Opinion
NOT TO BE PUBLISHED
Marin County Super. Ct. No. CV 070247
Margulies, J.
Sheldon Caughey, doing business as Sausalito Yacht and Ship, sued Cara Dibnah to recover a commission on Dibnah’s sale of her motor yacht to a third party. Caughey alleged that the commission was due under an open listing agreement he had entered into with Dibnah in 2004. After a court trial, the trial court found that Caughey was not entitled to a commission because he breached his fiduciary duties to Dibnah in several respects. Caughey appealed from the ensuing judgment, which we now affirm.
I. BACKGROUND
A. Trial Evidence
Cara Dibnah signed an open listing agreement with Caughey, a licensed California yacht broker, in March 2004 to sell her 79-foot motor yacht, the St. Elias. The agreement specified an asking price of $285,000 and provided for payment of 10 percent of the selling price to the broker as a commission for procuring a buyer: “The owner agrees to pay the standard commission of 10 percent of the above-purchase price, or any price owner might finally accept from any ready, willing, and able buyer, or purchaser, or sublisting broker.” There was no expiration date for the listing agreement, but it could be terminated on 45 days’ notice. Under the agreement, the broker was entitled to a commission if he identified or furnished specifications to anyone who thereafter purchased the vessel within two years.
On May 5, 2004, Caughey’s surety bond, required by Harbor and Navigation Code section 730, was cancelled and not reinstated until September 1, 2005. As a result, Caughey’s broker’s license was suspended from July 30, 2004 through August 30, 2005. Caughey did not inform Dibnah of the suspension, but continued to act as her broker during this time, communicating with her by e-mail and bringing two or three prospective purchasers to look at the boat. Caughey testified that he was unaware his license had been suspended until this litigation began, but the trial court found this testimony to be false.
In March 2005, Dibnah accepted an offer of $240,000 or $245,000 for the yacht, but the sale fell through due to a dispute over repairs. In July 2005, Dibnah lowered the asking price for the yacht from $325,000 to $255,000, but she raised it back up to $385,000 in January 2006. After that, she never authorized Caughey to offer the boat at a lower price.
In mid-August 2006, James Hornung contacted Caughey to express his interest in purchasing the yacht, telling Caughey that the St. Elias was the “exact” type of boat he had been looking for—a large yacht that was part commercial and could be moored at either a yacht club or commercial pier. Caughey testified that he told Hornung in their first conversation that Dibnah had accepted an offer for the boat of around $250,000 the previous year. Dibnah testified, without objection, about a conversation she later had with Hornung on this subject. According to Dibnah, Hornung recalled Caughey telling him in their first conversation that “[Dibnah] would sell the boat for [$250,000].” Dibnah never authorized Caughey to disclose the previous year’s accepted offer, or to represent that she might accept some amount less than $385,000.
On cross-examination, Caughey admitted testifying in his deposition that he told Hornung that Dibnah had accepted an offer of $255,000 the previous year.
Plans were made for Hornung to inspect the boat on August 30. A few days before the inspection, another broker contacted Dibnah after noticing that the Yacht World Web site was listing the boat at $350,000, which was lower than the $385,000 price the broker was listing it for. When Dibnah asked Caughey about this on August 27, he told her that it was Yacht World’s mistake and he would have it corrected. Dibnah later confirmed that the price had been corrected.
Hornung inspected the boat on August 30. Caughey met him there and introduced him to Dibnah and her husband, Anthony. Anthony Dibnah gave them a tour of the boat that lasted approximately two hours. When Caughey excused himself to go to a luncheon, Hornung asked if he could stay, and Caughey told him that would be fine. Hornung and Dibnah exchanged contact information at that time, although Dibnah testified that Caughey had already provided her with Hornung’s contact information. She explained they exchanged contact information so Hornung could get any specific information he needed about the boat from her that the broker might not have. On his way to the airport after the inspection, Hornung called Caughey and told him he “absolutely love[d]” the boat and would be making an offer. Caughey testified that once Hornung told him he was going to make an offer, he considered himself a dual agent of the seller and the purchaser.
On September 6, Hornung called Caughey and asked him about the procedure for making an offer. According to Caughey, Hornung asked him what he thought the boat might be worth. Caughey insisted his only response to that question was to inform Hornung that there had been a transaction the year before “in the area of $250,000.” The next day, Hornung sent Caughey an e-mail stating, “I have been putting my thoughts together after our conversation last night,” and proposing to make an offer of $255,000. Caughey prepared the offer on a California Yacht Brokers Association form purchase agreement, and faxed it to Hornung for his signature. Page six of the form purchase agreement included a paragraph containing three check boxes to indicate whether the broker was acting as the exclusive agent of the buyer, the seller, or both the buyer and the seller. Caughey checked the dual agent box when he prepared the purchase agreement, but he failed to include it when he faxed the agreement to Hornung for signature. According to Caughey, this resulted from a “mechanical failure” in the fax machine.
There is a typographical error in the e-mail, but it is clear that Hornung intended an offer of $255,000 gross, meaning that Caughey’s commission would reduce Dibnah’s net proceeds from the sale.
When Caughey received the signed offer back from Hornung on September 8, he walked it over to Anthony Dibnah. According to Caughey, in his haste to get the offer over to Mr. Dibnah late in the afternoon, he inadvertently failed to notice that page six was missing from the signed offer. According to Dibnah, Caughey never alerted her that there was a missing page and never informed her that he was acting as an agent for the buyer. She testified that she would not have accepted this arrangement because she wanted her broker to represent her, not someone else.
When Anthony Dibnah saw the first offer, he told Caughey that Mrs. Dibnah was not going to like it. He asked Caughey how the amount of the offer could have turned out to be “the exact price that we agreed to sell the boat [for] before.” Caughey denied any knowledge of that. Caughey wrote an e-mail to Hornung that evening, reporting on his meeting with Anthony Dibnah: “His reaction was medium, if I can give you a guess. [¶] I think we are a bit low on his final price.... but I never know for sure. We can see his counter offer. We may have to play poker, but I think we are within 10%.”
On September 10, Caughey received a fax back from the Dibnahs making a counteroffer to sell the boat for $285,000 “net,” meaning that Dibnah’s net proceeds from the sale would not be reduced below $285,000 to pay Caughey’s commission. The counteroffer also included an expiration date of September 13. With those changes to the terms of the sale, the Dibnahs had signed the agreement and initialed all of the pages of it that Caughey had delivered to them. Caughey informed Hornung of the counteroffer and told him that if Hornung accepted it, Caughey would be denied his commission. Hornung promised Caughey he would not do that. Hornung asked Caughey to prepare a new offer to purchase the boat for $275,000 gross.
Caughey flew to Mexico for a planned vacation on the morning of September 12. Caughey testified that he tried to fax Hornung’s second offer to the Dibnahs multiple times after he arrived in Mexico on September 12, but was unable to get through. The Dibnahs denied turning off their fax machine during this time. Dibnah introduced a copy of a handwritten fax sent to her by Caughey from Mexico on September 13, in which he states, “I have another offer coming, I think. [¶] First, I need us to be in agreement 100%. I need a current and signed listing about representing the boat. [¶] Please sign, if agreeable, and fax back to me....” The September 13 fax included a California Yacht Brokers Association form “Open Listing Agreement” with different terms than the 2004 agreement Dibnah had originally signed. In particular, the agreement included a provision allowing the broker, with the seller’s consent, to act as a dual agent for buyer and seller. Caughey had made no mention of any dual agency arrangement, either in the handwritten cover letter or otherwise. Dibnah felt Caughey was pressuring her to sign the agreement, noticed that the agreement was back-dated to September 1, and was troubled that “too many odd things” were going on.
On September 14 at 6:05 p.m., Caughey faxed Hornung’s second purchase offer to Dibnah, including page six with the dual agency box checked, and the same listing agreement he had faxed on September 13. Dibnah found these papers in a jumble on the floor when she returned home shortly after 6:05 p.m. Hornung had signed the purchase offer on September 12, and it had expired by its own terms at 5:00 p.m. on September 14.
The Dibnahs did not respond to Caughey about the offer and did not answer his telephone calls about it in the next few days. The morning after receiving Hornung’s second offer, Dibnah called Hornung. She was very upset with Caughey and felt he was again pressuring her by sending the purchase offer and the listing agreement all jumbled together. She apologized to Hornung for her broker, explaining that she was “highly suspicious that something [was] amiss.” When Hornung disclosed Caughey’s statement to him in their first conversation that Dibnah “would sell the boat for [$250,000],” Dibnah felt she had “been had.”
On September 18, 2006, Dibnah contacted the Yacht World Web site to find out whether Caughey had told her the truth about how the listing price had been reduced from $385,000 to $350,000. She was informed that only Caughey had the ability, using his protected password, to lower the asking price listed on the Web site. This confirmed Dibnah’s suspicion that she could not trust Caughey any longer. She e-mailed Caughey that same day, cancelling her listing agreement with him.
On October 2, Caughey sent Hornung an e-mail asking Hornung to confidentially apprise him of his discussions with the Dibnahs, stating, “I don’t think the Dibnahs should know we are comrades in this,” and that “[t]here is going to have to be a little secrecy in our working together.”
On October 30, 2006, Hornung entered into an agreement with Dibnah to purchase the boat from her for $285,000 net. Caughey was not informed of the agreement at the time and received no commission when the sale was consummated.
Caughey’s expert on brokerage practices, Lenard Lee, testified that the boat was appraised by a marine surveyor in 2005 at a value of $250,000, if certain repairs were made. Lee was not aware of the Dibnahs’ reasons for raising their asking price to $385,000 in January 2006, and did not think the increase was justified. Dibnah’s valuation expert, Alan Hugenot, appraised the boat for insurance purposes at $490,000 in March 2007, based on sales of comparable boats.
At trial, Caughey sought recovery of his 10 percent commission under the 2004 listing agreement and, by way of cross–complaint, Dibnah sought $20,000 in emotional distress damages caused by Caughey’s asserted breaches of fiduciary duty.
B. Trial Court Decision
The trial court found that Caughey breached his fiduciary duty to Dibnah in various respects. The court noted in particular the following: (1) Caughey’s failure to inform Dibnah that his license had been suspended, (2) his failure to disclose that he was acting on behalf of the buyer as well as the seller, (3) Caughey’s disclosure to Hornung of the price of the offer Dibnah had accepted in 2005 and other overtures he made to Hornung to act collusively with him at the expense of the seller, (4) his delay in delivering Hornung’s second offer while he attempted to get Dibnah’s signature on a new listing agreement, and (5) Caughey’s responsibility for the boat being listed at an unauthorized price in Yacht World.
While acknowledging that Caughey did procure a ready, willing, and able buyer under his listing agreement with Dibnah, the court ruled as a matter of law that Caughey’s breaches relieved Dibnah of her obligation to pay Caughey his commission. The court declined to make any award under Dibnah’s cross-complaint. Caughey timely appealed from the ensuing judgment.
Caughey’s application for leave to file a corrected augment to his opening brief is granted.
II. DISCUSSION
A. Procedural Issues
Caughey makes two procedural contentions that we address first: (1) Dibnah’s trial counsel engaged in witness tampering by contacting an expert witness retained by Caughey and allegedly discouraging him from testifying, and (2) the court improperly denied Caughey’s applications for a waiver of fees.
1. Witness Tampering
At the outset of the trial, Caughey informed the court that one of his expert witnesses, marine surveyor Steven Wedlock, had called him a few days before trial and informed him that he would not be appearing. According to Caughey, Wedlock explained to him that Dibnah’s attorney, Terence Cox, had contacted Wedlock and told him that if he appeared Cox would not be able to properly cross-examine him. Cox told the court Wedlock had been a client of his for 10 years and was still his client. According to Cox, he called Wedlock as trial approached and left a voicemail message asking him if he was going to be appearing at trial. Wedlock responded via e-mail that Caughey had asked him to appear and he did not know if he would. Cox then sent an e-mail to Wedlock stating in substance that it would put him and Wedlock into an “awkward position” if Wedlock took the stand, but that it was Wedlock’s choice if he wanted to testify. Caughey maintained Cox should have objected to Wedlock testifying when the parties exchanged expert witness information, but it appeared Cox chose instead to deliberately try to “sabotage” his case by dissuading Wedlock from testifying at the last minute. But when pressed by the court about whether he wanted a continuance to obtain a new expert, Caughey stated: “I will waive this and I’ll proceed with my case and allow my other expert witness [Lenard Lee] to answer the questions... he’s qualified to answer as to the value of the vessel. [¶]... [¶]... I think that will suffice to give the Court the right information.”
We do not approve of Cox’s conduct in making ex parte contact with the opposing party’s designated trial expert in hopes of discouraging that witness from appearing. By doing so, Cox flirted with conduct that violates the law and the State Bar Rules of Professional Conduct. (See Pen. Code, § 136.1; Rules of Prof. Conduct, rule 5-310(A).) Even if Cox’s action did not violate the law or breach any ethical duty, “attorneys must use their common sense to avoid conduct which could appear to be an improper attempt to influence a witness who is about to testify.” (Erickson v. Newmar Corp. (9th Cir. 1996) 87 F.3d 298, 303 [attorney who hired expert retained by opposing party to work on another case created appearance of attempted bribery].) Instead of initiating an ex parte contact with Wedlock about his upcoming testimony just before trial, Cox should have promptly called his ongoing attorney-client relationship with Mr. Wedlock to Caughey’s attention as soon as the witness was designated. If Caughey did not elect to withdraw Wedlock as his expert, Cox could have objected to the designation before trial.
Although Cox’s actions were at least arguably improper, the prejudice to Caughey was, at most, that he was left without a valuation expert to call at trial. From all appearances, the court was prepared to grant him a continuance to obtain a new valuation expert. Instead of accepting a continuance, however, Caughey expressly waived the issue, proceeded with his case, and called Mr. Lee to testify about valuation. In our view, Caughey is barred by his express waiver at trial from renewing his objection to Cox’s alleged witness tampering on this appeal. Although Caughey now claims he was too “shaken” to realize Wedlock’s importance to his case or that he could have called him as a rebuttal witness, the fact remains that his voluntary decision to proceed with the trial prevented the court from alleviating the prejudice of which he now complains. Caughey’s inexperience and second thoughts about his decision to proceed with the trial do not relieve him of the effect of his express waiver, and do not afford sufficient grounds to nullify the judgment.
2. Denial of Fee Waiver Applications
Caughey asks this court to order the trial court to vacate its orders denying his applications for a waiver of court costs and fees and to allow him a refund. We decline to reach the merits of Caughey’s claim because the orders in question are not appealable. As stated in Fuller v. State of California (1975) 51 Cal.App.3d 926: “The ruling [denying plaintiff’s motion for permission to proceed in forma pauperis] cannot be reviewed on appeal. The proper method to have the ruling reviewed would have been for plaintiff to petition this court for a writ of mandamus. (See Isrin v. Superior Court (1965) 63 Cal.2d 153, 154–155.) Under such proceeding, if the ruling were determined erroneous, the trial court would have been ordered to rehear the motion and to determine the status of plaintiff as to being or not being a pauper, which status has not been determined. It is too late to have that status determined now. By not following such procedure plaintiff has waived his right to have the ruling reviewed.” (Id. at p. 950; see also Guardianship of Pankey (1974) 38 Cal.App.3d 919, 939.)
B. Substantive Merits of the Judgment
Caughey claims the judgment must be reversed due to “numerous judicial errors” but he fails to organize his arguments into coherent assertions of specific, appealable errors made by the trial court. We construe Caughey’s brief as raising two broad questions regarding the judgment: Did the trial court err in finding that Caughey materially breached his fiduciary or contractual duties to Dibnah? Assuming Caughey did breach his fiduciary or contractual duties to Dibnah in one or more material respects, did the court err in finding that these breaches relieved Dibnah of the obligation to pay him a 10 percent commission on the sale price of the boat pursuant to the 2004 listing agreement? We will assume for purposes of our analysis that Caughey did procure Mr. Hornung as a ready, willing, and able buyer for the boat and that Dibnah’s purported termination of the 2004 listing agreement, standing alone, would not have relieved her of her legal obligation to pay Caughey’s commission.
We treat Caughey’s objections to the court’s factual findings as a challenge to the sufficiency of the evidence to support them. “In reviewing a challenge to the sufficiency of the evidence, we are bound by the substantial evidence rule. All factual matters must be viewed in favor of the prevailing party and in support of the judgment. All conflicts in the evidence must be resolved in favor of the judgment.” (Heard v. Lockheed Missiles & Space Co. (1996) 44 Cal.App.4th 1735, 1747.) The trial court’s findings are binding on us so long as they are supported by substantial evidence. (San Diego Metropolitan Transit Development Bd. v. Handlery Hotel, Inc. (1999) 73 Cal.App.4th 517, 528.) In the absence of a statement of decision, all factual findings necessary to support the judgment will be implied. (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133–1134.) We are not bound by a trial court’s interpretation of the law and we independently review the application of the law to undisputed facts. (73 Cal.App.4th at p. 528.)
There was substantial evidence in the record, including testimony and/or documentation, to support the following factual findings, either directly or by reasonable inference: (1) after Dibnah signed a listing agreement with Caughey in March 2004, Caughey deliberately failed to inform her that his broker’s license was suspended from July 30, 2004 through August 30, 2005; (2) without Dibnah’s authorization, Caughey disclosed the amount of the offer Dibnah had accepted in 2005 to Hornung before Hornung made an offer on the boat; (3) Caughey told Hornung in their first conversation that Dibnah would accept an offer in the neighborhood of $250,000 even though she was listing the boat for $385,000; (4) Caughey never informed Dibnah that he was purporting to act as a dual agent for her and Hornung and tried to conceal that fact from Dibnah by leaving out page six of the form purchase agreement that he faxed to Hornung and delivered to the Dibnahs on September 8, 2006; (5) after delivering Hornung’s offer to Dibnah, Caughey told Hornung that he thought the offer was within 10 percent of what Dibnah would ultimately accept for the boat; (6) Caughey continued to try to get Dibnah to sign a new dual agency listing agreement, even withholding Hornung’s second offer while waiting for her to sign it, without explaining to Dibnah that he wanted her to agree to a dual agency arrangement and was in fact already acting as Hornung’s agent and had already furnished information to Hornung that she might accept substantially less than her asking price for the boat.
The court did not believe Caughey’s claim that he was unaware his license had been suspended.
Under Harbor and Navigation Code section 732, it is grounds for the denial, suspension or revocation of a boat broker’s license that the licensee “[a]cts for the buyer and seller in a transaction without full disclosure of that fact to the buyer and seller and their written consent[,]... [¶]... [¶]... [q]uotes prices different from the gross listing prices without the consent of the seller[,] [¶]... [e]ngages in any other conduct constituting fraud or dishonest dealings... with respect to his or her principal.... [¶]... [¶] [or] [f]ails to act in accordance with, or disregards, his or her fiduciary duty toward a principal.” Thus, the Legislature has expressly recognized that the kind of conduct engaged in by Caughey, as shown by the trial evidence, reflects serious and substantial breaches of a broker’s legal duties to his client.
Caughey acknowledges that case law concerning the rights, duties, and liabilities of real estate brokers is relevant to the legal issues before this court. In Huijers v. DeMarrais (1992) 11 Cal.App.4th 676 (Huijers), the Court of Appeal held that the seller’s remedy for a real estate agent’s failure to disclose her dual representation of the seller and buyer was that the listing agreement, including the agreement to pay the agent a commission, were voidable at the seller’s option. (Id. at pp. 679, 685–686.) The underlying common law principles were stated in McConnell v. Cowan (1955) 44 Cal.2d 805 (McConnell): “ ‘[W]here an agent has assumed to act in a double capacity, a principal who has no knowledge of such dual representation... may avoid the transaction. Actual injury is not the principle upon which the law holds such transaction voidable; rather, the law holds it voidable in order to prevent the agent from putting himself in a position where he will be tempted to betray his principal.... “... Such conduct is a fraud upon his principal, and not only will the agent not be entitled to compensation for services so rendered, but the contract or dealings made or had by the agent, while so acting also for the other party without the knowledge or consent of the principal, are not binding upon the latter.... It makes no difference that the principal was not in fact injured, or that the agent intended no wrong or that the other party acted in good faith; the double agency is a fraud upon the principal and he is not bound.” ’ ” (Id. at pp. 809–810, quoting Vice v. Thacker (1947) 30 Cal.2d 84, 90, italics added.)
In our view, this case presents a classic example of the faithless agent who betrays his principal. Dibnah listed the boat for $385,000. She never authorized Caughey to disclose or suggest to a prospective buyer that she would accept any lesser amount. Although the evidence in the record was conflicting, there was evidence from Dibnah’s valuation expert that the boat was in fact worth substantially in excess of $300,000. From his first contact with Caughey, Hornung expressed great enthusiasm about acquiring Dibnah’s boat. Instead of respecting his principal’s instructions and her interest in obtaining the highest possible purchase price, Caughey betrayed her by suggesting to Hornung that she would accept something in the neighborhood of $250,000. He thereafter tried to obtain retroactive ratification for his wrongful acts by pressing Dibnah unsuccessfully to sign a new listing agreement with a dual representation provision. He failed because Dibnah began to suspect when she received Hornung’s first offer that Caughey had betrayed her. Although Dibnah was not required to prove she was damaged by Caughey’s conduct under Huijers and McConnell, there was ample evidence in the record from which actual damage may be inferred.
Caughey does not discuss the Huijers and McConnell cases, but claims he did provide or attempt to provide adequate disclosure of his dual representation. We are not convinced. The fact that Caughey brought Hornung to see Dibnah’s boat is not a disclosure that he was representing Hornung in the transaction. Dibnah’s past experience with dual agency agreements also did not put her on notice that Caughey was acting as a dual agent. Although Caughey did ultimately fax Dibnah a document containing a dual agency clause, he never called her attention to it and she never signed it. It may be inferred from all of the evidence presented that Caughey merely wanted to obtain a document he could hold up as proof of her consent to dual agency. He did not, in fact, want to call her attention to his representation of Hornung in the transaction, much less to disclose the tenor of the conversations he had been having with Hornung about her negotiating position. It is simply disingenuous for Caughey to blame Dibnah for making full disclosure and consent impossible.
Caughey also faults the trial court for not making findings concerning Dibnah’s asserted violations of her duties under the 2004 listing agreement. The matters Caughey refers to are either immaterial (Dibnah’s failure to inform him of earlier sales that fell through) or took place at a time when the listing agreement was already voidable by Dibnah due to Caughey’s material breaches. These arguments are unavailing in any event because it is Caughey who seeks to enforce the listing agreement. They neither excuse Caughey’s dishonest dealings with his principal nor justify his betrayal of her trust.
The judgment is supported by substantial evidence and consistent with the applicable law.
III. DISPOSITION
The judgment is affirmed.
We concur: Marchiano, P.J., Dondero, J.