Walczer

Plaintiff Alliance Payment Systems, Inc., a California corporation (APS), appeals from an order granting a new trial in its action against Lisbeth Walczer and Reliable Processing Solutions (RPS; Walczer and RPS are hereafter referred to collectively as defendants) to collect amounts allegedly owed under a settlement agreement that divided a business. Defendants have filed a protective cross-appeal from the judgment after a bifurcated trial.

In the first phase of the trial, a jury awarded APS damages under two provisions of the settlement agreement: one prohibiting the parties from soliciting each other's customers, and another requiring that the parties each forfeit to the other any revenue they received from the other's customers, regardless of solicitation. In the second phase of the trial, the court found that the revenue forfeiture provision was unenforceable as an illegal restraint of trade, and the court subsequently ordered a new trial because the verdict may have erroneously awarded damages under that provision.

The principal issues presented are whether the settlement provisions are restraints of trade prohibited by Business and Professions Code section…