Amtower v. Photon Dynamics, Inc

In Amtower v. Photon Dynamics, Inc. (2008) 158 Cal.App.4th 1582, the president of one corporation sued officers and directors of another corporation with which his corporation merged for deceiving him about the transferability of the stock he would acquire during the merger, alleging fraud, breach of fiduciary duty, and a violation of section 11 of the federal Securities Act of 1933. (Id. at pp. 1587, 1590.) Plaintiff relies on our discussion of whether the trial court had unduly limited the scope of an expert's testimony about the standards, customs, and practices in the securities industry. (Id. at p. 1599.) The Court upheld the trial court's ruling, describing the elements of a cause of action for breach of fiduciary duty and explaining: "Whether a fiduciary duty exists is generally a question of law. Whether the defendant breached that duty towards the plaintiff is a question of fact. Thus, insofar as the excluded testimony would have described the fiduciary relationship, it was properly excluded as pertaining to a question of law. The judge would explain that in the jury instructions." (Ibid.) The Court criticized the increasingly frequent "use of in limine motions as substitutes for summary adjudication motions, motions for judgment on the pleadings, or other dispositive motions authorized by statute." (Id. at p. 1588.) This court published the Amtower opinion "to express our concerns surrounding the proliferation of such shortcut procedures." (Ibid.) There, this court observed: "The better practice in nearly every case is to afford the litigant the protections provided by trial or by the statutory processes." (Ibid.; see id. at pp. 1593-1595.) Nevertheless, this court continued, "although we would have preferred that the statute of limitations issue be decided by a proper summary adjudication motion or motion for nonsuit, the trial court's unorthodox procedure does not warrant reversal because plaintiff could not have prevailed under any circumstances." (Id. at p. 1588; see id. at pp. 1596-1597.)