New Trial After Unqualified Reversal of a Judgment
In Bank of America v. Superior Court (1990) the court considered the effect of its earlier decision in Kruse v. Bank of America (1988) where the trial court had entered judgment for plaintiffs after the jury returned a verdict in favor of them against Bank of America (the Bank) and it denied the Bank's motion for judgment notwithstanding the verdict (JNOV).
On appeal, the judgment was reversed for legally insufficient evidence. (Bank of America, supra, 220 Cal. App. 3d at p. 615.)
After remand, the Bank sought entry of judgment in its favor, summary judgment or summary adjudication of certain issues, and the plaintiffs sought leave to amend to add another cause of action. (Id. at p. 616.)
When the trial court granted the plaintiffs' motion and denied those brought by the Bank, the Bank petitioned for mandamus in the Court of Appeal to compel the trial court to enter judgment in its favor. (Id. at p. 617.)
In granting the relief requested, the court in Bank of America applied law of the case and a statutory policy similar to the exception to the general reversal rule that an unqualified reversal of a judgment remands the case for new trial (Stromer v. Browning (1968) 268 Cal. App. 2d 513 [74 Cal. Rptr. 155]) to avoid the anomaly that would result if the trial court's denial of the Bank's motion for JNOV were to stand in light of the appellate court's determination in Kruse that the judgment should be reversed for insufficiency of the evidence. (Bank of America, supra, 220 Cal. App. 3d at pp. 620-626.)
The court in Bank of America found that the failure of the court in Kruse, supra, 202 Cal. App. 3d 38, to direct entry of judgment "would fortuitously confer" on the plaintiffs a second chance to prove their case which they would not have had if the trial court had acted correctly. (Bank of America, supra, 220 Cal. App. 3d at p. 625.)
In directing entry of judgment in favor of the bank, the Bank of America court specifically stated:
"Like the court in Stromer, we view the unqualified reversal rule as a general rule subject to limitations. Stromer created its exception to avoid applying the general rule to defeat the manifest intent of the appellate court to disallow retrial. It would be just as unreasonable to allow retrial under the general rule in a case where, but for the trial court's erroneous denial of the Bank's motion for [JNOV] and the Court of Appeal's failure to comply with [a statute that provided a reversal on appeal for insufficiency of the evidence concludes the litigation], real parties would clearly have lost their right to another day in court. There is no compelling policy reason to restore it to them.
As our Supreme Court recently pointed out in a different context, the need to enhance the finality of judgments and avoid 'an unending roundelay of litigation,' makes it 'necessary that litigants assume responsibility for the complete litigation of their cause during the proceedings.'
The present case . . . has been exhaustively litigated. We cannot assume real parties failed to marshall the best evidence, because the [JNOV] must ordinarily be predicated on the assumption that the party against whom the motion is made has presented the strongest possible case.
Accordingly, we hold that the unqualified reversal rule has no application in a case where a motion for [JNOV] was made and denied by the trial court, and the appellate court reverses the judgment for insufficiency of the evidence." (Bank of America, supra, 220 Cal. App. 3d at p. 626.)
The reasoning of Bank of America, supra, 220 Cal. App. 3d 613 was applied to reach a similar result in McCoy v. Hearst Corp. (1991) 227 Cal. App. 3d 1657 [278 Cal. Rptr. 596].
In McCoy, the California Supreme Court had reversed the first judgment without directions, for insufficiency of the evidence to support a finding of actual malice for libel under the New York Times rule. (McCoy, supra, 227 Cal. App. 3d at p. 1657, citing New York Times v. Sullivan (1964) 376 U.S. 254 [11 L. Ed. 2d 686, 84 S. Ct. 710, 95 A.L.R.2d 1412].)
On remand, when the trial court entered judgment for the defendants and dismissed the action, the plaintiffs appealed, maintaining they were entitled to a new trial. (McCoy at p. 1659.)
In upholding the trial court, the court in McCoy noted:
"When the plaintiff has had full and fair opportunity to present the case, and the evidence is insufficient as a matter of law to support plaintiff's cause of action, a judgment for defendant is required and no new trial is ordinarily allowed, save for newly discovered evidence.
. . . It is anomalous to end the case when the trial court correctly enters a nonsuit or JNOV on the ground that the plaintiff has, as a matter of law, failed to prove a cause of action, but to allow plaintiff another trial when the appellate court makes the same determination, since the standard applied by the respective courts is virtually identical." (McCoy, supra, 227 Cal. App. 3d at p. 1661.)