Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, No. SC085437. Ernest M. Hiroshige, Judge.
Russ, August & Kabat, Jules L. Kabat and Michael S. Brophy for Appellant and Defendant.
Weiss & Hunt, Thomas J. Weiss and Hyrum K. Hunt; Mink Law Firm and Lyle R. Mink for Plaintiff and Respondent Tony Neman.
Robertson + Thomarson and Jon R. Robertson for Plaintiff and Respondent Jeffrey I. Golden, Chapter 7 Trustee for 1124 Marilyn Drive Development, LLC.
CHAVEZ, J.
This is the second time this matter is before us. The case stems from claims filed by 1124 Marilyn Drive Development, LLC (Marilyn Drive) and Tony Neman (Neman) (collectively “respondents”) against Shahram Elyaszadeh (appellant) for contract and tort damages arising out of a promissory note issued from appellant to respondents, which the jury found appellant had fraudulently altered. In September 2006, following jury trial, the trial court entered judgment against appellant in the amount of $2,280,148 plus $350,000 in punitive damages for a total award of $2,630,148. In January 2008, we issued an opinion in 1124 Marilyn Drive Development, LLC et al. v. Shahram Elyaszadeh (B196070 c/w B196900). We reversed the trial court’s untimely order granting appellant a new trial, and reinstated the judgment. We also vacated the trial court’s orders declaring appellant’s other posttrial motions to be moot. We declined to address appellant’s cross-appeal of the judgment at that time because the matter was to be remanded for further proceedings.
Marilyn Drive filed for chapter 7 bankruptcy protection. Jeffrey I. Golden, as Chapter 7 Trustee for 1124 Marilyn Drive Development, LLC, has filed a respondent’s brief in this appeal.
On remand, the trial court denied appellant’s motion to vacate the verdict; denied appellant’s motion to stay enforcement of the judgment without undertaking or bond; and denied appellant’s request for a statement of decision.
Appellant now renews his appeal of the underlying judgment, and challenges the trial court’s rulings on remand.
We find that the evidence does not support the damage award, therefore we reverse and remand for a new trial on the amount of compensatory damages and the amount of punitive damages.
CONTENTIONS
In his direct appeal from the judgment, appellant argues that the damages award is not supported by the evidence. Appellant asks that we reverse the judgment and order a new trial on damages.
Appellant also challenges the trial court’s denial of his motion to vacate the verdict. He argues that there was an incorrect and erroneous legal basis for the verdict, and that the verdict was not consistent with nor supported by the facts. Appellant asks that we direct the trial court to set aside the judgment and enter a corrected judgment, or order the trial court to vacate the judgment and order a new trial as to damages.
Next, appellant challenges the trial court’s denial of his motion to stay enforcement of the judgment without undertaking or bond. Appellant contends that equity demands that enforcement of the judgment be stayed in recognition of his offsetting judgment against Neman in a separate action.
Finally, appellant asks that we reverse the trial court’s ruling on appellant’s motion for a statement of decision. Appellant argues that he was entitled to such a statement.
This opinion addresses only those contentions not rendered moot by our reversal of the damages award.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
Neman was involved in the construction of a residence at 1124 Marilyn Drive in Beverly Hills. On October 17, 2002, appellant and respondents executed a promissory note secured by a deed of trust, setting forth respondents’ loan obligation for $1,660,000. When appellant attempted to foreclose on the loan, respondents sued him for contract and tort claims. The matter went to trial, and by special verdict, the jury found that appellant had fraudulently altered the loan agreement and charged excessive amounts in his recorded notice of sale. The jury awarded respondents $1,171,853 on the breach of contract claim, $2,280,148 on the fraud claim, and punitive damages of $350,000. On September 18, 2006, judgment was entered on the jury verdict on the tort in the amount of $2,280,148 plus $350,000 in punitive damages, for a total award of $2,630,148.
On October 3, 2006, appellant filed a timely notice of intent to move for new trial, for judgment notwithstanding the verdict, and to amend/set aside the verdict. In these posttrial motions, appellant argued that the verdict and judgment contravened court rulings, law and evidence; that the verdict and judgment could not withstand the trial court’s independent weighing and scrutiny of the evidence; and that the court did not set forth its adjudication of issues in a statement of decision. After several delays, on December 15, 2006, the trial court heard and granted appellant’s motion for a new trial.
On January 5, 2007, respondents appealed the trial court’s December 15, 2006 order granting appellant’s motion for new trial. On January 25, 2007, appellant cross-appealed from the underlying judgment. On February 16, 2007, respondents appealed from the trial court’s order of the same date exonerating the bond that appellant had posted to stay respondents’ enforcement of the monetary judgment. On June 14, 2007, we consolidated those appeals.
In an unpublished opinion filed on January 24, 2008, we reversed the trial court’s order granting a new trial and ordered the judgment to be reinstated. We vacated the orders declaring appellant’s other posttrial motions to be moot and authorizing exoneration of the bond. The matter was remanded for further proceedings.
On remand, the court heard appellant’s renewed motion to vacate the verdict and motion to stay enforcement of judgment. On October 17, 2008, both motions were denied. The trial court also denied appellant’s request for a statement of decision. On October 28, 2008, appellant filed a notice of appeal from these orders and renewed his appeal from the September 18, 2006 judgment.
DISCUSSION
I. Direct appeal from the judgment
Although the judgment was entered in September 2006, under California Rule of Court, rule 8.108, subdivision (c), appellant timely appealed from the judgment within 30 days after the trial court’s denial of his motion to vacate the judgment on remand.
In his direct appeal from the judgment, appellant does not challenge the finding of liability. Instead, he challenges the damages award. Appellant argues that the $2,280,148 fraud damage award is unsupported by the evidence and contrary to the trial court’s rulings.
The standard of review is whether any substantial evidence, contradicted or uncontradicted, supports the jury’s conclusion. (Sweatman v. Department of Veterans Affairs (2001) 25 Cal.4th 62, 68.) We therefore review the evidence to determine if it supports the amount of damages that the jury awarded against appellant.
A. Appellant’s recitation of the evidence
Appellant argues that the damage award could only have been based on an impermissible “lost sale” award. According to appellant, the only evidence of tort damages presented to the jury was approximately $75,000 in bankruptcy expenses and $51,000 in property taxes. Appellant also challenges the jury’s computation of the contract damage award. Appellant points out that respondents argued to the jury that the contract damages included interest on the loan calculated based on a principal sum of $1,660,000. However, the court had ruled that the principal amount of the loan was $1,000,000.
The trial court sustained appellant’s objection to the jury’s consideration of damages in the form of lost sales based on the court’s determination that the computation of any such losses would be “pure speculation.”
Respondents’ counsel calculated seven percent interest on $1,660,000 for a year and came up with $116,200. His interest figure for the relevant time period for damages, which he claimed was one year, three months, and nine days, was $148,111. Later, in response to appellant’s motion for a new trial, respondents’ counsel calculated seven percent interest on $1,000,000, and came up with a difference of about $53,900 for 14 months.
Thus, appellant argues, the verdict and judgment cannot be allowed to stand. In addition, appellant argues, because the $2,280,148 fraud damage award is not supported by the evidence and contravenes the trial court’s ruling the punitive damage award must also be lowered proportionally. Appellant posits that because the $75,000 bankruptcy costs plus $51,000 property taxes equal a maximum of $126,000 in fraud damages, the corresponding punitive damage award should be no more than $18,900.
B. Respondents’ recitation of the evidence
Respondents take a different view. They contend that the jury’s verdict was supported by the evidence. However, as set forth below, the various components of the damage award enumerated by respondents do not add up to $2,280,148. We discuss each item of possible damages separately.
Respondents first contend that appellant has waived his challenge to the sufficiency of the evidence by failing to set forth all material evidence in his opening brief. However, the only evidence respondents point to as having been omitted from appellant’s brief is the interest on the loan from East West Bank. In his reply brief, appellant does address the interest on the loan from East West Bank, which he characterizes as evidence of contract damages, not fraud damages. We address appellant’s claims regarding sufficiency of the evidence because his omission of this evidence apparently stemmed from a categorization of the interest on the East West Bank loan as contract damages, as opposed to fraud damages.
1. Interest on the loan from East West Bank
In opposition to appellant’s argument, respondents cite accounting statements for a loan from East West Bank and the testimony of East West Bank officer Paul Favero. Respondents contend that the largest components of the contract damages awarded by the jury were for interest that accrued on a construction loan from East West Bank after appellant recorded the notice of sale based on his fraudulent alterations to the note. Respondents contend that according to this evidence, at a daily interest rate of $1,780 per day, by the time judgment was entered on September 18, 2006, the charges due to East West Bank exceeded $1,203,000 -- an amount greater than the contract damages the jury awarded.
While the court entered only the $2,280,148 fraud damages (plus punitive damages), the contract damages could properly have been included in that sum. The amount of damages properly awarded in a tort claim is “‘the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not.’” (Erlich v. Menezes (1999) 21 Cal.4th 543, 550; Civ. Code, § 3333.)
Respondents argued to the jury that the amount of interest accrued on the East West Bank construction loan could properly be considered as a component of damages. On the date of closing argument, June 29, 2006, respondents’ attorney argued that the amount of interest on the loan from East West Bank was $1,043,449. Appellant did not object to this calculation or to the jury’s consideration of this amount.
Appellant now argues that these loan expenses could not have been proximately caused by appellant. Appellant points out that unless the jury was improperly considering respondents’ inability sell the home due to the recording of the inflated notice of sale, the interest that continued to accrue on the construction loan could not have been included as damages. However, because no objection was raised during respondents’ closing argument to the jury, we consider these expenses as a possible component of the jury’s damage calculation.
2. Bankruptcy costs and property taxes
Respondents include in their calculation of damages at least $126,000 in property taxes and bankruptcy costs. Appellant does not dispute that this $126,000 was properly included in the judgment.
3. Interest on the loan from appellant to respondents
Respondents also argue that interest on the loan from appellant to respondents was properly considered as damages. As set forth above, in his argument to the jury, respondents’ attorney computed seven percent on $1,660,000 for 15 months and 9 days, for a total of $148,111.
Counsel later computed for the jury, seven percent on $1,660,000 for 14 months and came up with $135,566. In viewing the evidence in the light most favorable to respondents, we will calculate the maximum possible damage award using the higher number.
Appellant did not object at trial when respondents’ counsel argued to the jury that such interest could be an element of damages.
During respondent’s counsel’s closing argument, appellant did object to respondents’ counsel’s use of the $1,660,000 figure as a principal amount for his calculation of interest, as opposed to $1,000,000, which the trial court had previously ruled was the principal amount of the loan. At the time of appellant’s objection, respondents’ counsel was explaining to the jury that the notice of sale filed by appellant was significantly inflated. The trial court overruled appellant’s objection, and allowed respondents’ counsel to continue with his argument. Later, when respondents’ counsel used the same interest figure as an element of damages, appellant did not object.
4. The $660,000 fraudulently charged in appellant’s notice of sale
Respondents contend that the fraud damages also include the $660,000 that appellant fraudulently charged in his notice of sale. However, appellant points out that there was no evidence that respondents ever paid the $660,000. Therefore, appellant argues, respondents cannot claim that amount as damages. We agree that respondents’ damages must be based on actual detriment caused by the perpetrator’s wrongful acts. (Civ. Code, § 3333.) Absent evidence that respondents paid the $660,000, it could not have been properly included as damages. (See Bardis v. Oates (2004) 119 Cal.App.4th 1, 17 [“‘[c]ompensatory damages “are intended to redress the concrete loss that the plaintiff has suffered by reason of the defendant’s wrongful conduct. [Citations]”’”]; Merlo v. Standard Life & Acc. Ins. Co. (1976) 59 Cal.App.3d 5, 20 [“Compensatory damages are awarded to compensate an injured party for his injury”].)
In addition, respondents provide no citation to the record indicating that respondents’ counsel argued to the jury that the $660,000 should be properly included as a measure of fraud damages. Thus, their theory that this amount might have been included in the jury’s damage calculation is pure speculation. In addition, appellant had no opportunity to object to the propriety of the jury’s consideration of such damages in their final calculation. If, as respondents speculate, the jury considered the $660,000 as a component of tort damages, it did so improperly.
5. Maximum possible damage award based on respondent’s recitation of the evidence
Viewing the evidence most favorably to the respondent, we calculate the maximum possible damages presented to the jury as follows: $1,043,449 in interest on the construction loan from East West Bank; $126,000 in bankruptcy and property tax costs; and approximately $148,111 in interest on the loan from appellant, for a total of $1,317,560. This falls short of the jury’s $2,280,148 award by $962,588.
We find it unnecessary to address appellant’s argument that the calculation of interest on the loan from appellant to respondents was based on the wrong principal amount. Even assuming respondents’ calculation of seven percent on $1,660,000 was proper the damages award still cannot be supported by the evidence.
Because the evidence does not support the jury’s award of fraud damages, we must reverse and remand for a new trial as to both compensatory and punitive damages.
II. Motion for statement of decision
Appellant argues that we should reverse the trial court’s denial of his motion for a statement of decision. Appellant argues that the trial court made numerous rulings regarding principal controverted issues. For example, appellant claims, “there is no dispute that the trial court ruled on whether [respondents] presented evidence of lost sale -- a principal controverted issue.” In addition, appellant contends that “the trial court’s statement confirming its ruling that the ‘principal amount of the loan was $1,000,000, ’... obviously stemmed from evidence presented in the context of the nine-day jury trial.”
Appellant made this same argument in his first appeal from the judgment. We held that appellant failed to show that the trial court issued any ruling on a question of fact which required the court to issue a written statement of decision under Code of Civil Procedure section 632 (section 632). However, we directed the trial court to reconsider on remand whether it made any decision on a question of fact warranting a written or oral statement of decision under section 632.
On remand, appellant filed a motion for statement of decision, and respondents opposed. After a hearing on the issue, the trial court denied appellant’s motion. The court held that appellant did “not have standing to request a statement of decision under [section] 632.” The court specifically found that there were “no decisions on questions of fact warranting a statement of decision under [section] 632.”
Section 632 directs that “upon the trial of a question of fact by the court... [t]he court shall issue a statement of decision explaining the factual and legal basis for its decision as to each of the principal controverted issues at trial upon the request of any party appearing at the trial.” The statement of decision is required to be in writing unless the parties agree otherwise; however, if the court trial is concluded in one calendar day or in less than eight hours over more than one day, the statement of decision may be made orally on the record. (§ 632.) When a party makes a timely request for a statement of decision upon the trial of a question of fact by the court, the court’s failure to prepare such a statement is reversible error. (In re Marriage of Ananeh-Firempong (1990) 219 Cal.App.3d 272, 282.)
As we stated in our previous opinion, appellant has failed to show that the trial court made any decision on a question of fact warranting a statement of decision under section 632.
In this second appeal, appellant acknowledges that the court made decisions orally on the record. However, he argues that he is still entitled to a written statement of decision. He claims that the trial court’s ruling puts a higher burden on him to establish his right to a written statement of decision than section 632 requires. First, he argues that the statute does not require that questions of fact be considered independently of evidentiary rulings or issues of law. Appellant makes this argument without reference to any specific mixed question of fact and law which required more than one calendar day or eight hours of the court’s time. Appellant states, as an example, that “there is no dispute that the trial court ruled on whether [respondents] presented evidence of lost sale -- a principal controverted issue.” This was a purely evidentiary ruling, not a trial of a question of fact, and appellant makes no claim that the court heard evidence or argument on this issue for more than eight hours or one calendar day. Because appellant has failed to reference a specific example of a relevant mixed question of fact and law, we and decline to address this argument further.
Second, appellant argues that the trial court interpreted the trial length requirements of section 632 more narrowly than the actual language in the statute. Unless a separate, distinct bench trial is held, appellant argues, the more reasonable approach to the statute’s timing guidelines is to measure the trial as a whole. By appellant’s calculation, the trial lasted nine court days, and included extensive in limine and related hearings on March 7, 2006 and May 10, 2006, as well as posttrial hearings and argument on December 5, 2006 and July 7, 2007.
We decline to adopt appellant’s approach to calculating the timing guidelines under section 632. The statute specifies that it applies to “the trial of a question of fact by the court.” Thus, we conclude that the reference to “the trial” being “concluded within one calendar day or in less than 8 hours over more than one day” refers to a court trial of a question of fact -- not to a jury trial. Appellant’s calculation of the length of the entire jury trial, including pretrial and posttrial motions, does not lead us to change our position that appellant has failed to point to any specific court trial of any factual issue which involved more than one calendar day or eight hours of the court’s time.
The trial court’s ruling denying appellant’s request for a statement of decision did not constitute error.
III. Remaining issues
Our decision that the damages award must be reversed and remanded for new trial renders moot appellant’s claim that the trial court erroneously denied his motion to vacate the verdict on remand. Therefore we do not address it. In addition, our reversal of the damages award renders the undertaking posted by appellant unnecessary as there is no existing money judgment. Therefore, we decline to address appellant’s argument that we should stay enforcement of the judgment without requiring an undertaking or bond, and appellant’s request for judicial notice is denied.
DISPOSITION
The judgment is reversed and remanded for a new trial as to damages only. The trial court’s ruling denying a statement of decision is affirmed. The parties shall bear their own costs of appeal.
We concur: DOI TODD, Acting P. J., ASHMANN-GERST, J.