Opinion
NOT TO BE PUBLISHED
San Francisco County Super. Ct. No. CGC-00-310997
RIVERA, J.
Larisa Khazan (Khazan) and Boris Khazan (collectively plaintiffs) brought this action against Felix Braynin (Braynin), Vera Braynin, Vladislav Chernoguz (Chernoguz), and Biana Chernoguz (collectively defendants) alleging, among other things, that defendants had defaulted on a promissory note secured by a deed of trust, and that they had also defaulted on a second promissory note. Plaintiffs prevailed on their causes of action for judicial foreclosure of a deed of trust, declaratory relief, and default on the second promissory note. Defendants appeal, contending the trial court abused its discretion in excluding evidence and that they were prejudiced by erroneous instructions and jury verdict forms. We affirm.
I. BACKGROUND
A. The Loan and Deed of Trust
Braynin and Chernoguz operated a real estate business known as Crown Real Estate and Investment (Crown), and together defendants owned a property on Hayes Street in San Francisco. Braynin asked plaintiffs for a loan to fund construction on the Hayes Street property. Plaintiffs agreed to loan them $300,000, with the loan secured by a deed of trust. In February 1995, Braynin gave plaintiffs a $300,000 promissory note and deed of trust, payable within one year. The parties dispute how much money plaintiffs gave in return. Plaintiffs took the position that they gave defendants checks totaling $140,000, and the remainder of the promissory note represented unpaid amounts defendants had previously borrowed from plaintiffs. According to defendants, all previous loans had been paid off, and Khazan gave Braynin checks totaling $119,000, promising him the balance of $181,000 within about two weeks.
B. Defendants’ Version of Events
The parties gave dramatically different versions of the events that took place next. According to defendants, within a few days of lending the money, Khazan told defendants that plaintiffs no longer wanted to continue with the loan, and instead asked them to transfer the money to another company, A and A Financial Management (A&A). Chernoguz told A&A’s owner, Alexander Lushtak, to transfer the $119,000, plus interest, from Crown’s account at A&A to the Khazans’ account, and Khazan was aware of the transfer. Braynin asked Khazan to return the note and deed of trust. At first she told him she was too busy to look for them. Later she said she had torn them up and thrown them away.
Defendants had introduced plaintiffs to A&A, which apparently specialized in arbitrage investments.
Braynin had a deed of reconveyance prepared, which recited that the indebtedness secured by the deed of trust had been fully paid and satisfied. He explained to plaintiffs that he wanted the deed of reconveyance executed so he could record it in the event the deed of trust and promissory note turned up. Plaintiffs signed the deed of reconveyance. However, although Braynin asked them to come to Crown’s office to have it notarized, they did not do so. Braynin eventually forgot about the deed of reconveyance.
Defendants presented evidence that the Khazans’ signatures on the deed of reconveyance were genuine.
Plaintiffs made no demands on the note for at least two years, and defendants made no payments. In approximately April or May 1997, however, A&A collapsed, and plaintiffs lost money they had invested with A&A. In late May 1997, Khazan recorded the $300,000 deed of trust.
Lushtak was later indicted for wire fraud (18 U.S.C. § 1343) and money laundering (id., § 1956(a)(1)(A)(i)) in connection with his operation of A&A. He pled guilty to money laundering. It appears that some of the clients whom defendants had introduced to A&A—and who held A&A notes cosigned by Lushtak, Braynin, and Chernoguz—held Braynin and Chernoguz responsible for the losses they suffered in A&A’s collapse. According to defendants, in order to forestall lawsuits by these clients, Braynin and Chernoguz issued promissory notes to the clients to replace the A&A notes, and they indicated they would pay the note amounts if they earned enough money from their other business operations. Although the balance in Khazan’s A&A account was $357,000, she told Braynin to prepare a note for $57,000, and Braynin and Chernoguz did so.
C. Plaintiffs’ Version of Events
Plaintiffs’ version of the events relevant to this appeal is irreconcilable with defendants’. Khazan testified that she did not have an account with A&A, that she never intended to loan money to A&A, and that the $300,000 note was fully funded by a combination of “new money” she gave defendants and “old money” rolled over from previous loans. Khazan did not immediately record the deed of trust because Braynin asked her not to do so, so that he could borrow more money against the property. She never told Braynin plaintiffs wanted to withdraw from the loan, did not ask him to have her money transferred to A&A, and did not tell him she had torn up the note and deed of trust. Khazan had no memory of signing the deed of reconveyance, although she agreed that the signatures on the document looked like plaintiffs’. She received numerous interest payments on the loan before April 1997, often in the form of cash and checks from Crown or A&A, but it appears that she did not keep records of the payments. When the note came due, she asked Bryanin and Chernoguz when it would be paid, and they told her they would pay very soon. She decided to record the note after Braynin told her, in around April 1997, that he had lost his money. After the note was recorded, Khazan again asked defendants when they would repay the amounts due on the $300,000 note. They said they would repay the loan, and Braynin indicated the payment would be made within a year.
She believed A&A was defendants’ company and that checks to A&A went to defendants.
The funding included the $119,000 paid to defendants, and an additional $21,000 check made out to A&A, at Braynin’s request.
D. The Litigation
Plaintiffs brought this action, seeking judicial foreclosure of the deed of trust and alleging fraud and other causes of action, and defendants cross-complained for slander of title and cancellation of cloud on title. A jury first heard the evidence and rendered its verdict. Responding to the special verdict form’s questions regarding breach of the $300,000 note, the jury found that defendants had executed and delivered the note, that plaintiffs had fully funded the note with checks and the rolling over of an existing indebtedness, that plaintiffs had not instructed Braynin and Chernoguz to cancel the $300,000 promissory note and deed of trust and to transfer their money to A&A, and that the interest rate on the note was usurious. On the cause of action for breach of the $57,000 note, the jury found that Braynin and Chernoguz had executed and delivered the note to Khazan, and that it was supported by $57,000 consideration. The jury found against plaintiffs on the other causes of action submitted to it. The trial court later issued a statement of decision ruling in plaintiffs’ favor on their first cause of action for judicial foreclosure of the deed of trust—finding that plaintiffs were entitled to the unpaid balance on the note, plus interest and attorney fees, and indicating its intent to issue a judgment of foreclosure directing the sale of the Hayes Street property—and the seventh cause of action for declaratory relief. The court entered judgment in plaintiffs’ favor on their causes of action for judicial foreclosure, declaratory relief, and default on the $57,000 note, as well as on the cross-complaint.
Because the jury found plaintiffs had not instructed Braynin and Chernoguz to cancel the note and deed of trust and to transfer their money to A&A, it did not reach the question of whether the money had in fact been transferred to A&A. Based on these findings, the jury similarly did not reach the cross-complaint’s cause of action for slander of title. The issue of whether the interest rate was usurious is not germane to this appeal.
The court declared plaintiffs’ deed of trust in second position for purposes of disposition of the proceeds of the sale of the property.
II. DISCUSSION
A. Effect of Any Error on Statement of Decision
Preliminarily, we address plaintiffs’ contention that we should not consider the merits of the issues defendants raise on appeal because any alleged errors affected only the jury verdict, and not the trial court’s statement of decision. Explaining the relationship of the jury’s findings to the statement of decision, the trial court stated: “Plaintiffs’ legal claims alleged in the Fifth Amended Complaint are subject to trial by jury, while those claims sounding in equity are to be determined by the Court. [Citation.] The parties agreed that the first cause of action seeking judicial foreclosure of a deed of trust fell within the equity jurisdiction of the Court and was not subject to trial by jury. The Court exercised its jurisdiction and allowed the jury to render an advisory verdict on this equitable claim. Nelson v. Anderson (1999) 72 Cal.App.4th 111, 123.”
Plaintiffs point out that the trial court explained in the statement of decision that it evaluated the evidence independently of the jury’s findings, and argue from this that any errors that might have affected the jury verdict did not affect the statement of decision, and therefore had no effect on the outcome of the case. However, we will consider the merits of defendants’ contentions for two reasons. First, although the trial court indicated it had examined the evidence independently, it also made clear that to the extent the jury had rejected the alleged cancellation and rescission of the note in its finding on the cross-complaint, those findings were binding on the parties and defendants were “precluded by that determination from contending that the note and deed of trust were canceled in their defense to the first cause of action.” Second, as to defendant’s contention that the trial court wrongly excluded evidence, that exclusion affected the evidence considered by both the jury and the trial court. Accordingly, we will proceed to the merits of defendants’ contentions.
B. Exclusion of Evidence
During trial, defendants for the first time produced to plaintiffs spreadsheets that they contend show that they transferred money into plaintiffs’ account at A&A. Through his counsel, Chernoguz explained to the trial court the reason for the delay in producing the spreadsheets, which were responsive to document requests plaintiffs had served during discovery. The spreadsheets had existed only on a diskette, which Chernoguz had misplaced around 1998. This litigation began in 2000, but Chernoguz did not realize he still had the diskette until September 2002 when he ran across it in an old briefcase in the basement of his home. He gave electronic copies of the spreadsheets to his attorneys, along with another spreadsheet he had prepared for his attorneys; however, through a misunderstanding, the attorneys thought that all of the electronic documents he gave them were attorney-client communications. They were unable to open the electronic spreadsheets Chernoguz had given them, and paid no more attention to the matter. In conversations with Chernoguz during trial, however, his attorneys realized the other spreadsheets were contemporaneous A&A records that had been prepared by Chernoguz and Lushtak. With more advanced Macintosh computer and software, they were able to open the PC-formatted spreadsheets. They then produced copies of spreadsheets to plaintiffs’ attorneys and the Braynins’ attorneys.
Plaintiffs objected to the introduction of the spreadsheets. After a hearing, the trial court excluded them, concluding that the introduction of the spreadsheets would prejudice plaintiffs because they would not have time to investigate the spreadsheets, and that exclusion of the evidence would not prevent defendants from presenting their case. Defendants contend the trial court abused its discretion in so ruling.
As defendants acknowledge, trial courts have broad discretionary power to impose discovery sanctions, and those sanctions can extend to the exclusion of evidence. (Vallbona v. Springer (1996) 43 Cal.App.4th 1525, 1545 (Vallbona); Do It Urself Moving & Storage, Inc. v. Brown, Leifer, Slatkin & Berns (1992) 7 Cal.App.4th 27, 36.) Courts have stated, however, that the two prerequisites to imposition of discovery sanctions are that (1) there must be a failure to comply with discovery, and (2) the failure must be willful. (Ibid.)
The trial court here did not find a willful failure to comply with discovery. At the hearing on the admissibility of the spreadsheets, after Chernoguz’s attorney had explained the reason for the delay in producing them, the trial judge said, “I [will] take you at your word that these things happen,” and later said, “There’s no finding at all that attorneys’ conduct was willful.” The trial court relied, however, on Pate v. Channel Lumber Co. (1997) 51 Cal.App.4th 1447 (Pate), which it found similar to this case.
After the plaintiffs in Pate had rested their case-in-chief at trial, the defendant sought to introduce documents that they had not previously made available to the plaintiffs, despite the plaintiffs’ repeated requests and contrary to the defendant’s repeated reassurances that plaintiffs had all relevant documents. By this conduct, the trial court found, the defendant had “ ‘played fast’ ” with the discovery rules. (Pate, supra, 51 Cal.App.4th at pp. 1452-1453.) Rejecting the defendant’s arguments that the sanction was improper because it was punitive and placed the plaintiffs in a better position than they would have been had the defendant properly responded to their discovery requests, the Court of Appeal reasoned: “Here, . . . the abuse was not revealed until after the plaintiffs had completed their case-in-chief. At this late date, the evidentiary sanction imposed by the trial court was virtually the only viable option available. Since it was an appropriate means to redress the disadvantage caused plaintiff[s] by defendant’s abuse of discovery procedures, the fact that it also had a detrimental effect on the defense was simply incidental to its proper objective.” (Id. at pp. 1454-1455.) The court also noted that the case involved a continuous discovery abuse and that the evidentiary sanction did not completely prevent the defendant from defending the case, since the trial court allowed testimony about the matter at issue. (Id. at p. 1455.)
The court in Deeter v. Angus (1986) 179 Cal.App.3d 241 (Deeter), reached a similar conclusion. There, the plaintiffs sought to introduce at trial a tape recording of a telephone conversation, and the defendants objected, partly on the ground that it had not been produced in discovery. The trial court excluded the evidence, and the Court of Appeal approved the ruling. (Id. at pp. 253-255.) It relied in part on Thoren v. Johnston & Washer (1972) 29 Cal.App.3d 270 (Thoren), stating, “In [Thoren], the appellate court held that the trial court had power to bar the testimony of a witness willfully excluded from an answer to an interrogatory seeking the names of witnesses to an accident. In so holding, it reasoned that ‘Where the party served with an interrogatory asking the names of witnesses to an occurrence then known to him deprives his adversary of that information by a willfully false response, he subjects the adversary to unfair surprise at trial. He deprives his adversary of the opportunity of preparation which could disclose whether the witness will tell the truth and whether a claim based upon the witness’ testimony is a sham, false, or fraudulent.’ (Id., at p. 274.) We see no reason why the same rule should not apply to the willful withholding of evidence such as the tape here at issue.” (Deeter, supra, 179 Cal.App.3d at pp. 254-255.)
A similar situation exists here. There is no dispute that plaintiffs’ document requests encompassed the spreadsheets. Presenting them for the first time in the middle of trial deprived plaintiffs of the opportunity to examine them, to question witnesses about their origin and authenticity, or to investigate the accuracy of the spreadsheets in any other way. As the trial court recognized, allowing their introduction at that late date presented a serious risk of prejudicing plaintiffs and depriving them of a fair trial. Indeed, defendants themselves recognized this when they made a motion in limine precluding plaintiffs from offering into evidence any documents that were not produced during discovery.
The Chernoguzes made this motion in limine, and the Braynins joined in it. Plaintiffs also made such a motion. It appears from the record that the parties reached agreement that the motions should be granted.
It is true that cases dealing with discovery sanctions have relied on the willful failure to produce evidence during discovery to justify excluding it during trial. (See, e.g., Vallbona, supra, 43 Cal.App.4th at pp. 1544-1545, Deeter, supra, 179 Cal.App.3d at pp. 254-255.) However, even aside from its power to impose discovery sanctions, the trial court has inherent authority to control the admission of evidence in order to guarantee a fair trial. The court in Peat, Marwick, Mitchell & Co. v. Superior Court (1988) 200 Cal.App.3d 272 (Peat, Marwick) recognized this rule. The question in Peat, Marwick was whether the trial court had the power to preclude a defendant from controverting the People’s evidence on certain elements of malpractice allegations after the defendant engaged in a corporate merger with the accounting firm retained by the People as their expert in the litigation. (Id. at pp. 275, 277-281.) The Court of Appeal concluded the preclusion order, although not explicitly authorized by statute, was valid. In doing so, it first noted that the order precluding evidence was not a sanction for abuse of discovery procedures, but a remedy for abuse of the litigation process. (Id. at p. 285.) It noted a court’s inherent power to control the proceedings before it and went on to state: “The court’s inherent power to curb abuses and promote fair process extends to the preclusion of evidence. Even without such abuses the trial court enjoys ‘broad authority of the judge over the admission and exclusion of evidence.’ [Citation.] As the People observe, trial courts regularly exercise their ‘basic power to insure that all parties receive a fair trial’ by precluding evidence. [Citations.]” (Id. at pp. 287-288, italics added.)
At our request, the parties submitted supplemental briefing on the question of whether the exclusion of the spreadsheets fell within the trial court’s inherent authority to control the admission and exclusion of evidence in order to guarantee a fair trial. As plaintiffs point out, our review of the exclusion of evidence is confined to the correctness or incorrectness of the ruling, not the trial court’s reasons for its ruling. (People v. Dimitrov (1995) 33 Cal.App.4th 18, 27; Philip Chang & Sons Associates v. La Casa Novato (1986) 177 Cal.App.3d 159, 173.)
In reaching this conclusion, the court in Peat, Marwick relied in part on Castaline v. City of Los Angeles (1975) 47 Cal.App.3d 580, 591-592, which considered an order excluding the testimony, proffered by the plaintiffs, of a “ ‘surprise witness’ ” at trial. The witness was a doctor who had examined one of the plaintiffs a few days before trial. The plaintiffs in that personal injury action had answered interrogatories stating they had fully recovered from their injuries, and based on those answers the defendant had cancelled a medical examination it had arranged. The court found no error in the trial court’s ruling, stating that while it doubted the parties were prohibited from generating evidence shortly before trial, “the defense point that [it] would be unfairly surprised by the witness had merit.” (Id. at pp. 583, 591-592.)
The Court of Appeal reached a similar result in Crumpton v. Dickstein (1978) 82 Cal.App.3d 166, 168, 172-173, concluding that the trial court had erred in allowing two experts to testify although their identities had not been revealed by answers to interrogatories. Relying on Thoren, supra, 29 Cal.App.3d at page 270, the trial court found no willful omission of the names, and allowed the testimony. (Crumpton, supra, 82 Cal.App.3d at p. 170.) The Court of Appeal reversed, concluding that although the omission was not willful, the trial court had “effectively thwarted a legitimate purpose of the discovery statute by impeding plaintiff’s preparation for trial.” (Id. at p. 172.)
The reasoning of these cases leads us to conclude that the trial court properly excluded the spreadsheets. Regardless of whether defendants acted willfully in failing to produce them during discovery, the trial court could reasonably conclude that plaintiffs would suffer prejudice by their introduction at trial, with no opportunity to examine them or to conduct relevant discovery. (See Campain v. Safeway Stores, Inc. (1972) 29 Cal.App.3d 362, 365-366 [defendant that relied on pretrial discovery in preparing for trial entitled to new trial where trial court allowed introduction of evidence in support of damages that plaintiff had said she would not be claiming].) The jury had been impaneled and trial had been underway for almost a month when the evidence came to light, which militated against a continuance as a solution to the problem. (See Thoren, supra, 29 Cal.App.3d at p. 275.) Plaintiffs’ counsel argued, and the trial court agreed, it would take “months and months” for plaintiffs to conduct a proper investigation into the authenticity and veracity of the documents. Moreover, as the trial court noted, the exclusion of the spreadsheets did not prevent defendants from controverting plaintiffs’ claims through other evidence, including their own testimony. The purpose of the court’s order was not the improper one of punishing defendants (see, e.g., McGinty, supra, 26 Cal.App.4th at p. 214), but the proper one of preventing prejudice. Nor can we conclude the exclusion of the evidence gave plaintiffs a windfall by putting them in a better position than they would have been absent the violation. (See ibid.) We cannot speculate now as to what the result would have been had plaintiffs had the opportunity to investigate the spreadsheets further.
Defendants note that the trial court relied on Pate, a discovery sanction case, and urge us to apply only the law of discovery sanctions. They draw our attention to Continental Ins. Co. v. Superior Court (1995) 32 Cal.App.4th 94, 108, which states that the scope of a trial court’s discretion “resides in the particular law being applied; action that transgresses the confines of the applicable principles of law is outside the scope of discretion and we call such action an abuse of discretion.” This principle does not prevent us from relying on the rule of Peat, Marwick and Castaline. As our discussion has shown, the policies underlying those cases are consistent with those underlying the discovery cases, and they are entirely consistent with the trial court’s ruling. Defendants also suggest that the rule of Peat, Marwick applies only to serious abuses of the litigation process, citing Deutsch v. Masonic Homes of California, Inc. (2008) 164 Cal.App.4th 748, 765, which states that Peat, Marwick involved an abuse of the litigation process, and McGinty v. Superior Court (1994) 26 Cal.App.4th 204, 212 (McGinty), which notes that Peat, Marwick involved “egregious interference” with the adversary’s ability to make a case. As we have noted, however, Peat, Marwick makes clear that a trial court has broad authority to preclude evidence to ensure a fair trial even without abuses. (Peat, Marwick, supra, 200 Cal.App.3d at p. 288.)
The case went to trial on June 28, 2004. The jury heard opening statements on July 12, 2004, and began hearing testimony on July 13. The spreadsheets were first produced after approximately two weeks of testimony, apparently about July 27, 2004, or shortly thereafter. The trial court heard argument on the matter and made its ruling on August 4, 2004.
We are not persuaded otherwise by New Albertsons, Inc. v. Superior Court (2008) 168 Cal.App.4th 1403. There, in a personal injury action, the plaintiffs moved for discovery sanctions, contending the defendant, Albertsons, had willfully destroyed video recordings and a photograph that the plaintiffs contended would have shown whether or not a bag of ice had been put on the floor of an Albertsons grocery store after the injured plaintiff had fallen, as Albertsons contended. (Id. at pp. 1408, 1413.) The trial court heard the motions five weeks before the scheduled trial date. As pertinent here, it imposed sanctions precluding Albertsons from entering into evidence or referring to any part of its video recordings. (Id. at pp. 1415-1416.) After staying the trial date, the Court of Appeal granted Albertsons’s petition for writ of mandate, and directed the trial court to deny in full the motion for sanctions. (Id. at pp. 1417, 1434.) It reasoned that the sanctions were not authorized under the discovery statutes in the absence of either egregious misconduct or a failure to obey an order compelling discovery. (Id. at pp. 1422-1431.) The court went on to rule that the sanctions were not justified by the court’s inherent power to control the litigation, concluding that the limitations imposed by the discovery statutes on the court’s power to impose sanctions for misuse of the discovery process “are binding unless they materially impair the court’s ability to ensure the orderly administration of justice.” (Id. at p. 1431, italics added.) According to the court, the destruction of the recordings was not egregious misconduct and the sanctions were not necessary to ensure a fair trial. (Id. at p. 1434.) Here, on the other hand, the evidence was produced for the first time during trial, too late for plaintiffs to investigate its provenance or ascertain its authenticity or accuracy. In these circumstances, the trial court had inherent authority to exclude the evidence in order to ensure a fair trial.
Defendants suggest in their reply brief that the failure to produce the spreadsheets before trial “could have been accommodated in a number of ways, including with a brief recess to allow whatever reasonable discovery the Khazans felt they needed to address the spreadsheets.” At trial, however, defendants never suggested any remedy short of simply allowing the spreadsheets into evidence with no opportunity for plaintiffs to examine them or the diskette, or to conduct further discovery related to their authenticity. They cannot complain now that the trial court did not order the trial continued.
We likewise reject the contention that the trial court’s order was unfair to the Braynins because the omission of the spreadsheets from discovery was due to the actions of Chernoguz and his attorney. Maldonado v. Superior Court (2002) 94 Cal.App.4th 1390, 1399, cited by defendants, does not assist them. The Court of Appeal there issued a writ of mandate ordering the trial court to grant the petitioners’ motions to compel further discovery responses, but declined to instruct the trial court to issue an order precluding the defendants from introducing testimony or asserting defenses as to matters regarding which they had refused to disclose information during discovery. (Id. at pp. 1398-1400.) In doing so, it noted that issue preclusion sanctions are not generally imposed at that stage of a discovery dispute and that there had been no repeated and willful refusals to permit discovery or produce documents, and went on to comment that an order restricting all defendants from producing certain evidence or interposing certain defenses would not be warranted unless they were controlled by the defendant that had not cooperated in discovery. (Id. at pp. 1398-1399.) Here, as we have discussed, the spreadsheets were revealed almost a month after trial began, and after the jury had been hearing evidence for two weeks. Whoever was responsible for failing to produce the documents, the trial court had the power to exclude evidence in order to ensure a fair trial.
C. Instructional Error and Verdict Form
Defendants contend they were prejudiced by an improper instruction and a related question on the jury form.
The trial court instructed the jury: “The burden of proof is on defendants Felix Braynin, Vera Braynin, Vladislav Chernoguz and Biana Chernoguz to prove that plaintiffs Larisa and Boris Khazan cancelled the $300,000 promissory note and directed them to transfer the loan funds represented by the $300,000 promissory note, plus accumulated interest, to Alexander Lushtak and A&A Financial Management and that the funds were, in fact, transferred.”
Question No. 4 on the special verdict form asked the jury: “Did Larisa and Boris Khazan instruct Felix Braynin and Vladislav Chernoguz to cancel the $300,000 promissory note and deed of trust and to transfer their money to A&A Financial Management?” The jury responded “No.”
“In order to persuade an appellate court to overturn a jury verdict because of instructional error, an appellant must demonstrate that ‘the error was prejudicial (Code Civ. Proc., § 475) and resulted in a “miscarriage of justice.” ’ [Citations.] Instructional error ordinarily is considered prejudicial only when it appears probable that the improper instruction misled the jury and affected the verdict.” (Lundquist v. Reusser (1994) 7 Cal.4th 1193, 1213.) “When deciding whether an instructional error was prejudicial, ‘we must examine the evidence, the arguments, and other factors to determine whether it is reasonably probable that instructions allowing application of an erroneous theory actually misled the jury.’ ” (Kinsman v. Unocal Corp. (2005) 37 Cal.4th 659, 682.) Although there is no precise formula for determining whether an erroneous instruction was prejudicial, we look at: “(1) the degree of conflict in the evidence on critical issues [citations]; (2) whether respondent’s argument to the jury may have contributed to the instruction’s misleading effect [citation]; (3) whether the jury requested a rereading of the erroneous instruction [citation] or of related evidence [citation]; (4) the closeness of the jury’s verdict [citation]; and (5) the effect of other instructions in remedying the error [citations].” (LeMons v. Regents of University of California (1978) 21 Cal.3d 869, 876; see also Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 580-581 (Soule).)
Defendants contend the challenged instruction violated the rule that “[a]n instruction should state rules of law generally, rather than elaborate matters of evidence. [Citation.] Any attempt to stress, overemphasize, or unduly make prominent selected portions of the evidence is in violation of the rule that instructions should not focus the jury’s attention on particular items of evidence.” (Slayton v. Wright (1969) 271 Cal.App.2d 219, 238; see also Fibreboard Paper Products Corp. v. East Bay Union of Machinists (1964) 227 Cal.App.2d 675, 718.) According to defendants, the instruction “improperly required that Appellants not only prove the essential fact that the Khazans cancelled the loan, but the additional non-essential facts” that plaintiffs directed defendants to transfer the loan funds to Lushtak and A&A and that the funds were, in fact, transferred. As a result, defendants argue, the instructions effectively—and improperly—told the jury it could not find consent to cancel or rescind the loan to be implied by conduct and “blinded the jury to all the evidence of conduct ‘clearly inconsistent with keeping the agreement in force.’ ”
We see no reasonable probability that the instruction actually misled the jury or affected the verdict. It tracked defendants’ own theory of the case. (See Soule, supra, 8 Cal.4th at p. 572 [trial court must instruct in specific terms that relate party’s theory to particular case].) Chernoguz and Braynin testified that Khazan told them plaintiffs did not want to continue with the loan because they wanted their money invested with A&A instead. They presented no evidence from which a jury could conclude that plaintiffs rescinded the loan but did not direct the money they had lent be transferred to A&A. Simply put, if the jury had believed defendants’ version of events, it must necessarily have believed that the loan had been rescinded and defendants no longer had the money at issue because plaintiffs had told them to transfer the money to A&A and that they had done so.
Defendants contend that an application of the LeMons factors leads to the conclusion that they were prejudiced. It is true, as defendants point out, that the evidence on the critical issues was in sharp conflict, that plaintiffs’ attorney repeated the instruction in closing argument, and that the jury found for plaintiff on question No. 4—which tracked part of the language in the challenged instruction—by only a nine-to-three margin. However, none of these factors outweigh the fact that the instruction was entirely consistent with defendants’ only theory of the case.
The jury was also instructed that consent to cancel or rescind a written instrument may be oral or implied by conduct, and that the parties need not use special words so long as the conduct of both parties is clearly inconsistent with keeping the agreement in force. Although the jury sent a note during deliberations asking what it should do if nine out of the 12 jurors did not agree on a verdict, it expressed no confusion about the meaning of the instructions on rescission.
We reach the same conclusion with regard to question No. 4 on the jury verdict form. Defendants contend it is impossible to tell from the jury’s negative answer whether it found that plaintiffs instructed Braynin and Chernoguz to cancel the note and deed of trust but not to transfer their money to A&A, that plaintiffs did not instruct them to cancel the note and deed of trust but did instruct them to transfer the money to A&A, or that they neither instructed them to cancel the note and deed of trust nor to transfer the money to A&A. According to defendants, reversal is required because the verdict is “hopelessly ambiguous, hopelessly inconsistent or incomprehensible.” (Mixon v. Riverview Hospital (1967) 254 Cal.App.2d 364, 375.) As we have indicated, defendants’ theory of the case is that plaintiffs instructed them to cancel the loan and transfer the funds to A&A. The answer to question No. 4 shows that the jury did not believe defendants had met their burden of proof. We see no ambiguity that requires reversal.
III. DISPOSITION
The judgment is affirmed.
We concur: RUVOLO, P.J., REARDON, J.