Norager v. Nakamura

Opinion

REARDON, J.

Defendant Edwin Nakamura appeals from a judgment ordering him to pay plaintiff Harry Norager $105,000 (plus interest, costs and attorney fees), and from an order denying his motion to vacate a judgment and to enter a new judgment under Code of Civil Procedure section 663.

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Harry Norager filed an action for breach of contract against Norager, Inc. (the Corporation) and Edwin Nakamura, based on $30,000 remaining due on a $135,000 promissory note. The Corporation was sued directly on the promissory note, while Nakamura was sued as a guarantor of the note obligation. The Corporation and Nakamura cross-complained.

On the last day of a four-day court trial, Norager successfully moved to amend his complaint to conform to proof, alleging Nakamura’s bad faith denial of the existence of a contract. In support of the motion to amend, Norager’s attorney relied heavily on the Supreme Court’s decision in

Seaman’s Direct Buying Service, Inc.

v.

Standard Oil Co.

(1984) 36 Cal.3d 752 [206 Cal.Rptr. 354, 686 P.2d 1158], in which that tort was first recognized.

Thereafter, the court found in favor of Norager and against the Corporation in the amount of $30,000 (plus prejudgment interest, attorney fees and costs) on the contract allegation. Further, the court found in favor of Norager and against Nakamura in the amount of $105,000 (plus prejudgment interest on $30,000, attorney fees and costs). The latter sum against Nakamura included $30,000 due under the guaranty, together with an additional $25,000 compensatory damages and $50,000 punitive damages based on the tort cause of action alleging the bad faith denial of the existence of the contract. The Corporation and Nakamura took nothing on their cross-complaint.

[1820]

Discussion

On appeal, Nakamura

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