Department 6 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107
CIVIL LAW & MOTION
Wayne Clark et al vs Donn Zellet et al
|Hearing Date:||Wed Jun 26, 2013 9:30|
Nature of Proceedings: Petition: Confirm Arbitration. TENTATIVE RULING: The petition for order confirming arbitration award and for entry of judgment in favor of plaintiff and against defendant is granted. Plaintiff shall prepare a proposed judgment consistent with the arbitration award and submit it to the court for signature. The injunction bond that was filed by plaintiff on February 24, 2012 is ordered released. BACKGROUND: Plaintiff Wayne Clark and defendant Donn Zellet manufacture, market, and sell portable break-away fence panels used primarily for sporting events. In 2006, plaintiff sued defendant for infringing on plaintiff’s patent and trademark rights to a plastic portable fence called “SportFence.” The parties subsequently entered into a settlement agreement pursuant to which defendant agreed to stop manufacturing SportFence. Defendant also agreed not to market or sell any product under the name SportFence that was not manufactured by plaintiff and not to use the special dies (parts FT11-W and BT11-W) that are used to manufacture the patented parts to SportFence. The settlement agreement provided that defendant could resume the manufacture of SportFence if plaintiff ceased manufacturing the product. On June 21, 2011, plaintiff filed the present action for injunction and damages, claiming that defendant had breached the settlement agreement. On February 2, 2012, this court (the Hon. Denise de Bellefeuille) ordered the matter to arbitration in accordance with ¶6 of the settlement agreement. At the same time, the court issued a preliminary injunction enjoining and restraining defendant from: 1. Manufacturing plastic portable fencing using die parts FT11-W and BT11-W; and 2. Selling or offering for sale any portable plastic fencing under the name “SportFence” in any form except for fencing purchased from plaintiff. The matter proceeded to arbitration before Arbitrator Nancy J. Warren of JAMS. The arbitrator determined that defendant had breached the settlement agreement by continuing to manufacture, market, and sell SportFence without ordering the fence product from plaintiff. (Arb. Award, p.7.) The arbitrator also found that defendant had continued to use the patented parts FT11-W and BT11-W in violation of the settlement agreement and the court’s preliminary injunction. (Arb. Award, p.7.) The arbitrator awarded damages to plaintiff in the amount of $376,418.00, plus attorney’s fees and costs in the amount of $59,544.58. (Arb. Award, pp. 10, 11.) The arbitrator also found that plaintiff was entitled to a permanent injunction prohibiting defendant from manufacturing any SportFence or selling any SportFence that is not manufactured by plaintiff. (Arb. Award, p. 10.) Plaintiff now petitions the court to confirm the arbitration award and for entry of judgment. Defendant objects to the petition and requests that the court correct the award on the ground that the damages were computed incorrectly. ANALYSIS: Code of Civil Procedure Section 1285 authorizes judicial enforcement of arbitration awards. Section 1285 provides: “Any party to an arbitration in which an award has been made may petition the court to confirm, correct or vacate the award. The petition shall name as respondents all parties to the arbitration and may name as respondents any other persons bound by the arbitration award.” If a petition to enforce an arbitration award is duly filed and served, the court shall confirm the award as made unless it corrects the award and confirms it as corrected, vacates the award, or dismisses the proceedings. Code Civ. Proc. §1286. Additionally, if an award is confirmed, the court shall enter it as a judgment and the judgment shall have the same force and effect as a judgment in a civil action. Code Civ. Proc. §1287.4. Section 1287.4 provides: “If any award is confirmed, judgment shall be entered in conformity therewith. The judgment so entered has the same force and effect as, and is subject to all the provisions of law relating to, a judgment in a civil action of the same jurisdictional classification; and it may be enforced like any other judgment of the court in which it is entered, in an action of the same jurisdictional classification.” Here, plaintiff has duly filed and served his petition to confirm the arbitration award. Defendant objects to the petition on the ground that the arbitrator miscalculated the damages. Defendant requests that the court correct the arbitration award by reducing the damages to no more than $30,448.40. As noted above, the arbitrator found that plaintiff was entitled to damages of $376,418.00. (Arb. Award, p.10.) The arbitrator calculated the damages by totaling the gross receipts received by defendant for the sale of SportFence, less the cost of production. (Arb. Award, p. 8.) Defendant contends that the damages awarded to plaintiff should have been based on the difference between what plaintiff would have charged defendant for the SportFence and plaintiff’s cost of manufacturing the fence. Defendant sold 2,335 portable break-away fence panels between the date of the settlement agreement and February 2012. (Zellet Dec., ¶¶ 11, 12.) Defendant opines that plaintiff would have sold the fence panels to him for $93.04 per panel, that plaintiff’s costs would have been about $80.00 per panel, and that plaintiff’s total profits would have been no more than $30,448.40. (Zellet Dec., ¶¶ 10-13, Ex. 4.) The court will grant plaintiff’s petition to confirm the arbitration award. Defendant seeks to retry his case, but the time to do that was at the arbitration hearing. Defendant was ordered by the arbitrator to produce records showing the costs he incurred in manufacturing SportFence. However, defendant produced only limited records. (Arb. Award, p. 8.) As the arbitrator stated, “The only basis available to calculate damages in this matter are from [defendant’s] records. [Defendant] cannot refuse to produce records and then complain that the damages cannot be clearly ascertained or calculated with reasonable certainty.” (Arb. Award, p. 8.) Defendant argues that his costs and profits should not have been considered and that the arbitrator should have only considered plaintiff’s costs in awarding damages, but this argument ignores the fact that plaintiff’s costs certainly would have been much lower and his sales much higher had defendant not actively competed with him for customers. Also, defendant needed to raise this argument when he sought to have the arbitrator correct her award in April. Instead, defendant only asked the arbitrator to correct the injunction language to make clear which molds he was permitted to use. (Arb. Award, p. 3.) There being no grounds to vacate or correct the arbitration award, the award is ordered confirmed. Pursuant to Code of Civil Procedure Section 1287.4, judgment shall be entered in favor of plaintiff and against defendant in the amount of $376,418.00, plus attorney’s fees and costs in the amount of $59,544.58. Plaintiff is also entitled to a permanent injunction against defendant as set forth in the award.