The Apple-owned headphone company won a motion for summary
judgment, but a jury — not a judge — will decide how much it is due.
Beats should create its plea for attorney’s fees from Monster LLC before a jury, not a choice, a California appeals court dominated Wed.
This legal fight began within the fall of 2015, once Monster, AN audio instrumentality company to not be confused with the energy drink of identical name, and its founder Yuletide Lee sued Beats natural philosophy.
Musicking Jimmy Iovine, Andre Young (aka Dr. Dre) and Lee in agreement to a deal in 2008 that granted Monster the proper to manufacture and sell Beats by Dre headphones, and amended their agreement consecutive year. That 2009 deal enclosed a provision that Beats may terminate the agreement on or whenGregorian calendar month. 7, 2013, or upon the closing of dealing that leads to the amendment of management — that Beats taken because of the acquisition of quite fifty % of the corporate. The termination provision was triggered in August 2011, once HTC paid $300 million for fifty-one % of Beats.
Lee had nonheritable five % of the corporation within the 2009 agreement, and afterward sold-out three.75 % back in 2012 and therefore the remaining one.25 % in 2013. Seven months later, Apple bought Beats for $3 billion — and Lee claims the HTC acquisition was a “sham” to chop him out of the Apple profits.
Monster sued for fraud in January 2015, alleging that the HTC deal was designed to force the corporate out of the producing method which Lee had asked Iovine whether or not any “liquidity events” were on the horizon before he sold-out his remaining interest and was told none were planned. Lee was paid $5.5 million for that one.25 percent, that he says would value upwards of $30 million he had paid out when the Apple purchase.
Beats discharged back, dispute that every one of Monster’s and Lee’s causes of action were barred by unharness provisions in their agreements and filing a cross-complaint alleging the fraud case was filed in breach of their deals.
In 2016, Beats prevailed on a motion for judgment. The court discharged Monster’s case with prejudice, finding that the claims were barred by the discharge provisions, and sent solely the cross-complaint forward to trial. Beats then argued that the damages sought-after — attorney’s fees arising from defensive the fraud claims — ought to be determined by a choice rather than a jury beneath Civil Code section 1717. Beats argued the code provides that once a contract provides that attorney’s fees and prices are going to be awarded to the litigant, the quantity awarded are going to be fastened by the court. la tribunal choose William Fahey in agreement and dominated the “’attorney’s fees issue’ would be ‘heard by the manner of a noticed motion resolved by the court.’” Monster appealed, that prompted the choice at hand.
A 2d District panel on Wed vacated the superior court’s order and educated it to “issue a replacement order directional that Monster and Lee area unit entitled to a jury trial to work out the number of these attorney’s fees.”
“If Beats ultimately prevails on its breach of contract claims, section 1717 would permit it to maneuver for attorney’s fees that it incurred in litigating those claims, however, the statute has no application to the fees Beats has sought-after as damages on its contract claims, that should be ‘proven — as the other item of damages — at trial,'” writes acting presiding justice Laurie Zelon.
Further, the panel found that upholding Beats’ interpretation of section 1717 may undermine the state’s constitution, that provides civil litigants the proper to possess a jury to assess damages in breach of contract actions.
“When potential, we tend to should construe with statutes in an exceedingly manner that avoids constitutional difficulties,'” writes Zelon. “Applying that principle here, to the extent section 1717 are often fairly taken within the manner Beats proposes, we tend to reject that reading to avoid the tough constitutional queries it might raise.”