Opinion
E066365 E066705
12-20-2018
MICHELE HOLLOWAY, Plaintiff and Appellant, v. ALLIANCE ENVIRONMENTAL GROUP, INC. et al., Defendants and Respondents. MICHELE HOLLOWAY, Plaintiff and Respondent, v. LUBA, INC., Defendant and Appellant.
Borton Petrini and Daniel L. Ferguson for Plaintiff, Appellant, and Respondent, Michele Holloway. Gordon & Rees, Jason F. Meyer, Matthew G. Kleiner, J. Todd Konold, and Jeffrey S. Herman for Defendant and Respondent, Alliance Environmental Group, Inc. Manning & Kass, Ellrod, Ramirez, Trester, Fredric W. Trester, and Ladell Hulet Muhlestein for Defendant and Appellant, Luba, Inc.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. RIC1304062) OPINION APPEAL from the Superior Court of Riverside County. Daniel A. Ottolia, Judge. Affirmed as to Michele Holloway; reversed with directions as to Luba, Inc. Borton Petrini and Daniel L. Ferguson for Plaintiff, Appellant, and Respondent, Michele Holloway. Gordon & Rees, Jason F. Meyer, Matthew G. Kleiner, J. Todd Konold, and Jeffrey S. Herman for Defendant and Respondent, Alliance Environmental Group, Inc. Manning & Kass, Ellrod, Ramirez, Trester, Fredric W. Trester, and Ladell Hulet Muhlestein for Defendant and Appellant, Luba, Inc.
This case is about a residential asbestos abatement gone awry. Michele Holloway owns a house in Norco, California. In 2011, she filed a claim for water damage with her insurance carrier, Travelers Commercial Insurance Company (Travelers), reporting that water from her toilets had leaked and flooded the house. After inspecting the property, Luba, Inc. (Luba) recommended testing the vinyl tile covering her foundation for asbestos. The test came back positive, and Holloway hired Alliance Environmental Group, Inc. (Alliance) to remove the tile and asbestos from her foundation.
After the abatement, Holloway complained of a strong chemical odor and claimed she could not reenter her home. About a year later, she sued Alliance and Luba for negligence, breach of contract, fraud, and deceptive practices against a disabled person. She claimed Luba had fraudulently induced her to agree to an unnecessary abatement and Alliance improperly performed the work. She sought compensation for personal injuries, emotional distress, and property damage, claiming the only way to remediate the contamination Alliance left on her property was to demolish and rebuild her house.
Over the course of a seven-week trial, Holloway's credibility was significantly impeached when it became clear she had lied on numerous occasions (at trial, in discovery, and in a previous litigation), forged exhibits, and tried to intimidate witnesses from testifying against her. The jury returned a verdict in favor of defendants. It found Luba not liable on any of the claims. It found Alliance liable for breach of contract and negligent misrepresentation, but awarded Holloway no damages.
On appeal, Holloway asserts numerous instances of reversible error. She argues: (1) the verdict in favor of Luba is not supported by substantial evidence; (2) the evidence compels a damage award in her favor; (3) the jury rendered an "inconsistent verdict" when it found Alliance liable on two of her claims but awarded her no damages; (4) the trial court violated the collateral source rule when it allowed the jury to hear evidence that Travelers had settled with her for about $80,000; and (5) the trial court improperly admitted a surveillance video of her taken by a private investigator. As we explain, we find each of these arguments unpersuasive, and will therefore affirm the verdict.
In a cross-appeal, Luba challenges the trial court's denial of its motion for attorney fees under California Civil Code section 1780, which authorizes a fee award to a prevailing defendant in a deceptive practices action "upon a finding by the court that the plaintiff's prosecution of the action was not in good faith." (Civ. Code, § 1780, subd. (e).) Luba argues the court erred by interpreting the term "prosecution" narrowly to mean the filing of an action only. We agree. The plain meaning of the term encompasses not just initiating, but also pursuing, an action. This includes bad faith trial tactics. We will therefore remand to the trial court for a new hearing on attorney fees.
I
FACTUAL BACKGROUND
A. Overview
The broad strokes of this case are as follows. Holloway filed a claim with Travelers for water damage to what she claimed was her primary residence, a house on Lori Court in Norco, California. Carlos Avila, the owner of Luba—the company Travelers sent to investigate the water damage—didn't detect any moisture in the house. He did, however, notice Holloway's foundation was severely cracked and covered in vinyl tiles he suspected contained asbestos. He recommended removing the tiles because they had been exposed to sewer water but first testing them for asbestos. Travelers approved this approach and agreed to pay for an asbestos abatement when the test came back positive.
Laura Urban, a project manager at Alliance, met with Holloway at the Lori Court house to discuss the abatement. Holloway informed Urban she had asthma and was sensitive to chemical odors. She also asked if Alliance could seal the cracks in her foundation. In what turned out to be the crucial moment in this case, Urban agreed to do so and added to the contract "[s]eal cracks in slab with plastic to make sure no [asbestos-containing tile adhesive] will settle in them." At trial, two Alliance representatives said the company does not offer that service and Urban never should have promised to do it.
After Alliance completed the abatement, Holloway complained the cracks had not been sealed and her home had a strong chemical odor that was affecting her respiratory system. Over the next month, Alliance scrubbed and filtered the air in her house and offered to pay for a flooring company to fill the cracks in her foundation. Holloway refused and countered by sending Alliance, Travelers, and Luba a settlement demand seeking $20,000 for pain, suffering, and medical expenses, plus compensation in an amount to be determined for loss of use of her residence, expert testing, and remediation. Travelers ultimately paid Holloway $84,237.74 to be released from any claims regarding her water damage claim or the asbestos remediation.
Holloway proceeded to sue Alliance and Luba. To demonstrate she was entitled to treble damages for her deceptive practices claim, she represented in verified discovery responses and in her deposition that the Lori Court house had been her primary residence since 1987. (See Civ. Code, § 3345 [authorizing treble damages when defendant's conduct causes the disabled plaintiff to suffer a "loss or encumbrance" of their "primary residence"].)
Trial did not go well for Holloway. Defendants presented several witnesses who said the Lori Court house was her rental property, not her residence. Chief among these witnesses was Corey Zogby, who demonstrated he had rented the house from 2008 until November 15, 2011, the day of the alleged water damage. In an attempt to undercut his credibility, Holloway forged a lease she claimed to be the real agreement between her and Zogby, but the plan backfired when it became obvious the document was a fake. In addition, Holloway forged another exhibit and tried to cover up the fact she was married to a man named Sid Campbell and had been living in his home before and after she filed the water damage claim. Plus, after she told the jury she needed a walker to get around and Campbell was legally blind, the defense showed a video taken just before trial of the couple running errands without any noticeable physical impairments.
During closing argument, Holloway's counsel admitted she had made a "pretty serious" mistake forging a lease and lying to the jury, but argued she had only done so out of desperation, because defendants had ruined her home. He argued her "imperfections" were irrelevant and detracted from "how she was legally wronged by the defendants." As noted, the jury found Alliance liable for breach of contract and negligent misrepresentation, but awarded Holloway nothing in damages.
B. Trial Evidence
1. Luba's inspection
Holloway told the jury that on November 15, 2011, she walked into her house to find water had leaked from her toilets and flooded the property. She opened a claim with Travelers that day, but later decided to retract it because she didn't want the associated rate increase. She said Travelers told her she could reopen the claim later if she changed her mind, so she decided to tackle the soaked floors herself. She said she supervised as her adult daughters (both in their 20s) removed all of the furniture, pulled up the wet carpet and padding, and removed wet ceramic tile, and linoleum. She then hired a plumber who removed both toilets to clean out the water lines.
Holloway decided to reopen the claim the following month when water leaked from the wax ring in one of the bathrooms. She asked if Travelers could also fix the large cracks in her foundation as part of the claim. She said she had put carpet over the cracks twice before, but this time "wanted to get an assessment of why and whether or not my insurance would cover it."
Kristina Encinas, the Travelers adjuster assigned to the claim, testified the policy required the home to be Holloway's primary residence and that she had represented it was. She said Holloway told her the house was her family's home, they had been living there when the leak occurred, and they were anxious to move back in. Travelers's notes on Holloway's claim say that a tree root was coming through her sewer line and her plumber had found roots in the failed wax ring.
Avila said Encinas asked him to inspect a "sewage leak" at an insured's home on December 16, 2011. He said when he arrived, Holloway told him she had recently evicted tenants from the house and suspected they had intentionally flooded her toilets before they left. She said the sewage water had been "really gross" and "black" and smelled so bad she had already removed the carpet.
Avila ran a water detection device over the floor and walls and found no moisture. But he did notice the floor was in "extremely poor condition." The carpet and padding had been removed. The tack strip was heavily damaged in most places and entirely missing in others. The floor—both the concrete slab and the vinyl tile covering it—was severely cracked. He told the jury that in his nearly 20 years in the water remediation business he had never seen a foundation so badly compromised. In some places, the cracking had caused one-inch offsets in the foundation. Many of the vinyl tiles were either loose or broken. Some pieces looked like they had been pulverized into powder and others had fallen into the foundation cracks. When Avila commented on the floor's condition, Holloway replied, "Yes, and I hope that the insurance company pays to fix these cracks."
Avila said he told Holloway he would recommend to Travelers the tiles be removed because they had been exposed to sewage water and were likely contaminated. He also told her he suspected the tile contained asbestos, and if it did, a company specializing in abatement would have to take them out because he wasn't qualified to do so.
Encinas agreed with Avila's recommendation and asked him to contact a lab to analyze the tile. The lab (Micron) concluded there was asbestos in both the tile and the tile adhesive—a product called "black mastic," an asphalt emulsion adhesive widely used in the 1950s and 1960s. In light of these results, Encinas asked Avila to contact Holloway and let her know Travelers would cover the cost of tile removal and asbestos abatement. Encinas said Travelers's general practice is to cover the removal of tile exposed to sewer water to avoid the risk of mold.
When Holloway learned Travelers would cover the abatement, she asked Avila to recommend a company. Avila said he recommended Alliance because he knew they were on Travelers's panel of approved companies and he thought they did quality work. Avila told Encinas that Holloway wanted to proceed with tile removal and abatement and contacted Alliance at Encinas's request.
Holloway tells a different version of these events. According to her, Avila pressured her into removing the tile to generate more profit for Luba and Alliance. She said she told Avila she wanted simply to cover the tile with carpet, but he told her it was "illegal" to place carpet over tile if it contained asbestos. One of her experts, Daniel Napier, testified it is perfectly legal to place carpet over asbestos-containing material, so long as the material is not considered friable (crushable by hand). Thus, because the lab had concluded the tiles were nonfriable, Holloway was not required to have them removed and could have covered them with carpet.
In rebuttal, Luba's water remediation expert, Michael Maxwell, said industry regulations require removal of tiles that have been exposed to sewage water due to the risk of disease. Avila therefore had complied with industry standards in recommending removal after Holloway told him her house had been flooded with "really gross" sewer water. Maxwell said Avila also complied with industry standards by recommending testing because if the tile contained asbestos, a certified abatement company—not a water remediation company like Luba—must remove it. In addition, industry regulations require abatement of any material that contains asbestos and is going to be demolished or damaged by construction activities, regardless of friability. Thus, even if Holloway had chosen to install carpet, the tile would have been damaged when the tack strip was hammered into it, providing additional support for Avila's recommendation to remove it. Finally, Maxwell said he had inspected the property and, given the damaged state of her foundation, any prudent water remediation company would have done what Avila did. He didn't know of any reputable, licensed flooring contractor who would lay carpet over a floor with the kind of offset cracks and broken and missing tile that Holloway's floor had, even if the owner requested.
Similarly, Matthew Lavigne, a certified asbestos consultant and the lead inspector at the lab that analyzed the tile, said nonfriable asbestos-containing material must be removed if it is going to be subject to cutting, grinding, or sanding during renovation or demolition activities.
2. Alliance promises to seal the foundation cracks with plastic
Urban, one of Alliance's project managers, met with Holloway at the Lori Court house to discuss the abatement. Holloway said she asked Urban why she couldn't just put carpet over the tile and Urban also told her it would be illegal because the tile contained asbestos. Like Avila, Urban denied any such conversation took place. She said she had asked Holloway what type of flooring she wanted after the abatement, and Holloway said she hadn't decided.
Urban said Holloway asked if Alliance could seal the cracks in her foundation before removing the asbestos. Urban agreed to do so and added to the scope of work section in the contract, "[s]eal cracks in slab with plastic to make sure no [asbestos-containing tile adhesive] will settle in them." Alliance's owner, Jeff McClean, told the jury Urban never should have made the promise because his company does not offer that service. Similarly, Craig Sawyer, one of Alliance's branch managers, said it is impossible to seal floor cracks with plastic because the solvent they use to remove asbestos will dissolve any plastic barrier. Urban explained that had she known it was impossible to seal the cracks with plastic, she never would have agreed to do it.
Urban said Holloway also told her she had asthma and a hypersensitivity to chemical odors and had asked what type of product Alliance would use to remove the asbestos. Urban sent Holloway the material safety data sheet for the solvent Alliance uses in all its abatement projects, Abatix's "AMR100C Low Odor Mastic Remover." Holloway admitted Urban had warned her there would be a residual chemical odor that would take about 48 hours to dissipate.
3. Holloway complains of an odor
Alliance began the abatement on December 28, 2011, and completed the project two days later. Despite the 48-hour warning, Holloway entered the house that day and complained to Encinas about a strong chemical smell. On December 31, Encinas asked Avila to inspect the property, as she had received several calls from Holloway regarding an odor.
Avila arrived at Lori Court that day and detected "a little bit of a smell in there" as well as moisture on the foundation. He set up four dehumidifiers and three scrubbers to try to clear the air and dry out the floor. He left the machines running for four days, and when he returned on January 4, 2012, the foundation had dried and he no longer smelled anything.
But Holloway told Travelers she could still detect an odor. The following day, Encinas inspected the house, but didn't smell anything. A few days later, on January 9, Urban and Sawyer from Alliance arrived and neither noticed any odors. Urban testified that she too is sensitive to chemical smells, having suffered from asthma since she was 13 years old. She said she was in the house for about 40 minutes and didn't smell anything. However, because Holloway was upset and claimed to be highly sensitive to odors, Alliance returned and cleaned her property the following day as a courtesy.
Holloway continued to complain about the smell. She told the jury that whenever she walked into her house without her respirator, the air would "burn my sinuses, my throat, my lungs . . . I'd get kind of dizzy, woozy if I was in there for more than just a few minutes. I got a rash all over my body." On January 20, Alliance's vice president of operations, Shaun Murphy, inspected the house. He arrived with a third-party industrial hygienist, a flooring contractor, and Sawyer. None of them detected an odor at Holloway's house.
At trial, Holloway called as a witness a flooring contractor who had come to Lori Court and given her an estimate for carpet installation in late January 2012, after everyone from Luba, Travelers, and Alliance had been to the property. He said when he pulled up Holloway told him he shouldn't go in the house because it smelled so bad. He said when he went in, "I noticed right away that there was, you know, it's an unpleasant smell in the house . . . And I got out of there and Mrs. Holloway asked me how I felt, and I said, 'You know, my—it's—there's an odor there and my eyes are bothering me a little bit.' . . . So I got home, within an hour later, my eyes were really burning, and I knew it was from going in that house. It's something that I had never experienced. I've been in the business 30 some-odd years."
Holloway believed the smell was coming from solvent that had seeped into the cracks in her foundation because Alliance failed to seal them before the abatement. On January 29, 2012, she sent Sawyer an email saying, "Craig, I wanted your thoughts on the mastic remover that got into the cracks because your workers didn't seal them with plastic. Will that stuff cause problems later if we just seal it up in the cracks?" Alliance consulted with its flooring contractor, who thought filling the cracks with caulk or concrete might take care of any residual odor Holloway was detecting. Alliance proposed this solution in exchange for a release of liability, but Holloway refused to sign a release. Hoping to resolve the issue, Alliance emailed her on January 30 and offered to perform the work without a release, but she again refused.
The witnesses who inspected the property in early January 2012 said Holloway's dissatisfaction with Alliance's work was limited to the odor. None of these witnesses saw any residual mastic or pieces of tile on the floor or in the cracks during their inspections. Murphy said when he was communicating with Holloway in January, she never mentioned Alliance may have left asbestos-containing material at her house. "[I]t never came up. It was just smell."
On February 4, Holloway's attorney sent Alliance a letter telling them they were no longer allowed on the property.
4. Holloway's demand letter
On February 28, 2012, Holloway sent a demand letter to Travelers, Alliance, and Luba. She alleged she had "been unable to use or enjoy her property since December 13, [2011,] when Travelers . . . seized control of the water damage repairs." She said her house was "uninhabitable" and the three parties were "jointly and severally liable" for the personal and property injury she has suffered. She said "[t]he full extent of the damages and the measures necessary to remediate the damages have yet to be fully ascertained," and asked the parties to "immediately pay [her] a lump sum of $20,000 for her medical expenses, attorney's fees, . . . pain and suffering, distress, and other miscellaneous costs." She proposed the parties agree to pay for the to-be-determined costs associated with: (1) "the loss of the use of her property at fair rental value beginning December 16, 2011 . . . until remediation is complete and an independent inspector verifies that all potential hazards have been abated"; (2) "expert consultation to develop an initial remediation plan," including "chemists, hazardous material remediation experts, soil contamination experts, civil engineering experts, structural engineering experts and construction experts"; (3) "industrial forensic analysis to establish a reasonable baseline upon which a remediation plan agreeable to Ms. Holloway can be developed," including "air quality testing for VOCs, asbestos contamination, material composition testing of the contaminants in the cracks in the slab, surface testing and soil testing to determine the extent of contamination"; (4) completing remediation; (5) "independent analysis to certify that remediation efforts have been successful and are complete."
5. Holloway complains of mastic and tile residue on her property
Holloway filed a claim against Alliance with the South Coast Air Quality Management District (SCAQMD) and the Contractors State Licensing Board (CSLB), claiming Alliance used a solvent harmful to her respiratory system and left asbestos-containing materials in her home. Brenda Seewald, an SCAQMD inspector, said she visited Holloway's property on May 23, 2012 in response to her claim. She had been at Lori Court to inspect Alliance's work on the day the project began, and said the company had set everything up properly. She said during the post-job inspection, Holloway wore a paper mask and followed her around the house, telling her where to look, to the point where it felt like Holloway was "pressing" her to find asbestos in the house. With a flashlight and tweezers, Seewald was able to find and remove small pieces of floor tile from the foundation cracks, and later testing confirmed the tile pieces contained asbestos. Seewald said she was familiar with Alliance and was surprised to find asbestos at the house. In her experience, Alliance was a responsible company that did good work. She said she had issued Alliance a $10,000 fine for leaving residual asbestos on Holloway's property, but had she known Holloway had prohibited Alliance from coming onto her property in February 2012, she would have instead considered Holloway the responsible party and issued her a notice to comply.
David Spiegel, a general contractor and industry expert for the CSLB inspected Holloway's property in October 2012, nearly a year after the abatement. He said the house had such a strong chemical odor he couldn't enter without using his respirator. He said he saw black mastic residue on the concrete slab and inside cracks in the slab, as well as on the drywall, horizontal framing plate, door case moldings, door jambs, and on the bottom of the fireplace.
Defense counsel showed Sawyer photos taken of Holloway's house in 2014 which depicted mastic on the floor and in the foundation cracks and chunks of tile strewn about. Sawyer said the house did not look like that when he visited in early January 2012. Maxwell, Luba's expert, said when he inspected the property in October 2014, he saw a can of black mastic in Holloway's garage. He showed the jury a photo he had taken of the can in the garage, explaining he was familiar with the product because he'd been in the construction industry for decades.
6. Travelers settles with Holloway
In November 2012, Travelers and Holloway entered an agreement entitled, "Compromise and Full Release of All Claims." In exchange for a total payment of $84,237.74, Holloway released Travelers from liability in connection with her water damage claim, which included its "alleged liability for work performed . . . by other entities, including but not limited to Luba and Alliance."
7. Holloway sues Luba and Alliance
In April 2013, Holloway filed a complaint against Alliance and Luba, asserting claims against both companies for fraud, breach of contract, conspiracy to defraud, negligent misrepresentation, negligence, nuisance, unfair business practices, and intentional infliction of emotional distress. After the trial court dismissed the conspiracy claim with prejudice, she amended her complaint to assert a claim for deceptive practices against a disabled person in violation of the Consumer Legal Remedies Act. She sought damages for personal injury, emotional distress, rent since the date she filed the water loss claim, and the cost of demolishing and rebuilding her home. She alleged Alliance broke its promise to seal the cracks in her foundation with plastic before beginning the abatement; aggravated her existing respiratory problems by using a petroleum-based solvent; and caused serious damage to her house by leaving asbestos-containing tile and mastic on her walls and floor and in the cracks in her foundation.
8. Holloway's cost of repair evidence
Holloway presented the testimony of two contractors and a structural engineer to support her claim that Alliance had left her house so contaminated it had to be completely rebuilt. Robert Leonard, a general contractor, testified Holloway had asked him to propose a solution for getting rid of a "smell and [a] black substance" on her property. Leonard arrived at the house in June 2012, six months after the abatement. Based on a 10- to 15-minute visual inspection of the house, he concluded it needed to be demolished and rebuilt. He said he couldn't inspect for any longer than 15 minutes because the property had "a very pungent odor," which he compared to that of paint thinner. "[E]yes got all burny, just the smell . . . I didn't know what it was so I didn't want to take myself too long in there so I went ahead and thought it was best to get out."
Leonard said he noticed a "black substance" he couldn't identify on the foundation and parts of the drywall. He said if the substance had seeped into the foundation cracks and into the underlying soil, the only way to remediate the contamination would be to remove the slab, clean the soil, then pour a new foundation—at an estimated cost of $250,000. On cross-examination, he agreed he "really didn't know what the extent of the problem was beyond it smells and there's black stuff on the floor." He admitted he didn't know what the substance was, whether it contained asbestos, or whether it had seeped into the soil. "It could have seeped two inches away from the crack or two feet away from the crack. No one would know until you had it tested."
Lonnie Mount, a structural engineer, said he had also inspected Holloway's home to develop a solution for the odor and the "black substance." He believed Holloway's two best options were to either demolish and rebuild the house or raise the house and replace the slab, though he preferred the former. However, on cross-examination, he admitted it was possible to replace portions of the concrete slab without lifting the house and that there could be other solutions for removing the black substance.
Edward Avery Reed, a general contractor, also believed the house should be demolished and rebuilt. His "ballpark" estimate for the cost of doing so was between $300,000 and $350,000. In reaching this number, he assumed Holloway's foundation was monolithic, meaning the center slab is connected to the perimeter, making it impossible to remove just the center slab. He assumed the foundation perimeter was also cracked and that asbestos could have entered those cracks.
Holloway hired Napier, a certified asbestos consultant and industrial hygienist, to determine whether there were hydrocarbons on her property. He collected a total of six samples of different materials at the house—including one "baseline" sample of air—and tested them for VOCs. He said the samples came back positive for benzene and naphthalene, and one sample contained methylene chloride at a level of 46 micrograms per cubic meter. He said methylene chloride had been used as a paint remover until it was banned because "it had some other side [effects], like it kills you."
Napier believed Alliance was the source of the hydrocarbons present in the samples. He said the company's air testing had showed benzene was not present outside Holloway's house, which indicated to him that the benzene had to come from the solvent. "There's no other explanation for it."
Alliance conducted sampling inside and outside Holloway's house and produced a related expert report, but decided at the close of her case-in-chief not to present its own expert testimony.
On cross-examination, Napier acknowledged the sample containing methylene chloride was actually the blank, "baseline" air sample. He apologized for the mistake. He hadn't realized it was the baseline sample when he wrote his report and couldn't remember where at the property he had taken the sample. He also acknowledged that only two other samples came back positive for methylene chloride, but at a level about eight times lower than the baseline. Finally, he agreed that federal regulations require material safety data sheets to disclose when dangerous chemicals like benzene, naphthalene, and methylene chloride are present in a product and that the material safety data sheet for Alliance's solvent did not list any of those chemicals as constituents.
Spiegel, the CSLB expert, estimated it would cost just under $48,000 to remove the black mastic residue he found in Holloway's house. He proposed removing and re-pouring the center slab and cutting out and patching the affected parts of the drywall. He "doubt[ed] seriously" the foundation was monolithic, which meant there was no need to demolish the house because the foundation perimeter could remain in place while the center slab was removed. He admitted his proposal was based on a cursory, visual inspection of the property.
9. Disability and personal injury evidence
Holloway testified she is disabled and suffers from scoliosis, asthma, fibromyalgia, diabetes, and diverticulosis. She said she has trouble walking due to her musculoskeletal defects and usually requires the aid of a walker, cane, or wheelchair. Her pulmonologist, Dr. Bradburne said her type of scoliosis—kyphoscoliosis—causes her to have a diminished lung capacity and renders her particularly susceptible to respiratory issues like asthma.
Her treating physician, Dr. Leon, said she reported in 2012 that her asthma was getting worse after an asbestos removal in her home. Dr. Leon said Holloway's medical records show that in 2012 she needed stronger medication and on a more frequent basis. Dr. Bradburne said Holloway visited him in October 2014 complaining about respiratory problems due to "exposure inside her home" and he had left treatment for the issue up to Dr. Leon. He said that before the October 2014 visit, he "hadn't seen her in a while because she had been doing well for a period of time."
Kaiser medical records from 2006 reflect Holloway reported suffering from obesity, anxiety disorder, depression, hypertension, mitral valve disorder, atrial arrhythmia, bronchitis, rhinitis, gastroesophageal reflux disease (GERD), diverticulitis, hematuria, osteoarthritis, a breast lump, tachycardia, polymyalgia rheumatica, chronic sinusitis, sleep apnea, spondyloarthropathy, and post-laminectomy syndrome. Holloway reported a history of toxin exposure and of testing positive for PCBs "in her blood." She also reported a "sensitivity to mold and certain trees" and experiencing negative reactions to sulfates. In 2009, she visited urgent care for dehydration symptoms and reported the "symptoms worse[n] when she drinks mineral water from Costco." That same year, she requested an appointment with Dr. Leon, reporting symptoms of "[s]weating a lot, dizziness, [and the] feeling of dying." During a visit in October 2009, she told Dr. Leon she had been "chronically exposed to pesticides while eating out at Jack in the Box for years" and that a naturopath had diagnosed her with a build-up of pesticides in her body.
Dr. Leon's notes from a 2011 visit state, "Michelle Holloway, 52-year-old female, complains of intermittent anxiety and anger with personal, financial, children, and disability issues. Her home is in foreclosure. Her husband divorced her after she became disabled. She has dependent children to care for. She is wheelchair-bound. She has occasional insomnia, and she wants something to help her occasionally to relax and sleep as needed." When shown this medical record, Holloway admitted her daughters were in their 20s in 2011, and denied telling Dr. Leon her home was in foreclosure.
10. Holloway's credibility was impeached at trial
a. Primary residence
One of the biggest issues during trial was whether the Lori Court house was Holloway's primary residence or a rental property. Her complaint sought damages for being "dispossessed of her home" and treble damages for loss of a "primary residence" by a disabled person. Her homeowner's insurance policy with Travelers required her to be the primary resident of the property in order to make a claim.
Before trial, she stated in verified interrogatory answers and testified at her deposition that Lori Court was her primary residence, continuously from December 1987 to November 15, 2011 (the date of the first water leak), and, at some point, she had rented a room to Corey Zogby and Sheri Conrad. Holloway also testified at her deposition that the evening of the first water leak was the first time she ever stayed at her "friend" Sid Campbell's house. After her deposition, she submitted an errata form stating Zogby and Conrad had rented the room from December 2007 to May 2009 and then from February 2010 to June 2011. Years earlier, in 2009, she testified in a deposition in a predatory lending lawsuit she had filed against her bank that she shared the house with Zogby. She said Zogby and Conrad were renting the house and she and her daughters lived in the garage.
During opening statements, defense counsel told the jury they had located Zogby and he was going to testify he had rented the entire house from Holloway from January 2008 to November 15, 2011. During her direct examination—presumably in anticipation of Zogby's testimony—Holloway changed her story. She admitted Zogby had rented the entire house starting in January 2008; however, she claimed she had evicted him in the summer of 2011 and had moved back in by September 2011. She also admitted that the night of the water leak was not the first time she stayed at Campbell's house, that she had lived there for the years Zogby had been her tenant. When presented with her 2009 deposition testimony, she claimed she had been confused by the questions. She said she and Zogby had discussed her moving into the garage, but it never happened because Conrad was "intimidated" by her.
Zogby and other residents of Lori Court testified differently. Zogby, his 16-year-old son, and Conrad, said their last day at the house was November 15, 2011—a date they remembered because it was Zogby's youngest son's birthday. They also said Holloway never lived with them. Zogby and Conrad denied ever being behind on rent or evicted in the summer of 2011. Zogby said he asked Holloway for a rent reduction in October 2011 and a few minutes later she served him with a 60-day eviction notice.
Zobgy said when he first moved in, Holloway had asked him to tell anyone looking for her that she wasn't home and, if they pushed, to say she was renting a room in the house. About six months later, she told him to say she was living in the garage. She said she was refinancing the home and needed to show she lived in it.
Zogby produced the lease agreement and several bills reflecting he had paid for utilities at the property through November 2011. Holloway's next-door neighbor, Ruth Pease, said Zogby and his family lived in the house until "around the holidays of 2011," and that Holloway never moved in after they moved out. According to Pease, after Zogby moved out Holloway asked her to lie and say she lived in the house if anyone asked.
Holloway claimed she had never seen the lease agreement Zogby had produced. She came to trial the next day claiming to have found the actual agreement after searching through her boxes "for hours." The document she showed the jury was a printed form month-to-month lease with fill-in-the-blanks for names and dates. In the "additional agreements" section, she had written "owner agrees to lower rent to $600—for sharing house w/Corey." It became obvious the document was a fake when Zogby said his signature was forged and pointed out although Holloway had dated it January 10, 2008, the disclosure section contained a link to a 2013 EPA website.
Finally, defense counsel showed the jury a text message Zogby had received from Holloway a few days before he testified, saying, "Don't let them use you to retaliate because you are angry about being evicted. . . . Charges were never filed yet against your boys or you after what they/you did." (Emphasis added.) Zogby took the message as a threat of retaliation if he testified. In a similar vein, Ruth Pease said the night before she was scheduled to testify, Holloway had called her boyfriend and left a threatening voice message, accusing them of having "talked when [they] shouldn't have" and telling them they should have said they "didn't know anything."
b. Forged flooring estimate
To support her testimony that Avila had convinced her not to install carpet over the vinyl tiles, Holloway produced an estimate from a company called "Flooring Express dba Hassan Abdelnaby." The estimate was dated December 4, 2011, and quoted a price of $1,585 for carpet delivery and installation. Near the bottom of the page was a handwritten note that read, "VCT Tile OK—No tack strip needed." Holloway testified Abdelnaby had written the note (presumably as evidence that it was not illegal to lay carpet over the tile). Abdelnaby, called by the defense, firmly denied writing it. He said he recalled visiting Lori Court in 2011 to provide the estimate. He said Holloway had told him the house was a rental property, and that she was going to have the vinyl tile removed and her foundation cleaned before installing the carpet. Abdelnaby said that years after that visit she called and asked him "to write something to say that the floor was [possible] to install over the existing tile" or to add something along those lines to his old estimate. He refused.
c. Visit to urgent care
Holloway testified she had a severe asthma attack after walking into her house on December 30, 2011, the day Alliance finished the abatement. She said her daughters rushed her to Kaiser's urgent care that day for "breathing treatments" and the doctors made her remove her clothing because it "smelled so bad." However, there was no record of a December 30 urgent care visit in her medical file, and Dr. Bradburne confirmed that Kaiser generates a record for any urgent care visit as a matter of practice.
d. Relationship with Sid Campbell
At her deposition, Holloway described Campbell as a friend she had met in 2004. She also said she had never remarried after she and her husband Garland Holloway divorced. During trial, she admitted she had actually known Campbell since 2000 and that they had married in July 2007. She didn't consider him her husband, though, because he had been unfaithful on their wedding night and as a result they "never consummated" the marriage.
She admitted she had lived at Campbell's house for $600 a month during Zogby's tenancy. She said she moved back into his house after the water leak, at which point he charged her $1,600 a month. By January 2015, she couldn't afford the rent, so he let her and her daughters live in a trailer in his back yard, where they stayed until May 2015. In January 2016, they moved back into his house, and have been there ever since, for $940 a month. Holloway said he reduced the rent because she helps take care of him, as he recently became "legally blind." She said she and Campbell are "not intimate" but thanks to a significant amount of counseling have recently "become friends."
Other evidence at trial, however, indicated Holloway and Campbell hold themselves out as a married couple. Several Kaiser records from the late 2000s say Holloway's husband was present during the appointment, and the physician's notes from an April 2008 visit say Holloway reported living with her "husband and kids." Holloway's neighbor, Ruth Pease, said she had seen the couple check on the Lori Court house and work on the yard together several times in the past year.
e. Physical impairments
Holloway used a walker every day in court. She told the jury she has metal rods in her back that made it difficult to walk and she had recently been diagnosed with "an atrophied muscle in my lower back and my buttock area." When Campbell testified, he wore dark glasses, used a cane, and approached the stand with the help of Holloway's daughters. He told the jury his "eyesight started going bad in 2008." He said he was completely blind in his right eye due to a detached retina, and his left eye was not much better—"like looking through Vaseline that's been tinted."
Luba's private investigator followed Holloway and Campbell for an afternoon about two weeks before trial, and showed the jury the video he had taken that day. He said he had watched the couple leave Campbell's house and drive to the post office, Target, and a fast food restaurant. Neither used a cane or any other device, and neither showed signs of physical impairment. His surveillance video shows them walking through Target with ease, bending over and picking up items. After shopping for over an hour, they appear to have no issues navigating the busy parking lot. The video shows Campbell pull the shopping cart up to the car and unload their purchases without any apparent vision issues.
Ruth Pease said she frequently saw Campbell driving and walking around the neighborhood and he never seemed visually impaired. Avila said Campbell was with Holloway when he had first inspected the Lori Court house for water damage in December 2011. He was not using a cane and seemed to be able to see perfectly fine.
f. Closing remarks
During closing statements, Holloway's counsel told the jury his client had "fessed up" to all the inconsistencies in her testimony and depositions. "One thing about Ms. Holloway, she did fess up to everything. She just fessed up. We're fessing up; okay? That's why you know about all the discrepancies, because she's admitted them, all her depos. Yeah, there was a discrepancy here and discrepancy there." He admitted she had forged the lease, and made sure the jury knew he hadn't been involved. "You know, when I learned that that rental agreement that was put up there was recreated by my client, you know, that's pretty serious stuff. Pretty devastating to hear that that happened." He said he hoped the jury wouldn't hold these things against her because "[s]he made a huge mistake out of desperation [and] fear."
II
DISCUSSION
A. Defense Verdict in Favor of Luba
Holloway argues the "undisputed facts showing Luba's liability" compel a finding in her favor and require us to reverse the jury's verdict. We disagree.
"A defense verdict must be upheld against the plaintiff's assertion that the verdict is not supported by sufficient evidence unless the evidence compels a finding in favor of the plaintiff as a matter of law." In other words, "[i]f there is any substantial evidence which supports the verdict in favor of the defendant, the judgment must be upheld." (Lobo v. Tamco (2014) 230 Cal.App.4th 438, 442, fn. 2.) "In determining whether a judgment was supported by substantial evidence, we consider all the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference and resolving conflicts in favor of the judgment. We do not reweigh the evidence, but instead determine whether the record contains substantial evidence, contradicted or uncontradicted, to support the judgment." (Bunch v. Hoffinger Industries, Inc. (2004) 123 Cal.App.4th 1278, 1303.)
To support her challenge, Holloway recounts in her briefing only the testimony favorable to her and does not discuss or acknowledge Avila's version of the events, or the fact his expert concluded he had met the industry standard of care. "To expect us to [overturn a jury verdict] . . . without reference to all of the evidence presented at trial . . . is, at best, naïve. At worst, it is an attempt to deceive." (Boeken v. Philip Morris, Inc. (2005) 127 Cal.App.4th 1640, 1658-1659 ["the appellant has the duty to fairly summarize all of the facts in the light most favorable to the judgment" and "the burden to provide a fair summary of the evidence 'grows with the complexity of the record'"].) When challenging the sufficiency of the evidence to support a verdict, the appellant is "'required to set forth in their brief all the material evidence on the point and not merely their own evidence.'" (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881.) "'Unless this is done the error is deemed to be waived.'" (Ibid.)
Putting aside Holloway's failure to meet her burden on appeal, we find the substance of her argument meritless. She said Avila pressured her to remove the tile by telling her it probably contained asbestos, and if it did, she could not install carpet over it. But Avila flatly denied this story. He said he recommended tile removal not because of asbestos but because Holloway told him the tile had been exposed to sewer water. He said he told her his company would not be able to remove the tile if it contained asbestos. He denied the topic of carpet ever came up. He thought she seemed open to having the tile removed and had even told him she was hoping her insurance company would pay to fix the cracks in her foundation. Luba's expert, Maxwell, said Avila's actions were prudent and appropriate given the contact with sewer water and the possibility of asbestos. Clearly, the jury found Avila the more believable witness and understandably so, given Holloway's credibility issues. Avila and Maxwell's testimony is "more than enough" to support the verdict for Luba. (HPT IHG-2 Properties Trust v. City of Anaheim (2015) 243 Cal.App.4th 188, 202-203; see also Lui v. City and County of San Francisco (2012) 211 Cal.App.4th 962, 969 ["The testimony of a single witness may be sufficient to constitute substantial evidence"].)
B. The Verdict on Damages
Holloway challenges the jury's finding of no damages on three grounds. She argues (1) her evidence compelled an award of damages; (2) the court improperly admitted evidence Travelers had settled with her for over $80,000; and (3) the liability and damages findings constitute inconsistent verdicts requiring a new trial under California Code of Civil Procedure section 657, subdivision (6). We find no merit to these arguments.
1. Holloway's evidence did not compel a damage award
It was Holloway's burden to prove she suffered damages, and while she was not required to prove an exact amount, she did have to give the jury a "reasonable basis of computation" for quantifying the detriment she claimed defendants caused. (Meister v. Mensinger (2014) 230 Cal.App.4th 381, 397; Evid. Code, § 500.) "The quantity of evidence presented by each side is irrelevant"—a jury must decide a case not in favor of the side that produced the most witnesses, but based on "the convincing force of the evidence." (Glage v. Hawes Firearms Co. (1990) 226 Cal.App.3d 314, 324-325.) "Where, as here, the judgment is against the party who has the burden of proof, it is almost impossible for him to prevail on appeal by arguing the evidence compels a judgment in his favor." (Bookout v. State of California ex rel. Dept. of Transportation (2010) 186 Cal.App.4th 1478, 1486.) "[W]e presume the [jury] found the plaintiff's evidence lacks sufficient weight and credibility." (Ibid.)
Holloway argues the jury could not have found her evidence lacked weight or credibility as a matter of law because her experts were "uncontradicted and unrebutted." She argues she presented multiple experts who said removing the contamination would cost between $200,000 and $350,000, and Alliance presented no expert testimony to the contrary. She also points out she presented the testimony of her treating physician, who said the chemical exposure had made her asthma worse.
Holloway's experts aside, there is a more fundamental problem at issue. On this record, the jury could reasonably have concluded Holloway failed to prove Alliance caused the contamination Spiegel found on her property nearly a year after the abatement. Those who inspected the house shortly after the abatement did not detect an odor or notice any mastic or pieces of tile on the property. Alliance's vice president of operations said that in early January 2012 the house looked nothing like it did in Holloway's photos from 2014. It wasn't until after all of Alliance's representatives had been banned from her property that Holloway started to complain about the mess Alliance had left. The only witnesses who noticed an odor or a mess were those Holloway had hired or invited to her property, on her terms. All this, coupled with the fact Luba's expert saw a can of mastic in Holloway's garage, permitted the jury to infer Alliance did not cause whatever odor and mess the witnesses saw. That inference on its own supports a finding of no damages, independent of the credibility of Holloway's witnesses.
In any event, whether her experts were uncontradicted is irrelevant because a jury is permitted to disregard uncontradicted expert testimony as incredible or lacking in sufficient weight. "[T]he trier of fact is not required to believe the testimony of any witness, even if uncontradicted." (Bookout v. State of California ex rel. Dept. of Transportation, supra, 186 Cal.App.4th at p. 1487, italics added.) "This rule is applied equally to expert witnesses." (Foreman & Clark Corp. v. Fallon, supra, 3 Cal.3d at p. 890.) The trial court made this clear to the jurors before deliberation, reminding them they did "not have to accept an expert's opinion." "As with any other witness, it is up to you to decide whether you believe the expert's testimony and choose to use it as a basis for your decision. You may believe all, part, or none of an expert's testimony." But it is worth noting Holloway's witnesses were not uncontradicted. Defense counsel successfully pointed out weaknesses in their opinions and assumptions during cross-examination. And, because Holloway's credibility had been severely damaged, the jury could reasonably disbelieve her witnesses to the extent they relied on statements or information she had given them. This is especially true of her two physicians, who simply relayed the symptoms she had reported to them after the abatement. We will therefore presume the jury was unpersuaded by Holloway or her experts, or both, and as a result found she had failed to prove damages.
2. Holloway introduced the Travelers payment evidence
Before trial, Holloway filed a motion in limine to exclude evidence of the settlement payment from Travelers, arguing its admission would violate the collateral source rule, which precludes reducing an injured party's damage recovery by the amount of compensation received from a source "wholly independent" of the tortfeasor. (Pacific Gas & Electric Co. v. Superior Court (1994) 28 Cal.App.4th 174, 176.) The court ruled the payment was not a collateral source, and in any event, was relevant to rebut her claim of having suffered credit damage due to not being able to afford her rent. "I think [the Travelers settlement] it's a different nature of payment, and it's basic fairness. [Holloway is] asking for damages for loss of credit and having to move out. I think the jurors should hear that she did get a payment from Travelers."
However, at trial, it was Holloway who introduced evidence of the payment. During direct examination, the following exchange took place between her and her attorney:
"Q. Now, did you ever make a claim arising out of this incident against Travelers?
"A. Yes.
"Q. Okay. And what did you make the claim against Travelers for?
"A. Living expenses, loss of use, those kinds of things.
[¶] . . . [¶]
"Q. [Did you] make a claim against Travelers because of you not being able to live in the house?
"A. Oh, yes.
"Q. Due to the work of Alliance?
"A. Yes.
"Q. And so you did make a contention that, what, your loss of use of the house—
"A. Yes.
"Q. —should be paid by Travelers?
"A. Yes.
"Q. And in responding to your claim . . . what did Travelers say?
[¶] . . . [¶]
"A. They said that they wouldn't cover it because it wasn't their fault, that Alliance had messed up.
"Q. But even though you made this claim against Travelers and they said it was not their fault, they paid you money; is that correct?
"A. Yes.
"Q. How much did they pay you total?
"A. I don't know the exact amount, but I know it was around 70,000. . . ."
During closing statements, Holloway's attorney argued the fact Travelers paid his client showed it recognized it had "forc[ed] Luba and Alliance down her throat" and that she had been damaged by those companies. After the jury returned its verdict, Holloway unsuccessfully moved for a new trial on damages, arguing the jury improperly considered the Travelers payment to conclude she had already been compensated for her harm.
Holloway reasserts the argument on appeal, claiming the trial court erred in denying her motion in limine because the collateral source rule applies to the payment. Whether or not the collateral source rule applies to the payment, and even assuming the court erred in admitting it (which we doubt), principles of estoppel prevent Holloway from challenging its admissibility on appeal. "The 'doctrine of invited error' is an 'application of the estoppel principle': 'Where a party by his conduct induces the commission of error, he is estopped from asserting it as a ground for reversal' on appeal." (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 403.) The doctrine's purpose is to "prevent a party from misleading the trial court and then profiting therefrom in the appellate court." (Ibid.) "There is nothing shocking about these rules. They are consistent with the adversary system's appreciation that lawyers in civil litigation must be given adequate breathing room to select whatever trial strategies they deem appropriate. Absent the need for the same constitutional protections afforded to defendants in criminal cases, there is considerable judicial deference to attorney creativity in civil cases." (Mesecher v. County of San Diego (1992) 9 Cal.App.4th 1677, 1686.)
After unsuccessfully seeking an order excluding the Travelers evidence for any purpose, Holloway chose not to wait and object if and when the time came, but to present the evidence herself. In doing so, she deprived the trial court the opportunity to revisit the evidence and hear specific objections tailored to the context in which it was being introduced. (Cf. People v. Williams (1988) 44 Cal.3d 883, 906 [the purpose of requiring a specific objection to the admission of evidence at trial is to "alert the trial court to the nature of the anticipated evidence and the basis on which exclusion is sought, and to afford the [other party] an opportunity to establish its admissibility"].) Perhaps she made this choice only because she had lost her motion in limine and figured if the evidence was coming in, she wanted to be in control of it. Or perhaps she introduced the evidence because she came to see it as favorable to her case. Whatever the reason, the choice was hers, and she must live with it on appeal. (Mesecher v. County of San Diego, supra, 9 Cal.App.4th at p. 1686 ["where a deliberate trial strategy results in an outcome disappointing to the advocate, the lawyer may not use that tactical decision as the basis to claim prejudicial error"].)
3. The jury's verdict was not inconsistent
Holloway argues the jury rendered "inconsistent verdict[s]" by awarding her no damages after finding Alliance had committed breach of contract and negligent misrepresentation. Holloway misconstrues the "inconsistent verdict rule," which applies in the distinct situation where a jury returns a different liability finding as to multiple defendants whose liability to the plaintiff is "based upon the same facts." (Cavallaro v. Michelin Tire Corp. (1979) 96 Cal.App.3d 95, 101.) Here, in contrast, liability and damages are separate legal concepts, and there is nothing inconsistent about a finding of liability but no damages. It simply means the jury concluded the plaintiff failed to meet her burden of proof on damages. (E.g., Fields v. Riley (1969) 1 Cal.App.3d 308, 313 ["The burden of proof is on the plaintiff to prove his damages with reasonable certainty. [Citation.] The extent of such damage must be proved as a fact"]; Meister v. Mensinger, supra, 230 Cal.App.4th at p. 396 ["an award of damages is the quantification of detriment suffered by a party"].)
Relatedly, Holloway argues defense counsel committed misconduct during closing statements by misstating the law and telling the jury it was not required to award damages even if it found Alliance liable on any of the claims. Not only did she fail to object to this statement at trial thereby forfeiting any challenge to it on appeal, but counsel's remark was proper.
On this record, the jury's findings make sense. Given the various incidents of perjury, forgery, and witness intimidation that came to light during trial, it is highly likely that by the close of evidence Holloway had lost all credibility with the jury. However, Alliance's witnesses had admitted that Alliance, through Urban, had promised to seal the cracks in her foundation with plastic before starting work, and that it failed to do so. In other words, even if the jury didn't trust anything Holloway said, other credible witnesses had admitted to conduct rendering Alliance liable for breach of contract and negligent misrepresentation. This explains why they found for defendants on every issue except Alliance's liability on those two claims.
The cases Holloway relies on are readily distinguishable. Campbell v. Zokelt (1969) 272 Cal.App.2d 315 is a textbook example of inconsistent verdicts between two parties based on the same set of facts, and is therefore inapplicable. (Id. at pp. 319-320 [in a three-person car accident, jury found defendant negligent as to one party but not as to the other].) In Mendoza v. Club Car, Inc. (2000) 81 Cal.App.4th 287, 303, the jury found the defendant was not liable, but then assigned it 40 percent of the fault for the plaintiff's injuries, which, unlike the liability and damage findings here, is logically inconsistent. A party cannot be both liable and not liable at the same time.
We conclude Holloway has not demonstrated any error in the jury's verdict as to Alliance.
C. The Surveillance Video
Finally, Holloway argues the defense investigator's surveillance video was irrelevant to any material issue, and its admission it was prejudicial error. We disagree.
"[T]he trial court is vested with wide discretion in determining relevance." (People v. Green (1980) 27 Cal.3d 1, 19, abrogated on other grounds in People v. Martinez (1999) 20 Cal.4th 225.) Evidence is relevant if it pertains to the "credibility of a witness." (Evid. Code, § 210.) Where a witness's "credibility was a significant issue" at trial, evidence bearing on that credibility has "substantial probative value." (People v. Abel (2012) 53 Cal.4th 891, 925.)
The court properly determined the video was relevant to Holloway's and Campbell's credibility. During trial, both witnesses represented to the jury, through their testimony and demeanor, that they suffered from significant physical impairments. The investigator's video showed the couple moving about with relative ease, and thus tended to prove they were lying about or exaggerating those impairments. Given that the success of Holloway's claims depended entirely on whether the jury believed her version of the events over defendants', the video was not just relevant, it was highly probative of the critical issue at trial.
D. Luba's Cross-appeal: Motion for Attorney Fees
After the court declared defendants prevailing parties, Luba filed a motion for $242,468 in attorney fees under Civil Code section 1780, arguing Holloway had prosecuted the action in bad faith. (See Code Civ. Proc., § 1032, subd. (a)(4).) Luba argued Holloway forged at least two documents, tried to intimidate witnesses from testifying, and repeatedly lied on the stand to support her deceptive practices claim. After a hearing, the court denied the motion on the ground Luba failed to show Holloway had initiated the suit in bad faith. It acknowledged Holloway had forged documents to support her claim, but found no evidence she forged the documents before filing her complaint. It observed the lease had been forged "during the trial, obviously," but explained the flooring estimate "could have been done sometime after the complaint was filed or before the case actually started." "Luba focus[es] on the fact that plaintiff presented false evidence at trial . . . [However w]hen the Court is asked to reach a determination regarding bad faith, the Court has to look at the motive that the plaintiff had at the time she brought the suit under the CLRA. Defendants have to show improper motive or improper animus at the filing of the complaint." (Italics added.)
In its cross-appeal, Luba argues the court misapplied the bad faith standard in Civil Code section 1780 by narrowly interpreting the word "prosecution" to encompass only the initiation of the action and nothing afterward. We agree. The plain meaning of the term "prosecution" refers not only to filing an action but also pursuing it.
Alliance also filed a motion for attorney fees, which the court also denied, but Alliance does not appeal that ruling.
"The determination of the legal basis for an award of attorney fees is a question of law that we review de novo." (Corbett v. Hayward Dodge, Inc. (2004) 119 Cal.App.4th 915, 921 (Corbett) [independently interpreting language in Civ. Code, § 1780].) When discerning the meaning of a statute, "[w]e give the language its usual and ordinary meaning, and '[i]f there is no ambiguity, then we presume the lawmakers meant what they said, and the plain meaning of the language governs.'" (Allen v. Sully-Miller Contracting Co. (2002) 28 Cal.4th 222, 227.)
Here, we must decide what the Legislature meant by "prosecution" when it authorized a court to award attorney fees to a prevailing defendant "upon a finding . . . that the plaintiff's prosecution of the action was not in good faith." (Civ. Code, § 1780, subd. (e).) Black's Law Dictionary defines "prosecute" as "[t]o commence and carry out (a legal action)." (Black's Law Dict. (10th ed. 2014), italics added.) It explains, "[t]o 'prosecute' an action is not merely to commence it, but includes following it to an ultimate conclusion." (Black's Law Dict. (6th ed. 1990) p. 1221.) We see no reason to apply anything other than the ordinary, dictionary definition of prosecute when it appears in Civil Code section 1780.
Our colleagues in the First District reached the same conclusion in Corbett, interpreting "prosecution" in Civil Code section 1780 to encompass not only initiating an action but also the "tactics [used] in pursuing" it. (Corbett, supra, 119 Cal.App.4th at p. 929; see also id. at p. 926 [bad faith prosecution "may be established by the circumstances such as evidence of personal animus or purposeful use of dilatory tactics for purpose of delay"] italics added; ibid. ["when the defense presents evidence that a [litigation] tactic or action has no merit, a court has the discretion to infer the plaintiff knew it lacked merit and pursued the action for 'some ulterior motive'"] italics added.) Our conclusion finds further support in the cases interpreting Code of Civil Procedure section 1038, which authorizes defense costs where, among other things, the trial court determines "the proceeding was not brought in good faith." (Code Civ. Proc., § 1038, subd. (a), italics added.) Those courts have held even "bringing" an action refers "not only to initiation of an action but also to steps to pursue it after it has been filed." (E.g., Knight v. City of Capitola (1992) 4 Cal.App.4th 918, 931.)
We therefore conclude the trial court erred when it interpreted Civil Code section 1780 to refer only to bad faith initiation of an action. We decline, however, Luba's invitation to forgo remand and enter an award of $242,468 in attorney fees on appeal. Luba argues we may do so because at the hearing the trial court agreed Holloway had forged two documents and it mentioned it thought Luba's fees were "reasonable." In other words, according to Luba, the court's statements demonstrate it would have granted the motion but for its misinterpretation of the term prosecution. But Luba overlooks the asymmetry of the attorney fee provision in Civil Code section 1780. The statute entitles prevailing plaintiffs to attorney fees as a matter of right, but only authorizes attorney fees to prevailing defendants who faced bad-faith litigation. (Civ. Code, § 1780, subd. (e) [court "may" award attorney fees to prevailing defendant upon a finding of bad faith].) Thus, even if we were willing to ascribe as much importance to the trial court's comments as Luba does, remand is still necessary to allow the court to exercise its discretion to decide whether to award attorney fees.
III
DISPOSITION
We reverse the order denying Luba's motion for attorney fees and direct the trial court to hold a new hearing consistent with this opinion. In all other respects, we affirm the judgment. Holloway shall bear Luba's and Alliance's costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
SLOUGH
Acting P. J. We concur: FIELDS
J. RAPHAEL
J.