Maglica v. Maglica

66 Cal.App.4th 442 (4th Dist. 1998)

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Nature of the Case

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Facts

D founded his own machine shop business in 1955. He got divorced in 1971 and kept the business. That year he met P an interior designer. They lived together, holding themselves out as man and wife--hence P began using the name Claire Maglica--but never actually got married. While they worked side by side building the business, D never agreed--or at least the jury found D never agreed--to give P a share of the business. When the business was incorporated in 1974, all shares went into D's name. D was the president, and P was the secretary. They were paid equal salaries from the business after incorporation. In 1978, the business began manufacturing flashlights, and, thanks in part to some great ideas and hard work on P's part (e.g., coming out with a purse-sized flashlight in colors), the business boomed. Mag Instrument, Inc., is now worth hundreds of millions of dollars. In 1992 P discovered that D was trying to transfer stock to his children but not her, and the couple split up in October. In June 1993 P sued D for, among other things, breach of contract, breach of partnership agreement, fraud, breach of fiduciary duty and quantum meruit. The case came to trial in the spring of 1994. The trial judge instructed the jury that the reasonable value of the plaintiff's services was either the value of what it would have cost the defendant to obtain those services from someone else or the 'value by which' he had 'benefitted [sic] as a result' of those services. The jury awarded $84 million for the breach of fiduciary duty and quantum meruit causes of action, finding that $84 million was the reasonable value of P's services. This appeal resulted.