Thomas Atencio et al v. Tunecore, Inc. et al

Filing 164

MINUTES OF IN CHAMBERS - ORDER FOR PARTIES TO SHOW CAUSE WHY THE COURT SHOULD NOT SUA SPONTE DISMISS AFFIRMATIVE DEFENSE SEVEN AND STRIKE PROPOSED JURY INSTRUCTIONS by Judge Dolly M. Gee: The parties filed their Proposed Disputed Jury Instructions on 10/26/2018 134 -1. Upon review and consideration of the disputed jury instructions, the Court has identified two separate issues regarding those instructions that require resolution before trial begins. Given that it appears Defendant has no basis for requesting a jury instruction on waiver, it is hereby ORDERED TO SHOW CAUSE why the Court should not dismiss Affirmative Defense Seven before trial as a matter of law. Both parties are hereby ORDERED TO SHOW CAUSE why the Court should not strike the Proposed Jury Instructions based on California law. Assuming good cause does not exist to apply California law, the parties are hereby ORDERED to meet and confer in an effort to agree on jury instructions based on New York law, as the stock optio n agreements require. Any proposed joint, or disputed, jury instructions regarding the breach of contract claim shall be filed on or before 12/4/2018. The parties need not submit written briefing on these issues. Instead, the Court will hear oral argument on the issues on 12/4/2018 08:30 AM before Judge Dolly M. Gee, before trial begins. See document for further details. Court Reporter: Not Reported. (gk)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.

CV 16-1925-DMG (MRWx)

Date

Title Thomas Atencio, et al. v. TuneCore, Inc.
Present: The Honorable

November 30, 2018
Page

1 of 2

DOLLY M. GEE, UNITED STATES DISTRICT JUDGE

KANE TIEN
Deputy Clerk

NOT REPORTED
Court Reporter

Attorneys Present for Plaintiff(s)
None Present

Attorneys Present for Defendant(s)
None Present

Proceedings: IN CHAMBERS - ORDER FOR PARTIES TO SHOW CAUSE WHY THE
COURT SHOULD NOT SUA SPONTE DISMISS AFFIRMATIVE
DEFENSE SEVEN AND STRIKE PROPOSED JURY INSTRUCTIONS
The parties filed their Proposed Disputed Jury Instructions on October 26, 2018. [Doc. #
134-1.] Upon review and consideration of the disputed jury instructions, the Court has identified
two separate issues regarding those instructions that require resolution before trial begins.
First, Proposed Jury Instruction No. 11 pertains to Defendant’s wavier defense. Id. at 23.
Defendant proposes that the Court instruct the jury that Defendant’s waiver defense must succeed
if Defendant shows that: (1) “Caterine knew that TuneCore was required to issue Caterine stock
if he exercised his stock option grants from the 2006 through 2008 stock option agreements starting
in 2006 through Caterine’s resignation as CFO in 2011”; and either (a) “Caterine freely and
knowingly gave up his right to have TuneCore issue stock to him by failing to timely exercise his
stock options after he resigned from TuneCore in January 2011” or (b) “Caterine freely and
knowingly gave up that right when he did not object when TuneCore told Caterine his options
expired and he was receiving a new grant that had a deadline of one year to exercise, and by
accepting this grant he gave up any right to claim that his expired options were still valid.” Id.
The Court is concerned that neither parts (a) nor (b) are appropriate for jury instruction.
Part (a) does not pertain to a waiver defense—it corresponds to the breach of contract argument
that Caterine did not perform his obligation to timely exercise his stock options under the
agreements. Part (b) appears to be foreclosed by the plain language of the “new grant” Defendant
references. The Court presumes the “new grant” refers to Caterine’s 2012 stock option agreement,
since that agreement has a one-year exercise term. As the Court previously noted in its Order
denying Defendant’s Motion for Summary Judgment, however, the 2012 Agreement itself appears
to foreclose Defendant’s waiver defense. [Doc. # 96 at 15.] The agreement states that it was
“granted to [Caterine] in addition to, and not in lieu of, any other form of compensation otherwise
payable to” Caterine. [Doc. # 86-4, Ex. 22 (“2012 Agreement”) at 1 (emphasis added).]
CV-90

CIVIL MINUTES—GENERAL

Initials of Deputy Clerk KT

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.

CV 16-1925-DMG (MRWx)

Title Thomas Atencio, et al. v. TuneCore, Inc.

Date

November 30, 2018
Page

2 of 2

Furthermore, even if Defendant plans to introduce evidence at trial showing that the parties
attempted to modify or amend the agreement by subsequent emails or conversations to operate as
a replacement for Caterine’s prior agreements, the 2012 Agreement also states that any “[s]uch
amendment must be in writing and signed by the Corporation.” Id. at 8. The Court is aware of no
such signed writing. Given that it appears Defendant has no basis for requesting a jury instruction
on waiver, it is hereby ORDERED TO SHOW CAUSE why the Court should not dismiss
Affirmative Defense Seven before trial as a matter of law.
Second, even though the parties’ stock option agreements plainly state that they “shall be
governed by, and interpreted pursuant to, the laws of the State of New York,” see e.g., [Doc. # 864, Ex. 20 (“Caterine’s 2008 Agreement”) at 4, Ex. 35 (“Atencio’s 2006 Agreement”) at 4], the
Proposed Disputed Jury Instructions regarding the stock option agreements almost exclusively
reference California law and the model California Civil Jury Instructions (CACI). See [Doc. #
134-1 at 12-17.] Accordingly, both parties are hereby ORDERED TO SHOW CAUSE why the
Court should not strike the Proposed Jury Instructions based on California law. Assuming good
cause does not exist to apply California law, the parties are hereby ORDERED to meet and confer
in an effort to agree on jury instructions based on New York law, as the stock option agreements
require. Any proposed joint, or disputed, jury instructions regarding the breach of contract claim
shall be filed on or before December 4, 2018.
The parties need not submit written briefing on these issues. Instead, the Court will hear
oral argument on the issues on December 4, 2018 at 8:30 a.m. before trial begins.
IT IS SO ORDERED.

CV-90

CIVIL MINUTES—GENERAL

Initials of Deputy Clerk KT