Opinion
A097955. A098272.
11-14-2003
FRANK G. FRISELLA et al., Plaintiffs and Appellants, v. STANLEY L. VISTICA et al., Defendants and Respondents. FRANK G. FRISELLA et al., Plaintiffs and Respondents, v. STANLEY L. VISTICA et al., Defendants and Appellants.
Frank G. Frisella (Frank) and his wife, Patricia M. Frisella (collectively, the Frisellas), sued Stanley L. Vistica (Stan) and his wife, Lisa D. Happich (collectively, the Visticas), after they became involved in a dispute regarding their partnership that involved the purchase and management of a four-unit apartment building in Burlingame, California. After a jury trial on the contract and tort claims, the Frisellas were awarded compensatory damages in the amount of $135,000. The Visticas appeal, arguing that substantial evidence did not support the verdict.
The court held a separate trial on the Frisellas claims in equity and the Frisellas appeal from the interlocutory judgment of partition. They challenge the amount of the constructive trust imposed by the trial court on property owned solely by the Visticas. They also appeal the courts denial of their request for attorney fees pursuant to Code of Civil Procedure sections 874.010 and 874.020.
We are unpersuaded by either partys challenges and affirm.
BACKGROUND
The Visticas contacted Frank, a real estate broker, regarding a property that was for sale near their home. That property had already been sold, and Frank informed them about a different property, which was a four-unit apartment building on California Drive in Burlingame (the Burlingame property) that the San Mateo County Public Administrator had appointed him to list and sell. The Visticas decided to purchase the Burlingame property and they provided the Frisellas with an option to purchase a one-half interest in it. The Visticas signed the option agreement drafted by Frank on December 21, 1994. Subsequently, Frank, on behalf of the Visticas, submitted a bid to the probate court of $263,000, which was 10 percent less than the appraised value of the Burlingame property. The sale was confirmed on March 23, 1995, and a deed for the Burlingame property was issued to the Visticas as joint tenants.
After the Visticas had begun to renovate the Burlingame property, the Frisellas exercised their option to purchase a one-half interest in the property. The Frisellas agreed to pay the Visticas $47,780. The Frisellas provided the Visticas with a cashiers check for $40,898.03 and a personal check for $6,881.41. Subsequently, the Visticas discovered that the bank would not honor the personal check, because the Frisellas had stopped payment on the check.[]
The Frisellas claimed that this amount was not part of the purchase agreement but was for the partnership reserve. Frank claimed that he was willing to refund the amount of the stopped check, with interest, once he received an adequate accounting from the Visticas.
The couples signed a partnership agreement regarding the management of the Burlingame property in November 1995, although the effective date of the agreement was July 1, 1995. The agreement provided for Frank to manage the property, handle leasing and tenant complaints, and arrange for maintenance and repairs. The Visticas were to keep the books, collect the rents, and pay the bills. The agreement provided for quarterly accountings, but did not specify who should do the accounting.
In December 1996, the Visticas purchased for themselves a rental property located on Oak Avenue in Redwood City (Oak property). The purchase price for the property was $231,000, and the Visticas down payment was $11,500. The Visticas paid $9,333 of the down payment on December 26, 1996. This sum was paid from the partnership account for the Burlingame property. The Visticas testified that they used the partnership funds rather than their own personal funds because they had brought the wrong checkbook when they went to the title company to make the Oak property purchase. The Visticas never informed the Frisellas about the withdrawal of money from the partnership account, nor did they provide the Frisellas with any accounting that showed this withdrawal. The Visticas replaced this money with interest into the partnership account more than two years later on January 29, 1999, and the Frisellas did not find out about it until a deposition in January 2000.
Lisa Happich (Lisa) admitted that she understood that her husband, Stan, and she were to provide the accountings to the Frisellas. However, the only three accountings the Frisellas received were two handwritten ledgers and a set of adding machine tapes. Despite eight or nine requests by Frank, the Visticas did not provide any further accounting. The Frisellas also made requests for background documentation on an "ongoing" basis. The Frisellas did not receive an adequate accounting until they went to court to obtain an expert accountant; they also had to subpoena the bank records.
In August 1998, the Frisellas filed a complaint against the Visticas. The Visticas filed a cross-complaint for declaratory relief, quiet title, accounting, and breach of contract on February 24, 2000. On April 26, 2001, the Frisellas filed a first amended complaint for breach of contract, dissolution of partnership, partition, accounting, injunctive relief, breach of fiduciary duty, fraud, negligent misrepresentation, and intentional infliction of emotional distress. The case was bifurcated: the contract and tort claims were tried before a jury and the equitable issues were later tried by the judge.
At trial, expert accountant David F. Thomas (Thomas), who examined the partnership books for the Burlingame property, testified. Thomas stated that he was never able to obtain all the documents he needed from the Visticas, but he did believe he had received all the documents they had. He admitted that his bill for his work was high "because the information that I received was incomplete because I received it at three different times during the period of late March through September 2000." He further agreed that he probably had made a comment earlier that acquiring the information from the Visticas was "like pulling teeth." He elaborated that his first request was "for any and all documentation, and it did not come in. The other things came in subsequently. [The Visticas] were quite pleasant in a personal way but the materials did not come in all at one time and in an organized fashion. And it was difficult to separate the weed from the chaff." He agreed that, with the information given to him, "other than to speculate," he was unable "to come up with any kind of accurate accounting." He stated that the records were inadequate and that a partner in a partnership has the responsibility for keeping the records for the partners so they can receive accurate, complete information about their investment.
The Frisellas testified that the Visticas behavior caused Frank to have a hard time sleeping and created "tensions to" his family. Frank also complained that after he received a phone call from the Visticas: "it was like [an] upset stomach, like, whats the next problem?" As a result of the problems in the partnership, Frank maintained that he experienced greater anxiety regarding money. Frank claimed that he had borrowed money thinking he would receive money from the Burlingame property investment.
Franks wife, Patricia Frisella (Patricia), also testified that borrowing the money caused tension between her husband and her. She stated: "When I would need money for certain things, I would have to ask him for it. And he was very stressed out and because there was no money coming in from this property, and, you know, that income would have helped out. And, of course, it caused tension between us because I would say to him, well, you put this money into this property to be half owner, and why arent we getting anything out of it?" She further explained: "Frank is a very sensitive, emotional person. And this really — he was very distraught over this because he felt like what had he done. You know, he borrowed this money to be half owner of this property and things werent working out. And it was causing tension between us, and he would, you know, he would wake up during the night and think what can I do? How can I make this better? And, like I said, he did try, but it just didnt work."
After the witnesses concluded their testimony, the attorneys for both couples were unable to agree on a special verdict form. The court warned: ". . . If you folks cannot come up with a special verdict form, Ill submit it to them on a general verdict form. So lets get cracking. Here they are. Get with it because thats the way its going to be. Either you come up with a special verdict form, Im not sitting here the rest of the night figuring out your special verdict form for you. You are the lawyers. The easiest thing for me to do is to submit it on a general verdict form." When counsel for the Frisellas responded that she would agree with the general verdict form, the court admonished that she would probably be sued for malpractice.
Subsequently, after hearing further argument about the special verdict, the court stated: "Okay. Ill tell you whats going to happen. The jurors are going to revolt. Theyll say were not going to do this and throw it on the ground. Ive never seen [a special verdict] this long the way it is. You want to double the length of it." The court then asked the counsel for the Visticas if the court could "go with a general verdict," and he responded that he "would be pretty much in favor of that." The court stated that both sides wanted a general verdict and that is what it was going to do. The attorney for the Frisellas, however, now objected and stated that she did not believe a general verdict was appropriate. The court responded that it did not have a duty to construct a special verdict and that both of them had agreed to use a general verdict. After listening to further argument the following day, the court stated that it was going to use a general verdict with special findings.
On May 18, 2001, the jury entered its general verdict with special findings in favor of the Frisellas. The jury found that the Frisellas were damaged in the amount of $135,000 and that the Visticas had acted with oppression, malice or fraud "in connection with any breach of fiduciary duty, false promise, concealment, conversion, or intentional infliction of emotional distress." The jury found against the Visticas on their cross-complaint. The parties stipulated to an additional sum of $25,000 in punitive damages for a total judgment of $160,000.
The Frisellas filed a motion for attorney fees, which the court denied. The court then heard the Frisellas equity claims. On September 7, 2001, the court issued its tentative decision and noted that a statement of decision had not been requested by either side. The tentative ruling noted that the parties had stipulated to the accuracy of the most recent accounting by the Visticas, which had been completed at the trial on the equitable issues. The court ordered the dissolution of the partnership, an even distribution of the partnership assets, and a constructive trust on the Oak property in the amount of $3,406.55. The tentative order also stated that the Visticas "are immediately enjoined from taking any action which would unreasonably hinder or delay the sale" of the Burlingame property.
The Frisellas filed a written request for a statement of decision and, in the alternative, for correction and clarification of the tentative decision. On October 11, 2001, the court issued an order amending its tentative decision because of a document indicating that the true purchase price of the Oak property was $231,000 rather than $263,000. The court found that the current fair market value of the property was $455,000; thus, the property had appreciated in value by about 96%. The court found: "A 96% appreciation factor applied to [the Frisellas] interest in the $9,333 of partnership funds used to purchase the property yields a damage figure of $4,479.84. (50% of $9333=$4666.50 × .96 =$4479.84.)" Accordingly, the court imposed a constructive trust on the Oak property for the benefit of the Frisellas equaling $4,479.84 plus interest.
On December 21, 2001, the trial court entered an interlocutory judgment of partition. The court reserved jurisdiction to resolve any disputes that might arise regarding the sale of the Burlingame property. The Frisellas served a notice of entry of judgment on December 27, 2001, and filed their notice of appeal on February 22, 2002. On February 25, 2002, the Visticas moved for a new trial, which the court denied on March 6, 2002. On March 26, the Visticas filed their notice of cross-appeal. We consolidated the appeals.
DISCUSSION
I. The Visticas Appeal
The Visticas contend that substantial evidence does not support the award of compensatory damages in the amount of $135,000. The damages were for both the economic and emotional harm suffered by the Frisellas.
The amount of damages is a question of fact, committed first to the discretion of the trier of fact and next to the discretion of the trial court on a motion for new trial. (Seffert v. Los Angeles Transit Lines (1961) 56 Cal.2d 498, 506.) We may interfere on the ground of excessive damages only where the facts are such that the excess appears as a matter of law, or such as to suggest passion, prejudice or corruption on the part of the trier of fact. (DiRosario v. Havens (1987) 196 Cal.App.3d 1224, 1240.)
If the damages award is supported by substantial evidence, it must be upheld. (Wright v. City of Los Angeles (1990) 219 Cal.App.3d 318, 354.) "`When a finding of fact is attacked on the ground that there is no substantial evidence to sustain it, the power of an appellate court begins and ends with the determination as to whether there is any substantial evidence, contradicted or uncontradicted, which will support the finding of fact. [Citations.] [¶] When two or more inferences can reasonably be deduced from the facts, a reviewing court is without power to substitute its deductions for those of the trial court. [Citation.]" (Scott v. Common Council (1996) 44 Cal.App.4th 684, 689, quoting Green Trees Enterprises, Inc. v. Palm Springs Alpine Estates, Inc. (1967) 66 Cal.2d 782, 784-785.) The testimony of a single credible witness may constitute substantial evidence. (In re Marriage of Mix (1975) 14 Cal.3d 604, 614.) Here, because the verdict was a general verdict, it shall be affirmed if supported by substantial evidence on any of its causes of action. (Henderson v. Harnischfeger Corp. (1974) 12 Cal.3d 663, 673.)
Preliminarily, the Frisellas argue that we should deny the appeal on procedural grounds because the Visticas failed to present any of the evidence at trial that supported the jurys award of damages. Further, they claim that the Visticas did not adequately brief the issue of emotional distress damages. Although the Visticas could be faulted for failing to present both sides of the argument, we do not consider their failure so egregious that we should refuse to consider the issues they have raised on appeal. We therefore consider the merits of their argument.
A. Economic Loss
The Visticas claim that no economic loss supported a $135,000 award for compensatory damages. They assert that the Frisellas agreed that the accountings of the partnership funds submitted at trial were complete and accurate. However, the Frisellas never agreed during the jury trial that the accountings were accurate. Rather, the Frisellas stipulated to the accuracy of the accounting completed during the trial on the equitable issues. The Frisellas had various reasons for being willing to stipulate to this accounting, which had no bearing on the evidence presented to the jury.
The only financial loss the Visticas acknowledge the Frisellas suffered was the $9,333 removed from the partnership fund and used as a deposit on the Oak property. This loss, they assert, was temporary since they replaced that sum with interest. The Visticas also concede that the record contained some evidence that they wrote several checks to themselves from the partnership account over the years, but they maintain that these checks were reimbursements for the materials and services for cleaning and repairing the apartment units at the Burlingame property.
It is undisputed that the evidence in the record does not support a financial loss to the Frisellas in the amount of $ 135,000. However, the record does support a finding of some economic loss. The Frisellas lost the use of one-half of the funds used as a deposit on the Oak property, since the Visticas failed to replace this withdrawn money for more than two years.[] In addition, the jurors could have concluded that not all of the checks written to the Visticas were reimbursements.
The Visticas assert that there was no evidence regarding lost opportunities for investment and therefore any damages were speculative. It is undisputed, however, that the Frisellas did not have use of the money for more than two years.
Although substantial evidence does not support an economic loss of $135,000, the jurors could have awarded the sum on the basis of both economic loss and emotional distress. Thus, the question before us is whether substantial evidence supported an award of emotional distress damages.
B. Emotional Distress
After trial, the jury returned a general verdict on the causes of action for breach of contract, conversion, breach of fiduciary duty, fraud, negligent misrepresentation, and intentional infliction of emotional distress in favor of the Frisellas. If any of these claims supported emotional distress damages, we will affirm. (See Henderson v. Harnischfeger Corp., supra, 12 Cal.3d at p. 673 [affirm if supported by substantial evidence on any cause of action when general verdict used].)
The Visticas first argue that emotional distress damages are not recoverable when the plaintiffs suffer only an economic injury and they cite Erlich v. Menezes (1999) 21 Cal.4th 543, 554-555 and DiLoreto v. Shumake (1995) 38 Cal.App.4th 35, 41-42. These cases, however, are not dispositive. Erlich involved an emotional distress claim resulting from a negligent breach of contract and DiLoreto involved intentional interference with economic advantage. Here, in addition to their breach of contract claim, the Frisellas claimed breach of fiduciary duty, conversion, fraud, negligent misrepresentation, and intentional infliction of emotional distress. Thus, although we agree that the Frisellas could not recover emotional distress damages on their breach of contract claim, as already noted, we will affirm if emotional distress damages are supported by substantial evidence on any of these causes of action (see, e.g., Henderson v. Harnischfeger Corp., supra, 12 Cal.3d at p. 673).
The fraud claim, according to the Visticas, also cannot support emotional distress damages and they cite Kruse v. Bank of America (1988) 202 Cal.App.3d 38, 67 (Kruse), Channell v. Anthony (1976) 58 Cal.App.3d 290, 315, and ONeil v. Spillane (1975) 45 Cal.App.3d 147, 159, with essentially no discussion or analysis. We can easily dismiss their reliance on these latter two cases, as these opinions discussed fraud in the sale of real property and Civil Code section 3343 governed the measure of damages. Section 3343, which covers the fraudulent purchase, sale, or exchange of property, limits damages to the out-of-pocket loss of the defrauded party and mental distress is not an element of damages for fraud under that section. (See, e.g., Sierra Nat. Bank v. Brown (1971) 18 Cal.App.3d 98, 103.) In the case before us, however, the fraud claim does not concern the purchase, sale, or exchange of property and section 3343 is not relevant.
The Visticas position does, however, find some support in Kruse. The Kruse court concluded that no fraud was involved in the case before it, but it proceeded to declare in dictum that "[e]motional distress is not recoverable as an element of damages for fraud." (Kruse, supra, 202 Cal.App.3d at p. 67.) However, when fraud is predicated on breach of fiduciary duty, which is the case here, the measure of damages is ordinarily governed by Civil Code section 3333. Section 3333 provides: "For the breach of an obligation not arising from contract, the measure of damages, except where otherwise expressly provided by this code, is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not." Thus, despite the dictum in Kruse, courts have affirmed awards of damages for emotional distress in the fiduciary duty context. (See, e.g., Twomey v. Mitchum, Jones & Templeton, Inc. (1968) 262 Cal.App.2d 690, 731; Washington v. Farlice (1991) 1 Cal.App.4th 766, 772.)
In any event, there is no dispute that emotional distress damages may be awarded under Civil Code section 3333 for a breach of a fiduciary duty or a conversion claim.[] With regard to these claims, the Visticas simply argue that the evidence did not support this award because the evidence of emotional distress was "scant" and a fiduciary relationship did not exist because the Frisellas failed to pay the outstanding $ 6,811.41 due under the partnership agreement. This latter assertion of no fiduciary relationship or partnership is not supported by any evidence in the record. Indeed, not one person testified that there was no partnership. To the contrary, the witnesses testified about the partnership; moreover, the partnership agreement was entered into evidence. All of the witnesses agreed that the Visticas were to provide the Frisellas with the accountings.
The Visticas also concede that emotional damages are recoverable for an intentional infliction of emotional distress claim, even when there is no physical trauma, but the defendants conduct must be outrageous. (See, e.g., Fuentes v. Perez (1977) 66 Cal.App.3d 163, 170.) Here, the Visticas argue that their conduct was not outrageous. We need not reach the question of whether the Visticas behavior satisfies the outrageous element, because emotional damages were recoverable on the Frisellas claim of breach of fiduciary duty (e.g., Stanley v. Richmond (1995) 35 Cal.App.4th 1070, 1097) or of conversion (e.g., Schroeder v. Auto Driveway Co. (1974) 11 Cal.3d 908, 921; Gonzales v. Personal Storage, Inc. (1997) 56 Cal.App.4th 464, 475-477).
As to the evidence regarding emotional distress, we conclude that substantial evidence supported the jurys award of damages. The Visticas argue that the only evidence of emotional distress was the Frisellas testimony that they endured sleepless night, experienced worry, and had some marital stress. They complain that no psychologist or other expert testified regarding the Frisellas emotional distress. A psychologists testimony, however, was not necessary. The question of emotional distress is a subjective state that the Frisellas were entitled to establish through their own testimony. (E.g., Stanley v. Richmond, supra, 35 Cal.App.4th at p. 1097.) The record establishes that the Frisellas were involved in this partnership that was causing them stress for six years. Frank testified that the Visticas behavior created "tensions to my family, lousy sleep, different things. Sometimes — at one point, when I would get a phone call from Vistica even, it was like [an] upset stomach. Like, whats the next problem?" In addition, he testified that he had to borrow money; thus, the tense situation aggravated his worries about money. In addition, Patricia testified that their investment, the lack of any financial return on their investment, and the problems they experienced with the Visticas, including the failure to receive any complete accountings, exacerbated the Frisellas financial problems and worries. These problems, she asserted, caused her husband to become "very distraught" and created tension between her husband and her. She further explained that her husband would wake up during the night worrying about these problems.
Based on this evidence, we conclude that substantial evidence supported the jurys award of $135,000 in damages and the trial courts denial of the Visticas motion for a new trial.
II. The Frisellas Appeal
A. Constructive Trust
The trial court imposed a constructive trust on the Oak property in the amount of $4,479.84 plus post-judgment interest at the legal rate until paid. The court concluded that the Oak property had appreciated 96 percent since the Visticas purchased the property. The Visticas had used $9,333 of the partnership funds to purchase the Oak property, and $ 4,666.50 or one-half of the deposit belonged to the Frisellas. Thus, the Frisellas were entitled to the 96 percent appreciation on their share of the deposit (.96 x $4666.50), which equaled $ 4,479.84.
The Frisellas contend that this calculation was an error of law or, alternatively, an abuse of discretion. They also complain that the court should have included the rent from the Oak property in the remedy.
1. Standard of review
The Frisellas concede that the court has the discretion to impose a constructive trust (David Welch Co. v. Erskine & Tulley (1988) 203 Cal.App.3d 884, 894) but, once it exercises that discretion, they contend that the court must not violate the principle that the wrongdoer must not be unjustly enriched (see, e.g., Heckmann v. Ahmanson (1985) 168 Cal.App.3d 119, 135). "The propriety of granting equitable relief in a particular case by way of impressment of a constructive trust generally rests upon the sound discretion of the trial court exercised in accord with the facts and circumstances of the case." (David Welch Co. v. Erskine & Tulley, supra, at p. 894.) Here, we conclude that the court neither abused its discretion, nor did it violate any rules of equity when calculating the constructive trust.
2. Calculating the amount by applying the appreciation to one-half of $9,333
The Frisellas contend that the Visticas removed $9,333 of the partnership funds; therefore, they argue that the constructive trust should have been based on the full amount of the unauthorized partnership withdrawal. They also argue that the unauthorized partnership withdrawal represented almost 80 percent of the down payment on the purchase of the Oak property, and "at a minimum the Frisellas were entitled to 80% of all of the Visticas ill gotten gains." The Frisellas want 80 percent of the increase in equity, which is $179,200. They maintain that the trial courts calculation violates the purpose of imposing a constructive trust on property wrongfully acquired, which is to prevent unjust enrichment and to prevent people from taking advantage of their own wrong. (Heckmann v. Ahmanson, supra, 168 Cal.App.3d at p. 135.)
This argument merits little discussion. The purchase price of the Oak property was $231,000, which the Visticas were obligated to pay. There is no evidence in the record that the Visticas used any partnership money to pay the mortgage or pay the balance owed on the property. Thus, the Frisellas are not entitled to 80 percent of the Visticas profit on the entire purchase price. Further, one-half of the partnership money belonged to the Visticas; therefore, the Frisellas are not entitled to the profit associated with the entire amount withdrawn from the partnership. Although $ 9,333 of the partnership money was withdrawn without authorization, only one-half of that amount belonged to the Frisellas. "A constructive trust is an equitable remedy to compel a person who has property to which he is not justly entitled to transfer it to the person entitled thereto. [Citations.]" (Weiss v. Marcus (1975) 51 Cal.App.3d 590, 600, italics added.) Here, the Visticas may not have been authorized to withdraw the money from the partnership, but they were entitled to one-half of the amount. Preventing unjust enrichment does not mean imposing a penalty, which is what the Frisellas are actually advocating.
In support of their argument, the Frisellas cite Church v. Bailey (1949) 90 Cal.App.2d 501 (Church). In Church, an employee had embezzled funds from the employers and had used a portion of these funds to purchase real property for the sum of $6,500. (Id. at p. 503.) The employee paid both the deposit and all subsequent payments on the principal with the embezzled funds. (Ibid.) When he died, $2,319.62 was still owed, and the employees wife used her own funds to pay this balance. (Ibid.) The employers discovered the embezzlement and sued. Although the property was now worth $15,000, the reviewing court held that the employers were entitled to the entire parcel of property and only had to pay the employees wife the sum she used from her own funds. (Ibid.)
It is unclear from the Frisellas brief exactly how they believe Church assists them. In Church, the injured parties were entitled to the entire property because the employee had used embezzled funds to pay both the deposit and mortgage on the property. In contrast, the Visticas used only a portion of the partnership money, which was later replaced, as a deposit on the Oak property. None of the mortgage payments was from partnership funds. Thus, the facts are not similar to those in Church and that opinion provides no support for the Frisellas position that they are entitled to 80 percent of the appreciated value of the entire Oak property. Accordingly, we will not disturb the amount in the constructive trust imposed by the trial court.
3. Refusing to include rent in the calculation
The Frisellas also complain that the court failed to include in the remedy any portion of the income the Visticas received on the Oak property. They argue that they were entitled to the income derived from the wrongfully acquired property and they cite A & M Records, Inc. v. Heilman (1977) 75 Cal.App.3d 554, 570.
The Visticas do not address the merits of the Frisellas position, but merely respond that the Frisellas have waived raising this issue on appeal because they never raised it in the trial court. The record establishes, however, that the Frisellas did state in their trial brief that they believed they were entitled to ownership of the Oak property as well as all income received with 10 percent per annum. At the court trial, the court heard testimony from Stan that the rent on the Oak property was $1,700 from January 1997 and it increased to $1,750 ever since January 2000. Accordingly, the Frisellas have preserved this issue for appeal.
Both parties briefs on this issue are woefully inadequate. As already noted, the Visticas do not even address the merits of this issue. The Frisellas, without any discussion of the case, cite A & M Records, Inc., supra, 75 Cal.App.3d at page 570. This case involved the misappropriation and sale of the plaintiffs intangible personal property without the plaintiffs authority. The court held that the gross proceeds acquired by the defendant from the sales of the property were to be held in a constructive trust for the plaintiff. (Ibid.) There is nothing in this case to support the Frisellas argument that the court abused its discretion in refusing to award them the rent from the Oak property.
To succeed in their claim of court error, the Frisellas must establish that the rent the Visticas collected from the Oak property constituted unjust enrichment. (See, e.g., First Nationwide Savings v. Perry (1992) 11 Cal.App.4th 1657, 1662; see also Civ. Code, § 2224[].) There is no evidence in the record that the Visticas would not have been able to purchase the Oak property if they had not used the partnership money. Rather, they testified that they used the partnership checkbook because they had brought the wrong checkbook with them to the title company; they then neglected for two years to reimburse the partnership fund. Since the Visticas did replace the removed money with interest, the only money the Frisellas had lost was the lost opportunity to use or invest that money. The record contains no evidence that the Frisellas would have invested this money in real property or other income property.
Civil Code section 2224 provides: "One who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act, is, unless he or she has some other and better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it."
The trial court heard the evidence and concluded that the Frisellas had not established that they would have invested that money in other real property that would have provided them with rental income. Further, it determined that fairness did not dictate that it award this money to the Frisellas. We agree that the courts remedy of imposing a constructive trust that equaled 96 percent of the Frisellas share of the partnership money after the Visticas had replaced this sum with interest (and the jury had awarded them compensatory damages) was more than fair; we therefore reject the Frisellas claim that they were entitled to the rent from the Oak property.
B. Attorney Fees
1. Standard of review
The Frisellas argue that the trial court abused its discretion in refusing to award them attorney fees in the amount of $119,500. We review the courts determination regarding attorney fees under the abuse of discretion standard. We will only disturb this decision when no substantial evidence supports the trial courts findings or when there has been a miscarriage of justice. (Beach Colony II v. California Coastal Com. (1985) 166 Cal.App.3d 106, 110.) If the trial court has made no findings, the reviewing court will infer all findings necessary to support the judgment and then examine the record to see if the findings are based on substantial evidence. (Ibid.)
2. Statutory fees
The general rule is the parties to a litigation are to bear their own attorney fees unless a statute or agreement provides otherwise. (Code Civ. Proc., § 1021.) It is undisputed that the partnership agreement between the Frisellas and the Visticas did not provide for attorney fees. The Frisellas, however, maintain they are entitled to statutory attorney fees. They assert that, under sections 874.010 and 874.020 of the Code of Civil Procedure,[] they are entitled to their costs, which include attorney fees.
All further unspecified code sections refer to the Code of Civil Procedure.
Section 874.010 provides in relevant part: "The costs of partition include: [¶] (a) Reasonable attorneys fees incurred or paid by a party for the common benefit." Section 874.020 reads: "The costs of partition include reasonable expenses, including attorneys fees, necessarily incurred by a party for the common benefit in prosecuting or defending other actions or other proceedings for the protection, confirmation, or perfection of title, setting the boundaries, or making a survey of the property, with interest thereon at the legal rate from the time of making the expenditures." In addition, although cited by neither party, section 874.040 reads: "Except as otherwise provided in this article, the court shall apportion the costs of partition among the parties in proportion to their interests or make such other apportionment as may be equitable."[]
Although both parties ignore this statute, this provision directs the court to apportion the fees between the owners of the property. Since the record indicates that the Visticas and the Frisellas have an equal interest in the property, the court would have abused its discretion if it had awarded all of the fees to the Frisellas. (§ 874.040, see also Finney v. Gomez (2003) 111 Cal.App.4th 527 (Finney).) The purpose of the statute, as stated in Stewart v. Abernathy (1944) 62 Cal.App.2d 429 at page 433, ". . . is to divide the cost of legal services among the parties benefited by the result of the proceeding."
The Frisellas contend that the language in Capuccio v. Caire (1932) 215 Cal. 518 (Capuccio II) compelled an award of attorney fees in their partition action. (See also Capuccio v. Caire (1929) 207 Cal. 200 (Capuccio I).) In Capuccio II, the reviewing court affirmed the trial judges award of attorney fees in a partition action, under former section 796[] (the predecessor of sections 874.010 and 874.020). The court held that "counsel fees may be allowed under the provisions of section 796 . . . for services rendered for the common benefit even in contested partition suits." (Capuccio II, supra, at pp. 528-529.) The Frisellas emphasize that Capuccio II makes it clear that attorney fees in a partition action may still be awarded in an adversarial action.
Former section 796 declared: "The costs of partition, including reasonable counsel fees, expended by the plaintiff or either of the defendants, for the common benefit . . . must be paid by the parties respectively entitled to share in the lands divided, in proportion to their respective interests therein, and may be included and specified in the judgment. . . . When, however, litigation arises between some of the parties only, the court may require the expense of such litigation to be paid by the parties thereto, or any of them."
We agree that attorney fees may be awarded in a partition action even when the parties are in an adversarial relationship. However, fees may only be awarded for services provided for the "common benefit." The Frisellas argue that their partition action was for the common good because, otherwise, the Burlingame property would have deteriorated. As evidence in support of this contention, they cite testimony by Lisa that the relationship between Frank and her husband Stan "had broken down pretty badly." Stan also testified that Frank and he had not been able to agree on any matter related to the Burlingame property. As a consequence of the impasse, the exterior of the building had not been painted and the property had continued to deteriorate. A painting contractor who provided an estimate for painting the exterior described the property as "dilapidated." Further, there was evidence that tenants complaints had not been addressed.
The Frisellas misconstrue the meaning of "services rendered for the common benefit" (Capuccio II, supra, 215 Cal. at pp. 528-529) and ignore the clear language of the statute, which provides that a party is entitled to attorney fees that are "necessarily incurred by a party for the common benefit in prosecuting or defending other actions or other proceedings for the protection, confirmation, or perfection of title, setting the boundaries, or making a survey of the property, with interest thereon at the legal rate from the time of making the expenditures." (§ 874.020.) Further, they ignore the following admonishment in Capuccio I: "It is not to be understood that . . . we are deciding that the cost of litigating purely controversial issues arising in such actions between parties thereto who have their own counsel and are incurring their own costs in the effort to sustain their adverse claims shall be chargeable or recoverable against the losing party or the parties to such controversy." (Capuccio I, supra, 207 Cal. at p. 208.)
"In a partition action, a court can only award those costs and fees incurred for the common benefit of the parties. What constitutes `for the common benefit is to be determined based on the facts and circumstances of each particular case. Typically reviewing courts have not found the fees and costs incurred in adjudicating contentious issues between parties to a partition to be `for the common benefit. In some instances, the reviewing court has inquired into whose interests were being protected by the services provided, whether the services contributed anything of benefit to the cotenants, or whether one partys counsels services made the proceedings any more advantageous to the other party." (Finney, supra, 111Cal.App.4th at pp.548-549, fns. omitted.)
Although none of the following cases was cited by either party,[] our independent research has uncovered the following relevant cases that have rejected an award of attorney fees in a partition action.[] Of particular significance, is the rejection of an award of attorney fees under that partition statute in Williams v. Miranda (1958) 159 Cal.App.2d 143, 158. The court in Williams refused to award fees because the lawsuit "purport[ed] to be one in partition, [but] from its very inception it developed into a proceeding to establish plaintiffs ownership to an undivided one-half interest in the subject property free and clear of the claims of the minor children under the trust agreement. All of the efforts of plaintiff both in the trial court and upon this appeal were and have been directed to this end. It is therefore clear that such services as were rendered by counsel for the plaintiff were in the interest of plaintiff alone and not for the common benefit." Similarly, when the plaintiff joined a quiet title action with an action for partition and the quiet title did not promote the common benefit of those interested in the partition action (Anger v. Borden (1951) 38 Cal.2d 136, 145-146) or when the plaintiff joined an accounting with a partition action (Deacon v. Deacon (1929) 101 Cal.App. 195, 202), the court disallowed fees for the legal work associated with the quiet title action (Anger v. Borden, supra, at pp. 145-146) and with the accounting (Deacon v. Deacon, supra, at p. 202, but see Regalado v. Regalado (1961) 198 Cal.App.2d 549, 551-552 [primary purpose of lawsuit was partition of real property and accounting incidental so attorney fees permitted insofar as services pertained to partition and for common benefit]).
Just as the trial court complained that it had to do its own independent research on this issue, presumably because of the inadequate briefing by counsel, we have similarly found that counsel for both parties have failed to cite or discuss the relevant statutes and cases.
We also discovered cases that, because of their facts, are not relevant to the issue here. For example, in Stewart v. Abernathy, supra, 62 Cal.App.2d at pp. 432-433, the lien holder who sought an allowance of counsel fees, unlike the Frisellas, had no ownership in the property. Similarly, a reviewing court reversed the award of attorney fees when the defendant did not have an interest in the parcel of land. (Sousa v. Sinsheimer (1943) 62 Cal.App.2d 107, 111-112.)
Still another court refused to award fees when the party, rather than an attorney, performed legal services, despite the fact that these services were for the common benefit of the cotenants. (Muller v Martin (1953) 116 Cal.App.2d 431, 436-437.)
We find nothing in the record to indicate that this lawsuit was primarily for partition or that the legal services performed on behalf of the Frisellas were for the common benefit. The pleading filed by the Frisellas alleged a variety of causes of action including, breach of contract, dissolution of partnership, partition, accounting, injunctive relief, breach of fiduciary duty, fraud, negligent misrepresentation, and intentional infliction of emotional distress. Indeed, when requesting fees under the partition statute, counsel never even separated the fees for the jury trial from those from the court trial.
The trial court determined that this action was brought on behalf of the Frisellas and that it did not represent the interests of the Visticas. We conclude that the Frisellas have failed to meet their burden of establishing that this was an abuse of discretion.[]
Nothing in the memorandum of costs or accompanying motion submitted by counsel for the Frisellas indicates that any of this work related specifically to the partition proceeding.
3. Fees under the courts equitable powers
The Frisellas contend that the court abused its discretion in refusing to award them attorney fees as equitable relief. In support of their argument they merely cite cases that set forth a well settled rule that trial courts have discretion to award costs as part of the equitable remedy. (E.g., Estrin v. Fromsky (1942) 53 Cal.App.2d 253, 255 [appellant ordered to pay audit costs].) As already noted, it is elementary that, unless qualifying as an exception created by the courts, attorney fees are only permitted when authorized by contract or statute. (§ 1021.) The Frisellas have not asserted that any exception applies here. Although their argument is not clear, perhaps they are arguing that all claims in equity represent an exception to the general rule set forth in section 1021. They provide no authority for this position and we will not consider an exception that will essentially usurp the rule on attorney fees.
It may be, although it is entirely unclear from their briefs, that the Frisellas are simply arguing that the court should have awarded them their costs for experts. They did request such costs, which the court denied. Other than pointing out that the court has the discretion to do this in equity, the Frisellas have not set forth any reason for us to question the trial courts decision. Accordingly, we conclude the trial court did not abuse its discretion when it refused to award the Frisellas their costs for experts.
DISPOSITION
The judgment is affirmed. Neither party is awarded costs.
We concur: Kline, P. J. and Haerle, J.