Opinion
A147357
01-30-2018
EDWARD W. SCOTT ELECTRIC CO., INC., Plaintiff and Respondent, v. THOMPSON PACIFIC CONSTRUCTION, INC., Defendant and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (San Francisco County Super. Ct. No. CGC-08-480551)
The issue of this appeal is whether the trial court should have entered a stipulated judgment in favor of plaintiff Edward W. Scott Electric Co., Inc. (Scott Electric) and against defendant Thompson Pacific Construction, Inc. (TPCI) in the amount of $326,691 plus interest from the entry of the judgment. TPCI appeals, arguing that the trial court entered the judgment erroneously based on a misinterpretation of a 2010 settlement agreement between Scott Electric, TPCI, and two other defendants in the case below, Peter S. Thompson and Toni H. Thompson (collectively, "Thompsons"). We affirm the judgment based on our de novo review of the settlement documents.
BACKGROUND
I.
The Action
In August 2009, Scott Electric filed a first amended complaint in the Superior Court for the City and County of San Francisco (action). Among the defendants Scott Electric identified were TPCI and the Thompsons. Scott Electric brought eight causes of action. It brought five against TPCI and Does 1 to 10 (collectively identified in the complaint as the "Thompson Pacific Defendants") alleging they owed Scott Electric $161,852 for its electrical and related construction work on a construction project, as well as interest, penalties, attorney fees and costs of suit. These causes of action were for monies due, quantum meruit, account stated, breach of contract and prompt payment violations.
Scott Electric also brought two causes of action against the Thompsons. The first alleged TPCI was an alter ego of the Thompsons. In the second, entitled "Conversion," Scott Electric alleged the Thompsons had deliberately and intentionally diverted funds paid to TPCI in connection with the construction project and in doing so violated Penal Code sections 484b and 484, that the Thompsons personally benefited from the unlawfully diverted funds, and that they were personally liable for compensatory and punitive damages based on this criminal misconduct.
Scott Electric's eighth cause of action was against another defendant, Western Surety Company, who was not a party to the relevant proceedings below and is not a party to this appeal. Scott Electric's allegations against Western Surety Company are not relevant to this appeal.
II.
The Settlement
In July 2010, before any trial occurred, Scott Electric, TPCI and the Thompsons entered into a "mutual release and settlement agreement" (settlement agreement) regarding this dispute. The interpretation of language used in the settlement agreement referring to the parties is at the center of this appeal, so we review this language in some detail.
The settlement agreement begins with a section entitled "Parties." It states, "This Settlement Agreement ('Agreement') is entered into by and between Edward W. Scott Electric Co., Inc. ('Scott Electric') on one hand, and Thompson Pacific Construction, Inc. ('TPCI'), Peter S. Thompson, and Toni H. Thompson (collectively, 'Thompsons'), on the other hand." It then states in a "Recitals" section that TPCI, as the prime contractor on the construction project, entered into a written subcontract agreement whereby Scott Electric agreed to undertake certain electrical work on the project. The recitals continue, "A dispute ensued, and Scott Electric filed suit against TPCI and the Thompsons, to recover the unpaid principal sum of $171,691." Further, "[o]n July 7, 2010, TPCI and the Thompsons and Scott Electric agreed to settle their dispute. Pursuant to the settlement, Scott Electric may have judgment entered against TPCI on an ex parte basis, without further notice to TPCI, in the amount of $326,691 (including a principal sum of $171,691 and attorney's fees and costs of $155,000)."
The Settlement Agreement then states specific terms of the parties' agreement in separate, numbered paragraphs. These include, as stated in paragraph 1, that contemporaneous with the execution of the agreement, the parties and their attorneys would execute a stipulated judgment attached as Exhibit A to the settlement agreement. According to the settlement agreement, this stipulated judgment provided for "entry of judgment in favor of Scott Electric and against TPCI in the amount of $319,691 . . . with interest to accrue at the rate of 10% per annum from the date of entry of the judgment."
As stated in paragraph 2, "[t]he Thompsons, jointly and severally" would pay Scott Electric $70,000 according to a specified schedule.
As stated in paragraph 3, contemporaneous with the execution of the agreement, the parties and their attorneys would execute a stipulation for entry of judgment attached as Exhibit B to the settlement agreement that would be filed "if the Thompsons fails [sic] to make the payments set forth in paragraph 2 above." On the other hand, as stated in paragraph 4, "[u]pon receipt of the final payment set forth in paragraph 2 above, Scott Electric shall file and serve a Request for Dismissal with prejudice in favor of the Thompsons."
The settlement agreement contains signature blocks for the presidents of Scott Electric and TPCI (the president of TPCI being Peter Sean Thompson), Peter Sean Thompson individually, Toni Haney Thompson individually, and their attorneys. All of them signed the agreement.
The stipulated judgment attached as Exhibit A contains a caption for the action. It states that it is stipulated between Scott Electric and TPCI "that judgment may be entered in favor of Scott Electric and against TPCI in the amount of $326,691 with interest to accrue at the rate of 10% per annum from the date of entry of this judgment until satisfied." The stipulated judgment has signature blocks for the presidents of Scott Electric and TPCI, and for the court. Both presidents signed the stipulated judgment.
The stipulation for entry of judgment attached as Exhibit B also contains a caption indicating it would be filed in the action. It states that it is stipulated between Scott Electric and "Defendant Peter S. Thompson aka Peter Sean Thompson and Toni H. Thompson aka Toni Haney Thompson (collectively 'Thompsons')" that the "Thompsons" owed Scott Electric the sum of $70,000 to be paid according to a specified schedule. It further states that the failure to make any specified payment would be considered a default, which the "Thompsons" could cure upon receipt of a notice of default. Further, should the "Thompsons" fail to cure a default, Scott Electric could request entry of judgment on an ex parte basis upon notice to the "Thompsons'" counsel. The judgment was to be in favor of Scott Electric "and against the Thompsons, jointly and severally, in the sum of $70,000, less any amounts paid, plus attorneys' fees and costs incurred in entering the judgment, and interest at the rate of 10% per annum from the date of entry of the judgment." The stipulation was not be filed with the court unless the "Debtors," an apparent reference to the Thompsons, defaulted and failed to cure their default. The stipulation contains signature blocks for the president of Scott Electric, Peter S. Thompson and Toni H. Thompson, as well as attorneys for these parties. All of them signed.
The documents indicate the parties signed the settlement agreement, Exhibit A and Exhibit B on different dates in late July or early August 2010 as part of their settlement.
III.
The Further Litigation in 2015
Almost five years later, on June 9, 2015, Scott Electric obtained an ex parte order for entry of judgment in the action against TPCI for $485,374.50. Subsequently, TPCI and the Thompsons moved to enforce the settlement and to declare the court's June 9, 2015 order void or, in the alternative, to reconsider that order. Along with their motion, they requested that the court take judicial notice of the first amended complaint, Scott Electric's ex parte application and supporting papers, and the court's order granting the application. The settlement agreement was included as part of Scott Electric's application, and it and the exhibits to it were also contained in the court's records from its consideration of the ex parte motion.
TPCI and the Thompsons contended that pursuant to the settlement agreement, they had paid $70,000 to Scott Electric, but that Scott Electric had not filed a request for dismissal of its claims against TPCI and the Thompsons as required by the settlement agreement. Their core contention was that the reference to the "Thompsons" in the settlement agreement was a reference not only to Peter S. Thompson and Toni H. Thompson as individuals, but to TPCI as well. Accordingly, the $70,000 payment by the "Thompsons" to Scott Electric required Scott Electric to dismiss its claims against TPCI also, regardless of the settlement agreement's providing for a stipulated judgment against TPCI for much more. They offered the declaration of Toni Thompson, in which she stated that she had written the checks to Scott Electric and had made payments called for by the settlement agreement.
TPCI and the Thompsons also argued that in any event the court's judgment of $485,374.50 against TPCI was in excess of the court's jurisdiction because it included prejudgment interest, even though the settlement agreement and stipulated judgment required TPCI to pay post-judgment interest only.
Scott Electric opposed TPCI's and the Thompsons's motion, claiming that it was "premised on an intentional and unsupportable misreading" of the settlement agreement. Scott Electric contended that the different obligations of TPCI and the Thompsons identified in the settlement agreement were "separate parts of the settlement, and the satisfaction of either has no effect on the other." It further asserted that it had already dismissed the Thompsons from the action. Scott Electric agreed that the stipulated judgment should be modified to exclude prejudgment interest, but asserted that the correct judgment amount was $326,691 as stated in the stipulated judgment that it and TPCI had executed.
TPCI and the Thompsons replied with a number of arguments. Their new arguments included that the $70,000 payment was obviously meant to result in the dismissal of the claims against all of them, because "[TPCI] was and is out of business, and the settlement agreement was to preclude Scott Electric from trying to collect these sums from Peter Thompson, the sole shareholder of [TPCI]." They further argued that the Thompsons would not have agreed to pay $70,000 and still be liable for the same amount. They also contended Scott Electric's almost five-year delay in seeking a judgment against TPCI while the $70,000 was being paid was consistent with their interpretation of the settlement agreement; that a settlement agreement that provided for a judgment for the "full amount" to be entered (apparently referring to the stipulated judgment against TPCI) upon nonpayment of the "lesser amount" (apparently referring to the $70,000) would be unenforceable; and that because the settlement agreement was ambiguous, Scott Electric's interpretation should be rejected to avoid a forfeiture that is disfavored under the law. They further contended that at a minimum any judgment against TPCI should be reduced by the Thompsons' $70,000 payment.
They acknowledged in their reply brief that Scott Electric had recently dismissed with prejudice its claims against the Thompsons. Nonetheless, their reply brief was filed on behalf of TPCI and the Thompsons.
TPCI and the Thompsons offered no evidence to support their factual assertions that TPCI was "out of business" or that the purposes of the settlement agreement were as they stated them. Toni Thompson's declaration stated her personal belief that by making the payments the entire case would be resolved, but a party's subjective understanding of a contract is inadmissible to prove its meaning. (Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc. (2003) 109 Cal.App.4th 944, 956 [" '[i]t is the objective intent, as evidenced by the words of the contract, rather than the subjective intent of one of the parties, that controls interpretation' "].)
At the hearing on the motion, the defendants made several arguments. They asserted for the first time that Scott Electric was time-barred from seeking judgment against TPCI because it did not seek this judgement within a reasonable time. They asserted that since the settlement agreement was a written contract, as a matter of law Scott Electric had to seek this judgment within the four-year statute of limitations for the prosecution of contract actions. Also, the settlement agreement was ambiguous in calling for a stipulated judgment in the amount of $319,691 while the stipulated judgment attached as Exhibit A provided for the amount of $326,691, and the lower number should control.
The defendants also argued that the complaint alleged the Thompsons were liable under alter ego theory as "co-obligors" of TPCI's obligation and so their later payment of $70,000 "partially satisfied the obligation" owed by TPCI and TPCI was entitled to credit against the judgment for that payment. Otherwise, "there's just no consideration" for the Thompsons' $70,000 payment. The trial court responded that it was "not going back to the complaint . . . . I've got a mutual release and settlement agreement in front of me, and the terms are on pages one and two. This is not exactly easy to decipher, but you know, I've been put in the position of having to do so. . . . I think that I've read it about 11 times, and this is where I come down," apparently referring to its tentative ruling.
Counsel for TPCI and the Thompsons then clarified his argument: "I wasn't coming back to the complaint for anything other than the fact that they're co-obligors on this obligation. And so that if they had two judgments against these two people for the full amount and one of them paid without a settlement agreement, they get credit for it because it's only one obligation. [¶] And it seems that the interpretation of this Court is they turn this one obligation for one amount of money into a double recovery, and the Court is saying that's what the parties agreed upon. And I'm just submitting that I disagree with that interpretation, so. Because why would anybody agree to that, to pay twice for one obligation? [¶] I would ask the Court to take a second look at it." The court replied, "I really delved into this, and I agree. It is not simple and there are ambiguities, but if I can figure out at least what it appears to mean on the face of it, I'm obligated to rule."
Subsequently, the court issued a written order on September 1, 2015. The order states, "Defendants' motion is GRANTED in part. The 2010 settlement agreement and the two separate stipulations for entry of judgment, although somewhat ambiguous, do appear to contemplate two separate judgments, one to be entered against TPCI at any time, and one to be entered against the individual Thompsons in the event they defaulted in the additional $70,000 they agreed to pay under the settlement. It does not appear that the parties intended the individual Thompsons' $70,000 payment to diminish or discharge the amount of the judgment against TPCI. Plaintiffs agree, however that prejudgment interest is not recoverable per the settlement agreement. Accordingly, the Court will modify the judgment to reduce the amount owed to $326,691 plus 10% interest from the date of entry." The court did not expressly rule on TPCI's and the Thompsons' request for judicial notice.
The court filed a judgment on September 30, 2015, reflecting a modification of the judgment amount to $326,691 plus 10 percent interest from the date of entry of the judgment. TPCI filed a timely notice of appeal on December 23, 2015.
TPCI filed its notice of appeal more than 60 days after Scott Electric attempted to serve notice of the judgment on TPCI, but the record indicates Scott Electric sent the notice to the wrong address. Therefore, TPCI had 180 days from entry of the judgment to file its appeal under California Rules of Court, rule 8.104(a)(1)(C).) TPCI timely filed its notice of appeal within this period.
DISCUSSION
I.
TPCI's Argument That the Trial Court Should Have Reviewed the First Amended
Complaint
TPCI first argues the trial court erred because it refused to look at the subject matter of the agreement, meaning the first amended complaint. It claims that this subject matter "shows the correctness of [TPCI's] interpretation and shows that Scott Electric's interpretation is nonsensical." That is, TPCI contends that because the first amended complaint alleges TPCI and the Thompsons are responsible under different legal theories for the same payment obligation to Scott Electric, the court should have concluded that the term "Thompsons" as used in the settlement agreement was intended to refer to both TPCI and the Thompsons and that once the "Thompsons'" paid their $70,000 obligation all three defendants would be dismissed from the action. We disagree.
A. Relevant Legal Standards
"A contractual settlement of a disputed claim is an agreement the interpretation and effect of which are governed by ordinary principles of contract law." (Gouvis Engineering v. Superior Court (1995) 37 Cal.App.4th 642, 649.) "A contract must be interpreted so as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful." (Civ. Code, § 1636.) "The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity." (Id., § 1638.) "When a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible . . . ." (Id., § 1639.) "The whole of the contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other." (Id., § 1641.) "Several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together." (Id., § 1642; see also Chern v. Bank of America (1976) 15 Cal.3d 866, 874 ["It is well established that ' . . . separate written instruments between the same parties and relating to the same subject matter . . . are to be construed together as one transaction"].) "A contract may be explained by reference to the circumstances under which it was made, and the matter to which it relates." (Civ. Code, § 1647.)
We "generally apply an independent, or de novo, standard of review to conclusions of law regarding interpretation of [contracts]. 'The precise meaning of any contract . . . depends upon the parties' expressed intent, using an objective standard. [Citations.] When there is ambiguity in the contract language, extrinsic evidence may be considered to ascertain a meaning to which the instrument's language is reasonably susceptible. [Citation.] . . . [¶] We review the agreement and the extrinsic evidence de novo . . . unless the interpretation depends upon credibility. . . . However, extrinsic evidence is not admissible to ascribe a meaning to an agreement to which it is not reasonably susceptible." (ASP Properties Group L.P. v. Fard, Inc. (2005) 133 Cal.App.4th 1257, 1266-1267.)
B. The Settlement Agreement States Separate Obligations for TPCI and the Thompsons.
The meaning of "Thompsons" as used in the "Parties" section of the recitals is ambiguous. It refers to "Thompson Pacific Construction, Inc. ('TPCI'), Peter S. Thompson, and Toni H. Thompson (collectively, 'Thompsons')." As defined in this phrase, "Thompsons" could mean either of two things: the entity (TPCI) together with the two individual Thompsons or the two individual Thompsons alone. The ambiguity is eliminated when we review the settlement agreement as a whole. Further, when the stipulated judgments attached as exhibits are considered, they make inescapable the conclusion that "Thompsons," as used in the agreement, means Peter S. Thompson and Toni H. Thompson, and does not mean the two of them and TPCI.
We turn first to the language of the agreement. The Parties section is followed almost immediately by references in subdivisions "B" and "C" of the "Recitals" section to the parties who are settling with Scott Electric, both of which are to "TPCI and the Thompsons." (Italics added.) To read "Thompsons" as including TPCI would create a redundancy. "TPCI and the Thompsons" in subdivisions B and C of the agreement would mean "TPCI and TPCI, Peter S. Thompson and Toni H. Thompson." The parties' usage of "Thompsons" in these later sections of the agreement clarifies "Thompsons" means the two individual Thompsons and not them and the company together.
Subdivision B recites that TPCI, as prime contractor, entered into a subcontract with Scott Electric for the latter to perform certain electrical work, "[a] dispute ensued, and Scott Electric filed suit against TPCI and the Thompsons, to recover the unpaid principal sum of $171,691." (Italics added.) Subdivision C recites that "[o]n July 7, 2010, TPCI and the Thompsons and Scott Electric agreed to settle their dispute." (Italics added.)
This conclusion is bolstered by consideration of the structure of the settlement agreement and the language and structure of the stipulated judgments. The agreement imposes distinctly separate obligations on TPCI and the Thompsons. It provides that Scott Electric may have judgment entered against TPCI without further notice and obligates TPCI to execute Exhibit A, which is the stipulated judgment against TPCI. That stipulated judgment is signed by the presidents of both Scott Electric and TPCI, but not by either Thompson individually. As to the Thompsons, the agreement requires them to pay Scott Electric $70,000 according to a schedule and to execute Exhibit B, which is the conditional stipulation for entry of judgment against the Thompsons. This stipulation, signed by the Thompsons individually and not by anyone on behalf of TPCI, is for a judgment "in the sum of $70,000, less any amounts paid," plus attorney fees and interest. It is conditional on the Thompson's defaulting on their obligation to pay $70,000. And Exhibit B explicitly defines "Thompsons" in unambiguous terms to mean, "Defendant Peter S. Thompson aka Peter Sean Thompson and Toni H. Thompson aka Toni Haney Thompson," "collectively."
These documents cannot reasonably be interpreted to include TPCI in "Thompsons." First, the language in Exhibit B specifically defines "Thompsons" to mean the individuals only. Second, the imposition of a separate and unconditional judgment against TPCI in the full amount of the corporate debt plus attorney fees and interest precludes an interpretation that would render that judgment conditional on the individual Thompsons' default or provide an offset if the Thompsons fulfill their obligation to pay $70,000. If it had been the intention of the parties to excuse TPCI from paying the full stipulated judgment amount in the event Scott Electric was paid the $70,000, they would have made the stipulated judgment conditional on the same default that was made a condition to entry of judgment against the Thompsons. Alternatively, if the parties had intended the $70,000 or any part of it that was paid to Scott Electric to offset the judgment against TPCI, they would have incorporated into the stipulated judgment against TPCI language similar to that which they used in the conditional stipulation for a judgment against the Thompsons. Specifically, like Exhibit B, Exhibit A would have provided that judgment shall be in favor of Scott Electric and against TPCI in the sum of $326,692, "less any amounts paid" pursuant to the settlement agreement, plus attorney fees and interest. The failure to qualify the stipulated judgment against TPCI in either of these ways makes plain the intent to impose an obligation on TPCI that was entirely separate and apart from, and in no way conditioned on default on the obligation of the individual Thompsons or reduced by the payments they made.
C. The First Amended Complaint Is Not Relevant to Prove a Meaning to Which the Language of the Settlement Agreement Is Reasonably Susceptible.
TPCI contends that "[t]he trial court erred because it refused to examine the subject matter of the agreement (Scott Electric's complaint) to see what the parties intended to settle. Without an understanding of what was being settled by the agreement, the trial court could not and, respectfully, did not properly interpret the intent of the parties at the time the agreement was made." In its opening brief, its only legal authority for this claim of error is a 76-year-old appellate decision which states in general terms, " 'The primary object of all interpretation is to ascertain and carry out the intention of the parties. "To interpret a contract is to ascertain the true intent of the contracting parties." . . . Intention is to be ascertained from a consideration of the language employed and the subject matter of the contract.' " (Bader v. Coale (1941) 48 Cal.App.2d 276, 278 [affirming trial court's interpretation of the language of a deed].) This argument falls far short of carrying TPCI's burden to show error. One aspect of appellant's burden is to furnish, and appropriately discuss, pertinent legal authority. We are not required to address arguments that the appellant has not supported with pertinent legal authority. (See Kim v. Sumitomo Bank (1993) 17 Cal.App.4th 974, 981-982.) Further, "an appellant is required to not only cite to valid legal authority, but also explain how it applies in his case." (Hodjat v. State Farm Mutual Automobile Ins. Co. (2012) 211 Cal.App.4th 1, 10.) Merely citing or discussing general propositions of law does not meet an appellant's burden of demonstrating error. (Id. at p. 11.)
In its reply brief, TPCI for the first time contends that "[t]he test of admissibility of extrinsic evidence to explain the meaning of a written instrument is not whether it appears to the court to be plain and unambiguous on its face, but whether the offered evidence is relevant to prove a meaning to which the language of the instrument is reasonably susceptible," relying on Pacific Gas & Elec. Co. v. G.W. Thomas Drayage & Rigging Co. (1968) 69 Cal.2d 33, 37, and Winet v. Price (1992) 4 Cal.App.4th 1159, 1165 (the latter also cited by Scott Electric). This is an apparent reference to the rules governing the admissibility of "parol evidence," although TPCI does not use that term. TPCI and the Thompsons did not present this argument below, and TPCI has waived it before this court by its tardy presentation of it. (Levin v. Lignon (2006) 140 Cal.App.4th 1456, 1486 ["[i]t is elementary that points raised for the first time in a reply brief are not considered by the court"].)
Even if we were to consider TPCI's parol evidence argument, it is not at all clear that the trial court failed to consider the first amended complaint before determining that it did not prove a meaning to which the language of the settlement agreement was reasonably susceptible. In any event, we conduct a de novo review of the settlement agreement and any undisputed extrinsic evidence. (ASP Properties Group L.P. v. Fard, Inc., supra, 133 Cal.App.4th at pp. 1266-1267.) In our view, having provisionally considered the first amended complaint, we conclude it is not relevant to prove a meaning to which the language of the instrument is reasonably susceptible. TPCI contends that the first amended complaint indicates "[t]here was only one obligation alleged by Scott Electric, the payment for alleged extra work of $161,852." It continues, "The dismissal of all defendants after payment of $70,000 is consistent with a compromise of a $161,852 extra work claim. . . . [¶] While a potential [TPCI] judgment for the full amount claimed by Scott Electric served as motivation by the Thompson defendants to pay $70,000, it is unreasonable to interpret the agreement as [TPCI] agreeing to a judgment of $319,691 or $326,691 and the [individual] Thompsons (who were the alleged alter egos of [TPCI]) agreeing to another independent judgment for an additional $70,000, as a compromise of Scott Electric's extra work claim." (Footnote omitted.)
To the extent TPCI asserts that the trial court did not consider the first amended complaint and/or denied its request for judicial notice of it, we construe TPCI's argument as including a request to this court for judicial notice of it and grant this request under Evidence Code section 452, subdivision (d).
TPCI's argument ignores Scott Electric's conversion claim against the Thompsons. As we have discussed, Scott Electric not only asserted an alter ego claim against the Thompsons, but also asserted a claim that the Thompsons had converted funds paid to TPCI for the construction project deliberately and intentionally to benefit themselves in violation of Penal Code sections 484b and 484, and could be held personally liable for compensatory and punitive damages based on this criminal misconduct. Case law supports Scott Electric's contention that it could maintain such a cause of action. (See City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1988) 68 Cal.App.4th 445, 484-485 [cause of action relying on section 484 stated a cause of action for receipt of property obtained by means of theft under California law].) Further, conversion is an intentional tort for which punitive damages may be awarded. (Collin v. American Empire Insurance Co. (1994) 21 Cal.App.4th 787, 812 [conversion is an intentional tort]; Ferraro v. Pacific Fin. Corp. (1970) 8 Cal.App.3d 339, 351 ["Exemplary damages are properly awardable in an action for conversion, given the required showing of malice, fraud, or oppression"].) Further, the Thompsons could reasonably have been concerned that if they were found liable under the conversion claim for a violation of the Penal Code sections cited by Scott Electric, they could be exposed to criminal penalties. For example, Penal Code section 484b, specifically cited by Scott Electric in the first amended complaint, provides for fines and/or imprisonment for any person who wrongfully diverts funds received for the construction of improvements in the amounts alleged by Scott Electric.
Indeed, in their opening brief in support of their motion below, TPCI and the Thompsons stated that the Thompsons' concern about their personal liability under this conversion cause of action was what motivated them to settle with Scott Electric. They stated: "During the course of the prior litigation, and presumably to obtain a litigation advantage, Scott Electric, by and through its attorneys, accused Peter Thompson, and his wife, Toni Thompson, of criminal activity. To protect himself and his wife from these scurrilous charges, on or about August 5, 2010, [TPCI and the Thompsons] entered into a settlement agreement . . . ."
Whether or not Scott Electric would have prevailed on this conversion claim, its assertion of a separate cause of action against the Thompsons exposing them to personal liability could be a basis for the Thompsons to separately agree to pay Scott Electric $70,000, in addition to and separate from the payments made by TPCI to Scott Electric under the settlement agreement. The first amended complaint thus does not support the view that the references to the "Thompsons" in the settlement agreement were intended to include TPCI. Therefore, it is not relevant to prove a meaning to which the language of the settlement agreement is reasonably susceptible.
In short, we reject TPCI's argument that the trial court erred by not looking at the first amended complaint in order to interpret the settlement agreement both because TPCI waived the argument and because the complaint did not in any event support the meaning for which TPCI proffered it.
TPCI also refers to the "ambiguity" in the settlement agreement between the different amounts stated for the stipulated judgment against it, $319,691 and $326,691. It does not explain why this ambiguity should be the basis for a reversal of any aspect of the judgment and so we do not consider it further.
II.
TPCI's "Forfeiture" Argument
TPCI next argues that we should adopt its interpretation of the "Thompsons" in the settlement agreement as including TPCI in order to avoid a forfeiture, i.e., TPCI's purported forfeiture of its right to contest Scott Electric's claims against it by entering into the stipulated judgment. We disagree for two reasons.
First, as Scott Electric points out, TPCI's agreement to enter into the stipulated judgment is not a "forfeiture." "In the law, 'forfeiture' is defined as 'A deprivation or destruction of a right in consequence of the nonperformance of some obligation or condition.' (Black's Law Dict. (6th ed. 1990) p. 650.)" (Chase v. Blue Cross of California (1996) 42 Cal.App.4th 1142, 1149; see also Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 315 [concluding case law addressing waivers of the right to arbitrate "use the word 'waiver' in the sense of the loss or forfeiture of a right resulting from failure to perform a required act"].) Thus, a forfeiture is distinctly different from a party's contractual agreement to settle a dispute by entering into a stipulated judgment.
Second, even if this case did involve a forfeiture, as we have already discussed, TPCI does not offer a reasonable interpretation of the settlement agreement, either regarding the meaning of the term "Thompsons" regarding separate obligations of, and stipulations by, TPCI and the Thompsons. As TPCI acknowledges, the law requires avoidance of forfeiture "upon any reasonable showing." (Talbot v. Gadia (1954) 123 Cal.App.2d 712, 718-719 [addressing whether a course of conduct amounted to a waiver of what would have been a forfeiture under an ambiguous contractual provision].)
For each of these reasons, we reject TPCI's forfeiture argument.
III.
TPCI's "Conduct of the Parties" Argument
Next, TPCI contends "[t]he trial court also erred in failing to give proper weight to the conduct of the parties before the dispute arose." It contends that TPCI made a couple of payments towards the Thompsons' $70,000 obligation and that while the obligation was being paid Scott Electric did not seek entry of judgment against any of the defendants, even though it was entitled to interest on the TPCI stipulated judgment only after entry of judgment. According to TPCI, "[i]f Scott Electric had believed that its new interpretation was a correct one, it would have treated Peter and Toni Thompson differently than [TPCI] by not crediting the Thompsons' obligation for payments made by [TPCI], and instead would have credited [TPCI's] payments to [TPCI's] 'obligation.' " TPCI contends the court should have considered this " 'practical construction' " of the settlement agreement, since the most important interpretation of a contract is the interpretation the parties themselves make, and this is shown by the actions of the parties prior to the dispute. (Bohman v. Berg (1960) 54 Cal.2d 787, 795.)
TPCI's interpretation of the parties' conduct is unpersuasive because it is not based on citations to any evidence presented below. In other words, TPCI fails to establish whether it (as opposed to the Thompsons) made any payments to Scott Electric or how Scott Electric might have applied such payments. Thus, its assertion of the reason for Scott Electric's delay in seeking a stipulated judgment against it is not worthy of our further consideration. (Grant-Burton v. Covenant Care, Inc. (2002) 99 Cal.App.4th 1361, 1379 ["Because '[t]here is no duty on this court to search the record for evidence' [citation], an appellate court may disregard any factual contention not supported by a proper citation to the record"], italics omitted.) Therefore, we reject TPCI's "practical construction" argument.
IV.
TPCI's "Reasonable Time" Argument
TPCI also contends, as it did at the hearing below on its motion to vacate or reconsider the order for entry of judgment, that Scott Electric's almost five-year delay in seeking entry of a stipulated judgment against TPCI bars it from asserting its right to this stipulated judgment. According to TPCI, this is the case because "[w]hen no time is stated, the law implies a reasonable time." It asserts that in this case, a reasonable time must be measured by the four-year statute of limitations for the prosecution of claims based on a written contract, meaning the settlement agreement.
Generally, "[i]f the contract does not specify the time of performance, and the act cannot be done 'instantly', a reasonable time is allowed." (1 Witkin, Summary of Cal. Law (11th ed. 2017) Contracts, § 785, p. 842.) Civil Code section 1657, regarding time of performance of contract, states in relevant part, "If no time is specified for the performance of an act required to be performed, a reasonable time is allowed." This is a "general principle of contract law." (Wagner Construction Co. v. Pacific Mechanical Corp. (2007) 41 Cal.4th 19, 30.) " '[W]hat constitutes a reasonable time is a question of fact, depending upon the situation of the parties, the nature of the transaction, and the facts of the particular case.' " (Ibid.) The facts to be considered in determining the question include "the conduct of the parties, delay to act, acquiescence in delay, whether the delay is for unfair purposes, the construction which the parties themselves placed upon their contract, and whether [the party] acts within such time as will work no injury to the other party." (Alpern v. Mayfair Markets (1953) 118 Cal.App.2d 541, 547.)
Scott Electric first asserts that TPCI has forfeited this reasonable time claim by not properly raising it first in the court below, apparently relying on the fact that TPCI only raised the issue briefly at the hearing on the motion to vacate/reconsider as a matter of law rather than as one subject to a finding about the particular facts of the case, and as one of several issues that it brought to the court's attention. Scott Electric objected at the time that TPCI had not properly raised the issue as a part of its motion. The court briefly considered the argument and did not rule on the issue at the hearing, nor did it refer to the issue in its written order.
We conclude the court's actions imply a finding of forfeiture and that it was supported by substantial evidence, given that TPCI made only a brief oral argument at the hearing based on only one, ancient case, Harrigan v. Home Life Ins. Co. (1900) 128 Cal. 531, that it discussed in a conclusory fashion. (Federal Home Loan Mortgage Corp. v. La Conchita Ranch Co. (1998) 68 Cal.App.4th 856, 860 ["where there are no express findings, we must review the trial court's exercise of discretion based on implied findings that are supported by substantial evidence"].) Therefore, TPCI has forfeited its reasonable time argument on appeal. (See In re Marriage of Eben-King & King (2000) 80 Cal.App.4th 92, 117.)
We shall decline to exercise our discretion to decide the merits of the claim in light of its fact-intensive nature. Contrary to TPCI's assertion, if the "reasonable time" rule of contract law applies here (a questionable proposition in light of the terms of the settlement agreement that we do not need to decide), the statute of limitations for the prosecution of contract actions does not as a matter of law limit the time Scott Electric had to file the stipulated judgment because Scott Electric was not pursuing an action on the contract. Rather, Scott Electric was seeking entry of judgment in a pending action before the court. TPCI was required below and before us to make an argument based on these particular facts in order to prevail. (See Wagner Construction Co. v. Pacific Mechanical Corp., supra, 41 Cal.4th at p. 30. It has not done so. Therefore, its argument is unpersuasive on its merits.
V.
TPCI's Offset Argument
Finally, TPCI asserts that to the extent we conclude that a judgment can be entered against TPCI, this judgment should be reduced by the $70,000 already paid. TPCI asserts that a payment by one joint obligor should be construed as a payment by all, citing Bell v. Adams (1907) 150 Cal.772, 775. As we have already discussed, the terms of the settlement agreement indicate the Thompsons' $70,000 payment was separate from TPCI's obligations under the stipulated judgment. Therefore, we reject this argument as well.
DISPOSITION
The judgment is affirmed. Scott Electric is awarded costs of appeal.
/s/_________
STEWART, J. We concur. /s/_________
RICHMAN, Acting P.J. /s/_________
MILLER, J.