Seaboard Music Co. v. Germano

Opinion

AULT, J.

After a court-tried case in which they were alleged to have knowingly and wrongfully induced the breach of a contract, defendants Germano and Connors appeal from a judgment awarding plaintiff Seaboard Music Co., Inc. damages against them in the amount of $6,222. On appeal they do not question the finding of liability, but contend only that the trial court used an improper measure to determine damages and that the amount awarded was excessive.

[621]

Facts

In 1965 plaintiff Seaboard Music Co., Inc., was in the business of leasing coin-operated juke boxes and amusement equipment to business establishments on either a fixed-rental or a division-of-proceeds basis. Defendant William Ohmer, who has not appealed, owned and operated a beer bar known as the “Gaiety” located in Huntington Beach, California. On August 3 of that year, Ohmer and plaintiff entered into a written equipment lease under which Ohmer agreed to lease and maintain plaintiff’s coin-operated equipment in his tavern for a period of 36 months. The lease provided for distribution of the gross income from the equipment 40 percent to the lessor and 60 percent to the lessee. As a further consideration plaintiff paid Ohmer the sum of $2,200 in advance commissions. If Ohmer sold the business he agreed to make assumption of the lease by the purchaser a part of any sales agreement and escrow. Pursuant to the lease, plaintiff installed a coin-operated juke box and pool table in the “Gaiety.”

In 1966 Ohmer wanted to sell the tavern. He enlisted the services of appellants Germano and Connors, who were business opportunity salesmen working for Orange County Business Sales. With full knowledge of the lease, appellants arranged the sale of the tavern to a purchaser who did not assume the lease. They advised both seller and purchaser the lease was invalid. After the close of escrow, the new owner of the tavern removed plaintiff’s juke box and pool table and placed them in storage.

Plaintiff filed this action against Ohmer and appellants to recover damages for loss of profits as well as unrepaid commissions advanced under the lease, attorney’s fees and costs. In his answer, Ohmer affirmatively alleged the lease created an illegal monopoly and was void. Germano and Connors simply denied the allegations of the complaint. At trial plaintiff’s president, Sam Holland, testified plaintiff’s share of the profits from the machines placed in the “Gaiety” averaged $55.10 per week duririg the period they had been in operation under the lease. The expense of operating and servicing the equipment came to $4.10 per week, leaving a net profit of $51.00 per week. He produced the company’s books and records to demonstrate these figures.