Opinion
A143886
05-31-2017
CHRIS KUZDOVICH, Plaintiff and Respondent, v. STEVE COCHRANE, Defendant and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Alameda County Super. Ct. No. RG 12642674)
Appellant Steve Cochrane (Cochrane) and respondent Chris Kuzdovich (Kuzdovich) entered into a contract according to which Cochrane agreed to pay Kuzdovich for renovation work performed by Kuzdovich on a property in Kensington, California. After Kuzdovich left the job, Cochrane discovered numerous problems with Kuzdovich's work, and incurred significant time and expense making repairs. Cochrane failed to pay Kuzdovich, Kuzdovich sued Cochrane for breach of contract, and Cochrane asserted an affirmative defense of setoff. A jury awarded Kuzdovich $30,738.93 in damages on his breach of contract claim, and awarded Cochrane $6,023 in damages on his setoff claim. Cochrane argues on appeal that the trial court committed prejudicial error when it failed to permit the introduction of lost profits evidence during trial. For the reasons that follow, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Cochrane is a general contractor who agreed to remodel a kitchen and two bathrooms in a house on Norwood Avenue in Kensington in 2011. Kuzdovich worked with Cochrane on the Norwood Avenue property between June and October of 2011. After various disagreements with Cochrane, Kuzdovich left the job around October 3, 2011. At that time, he and Cochrane entered into a contract according to which Cochrane agreed to pay Kuzdovich $30,933.93 (approximately $50/hour for 672 hours) for the work he had done at the Norwood property.
After Kuzdovich left the job, Cochrane and his clients discovered problems with the work Kuzdovich had done, including leaks in the bathrooms and faulty wiring. Cochrane testified that he spent approximately two and a half months repairing the work that Kuzdovich had done, at a cost of about $39,000.
In August 2012, Kuzdovich sued Cochrane for breach of contract, alleging that he was never paid the amount he was owed under the parties' agreement. Cochrane answered and asserted an affirmative defense of setoff, alleging that "[p]laintiff failed to perform remodeling work on behalf of defendant in a good and workmanlike manner" and that Cochrane "had to incur time and expense to remedy plaintiff's defective work, and thereby incurred damages in an amount at least equal to that of plaintiff's claim." Cochrane also asserted a counterclaim against Kuzdovich, alleging that Kuzdovich breached an "implied condition of the agreement" that Kuzdovich would perform the work in a good and workmanlike manner, and that Cochrane incurred $50,000 in damages to remove and completely redo the work himself.
A jury was empaneled, in October 2014, to hear evidence regarding Kuzdovich's breach of contract claim and Cochrane's asserted defenses and counterclaim. On the fourth day of trial, outside the presence of the jury, the court and counsel engaged in the following colloquy regarding the proposed verdict form submitted by counsel:
During a discussion between counsel for the parties and the court regarding the verdict form, the court asked for an offer of proof regarding the evidence in support of Cochrane's counterclaim, which led to a discussion of whether the cross-complaint was duplicative of the setoff defense. The trial court ultimately dismissed Cochrane's counterclaim as duplicative of his setoff defense at the request of Cochrane's counsel.
MS. VARLACK (Plaintiff's counsel): And then I had [a] question of the verdict form. Is he allowed to write in the amount that he spent? I guess there's like a place to write how much Mr. Cochrane spent.
THE COURT: Well, that's because of the set off.
MS. VARLACK: We just don't have any evidence, maybe he will present some but right now.
THE COURT: Well I know. I know, there is no evidence presented so far. I mean, I actually had a question about that. Mr. Pyle, is there going to be evidence presented as to what his set off damages are?
MR. PYLE: Yes.
THE COURT: Are there any documents to support that?
MR. PYLE: I have some.
THE COURT: Are they in the binder?
MR. PYLE: Some are in the binder.
THE COURT: Have you seen them?
MS. VARLACK: No.
MR. PYLE: Well, the bids for Maurice Taylor and Paula somebody - it's one of your exhibits, two of your exhibits.
THE COURT: Okay. Well, I'm just going to say up front if documents have not been shown prior to this, I am not taking them today. Okay. Hmm, because they have to be, you know, presented prior to - so how are we fixing No. 8, tell me?
The parties' counsel and the court then discussed other changes to the verdict form. Shortly thereafter, the jury returned and testimony continued.
Later on, as part of the defense's case, Cochrane testified on his own behalf. He was asked if he had "an estimate as to the amount of cost for redoing - doing the corrective work?" Cochrane responded: "Yes. Let me try to find it." When it became clear that Cochrane was referring to a document, Kuzdovich's counsel objected on the ground that the use of the document constituted "improper recollection — refreshment." The jury was excused and the following discussion took place:
THE COURT: Okay. What is it that he's looking at to refresh his recollection exactly?
MR. PYLE: He's looking at some calculations he has done.
THE COURT: When did he do them?
MR. PYLE: Recently.
THE COURT: What is that?
MS. VARLACK: So, your Honor, Mr. Pyle repeatedly stated we didn't ask for this, but in our request for production of documents which was served in May of this year, we asked for No. 1 was legible copies of all estimates, repair estimates, bills, invoices, receipts from vendors from the work you performed on the 23 Norwood property for the duration of the job. That was No. 1.
And No. 2, we requested at 16, all documents showing what loss profits you suffered as a result of the plaintiff's work. So I feel that should have been produced.
THE COURT: Yeah, it should have.
MR. PYLE: As to loss profits that's Exhibit 50, it consists of four pages. It shows other projects that he was not able to complete.
MS. VARLACK: Well
THE COURT: Okay. Well, loss profits I think are not at issue here, are they?
MR. PYLE: They are part of the set off, your Honor.
THE COURT: Okay.
MR. PYLE: We can't - perhaps we can't get money in return but it is part of the set off.
THE COURT: This is somebody else's house?
MR. PYLE: Yes.
THE COURT: And what's the testimony going to be on this?
MR. PYLE: The testimony would be that he had submitted a bid to this person, the person said - this is Reese Taylor, that he would submit his bid to this person. The person said that looks good to me, how soon could you start. And he couldn't start because he had to go back and do corrective work on the Norwood house.
THE COURT: But wait a minute, wait a minute. But the loss -- this loss profit though doesn't have anything to do with the value of what he had -- normally the set off refers to whatever the repair work was that was necessary and how much it cost to do that. That's on the project at issue. So this doesn't really address that issue, I don't think.
MR. PYLE: Well, it's a set off because while he was doing all this corrective work during October
THE COURT: Yeah.
MR. PYLE: -- November, this owner wanted him to start in October. And by the time he finished the work on the Norwood house, the owner had gone about his way.
THE COURT: Yeah, I understand what you're saying.
MR. PYLE: He lost the contract.
THE COURT: The set off work means that work that Mr. Kuzdovich is asking to be compensated for was the amount for that work was set off by the repair necessary to do that. So this is not really related directly to that issue. You know, it has to do with Mr. Cochrane's loss profits but -- I don't quite get what the connection is. Technically the set off goes to, like, you know, what the value was to have to deal with his work directly, not some other job that's not related to this particular job. So I don't think that's really relevant. But as to - let's get back to the issue we were talking about which is, you know, his calculation how much it cost to repair. I mean, it doesn't seem as though any of the documents that he's looking at has been produced to plaintiff.
MR. PYLE: He can testify without the documents. He can testify that he made calculations as to the amount of the cost to him was $39,000.
MS. VARLACK: Your Honor, this feels like sand bagging at this point.
THE COURT: Well, I mean he can testify that's - I mean, you can cross on how he calculates any of that and what he has to support, Ms. Varlack, it seems to me. Yeah, I mean, he can testify what he thinks his calculations are, but you know, it's always subject to cross-examine, right?
MS. VARLACK: Yes.
THE COURT: So I am not going to allow him to refer to any documents or calculations he's made recently relative to this issue because those need to have been produced to the plaintiff and they haven't been. Okay. Is there another issue that we need to talk about?
MR. PYLE: I don't think so.
After this discussion, the jury was reassembled and Cochrane's testimony regarding the repair work continued. Cochrane did not testify on the subject of lost profits, nor did counsel seek to introduce Exhibit 50. After trial, the jury found that Cochrane had breached the parties' contract and awarded Kuzdovich $30,738.93 in damages. The jury also found that Kuzdovich had not performed his work in a good and workmanlike manner, that Cochrane acted reasonably in repairing the defective work, and awarded Cochrane $6,023 in damages on his setoff claim, for a judgment in Kuzdovich's favor in the amount of $24,715.93. After entry of judgment, Cochrane filed this timely appeal.
As Cochrane notes, it is unclear why the jury awarded $30,738.93 in damages instead of the contract amount of $30,933.93.
The trial court later entered an amended judgment adding costs and disbursements of $7,401.96 to the $24,715.93 amount, which it appears to have copied from the original judgment as $24,715.97, for a total award of $32,117.93.
DISCUSSION
The question before us in this appeal is whether the trial court erred when it failed to permit Cochrane to introduce "lost profits" evidence in support of his setoff defense. "Broadly speaking, an appellate court applies the abuse of discretion standard of review to any ruling by a trial court on the admissibility of evidence." (City of Ripon v. Sweetin (2002) 100 Cal.App.4th 887, 900.) "The burden is on the party complaining to establish an abuse of discretion, and unless a clear case of abuse is shown and unless there has been a miscarriage of justice a reviewing court will not substitute its opinion and thereby divest the trial court of its discretionary power." (Dorman v. DWLC Corp. (1995) 35 Cal.App.4th 1808, 1815.) "The trial court's error in excluding evidence is grounds for reversing a judgment only if the party appealing demonstrates a 'miscarriage of justice'—that is, that a different result would have been probable if the error had not occurred." (Zhou v. Unisource Worldwide, Inc. (2007) 157 Cal.App.4th 1471, 1480; see Evid. Code, § 354 [reversal of judgment based on excluded evidence requires "miscarriage of justice" and that "substance, purpose, and relevance of excluded evidence [be] made known to the court"]; Code Civ. Proc., § 475.)
In his opening brief, Cochrane frames the question as "whether a setoff is appropriate in equity," which is a question "within the trial court's discretion." Kuzdovich never directly frames the issue for our review, but agrees that we should review for abuse of discretion. Because the trial court allowed Cochrane's setoff claim and testimony regarding his costs to repair Kuzdovich's work, we view the question before us a challenge to an evidentiary ruling and not a question of whether the setoff itself was appropriate.
Cochrane argues that the trial court's refusal to allow lost profits evidence was an abuse of discretion because it was based on "incorrect legal assumptions," namely, the trial court's alleged understanding that Cochrane could not recover lost profits damages on his setoff claim as a matter of law. We disagree with Cochrane's contention. The record before us reflects that the trial court never expressly stated that it thought lost profits damages unavailable as a matter of law. To the contrary, the trial court stated that lost profits were "not really related directly," not "really relevant," and that the trial court did not "quite get what the connection is." The discussion of the lost profits evidence came up in the context of Cochrane's testimony regarding the repair work, and Cochrane's counsel did not seek to clarify the court's ruling, attempt to have the lost bids admitted into evidence, or ever revisit the issue. Cochrane's setoff and counterclaim make no mention of lost profits and describe Cochrane's damages as "time and expense to remedy plaintiff's defective work." Therefore, we conclude that Cochrane has not established that the trial court refused to allow lost profits evidence based on the incorrect legal assumption that those damages were not available on his setoff claim.
The record reflects that the only lost profits evidence Cochrane was prepared to offer were the two lost bids and Cochrane's testimony that he lost one of those projects because he was occupied with repair work on the Norwood property.
In all events, we find that Cochrane has failed to demonstrate that had his lost profits evidence been admitted, a more favorable result would have been reached. (See Zhou v. Unisource Worldwide, Inc., supra, 157 Cal.App.4th at p. 1480.) Cochrane's offer of proof regarding lost profits evidence consisted of: (1) an October 15, 2011 "preliminary project description" of a kitchen remodel for Paula Emigh in Chico, California, listing several tasks (e.g., "relocate wall between kitchen and dining room"), a "target bid" of $70,000 and a budget of "$50,000-60,000"; (2) an October 23, 1011 "preliminary project description" of a kitchen remodel for Maurice Taylor in Chico, California, again listing several tasks (e.g., "reface and reinstall existing cabinet doors") with a "target bid" of $65,000 and a "budget" of $50,000; and (3) Cochrane's proffered testimony that he submitted a bid to "Reese" Taylor and was asked "how soon could you start," but ultimately lost the job because he was occupied with the repair work on the Norwood property.
These two documents (Plaintiff's Exhibit 50) were withdrawn as an exhibit before the trial court. They were mistakenly omitted from the clerk's transcript on appeal, but were subsequently added to the record pursuant to Rule 8.155(b).
This was Maurice "Reese" Taylor.
To the extent Cochrane argues that he would have given other unspecified "testimony about the details of the lost profits" not described in his offer of proof to the trial court, his argument fails. (See Evid. Code, § 354 [to reverse judgment on appeal based on excluded evidence offer of proof should include "substance, purpose, and relevance of the excluded evidence"]; People v. Schmies (1996) 44 Cal.App.4th 38, 53 [in order to provide appellate court with means of determining error and assessing prejudice an offer of proof "must be specific" and "must set forth the actual evidence to be produced and not merely the facts or issues to be addressed and argued"].)
Even with these documents, we find that Cochrane's proffered evidence would have been insufficient to support an award of lost profits damages. Cochrane did not proffer any evidence that his was an established business or had a track record of profitably performing renovations. (See Greenwich S.F., LLC v. Wong (2010) 190 Cal.App.4th 739, 763 [reversing judgment for lost profits damages where evidence was "insufficient to show that [plaintiffs] were established businesses or had track records of successfully developing or redeveloping properties"].) Other than handwritten notes on the Emigh and Taylor bids indicating a "budget" for those projects of $50,000-60,000 and $60,000, respectively, there was no detailed evidence of the costs that would have been incurred had those projects been performed and no evidence that those costs were accurate. (See Greenwich S.F., LLC v. Wong, supra, 190 Cal.App.4th at p. 765 [lost profits award requires jury to subtract "costs . . . that plaintiffs would have incurred had the [lost] contract been performed"]; S. C. Anderson, Inc. v. Bank of Am. (1994) 24 Cal.App.4th 529, 537 [rejecting lost profits as a matter of law where plaintiff "did not offer any evidence that its bid was accurate or reasonable or that [he] could have done the work required . . . for an amount equal to or less than the portion of [his] bid which represented the projected costs of the work"].) We conclude that any award of lost profits based on the scant evidence proffered by Cochrane would have been unduly speculative and uncertain as a matter of law, and thus Cochrane has failed to demonstrate that had his lost profits evidence been admitted, a "different result would have been probable." (Zhou v. Unisource Worldwide, Inc., supra, 157 Cal.App.4th at p. 1480.)
In addition, with respect to the two preliminary project descriptions, the record strongly suggests that the trial court would not have admitted these documents on the grounds that Cochrane failed to produce them in discovery. When asked if she had seen the exhibit supporting Cochrane's setoff defense, counsel for Kuzdovich said "No," and the trial court stated that "I'm just going to say up front if documents have not been shown prior to this, I am not taking them today." Later on, during Cochrane's testimony regarding his repair work on the Norwood property, the trial court again reiterated this position, and did not allow Cochrane to refer to written estimates he made regarding the cost of the repair work because those documents had not been produced in discovery. Thus, the record suggests that even absent the alleged incorrect legal assumption made by the trial court, Cochrane's documents would not have been admitted. --------
DISPOSITION
The judgment is affirmed. Kuzdovich shall recover his costs on appeal.
/s/_________
Jenkins, J. We concur: /s/_________
Pollak, Acting P. J. /s/_________
Siggins, J.