, however, was to leave unreviewed and
unenforceable all of this Court’s rulings in that regard, including
its ruling that Plaintiffs breached those Releases by suing
Defendants.” Monster and Lee asked the trial court to amend the
judgment, affirmed on appeal, to remove the award of damages
on Beats’s cross-complaint to preserve their right to seek
appellate review of the trial court’s ruling on the enforceability of
the releases and further requested the court reconsider its prior
rulings on that issue.
       The trial court on February 9, 2021 issued a brief minute
order denying Monster and Lee’s motion to amend the judgment
and granting Beats’s motions to apply the cash deposit and for
attorney fees. On March 4, 2021 the court signed and entered a
third amended judgment in favor of Beats on Monster and Lee’s

                                 15
complaint and Beats’s cross-complaint. Monster and Lee filed a
timely notice of appeal from the third amended judgment.
                         DISCUSSION
      1. The Judgment Awarding Beats Damages on Its Cross-
         complaint Is Not Void or Otherwise Unenforceable
       As discussed, in the trial court Monster and Lee contended
only that amendment of the judgment was necessary to preserve
their right to appellate review of the award of damages to Beats
on its cross-complaint. While not entirely abandoning that
contention, Monster and Lee now make two, somewhat
inconsistent arguments that the portion of the judgment
awarding Beats damages is unenforceable and, therefore, that
the trial court erred in denying their motion to amend the
judgment. First, they claim Beats never obtained a legal
determination of their liability for breach of contract that would
entitle Beats to an award of damages, rendering void the
judgment we affirmed in Monster II. Second, they assert, because
we decided Monster II without determining whether the releases
in the 2012 and 2013 agreements were enforceable (because we
did not need to reach that issue), the trial court’s rulings
regarding the releases—and the consequent award of damages to
Beats for Monster’s and Lee’s breach of the contracts containing
them—are unenforceable. The first argument misrepresents the
record and ignores the positions advocated by their counsel before
the trial court and this court in Monster I and Monster II. The
second argument fundamentally misconstrues the Supreme
Court’s decision in Samara v. Matar (2018) 5 Cal.5th 322.

                               16
         a. Monster and Lee conceded (expressly and by
            implication) the summary judgment ruling
            necessarily included a finding they had violated the
            2012 and 2013 agreements
       It is true, as Monster and Lee repeatedly emphasize, that
the trial court’s August 29, 2016 order granting Beats’s motion
for summary judgment did not also grant summary judgment or
summary adjudication on any claims asserted in Beats’s cross-
complaint. All the court’s order said in that regard was that the
case would proceed to trial on the first and third causes of action
of Beats’s cross-complaint against Monster and Lee. Monster and
Lee’s singular focus on the language of the August 29, 2016 order,
however, while ignoring all else that transpired between the
entry of that order and the court’s ruling denying their motion to
amend the judgment on February 9, 2021, creates a grossly
distorted picture of what actually occurred with respect to the
issue of liability on the cross-complaint.
       At a hearing on August 31, 2016, two days after the court
granted the motion for summary judgment, the court asked
counsel for Beats whether Beats was simply seeking attorney fees
on the two causes of action remaining in its cross-complaint.
Counsel responded yes. The court then asked whether that issue
could be decided by noticed motion. Counsel again answered yes.
The court then asked counsel for Monster and Lee whether he
agreed or disagreed. After counsel said he disagreed and the
court asked why, counsel explained that attorney fees were
sought as damages for breach of contract and, under established
case law, because proof of damages was an element of the two
causes of action, Monster and Lee were entitled to a jury trial on
the issue. After confirming with Monster and Lee’s counsel that
the court’s previous rulings determined the releases in the 2012

                                17
and 2013 agreements (at issue in the first and third causes of
action of the cross-complaint) were “valid as a matter of law,” the
court inquired what remained for the jury to determine. In
response, counsel for Monster and Lee stated the court would
direct the jury “as to the liability portion, but not as to the
damage portion.”11 From that point forward, the parties and the
court proceeded with the understanding that the issue of liability
had been resolved and the only remaining question was whether
a jury trial was required to determine the amount of damages.
      More than four years later, different counsel for Monster
and Lee confirmed this understanding, explaining in the motion
to amend the judgment that the trial court had held Monster’s
and Lee’s breaches of the releases “resulted ipsu iure [by
operation of law] from this Court’s ruling the Releases barred
Plaintiffs from asserting their claims of fraud.” Counsel did not
contend no determination of liability by the trial court had been
made or that its conclusion that breaches of the releases had been
established by the court’s rulings on the summary judgment
motion was incorrect, but argued only that the damage award
remained subject to judicial review because we did not reach any
issue of the scope, validity or enforceability of the releases when
deciding Monster II.

11    Although counsel used the term “instructed,” rather than
“directed,” in context it is clear he meant only the issue of
damages, and not liability, remained for the jury to determine.
As demonstrated by the colloquy that followed between the court
and counsel concerning a trial on attorney fees as damages,
counsel unquestionably intended for the jury to be given
instructions on the proper methods for calculating Beats’s
damages.

                                18
       In the intervening years, Monster and Lee, represented by
experienced, sophisticated counsel, never argued the issue of
their liability for breach of contract had not been established. As
discussed, when seeking writ relief from this court after the trial
court concluded the attorney fees issue should be determined by
motion, rather than a jury trial, Monster and Lee did not contend
the issue of liability had not been decided or request that we
order a jury trial on that issue. And when the case returned to
the trial court after we granted relief in Monster I, and further
argument ensued as to what issues required a jury trial and
what, if anything, could still be done by way of motion, counsel
for Monster and Lee again insisted only that they were entitled to
a jury trial “dealing with the issue of fees and costs incurred up
to and including the order on the summary judgment. They get
whatever they get on that, okay. There’s then a judgment that’s
entered on the complaint and the cross-complaint, right, the
two competing affirmative claims, you’d have a judgment, and, if
there is a basis for a prevailing party motion for fees, which
would be from post whatever it was . . . , that would be their
motion for fees as a prevailing party.”
       That, of course, is exactly what happened. A jury trial was
held on the issue of attorney fees. Judgment was entered on the
complaint and cross-complaint, and postjudgment motions were
heard regarding additional attorney fees to Beats as the
prevailing party. And to reiterate, on appeal in Monster II the
only argument made by Monster and Lee with respect to the
portion of the judgment awarding damages to Beats on its cross-
complaint was that, if we reversed the order granting summary
judgment on the complaint, we should also reverse the award on
the cross-complaint. At no point did Monster and Lee contend, as

                                19
they do now, that the issue of liability for breaching the 2012 and
2013 agreements had never been decided by the trial court. The
judgment in this case was not entered in violation of Monster’s
and Lee’s rights to due process and is not void (on its face or
otherwise).
       Curry v. Curry (N.Y.App.Div. 2005) 14 A.D.3d 646
[789 N.Y.S.2d 307], an opinion from New York’s intermediate
appellate court on which Monster and Lee rely to argue the
judgment we affirmed in Monster II is void on its face, does not
assist them. The Curry court held a judgment must conform to
the underlying decision on which it is based and, if there is any
inconsistency between the two, the decision controls. (Curry,
789 N.Y.S.2d at p. 308.) We have no quarrel with that general
principle. However, the issue before us is not whether the third
amended judgment strictly conforms to the August 29, 2016 order
granting Beats’s motion for summary judgment. There is no
dispute that it does not. But to prevail on appeal Monster and
Lee needed to establish that the trial court never decided its
ruling on summary judgment also determined Monster’s and
Lee’s liability for breach of contract, leaving only unresolved the
issue of damages. The trial court clearly made that
determination, and it did so with the active acquiescence of
counsel for Monster and Lee.12

12     To the extent Monster and Lee may have had a viable
argument that the trial court failed to comply with all necessary
formal requirements for making its liability determination, they
forfeited the issue by failing to challenge the judgment on that
basis in Monster II, supra, B285994. (See People v. Rosas (2010)
191 Cal.App.4th 107, 116 [waiver precludes a subsequent appeal
based on issues ripe for consideration in a prior appeal and not
brought in that proceeding]; People v. Senior (1995)

                                20
         b. Monster and Lee forfeited any further right to
            appellate review of the award of damages on the
            cross-complaint
       The Supreme Court in Samara v. Matar, supra, 5 Cal.5th
322 (Samara) considered the claim- and issue-preclusive
significance, in future litigation, of a conclusion relied upon by
the trial court and challenged on appeal, but not addressed by the
appellate court. (Id. at p. 326.) Overruling its 150-year-old
decision in People v. Skidmore (1865) 27 Cal. 287, the Court held
“the preclusive effect of the judgment should be evaluated as
though the trial court had not relied on the unreviewed ground.”
(Samara, at p. 326.)
       The claim- and issue-preclusion issue before the Court in
Samara, supra, 5 Cal.5th 322 arose from a professional
negligence lawsuit filed by a patient (Samara) against
two dentists (Drs. Nahigian and Matar). Samara alleged
Dr. Nahigian had negligently performed oral surgery on her and
Dr. Matar, as Dr. Nahigian’s employer, was vicariously liable for
Dr. Nahigian’s negligence. The trial court granted summary
judgment for Dr. Nahigian on alternative grounds—Samara’s
negligence claim was barred by the statute of limitations and
Samara could not establish causation. This court affirmed the
judgment in favor of Dr. Nahigian based solely on the statute of
limitations, expressly declining to reach the issue of causation.
(Samara v. Estate of Stephen Nahigian, D.D.S. (Nov. 10, 2014,

33 Cal.App.4th 531, 538 [same]; see also Amato v. Mercury
Casualty Co. (1997) 53 Cal.App.4th 825, 839 [time for insurer to
advance contention default judgment against its insured was the
product of collusion was first appeal, when the issue could be
raised, not a second appeal in the case].)

                                21
B248553) [nonpub. opn.].) Following our decision in favor of
Dr. Nahigian, Dr. Matar moved for summary judgment, arguing
the question of Dr. Nahigian’s liability had been conclusively
determined in Dr. Nahigian’s favor (issue preclusion) and
Dr. Matar was thus entitled to judgment on Samara’s vicarious
liability claim as a matter of law. The trial court granted
Dr. Matar’s motion, concluding Samara’s claim for vicarious
liability was barred under the doctrine of claim preclusion.
       We reversed the judgment in favor of Dr. Matar, and the
Supreme Court affirmed our decision. (See Samara, supra,
5 Cal.5th at p. 338.) Rejecting one of Dr. Matar’s arguments, the
Supreme Court explained, “It is true that a trial court’s judgment
is presumed correct, and so ordinarily will not be set aside on
appeal absent an affirmative showing of reversible error.
[Citations.] But that principle governs how appellate courts
should review trial court determinations; it does not speak to the
preclusive effect, in future litigation, of a challenged trial court
determination that evaded appellate review. The distinction is
particularly clear under California law: Although the
presumption of correctness applies while direct review is ongoing
[citation], under California law, an unsatisfied trial court
judgment has no preclusive effect until the appellate process is
complete.” (Id. at p. 335.)
       Monster and Lee contend, under Samara, portions of a
judgment not actually reviewed on appeal are not final or
binding. Because our opinion in Monster II expressly declined to
evaluate any of the trial court’s rulings regarding the
enforceability and effect of the 2012 and 2013 releases (because
unnecessary to our decision), they continue, the award to Beats of
damages on its cross-complaint is not final, and it was error for

                                 22
the trial court not to amend the judgment in order to preserve
their right to appellate review.
       This argument betrays a fundamental misunderstanding of
the Supreme Court’s decision in Samara, which, as stated,
concerned the preclusive effect in future litigation of a trial
court’s decision on a legal ground not reached on appeal, not the
finality of a judgment, as here, properly affirmed on one of
several alternative bases. To be sure, because we did not
consider the scope, validity or enforceability of the releases in
Monster II, under Samara the trial court’s ruling enforcing the
releases may well have no preclusive effect in any future
litigation in which that issue might arise. But the judgment
awarding damages to Beats on its cross-complaint affirmed in
Monster II (just as the judgment in favor of Dr. Nahigian
affirmed in Samara v. Estate of Stephen Nahigian, D.D.S., supra,
B248553) is final and binding.
       To reiterate once again, when appealing the judgment in
Monster II in favor of Beats on both the complaint and cross-
complaint, the only argument made by Monster and Lee
concerning the cross-complaint was, because summary judgment
had been erroneously granted on the complaint, the damages
award on the cross-complaint also had to be vacated. Their
counsel did not contend—either in briefing, a petition for
rehearing or the petition for review in the Supreme Court—that,
because that award rested specifically on the enforceability of the
releases, this court needed to (or should have) addressed that
issue, not simply the propriety of summary judgment in

                                23
general.13 While counsel and their clients may now regret their
tactical decision, it is far too late to revisit it in this appeal.
      3. Monster and Lee Forfeited Any Challenge to the Trial
         Court’s Use of California’s Statutory Rate for
         Prejudgment and Postjudgment Interest
       Both the August 2009 Beats operating agreement, which
Lee signed as the owner of a 5 percent interest in the company,
and the 2013 unit purchase agreement pursuant to which Lee
sold back his remaining 1.25 interest in the company contained
Delaware choice of law provisions. Explaining that Delaware’s
legal rate of interest varied from 7 percent to 7.5 percent during
the relevant period, and emphasizing that Beats had consistently
argued that Delaware law governed Lee’s fraud and breach of
fiduciary duty claims (as this court held when ruling the
nonreliance provision in the 2013 unit purchase agreement was
enforceable under Delaware law), Monster and Lee argue the
trial court committed reversible error by calculating Beats’s
prejudgment and postjudgment interest using California’s
10 percent statutory rate, rather than the lower Delaware rate.

13     To put perhaps too fine a point on it, rather than asserting
generally that the damage award must be reversed because
summary judgment was erroneously entered, counsel could have
argued, “The finding that Monster and Lee had breached the
release agreements was the predicate for the award of damages
to Beats. Because Monster and Lee raised triable issues of fact
whether the releases were enforceable, as demonstrated in
argument section A.2. of this brief, the judgment in favor of Beats
on its cross-complaint must also be reversed.” And if counsel
believed that this more specific contention was implicit in their
briefing and we erred in overlooking it, they could have raised
that issue in a petition for rehearing.

                                 24
       Monster (which, in any event, was not a party to the
two agreements containing Delaware choice of law provisions)
and Lee have forfeited this argument. In the second amended
judgment on the complaint and cross-complaint, entered July 31,
2018, the trial court explained that on February 27, 2018 it had
ruled Beats was entitled to recover prejudgment interest between
the date of the verdict (December 21, 2017) and the date of entry
of the initial judgment (January 23, 2018). The judgment then
stated, “This amounts to $104,680.21”—10 percent of the
damages award of $11,578,265.49 for 33 days. The court also
noted it had previously ruled that Beats was to recover
postjudgment interest, which the second amended judgment
provided was to accrue “at the statutory rate from January 23,
2018, through the date of payment.”
       In context, the trial court’s award of postjudgment interest
at “the statutory rate” after having calculated prejudgment
interest using the 10 percent rate specified in Civil Code
section 3289, subdivision (b), for interest chargeable after a
breach of contract, was unquestionably intended to similarly
apply California’s 10 percent rate. Nothing in the record
suggests Monster and Lee in 2018, when the second amended
judgment was entered, made a contrary argument. And in their
appeal of the original, first amended and second amended
judgments in Monster II, Monster and Lee did not challenge
Beats’s entitlement to prejudgment and postjudgment interest if
the judgment was not reversed, nor did they contest the
applicability of California’s 10 percent statutory rate of interest
to the calculation of the amount of prejudgment interest due or
its use to determine postjudgment interest. Their belated
argument that the trial court should have used the Delaware

                                25
interest rate—even if it were correct—has been forfeited.
(See People v. Rosas (2010) 191 Cal.App.4th 107, 116; People v.
Senior (1995) 33 Cal.App.4th 531, 538.)
      4. Monster and Lee Failed To Demonstrate the Trial Court
         Abused Its Discretion by Including Postjudgment Interest
         Accruing Until the Date the Judgment Was Paid
       In a second amended order granting Beats’s motion for
order applying cash deposit and interest filed March 17, 2021, the
trial court directed the clerk of the court to transfer to Beats the
principal amount of the cash collateral deposited by Lee on behalf
of the Monster parties on March 13, 2018, plus all accrued
interest, in partial satisfaction of the liability owed by Monster
and Lee to Beats. Those funds were apparently not released to
Beats until April 19, 2021, a delay that Monster and Lee assert
“was caused solely by the Clerk of the Superior Court who
controlled those Funds, not by Appellants.” Monster and Lee’s
final argument is that the trial court abused its discretion in
awarding postjudgment interest through April 19, 2021.
       Monster and Lee do not dispute that Beats was not actually
paid from the cash deposit until April 19, 2021. Nor do they
contend the delay in payment resulted from the superior court
clerk’s misconduct or bad faith, rather than simply from
quotidian administrative processing. Monster and Lee elected to
use a cash deposit pursuant to Code of Civil Procedure
section 995.710 to stay enforcement of the judgment during the
appeal in Monster II, rather than another form of security. On
appeal they cite no authority and advance no factual basis for us
to conclude it was an abuse of discretion for the court to order
that postjudgment interest accrued until the judgment was
satisfied. (See City of Santa Maria v. Adam (2012)
211 Cal.App.4th 266, 287 [“we may disregard

                                 26
conclusory arguments that are not supported by pertinent legal
authority or fail to disclose the reasoning by which the appellant
reached the conclusions he wants us to adopt”]; see also WFG
National Title Ins. Co. v. Wells Fargo Bank, N.A. (2020)
51 Cal.App.5th 881, 894.)
                         DISPOSITION
      The order denying Monster and Lee’s motion to amend the
judgment and granting Beats’s motions to apply the cash deposit
and for attorney fees and the third amended judgment entered
thereafter are affirmed. Beats is to recover its costs on appeal.

                                     PERLUSS, P. J.

      We concur:

            SEGAL, J.

            FEUER, J.

                                27