Court Opinion

ID: 4436620
Source: CourtListenerOpinion
Date Created: 2019-09-09 17:00:33.851965+00
Date Added: 2024-06-11T14:51:19.055828
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

WAVERLY SCOTT KAFFAGA, as                   No. 18-55336
Executrix of the Estate of Elaine
Anderson Steinbeck,                           D.C. No.
                   Plaintiff-Appellee,     2:14-cv-08699-
                                              TJH-FFM
                  v.

THE ESTATE OF THOMAS STEINBECK,              OPINION
GAIL KNIGHT STEINBECK, and THE
PALLADIN GROUP, INC.,
            Defendants-Appellants.

      Appeal from the United States District Court
          for the Central District of California
      Terry J. Hatter, Jr., District Judge, Presiding

         Argued and Submitted August 6, 2019
                 Anchorage, Alaska

                Filed September 9, 2019

      Before: Richard C. Tallman, Sandra S. Ikuta,
          and N. Randy Smith, Circuit Judges.

               Opinion by Judge Tallman
2        KAFFAGA V. ESTATE OF THOMAS STEINBECK

                          SUMMARY *

                             Damages

    The panel affirmed the district court’s compensatory
damages award, vacated the jury’s punitive damage award
against defendant Gail Knight Steinbeck, and remanded to
the district court with instructions to dismiss the punitive
damages claims against Gail, in an action alleging claims
concerning disputed interests in John Steinbeck’s literary
works.

    In the wake of a long history of litigation, a federal jury
awarded plaintiff Waverly Kaffaga, as executrix of the
Estate of Elaine Steinbeck (John Steinbeck’s wife),
approximately $5.25 million in compensatory damages for
slander of title, breach of contract, and tortious interference
with economic advantage, and $7.9 million in punitive
damages against defendants – Gail Knight Steinbeck (the
author’s daughter-in-law), the Estate of Thomas Steinbeck
(the author’s son) to which Gail is executrix, and the Palladin
Group, Inc. (which Gail Steinbeck owns and controls).

    The panel affirmed the district court’s orders granting
summary judgment and striking defendants’ defenses to
tortious interference on grounds of collateral estoppel arising
from this court’s, and the Second Circuit’s, prior decisions.
The panel further held that the district court’s decisions to
exclude evidence related to defendants’ different
understanding of the parties’ 1983 settlement agreement, or

    *
      This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
        KAFFAGA V. ESTATE OF THOMAS STEINBECK               3

the validity of prior court decisions, were not abuses of the
trial court’s discretion.

    The panel affirmed the jury’s compensatory damages
award on all causes of action in the clearly written and fully
answered special verdict form because they were supported
by substantial evidence. The panel further held that
suspicion of double recovery was not enough to reverse the
jury’s verdict. The panel also held that the compensatory
damages here were not speculative because they were based
on reasonable estimates by lay and expert testimony, as well
as documentary evidence.

    The panel held that the record contained overwhelming
evidence of Gail and Thom Steinbeck’s malice to support the
punitive damages award. The panel further held that any
possible error in the district court’s evidentiary decisions
was harmless. The panel held that plaintiff failed to meet
her burden of placing into the record “meaningful evidence”
of Gail Steinbeck’s financial condition and ability to pay any
punitive damages sufficient to permit a comparative analysis
on appeal, as required by California law. The panel therefore
vacated the $5.9 million punitive damage award against
Gail, and remanded to the district court with instructions to
dismiss the punitive claims against Gail.

                        COUNSEL

Matthew J. Dowd (argued), Dowd Scheffel PLLC,
Washington, D.C.; Matthew I. Berger, Matthew I. Berger
Law Group, Santa Barbara, California; for Defendants-
Appellants.
4       KAFFAGA V. ESTATE OF THOMAS STEINBECK

Susan J. Kohlmann (argued), Alison I. Stein, and Brittany R.
Lamb, Jenner & Block LLP, New York, New York; Andrew
J. Thomas, Jenner & Block LLP, Los Angeles, California;
for Plaintiff-Appellee.

                         OPINION

TALLMAN, Circuit Judge:

                        PROLOGUE

       “This ‘suit has, in course of time, become so
       complicated, that . . . no two . . . lawyers can
       talk about it for five minutes, without coming
       to a total disagreement as to all the premises.
       Innumerable children have been born into the
       cause: innumerable young people have
       married into it;’ and, sadly, the original
       parties ‘have died out of it.’ A ‘long
       procession of [judges] has come in and gone
       out’ during that time, and still the suit ‘drags
       its weary length before the Court.’”

Stern v. Marshall, 564 U.S. 462, 468 (2011) (Roberts, C.J.)
(quoting Charles Dickens, Bleak House, in 1 Works of
Charles Dickens 4–5 (1891)). “Those words were not
written about this case . . . but they could have been.” Id.

    Appellants Gail Knight Steinbeck (“Gail”), the Estate of
Thomas Steinbeck (to which she is executrix), and The
Palladin Group, Inc. (“Palladin”) (which she owns and
controls) (collectively, “Defendants”), have vowed they will
not stop litigating their interests in profiting from John
Steinbeck’s literary works until Gail draws her “last breath.”
The parties (and their predecessors in interest) have been
        KAFFAGA V. ESTATE OF THOMAS STEINBECK                5

litigating over the bequests in John Steinbeck’s will and the
changes in copyright laws as they impact on rights to his
intellectual property for almost half of a century. Most
notably, the parties have repeatedly disputed the meaning
and validity of a 1983 settlement agreement (the “1983
Agreement”) entered between Elaine Steinbeck (“Elaine”),
the widow of John Steinbeck, and Thomas Steinbeck
(“Thom”) and John Steinbeck IV (“John IV,” collectively
with Thom, his “Sons”), and their rights to control and profit
from the various John Steinbeck books.

    In this latest round, a federal jury in Los Angeles
unanimously awarded Waverly Kaffaga (“Kaffaga” or
“Plaintiff”), as executrix of Elaine’s estate, approximately
$5.25 million in compensatory damages for slander of title,
breach of contract, and tortious interference with economic
advantage, and $7.9 million in punitive damages against
Defendants. On appeal, Defendants argue, among other
things, that (1) prior litigation related to the 1983 Agreement
did not decide whether Defendants had termination rights
under 1998 amendments to U.S. copyright laws, (2) the
district court improperly excluded evidence relating to
Defendants’ intent, which they raised as a defense to
intentional interference with Kaffaga’s efforts to negotiate
movie rights to Steinbeck works and punitive damages,
(3) the punitive damages award was not supported by
meaningful evidence of Gail’s financial condition and was
excessive under California law, and (4) the compensatory
damages awarded were duplicative and speculative.

    We have jurisdiction under 28 U.S.C. § 1291. We affirm
the compensatory damages award and vacate and remand
with instructions to dismiss the punitive damages claims
against Gail.
6        KAFFAGA V. ESTATE OF THOMAS STEINBECK

                           CHAPTER I

        “There ain’t no sin and there ain’t no virtue.
        There’s just stuff people do. It’s all part of
        the same thing. And some of the things folks
        do is nice, and some ain’t nice, but that’s as
        far as any man got a right to say.” John
        Steinbeck, The Grapes of Wrath 23 (2002).

     During his lifetime, John Steinbeck registered and
renewed the copyrights to his works, including The Grapes
of Wrath, Of Mice and Men, East of Eden, and The Pearl, so
that they were protected by the version of the Copyright Act
in effect at the time. When John Steinbeck died in 1968, he
left his interests in his works to his third wife, Elaine. The
Sons, John’s by a previous marriage, each received a
$50,000 gift in a trust, which, according to Gail, was “pretty
substantial money for two boys just coming back from
Vietnam.”

    The Sons later acquired an interest in some of
Steinbeck’s later works 1 when the interests had to be
renewed. See 17 U.S.C. § 304(a)(1)(C). To try to resolve
their competing interests Elaine and the Sons entered into an
agreement in 1974 (the “1974 Agreement”) that provided
Elaine would receive 50 percent of the domestic royalties to
the works, and the Sons would each receive 25 percent.

    1
      Steinbeck’s early works were renewed before he died in 1968 and
are not at issue in this case.
         KAFFAGA V. ESTATE OF THOMAS STEINBECK                          7

    In 1976, Congress amended the Copyright Act. One of
the amendments created termination rights 2 for certain heirs
with respect to certain categories of works. See Copyright
Act of 1976, Pub. L. No. 94-553, 90 Stat. 2541 (effective
1978). If the work is subject to termination under the
Copyright Act, § 304(c)(5) indicates that termination “may
be effected notwithstanding any agreement to the contrary.”
17 U.S.C. § 304(c)(5); see also 17 U.S.C. § 304(d)(1)
(providing for termination under the same circumstances).

    In 1981, following the amendments to the Copyright Act,
the Sons sued Elaine in the United States District Court for
the Southern District of New York contesting the 1974
Agreement and accusing Elaine of fraud. John Steinbeck, IV
and Thom Steinbeck v. Elaine Steinbeck, No. 81 Civ. 6105
(S.D.N.Y. Dec. 8, 1982). The parties entered into the 1983
Agreement to settle the dispute.

    The 1983 Agreement provided that the Sons would
receive an increased share of the royalties from the works—
one third each, rather than a quarter. In exchange, Elaine
received “complete power and authority to negotiate,
authorize and take action with respect to the exploitation
and/or termination of rights” in the works.

   In 1995, Thom married Gail. The couple thereafter
formed Palladin, a management and production company in

    2
      Under certain circumstances, federal copyright law allows authors
or their heirs to terminate the prior grant of a transfer or license of an
author’s copyright in a work or of any other right under a copyright. See
17 U.S.C. §§ 203, 304(c), 304(d). To terminate a grant, a written, signed
termination notice must be served on the grantee or the grantee’s
successor-in-interest, and the termination notice must be recorded with
the U.S. Copyright Office.
8       KAFFAGA V. ESTATE OF THOMAS STEINBECK

Los Angeles. 3 In 2003, Elaine passed away. Pursuant to the
1983 Agreement, her daughter, Waverly Kaffaga, as
executrix of Elaine’s estate, stepped into Elaine’s shoes as
successor under the 1983 Agreement.

    In 1998, Congress again amended the Copyright Act.
These amendments added an additional termination right,
exercisable during a five-year window opening 75 years
after the first publication of a copyrighted work. See Pub. L.
No. 105-298, 112 Stat. 2827 (1998).

    In 2004, Thom and Blake sued Kaffaga and others
involved in publishing the works in the Southern District of
New York (and Kaffaga and the publishers countersued),
which resulted in numerous decisions by both the district
court there and the United States Court of Appeals for the
Second Circuit (the “New York Litigation”). The parties
(and others) have been litigating their rights under the 1983
Agreement ever since. See, e.g., Steinbeck v. McIntosh &
Otis, Inc., 433 F. Supp. 2d 395 (S.D.N.Y. 2006), rev’d sub
nom. Penguin Grp. (USA) Inc. v. Steinbeck, 537 F.3d 193
(2d Cir. 2008); Steinbeck v. McIntosh & Otis, Inc., No. 04
CV 5497 (GBD), 2009 WL 928189 (S.D.N.Y. Mar. 31,
2009), aff’d sub nom. Steinbeck v. Steinbeck Heritage
Found., 400 F. App’x 572 (2d Cir. 2010), cert. denied,
564 U.S. 1012 (2011). Relevant here, the Second Circuit
concluded that the 1983 Agreement was a valid and
enforceable agreement, which “forecloses any argument that
the parties intended the [Sons] to retain control over
Elaine[’s] exercise of the authority conferred upon her.”
400 F. App’x at 575.

    3
      In 1991, John IV passed away, and his daughter, Blake Smyle
(“Blake”), and his former wife inherited his interest.
        KAFFAGA V. ESTATE OF THOMAS STEINBECK                9

    Despite their losses at the Second Circuit, the plain
language of the 1983 Agreement, and a stipulated judgment
they signed forgoing all further litigation, Thom and Blake
continued spending time and treasure asserting rights courts
had already told them they did not have. In 2014, they sued
Kaffaga and others in the United States District Court for the
Central District of California seeking, among other things, a
declaration that the 1983 Agreement was an “agreement to
the contrary” under 17 U.S.C. §§ 304(c) and (d) and
therefore could not prevent them from exercising
termination rights.

    The district court in Los Angeles (Hon. Terry Hatter)
dismissed Thom and Blake’s case in 2015, holding that their
claims were precluded by the doctrine of collateral estoppel
because the Second Circuit had conclusively determined that
the 1983 Agreement was valid and enforceable.

    In November 2017, we affirmed the district court’s 2015
ruling in Thom and Blake’s case, holding in no uncertain
terms that all issues presented on appeal were barred by
collateral estoppel. Steinbeck v. Kaffaga, 702 F. App’x 618,
619–20 (9th Cir. 2017). We concluded that the Second
Circuit “squarely held” that the 1983 Agreement is valid and
enforceable, and “[t]he district court correctly concluded that
the Sons already have fully litigated whether they have a
right to issue and exploit copyright terminations of
Steinbeck’s works, and that the prior litigation held that the
Sons do not have those rights.” Id. Thus, Thom and Blake’s
arguments to the contrary were precluded. See id.

                        CHAPTER II

       “An unbelieved truth can hurt a man much
       more than a lie.” John Steinbeck, East of
       Eden 264 (1992).
10      KAFFAGA V. ESTATE OF THOMAS STEINBECK

    In 2014, after Thom and Blake brought their action that
was dismissed in 2015 and affirmed on appeal, Kaffaga
countersued by filing this case in the Central District of
California. She alleged breaches of the 1983 Agreement,
slander of title, and tortious interference with economic
advantage in the time since the New York Litigation had
ended, and she sought punitive damages. Among other
things, Kaffaga alleged that Defendants had continued to
attempt to assert various rights in Steinbeck works despite
their previous court losses establishing they had no such
rights. Those attempts led to multiple Hollywood producers
abandoning negotiations with Kaffaga to develop
screenplays for, among other things, a remake of The Grapes
of Wrath and East of Eden involving highly successful
movie producers and well-known actors.

      Judge Hatter granted Kaffaga summary judgment on
her breach of contract and slander of title claims and left the
resolution of contested facts regarding the tortious
interference claims for the jury to decide.

    In the summer of 2017, Judge Hatter ruled on motions in
limine. Judge Hatter granted Kaffaga’s motion to preclude
evidence and argument related to issues decided by prior
courts without prejudice to Defendants’ filing a motion in
limine to introduce such evidence that could otherwise be
shown to be relevant and not amounting to relitigation. The
court later denied Defendants’ motion in limine to permit
certain subsets of that evidence and argument related to the
prior litigation, reiterating that the New York Litigation had
established that “the 1983 Agreement bound the parties’
heirs, successors, and assigns.” Prior to trial, the district
court also struck defenses Defendants argued were
applicable to the tortious interference claims as precluded by
the prior decisions in this litigation.
        KAFFAGA V. ESTATE OF THOMAS STEINBECK               11

    Beginning on August 29, 2017, the district court
conducted a five-day jury trial with 13 witnesses, including
Thom (by video deposition) and Gail, and the admission of
78 exhibits. The court sustained several objections to
testimony by Gail related to her justification for contacting
various producers or attempting to compete with Kaffaga in
negotiating with Hollywood studios the disputed control of
rights in various John Steinbeck works, including her
contrary understanding of the previous court decisions.
Certain testimony and documents about Gail’s and Thom’s
reasoning and understanding of the 1983 Agreement and the
prior court decisions were nonetheless permitted at trial and
not stricken, including testimony conveying their lack of
respect for the previous adverse court decisions.

    After careful and correct instruction by the district court
on all issues in the case, the jury unanimously found for
Kaffaga on the remaining claims and awarded $13.15
million in compensatory and punitive damages against
Defendants:

       •   $1.3 million for Kaffaga’s breach of
           contract claim;

       •   $1.3 million for Kaffaga’s slander of title
           claim;

       •   $2.65 million for Kaffaga’s intentional
           interference of prospective economic
           advantage claim; and

       •   $7.9 million for punitive damages,
           including $5.925 million against Gail
           individually.
12     KAFFAGA V. ESTATE OF THOMAS STEINBECK

    In February 2018, after the jury had spoken, the district
court denied Defendants’ motion for judgment as a matter of
law, new trial, and/or remittitur. It held that judgment as a
matter of law and a new trial were inappropriate because the
jury’s verdict was reasonable and supported by substantial
evidence. The court also denied remittitur because it was
“not convinced that the jury should have reached a different
verdict or that the verdict reached was improper.”

                       CHAPTER III

       “There’s more beauty in truth, even if it is
       dreadful beauty.” John Steinbeck, East of
       Eden 360 (1992).

    We review the granting of summary judgment de novo.
Ford v. City of Yakima, 706 F.3d 1188, 1192 (9th Cir. 2013)
(per curiam). We review evidentiary rulings for abuse of
discretion and only reverse if any abuse was prejudicial.
Nevada Dep’t of Corr. v. Greene, 648 F.3d 1014, 1018 (9th
Cir. 2011); Ruvalcaba v. City of Los Angeles, 64 F.3d 1323,
1328 (9th Cir. 1995) (reversal only when an erroneous
evidentiary ruling “substantially prejudiced” a party).

   We review a jury’s verdict, including compensatory and
punitive damages awards, for substantial evidence. In re
Exxon Valdez, 270 F.3d 1215, 1247–48 (9th Cir. 2001)
(compensatory damages); Fair Hous. of Marin v. Combs,
285 F.3d 899, 907 (9th Cir. 2002) (punitive damages).

    Denial of a motion for new trial and remittitur are
reviewed for abuse of discretion. See Martin v. Cal. Dep’t
of Veterans Affairs, 560 F.3d 1042, 1046 (9th Cir. 2009).
Denials of motions for judgment as a matter of law are
reviewed de novo. See Dunlap v. Liberty Nat. Prods., Inc.,
878 F.3d 794, 797 (9th Cir. 2017). We must avoid reversing
         KAFFAGA V. ESTATE OF THOMAS STEINBECK                       13

a jury verdict for lack of evidence or alleged double recovery
if the verdict is capable of a “correct interpretation” that is
not illegal, and if the verdict is not “hopelessly ambiguous.”
Roby v. McKesson Corp., 219 P.3d 749, 760 (Cal. 2009),
modified, (Feb. 10, 2010); Flores v. City of Westminster,
873 F.3d 739, 751–52 (9th Cir. 2017), cert. denied sub nom.
Hall v. Flores, 138 S. Ct. 1551 (2018).

                           CHAPTER IV

         “Can it be that haters of clarity have nothing
         to say, have observed nothing, have no clear
         picture of even their own fields?” John
         Steinbeck, The Log from the Sea of Cortez 62
         (1995).

    We previously held in 2017, in affirming the dismissal
of Thom and Blake’s suit concerning the rights allocated in
the 1983 Agreement, that “the parties have already litigated
the precise issues raised in this suit ‘ad nauseum’ in the
Second Circuit” and that “[t]he district court correctly
concluded that the Sons already have fully litigated whether
they have a right to issue and exploit copyright terminations
of Steinbeck’s works.” 4 Steinbeck v. Kaffaga, 702 F. App’x
at 619–20. Defendants’ arguments in this case (Kaffaga’s
suit) were squarely before us in the earlier case (Thom and
Blake’s suit), and we held that all of defendants’ arguments
there were precluded by the decisions of the Second Circuit.
See id.; see also Dkt. No. 40-1 at 7, 18. In the most recent
    4
      We grant Appellee’s motion for judicial notice [Dkt. No. 40] and
Defendants’ motion for judicial notice [Dkt. No. 54] as unopposed and
because they are the proper subjects of judicial notice in evaluating a
claim of collateral estoppel, including examination of the briefing filed
in the prior federal court cases. See Ritchey v. Upjohn Drug Co.,
139 F.3d 1313, 1319 (9th Cir. 1998).
14      KAFFAGA V. ESTATE OF THOMAS STEINBECK

trial in August 2017, the district court’s summary judgment
and evidentiary rulings were consistent with our prior
holding. Those decisions were correct, and we will not
revisit them here. Whether a prior disposition is published
or unpublished is of no consequence—unpublished
decisions have the same preclusive effect. See 9th Cir. R.
36-3 (unpublished dispositions and orders are precedent for
the purposes of the doctrine of law of the case or rules of
claim preclusion or issue preclusion).

     Therefore, we affirm the orders granting summary
judgment and striking Defendants’ defenses to tortious
interference on grounds of collateral estoppel. It follows that
the district court’s decisions to exclude evidence related to
Defendants’ different understanding of the 1983 Agreement
or the validity of prior court decisions were not abuses of the
trial court’s discretion. In any event, the record indicates that
the district court allowed Gail to testify about her
understanding of the 1983 Agreement and the Copyright Act
at trial.

    Defendants must now stop attempting to relitigate the
validity and enforceability of the 1983 Agreement, including
whether it is an “agreement to the contrary,” and their
understanding of the 1983 Agreement and the plethora of
court decisions interpreting it. They must also stop
representing to the marketplace that they have any
intellectual property rights or control over John Steinbeck’s
works. The 1983 Agreement vests those control rights
exclusively in Kaffaga, as successor to her mother Elaine,
and is enforceable according to its terms. Various federal
courts, including this one, have repeatedly affirmed Elaine
and Kaffaga’s exclusive control. This has to end. We cannot
say it any clearer.
        KAFFAGA V. ESTATE OF THOMAS STEINBECK               15

                        CHAPTER V

       “And now that you don’t have to be perfect,
       you can be good.” John Steinbeck, East of
       Eden 585 (1992).

     We affirm the jury’s compensatory damages award on
all causes of action in the clearly written and fully answered
special verdict form because they are supported by
substantial evidence. See In re Exxon Valdez, 270 F.3d
at 1247–48. The evidence of damages attributed by the jury
to each cause of action was sufficiently separate and non-
duplicative under California law. Roby, 219 P.3d at 760; see
also Flores, 873 F.3d at 752 (holding there was not
impermissible double recovery from multiple defendants
and affirming the jury verdict where substantial evidence
permitted “a correct interpretation” of the jury’s verdict that
avoided finding double recovery). And we presume that the
jury followed the district court’s thorough and clear
instructions to avoid double recovery. See United States v.
Johnson, 767 F.3d 815, 824 (9th Cir. 2014).

    Defendants point to circumstantial evidence that the
verdict is reversible as double recovery under Khoury v.
Maly’s of Cal., Inc. See 17 Cal. Rptr. 2d 708, 712 (Cal. Ct.
App. 1993) (rejecting tortious interference and breach of
contract as separate causes of action that would lead to
double recovery for the same harm). It is true that because
the district court granted summary judgment on Plaintiff’s
breach of contract and slander of title causes of action here,
the jury was only asked specific factual questions about
tortious interference and reached $2.65 million in total
tortious interference damages. The special verdict form then
asked more generally about damages for breach and slander
because the court had granted summary judgment on those
16      KAFFAGA V. ESTATE OF THOMAS STEINBECK

claims. The jury answered by giving identical sums of $1.3
million to each. The fact that the jury gave $1.3 million for
both slander and breach and, when combined, now nearly
equal the $2.65 million awarded for tortious interference is
indeed suspicious.

    But suspicion of double recovery is not enough to
reverse a jury’s verdict, and this case is distinguishable from
Khoury. See id. at 711 (“sole alleged [tortious] conduct of
[the defendant] was the breach of contract” (emphasis
added)); see also Walker v. Signal Cos., Inc., 149 Cal. Rptr.
119, 125 (Cal. Ct. App. 1978) (impermissible double
recovery where no separate evidence supported distinct
awards for damages in contract and tort). As an initial
matter, Khoury was at the motion to dismiss stage; it did not
overturn a jury verdict. Moreover, Kaffaga presented
evidence of tactics or actions that violated the 1983
Agreement that were not independently tortious, like Gail’s
attempting to negotiate separately for her own piece of
option deals. And the jury heard evidence of Defendants’
separate, tortious conduct such as lying, meddling,
slandering, and threatening litigation to harm Kaffaga and
Elaine’s estate. Cf. Roby, 219 P.3d at 759–60 (new trial
required because even the plaintiff’s proposed approach to
interpreting the verdict so as to avoid double recovery
created “an inconsistency” in the amounts actually awarded,
and the plaintiff admitted there was “no evidence of an act
of discrimination that [wa]s separate from her failure-to-
accommodate and wrongful-termination claims”).

    The district court here carefully cited the facts it believed
supported breach of contract “and/or” slander of title to the
jury, such as Gail’s statements (1) to the Executive Vice
President of Business Affairs at DreamWorks that he
“should read this attachment very carefully before you
        KAFFAGA V. ESTATE OF THOMAS STEINBECK              17

decide to make a deal with the Scott family alone” because
“the two-thirds owners of that copyright want to make a deal
with you” and “give you the chain of title you need”; (2) that
the adaptation of The Pearl is one of “a few current projects
for which we control the underlying rights”; and (3) to a
third party concerning an East of Eden movie deal that
Kaffaga’s agent did not represent Gail and Thom “on a
copyright termination because it created a brand new set of
rights,” that someone at the studio needed to call her in
relation to “who is out there marketing the brand and ‘new
set of rights’ because somebody could get in trouble,” and
she and Thom “don’t want that to happen.”

    Therefore, the record contains substantial evidence to
support the awards on each cause of action independently,
especially giving deference to the jury’s verdict. See
McCollough v. Johnson, Rodenburg & Lauinger, LLC,
637 F.3d 939, 955 (9th Cir. 2011); see also Tavaglione v.
Billings, 847 P.2d 574, 580 (Cal. 1993) (in bank) (“[W]here
separate items of compensable damage are shown by distinct
and independent evidence, the plaintiff is entitled to recover
the entire amount of his damages, whether that amount is
expressed by the jury in a single verdict or multiple verdicts
referring to different claims or legal theories.”).

    The compensatory damages here were also not
speculative; they were based on reasonable estimates
established by lay and expert testimony, as well as
documentary evidence. GHK Assocs. v. Mayer Grp., Inc.,
274 Cal. Rptr. 168, 179–80 (Cal. Ct. App. 1990) (“The law
requires only that some reasonable basis of computation of
damages be used, and the damages may be computed even if
the result reached is an approximation.” (citing Allen v.
Gardner, 272 P.2d 99, 102 (Cal. Ct. App. 1954) (“[J]ustice
and public polic[y] require that the wrongdoer shall bear the
18       KAFFAGA V. ESTATE OF THOMAS STEINBECK

risk of the uncertainty which his own wrong has created.”
(citation omitted)))). We affirm the jury’s compensatory
damages award on all causes of action.

                          CHAPTER VI

        “[I]ntentions, good or bad, are not enough.”
        John Steinbeck, The Winter of Our
        Discontent 99 (2008).

    California law provides for punitive damages where the
defendant has acted with “fraud, or malice,” express or
implied, which must be proven with clear and convincing
evidence. Cal. Civil Code § 3294(a). “There must be an
intent to vex, annoy, or injure.” Gombos v. Ashe, 322 P.2d
933, 939 (Cal. Dist. Ct. App. 1958) (holding “negligence,
even gross negligence, is not sufficient to justify” punitive
damages). The requisite intent to support punitive damages
is malice, and it “may be proved ‘either expressly (by direct
evidence probative on the existence of hatred or ill will) or
by implication (by indirect evidence from which the jury
may draw inferences).’” Neal v. Farmers Ins. Exch.,
582 P.2d 980, 987 n.6 (Cal. 1978) (quoting Bertero v. Nat’l
Gen. Corp., 529 P.2d 608, 625 (Cal. 1974)).

    Defendants argue that Gail did not act with the requisite
intent to sustain punitive damages but could not properly
explain that to the jury due to the district court’s rulings on
the motions in limine and preventing certain lines of
questioning. 5 Kaffaga responds that Defendants are really

     5
       Defendants focus most of this argument on their justification
defense for tortious interference. However, because that defense was
stricken prior to trial and Defendants do not challenge that decision
except by arguing collateral estoppel did not preclude it—which it did—
         KAFFAGA V. ESTATE OF THOMAS STEINBECK                          19

complaining that “Gail ‘was not allowed to fully explain’ her
answers when she was cross-examined by” Kaffaga, which
is simply the nature of cross-examination. We agree with
Kaffaga that Defendants could have presented evidence
related to Gail and Thom’s understanding of their rights and
the New York Litigation in other ways, including on redirect
examination. Regardless, Kaffaga maintains that any error
was harmless.

    Kaffaga has the better argument. Gail was at times not
permitted to answer beyond the scope of the questions on
cross-examination; her responses related to her belief about
rights she actually held and the impact of the New York
Litigation in settling those issues were properly stricken as
beyond the scope of direct. But the court occasionally
permitted Gail to explain her beliefs about her and Thom’s
putative rights in various works, or otherwise instructed her
that she could more fully explain answers about her
understanding of agreements and court decisions when her
own attorney examined her on direct. And on cross
examination by her own counsel when she was called to
testify during Kaffaga’s case-in-chief, the court overruled at
least one of Kaffaga’s objections related to Gail’s beliefs
about her rights because Gail’s counsel explained that he
was seeking to clarify items Kaffaga asked Gail about on
direct. 6 These evidentiary decisions were reasonable and

we only analyze the district court’s evidentiary decisions in the context
of punitive damages.

    6
       As to the proposed testimony from potential witness Louis Petrich
regarding Gail and Thom’s termination rights and their “complexity,”
the district court did not abuse its discretion in excluding it. Indeed, the
district court carefully examined whether Petrich, an attorney who
apparently previously consulted with Thom and Gail about their
termination rights, could offer any testimony other than improper expert
20       KAFFAGA V. ESTATE OF THOMAS STEINBECK

balanced; the court did not abuse its discretion. See United
States v. Olafson, 213 F.3d 435, 442 (9th Cir. 2000) (finding
no abuse of discretion where the district court’s evidentiary
decisions were well-reasoned and comported with
precedent).

    Kaffaga fails to respond to defense challenges to one
series of sustained objections during Gail’s direct testimony
in the Defendants’ case-in-chief where the district court
limited her testimony regarding the New York Litigation and
Gail and Thom’s alleged termination rights. However,
assuming arguendo that those rulings were erroneously
reasoned, they were not abuses of discretion because the
complaint framing the issues for trial only alleges causes of
action based on facts arising after the Second Circuit’s
decision in 2010. Evidence of, and argument regarding, Gail
and Thom’s beliefs prior to 2010 were not relevant to
whether Defendants should have been subjected to punitive
damages for their actions post-2010.

    Moreover, the record contains multiple instances that
were not stricken of Gail testifying that she believed she and
Thom actually had retained certain control rights to various
John Steinbeck works. And Defendants argued at trial,
including during closing statements to the jury, that they did
not act with the requisite intent to support punitive damages.
Additional testimony and argument regarding those beliefs

testimony on his legal opinion. The court’s conclusion that Petrich’s
testimony would be irrelevant and improper legal opinion was correct
and was not an abuse of discretion. See Hangarter v. Provident Life &
Accident Ins. Co., 373 F.3d 998, 1016 (9th Cir. 2004) (“[A]n expert
witness cannot give an opinion as to her legal conclusion, i.e., an opinion
on an ultimate issue of law.” (emphasis omitted) (citation omitted)).
Petrich was also not properly disclosed as a testifying expert before trial,
and therefore could not testify as an expert. See Fed. R. Civ. P. 37(c).
        KAFFAGA V. ESTATE OF THOMAS STEINBECK                21

would have been unnecessarily cumulative and may very
well have damaged Defendants’ case by belaboring their
lack of respect for previous court decisions.

    Even more importantly, the record contains
overwhelming evidence of Gail and Thom’s malice to
support the punitive damages award, and thus any error was
harmless. The jury did not credit Gail’s forceful assertion of
her belief that she and Thom maintained termination and
negotiation rights, and that they attempted to separately
negotiate with the studios in order to maximize profits from
the sale of intellectual property rights in Steinbeck’s works.
The testimony at trial instead established that Gail and Thom
knew about the 1983 Agreement and the various court
decisions upholding the fact that Elaine (and Kaffaga)
control Steinbeck’s works. It further showed that Gail and
Thom attempted to exercise their purported negotiation and
termination rights anyway, and that Thom “had no intention
of stopping [his] challenge to all of these things, so it really
didn’t make a lot of difference to [him] that a decision would
go one way or the other until [he’d] finally won.”

    Additionally, the documentary evidence that Defendants
were knowingly and purposefully acting contrary to those
court decisions, including written statements that the rulings
in the New York Litigation “won’t stand” and were “always
going to be nebulous, [and] always going to be at risk,” is
devastating. The documents demonstrate that, when they
learned that Kaffaga was negotiating film rights for The
Grapes of Wrath and East of Eden, Gail and Thom intended
to insert themselves and thwart negotiations by “riddl[ing
them] with lawsuits.” The record stands as persuasive
evidence that they made good on the threat.

    The documents further show that Gail and Thom acted
out of hatred and ill will, contrary to Defendants’ arguments
22      KAFFAGA V. ESTATE OF THOMAS STEINBECK

that they were only acting in their own economic interest and
thus not attempting to actually impede any deals. See
Bertero, 529 P.2d at 625 (improper motive of “hatred or ill
will” meriting the award of punitive damages). Gail wrote
in an email that she was “just pissed” and planned to litigate
even though it would cause a “pricey situation with little
[return on investment].” Thom himself penned that he sued
Kaffaga in New York because he “didn’t agree with her
maintaining [his] father’s inheritance.” And the jury could
have reasonably interpreted Gail’s insistence on negotiating
with production companies in secret to mean that she knew
such negotiations behind Kaffaga’s back were improper.

    We hold there is more than ample evidence of
Defendants’ malice in the record to support the jury’s
verdict, triggering entitlement to punitive damages. See
Pavao v. Pagay, 307 F.3d 915, 918 (9th Cir. 2002) (“A jury’s
verdict must be upheld if it is supported by substantial
evidence . . . , even if it is also possible to draw a contrary
conclusion.”). To the extent there were any erroneous
decisions that prevented some evidence about what rights
Gail and Thom believed they had, there was no abuse of
discretion and, regardless, any error was harmless. See
Molina v. Astrue, 674 F.3d 1104, 1119 (9th Cir. 2012)
(holding “a district court’s erroneous exclusion of evidence
does not warrant reversal unless the error more probably
than not tainted the verdict” (internal quotation marks and
citations omitted)).

                       CHAPTER VII

       “With a few exceptions people don’t want
       money. They want luxury and they want love
       and they want admiration.” John Steinbeck,
       East of Eden 541 (1992).
          KAFFAGA V. ESTATE OF THOMAS STEINBECK                          23

    Defendants argue that the punitive damages award
against Gail is illegally excessive under California law. 7
They contend there is insufficient evidence of Gail’s
financial condition and ability to pay to support punitive
damages. And, in so many words, even if the evidence is
sufficient to sustain some amount of punitive damages, the
$5.9 million awarded against Gail is disproportionately large
compared to her financial condition. 8

    When faced with a challenge to the size of punitive
damages under California law, reviewing courts must
“determine whether the award is excessive as a matter of law
or raises a presumption that it is the product of passion or
prejudice.” Adams v. Murakami, 813 P.2d 1348, 1350 (Cal.
1991) (in bank). This “‘passion and prejudice’ standard does
not occur in a vacuum, but is measured against,” as relevant
here, “the ratio between the damages and the defendant’s net
worth.” Boyle v. Lorimar Prods., Inc., 13 F.3d 1357, 1360
(9th Cir. 1994) (per curiam) (quoting Las Palmas Assocs. v.
Las Palmas Ctr. Assocs., 1 Cal. Rptr. 2d 301, 323 (Cal. Ct.
App. 1991)); see also Neal, 582 P.2d at 990 (seminal
California Supreme Court case). It is the plaintiff’s burden
to place into the record “meaningful evidence of the
    7
      The propriety of punitive damages is a matter of state law; thus
California law applies here. See Browning-Ferris Indus. of Vt., Inc. v.
Kelco Disposal, Inc., 492 U.S. 257, 278 (1989).
     8
       For the first time in their reply, Defendants argue that the Plaintiff
failed to “identify any evidence relating to the financial wherewithal of
Thom or Palladin that would warrant punitive damages [of $2 million]
against either of them.” This argument may have had legs had it been
properly raised in the opening brief. But the issue is not properly before
the panel because it was neither raised in the opening brief nor to the
district court. See Burlington N. & Santa Fe Ry. Co. v. Vaughn, 509 F.3d
1085, 1093 n.3 (9th Cir. 2007) (appellants forfeit an “argument by
raising it for the first time in their reply brief”).
24       KAFFAGA V. ESTATE OF THOMAS STEINBECK

defendant’s financial condition” to support a defendant’s
ability to pay. Adams, 813 P.2d at 1349, 1357–60. “The rule
established by lower California courts is that only net, not
gross, figures are relevant.” Boyle, 13 F.3d at 1361; see also
Lara v. Cadag, 16 Cal. Rptr. 2d 811, 813 n.2 (Cal. Ct. App.
1993), modified, (Mar. 9, 1993). The record thus must
contain sufficient evidence of Gail’s assets, income, and
liabilities and expenses for the punitive damages award to
stand. See Boyle, 13 F.3d at 1361.

    Gail testified that she receives between $120,000 and
$200,000 per year from domestic book royalties from John
Steinbeck’s works. At the time of trial, she and Palladin had
four television series and six feature films in development,
with three “in some form of prep,” and she testified that she
would be “paid for these projects when they are optioned or
licensed.” Yet, Kaffaga introduced no estimate of Gail’s
potential income from those endeavors or the total value of
her other intellectual property assets, and thus they cannot
serve to support the punitive damages award. The record
contains some testimonial evidence about her lack of
expenses, including no minor children, mortgages, or other
debts. But Kaffaga failed to adduce any other evidence,
including, for example, an expert accountant to examine
Gail’s financial records to estimate her liabilities or net
worth. 9

   The record indisputably contains some evidence of
Gail’s financial condition. However, we conclude that

     9
       At oral argument, Plaintiff’s counsel referenced problems
obtaining that evidence during discovery because Gail was
uncooperative. But Plaintiff failed to (1) show where she sought to
compel additional evidence from Gail and was denied, (2) seek an
adverse inference instruction at trial, or (3) brief either point.
        KAFFAGA V. ESTATE OF THOMAS STEINBECK               25

Plaintiff failed to meet her burden of placing into the record
“meaningful evidence” of Gail’s financial condition and
ability to pay any punitive damages award sufficient to
permit us to conduct the comparative analysis on appeal
required by California law. See Adams, 813 P.2d at 1350;
see also Kelly v. Haag, 52 Cal. Rptr. 3d 126, 130 (Cal. Ct.
App. 2006) (reversing a punitive damages award for lack of
evidence where there was vague testimony by a layman
regarding the defendant’s assets and liabilities that was
otherwise unsupported by documentation or expert
testimony); Boyle, 13 F.3d at 1361. In reviewing the record,
we are unable to come to even a reasonable approximation
of Gail’s net worth. Without that, we have nothing to
compare to the size of the award to complete the
excessiveness analysis under California law. We therefore
vacate the jury’s punitive damages award against Gail for
lack of evidence of her ability to pay, and remand to the
district court with instructions to dismiss the punitive claims
against Gail. No additional evidence or briefing on the issue
is necessary.

                      CHAPTER VIII

       “We asked a gentleman by us, if he knew
       what cause was on? He told us [Steinbeck].
       We asked him if he knew what was doing in
       it? He said, really no he did not, nobody ever
       did; but as well as he could make out, it was
       over. ‘Over for the day?’ we asked him.
       ‘No,’ he said; ‘over for good.’” “Over for
       good!” Charles Dickens, Bleak House 865
       (1991).

   This dispute is indeed over. We reverse and vacate the
punitive damages award against Gail. All other issues and
26       KAFFAGA V. ESTATE OF THOMAS STEINBECK

the award of compensatory damages are affirmed. The
district court may wish to reconsider Kaffaga’s request for
an injunction to put an end to this recidivist litigation. This
panel will retain jurisdiction over any subsequent appeals.

     Costs are awarded to the Appellee.

   AFFIRMED IN PART AS TO COMPENSATORY
DAMAGES CLAIMS, VACATED AND REMANDED
IN PART WITH INSTRUCTIONS TO DISMISS THE
PUNITIVE DAMAGES CLAIMS.