Opinion
NOT TO BE PUBLISHED
Super. Ct. No. SCV15943.
SIMS, Acting P.J.
Plaintiff and cross-defendant Craig A. Wilkes seeks reversal of a judgment entered in favor of his elderly parents (we call the parties by their first names for convenience, intending no disrespect), defendants and cross-complainants John (J.T.) and Georgina Wilkes, after an unreported 12-day court trial. Based on Craig’s conduct in this and other proceedings, the experienced trial judge called him “the least credible witness ever encountered.” We shall affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Because this is an appeal on the judgment roll, and because the trial court’s statement of decision captures the essence of this case, we set out the statement of decision verbatim:
“I. INTRODUCTION
“This matter came on for court trial on March 27, 2006. Plaintiff and Cross-Defendant appeared in person and was represented by Weintraub Genshlea Chediak Sproul, by Louis Gonzalez, Esq. and Peter D. Halloran, Esq. Defendants and Cross-Complainants appeared in person and were represented by Gary Fitzpatrick, Esq. The court took evidence over the course of twelve days, and the matter was argued and submitted on April 27, 2006.
Both parties previously waived a jury trial. Additionally, the parties personally waived their right to a court reporter on the first day of trial.
“On June 2, 2006 the court issued its tentative decision. On June 20, 2006 plaintiff filed his request for statement of decision and for ruling on additional controverted issues. On June 26, 2006 defendants filed their response. The court herewith issues its Statement of Decision.
“The crux of this case is a dispute between Craig Wilkes and his parents J.T. and Georgina Wilkes over a parcel of real property in Colfax, California. Craig claims that he is the equitable owner of the property, and is entitled to have the title of the property conveyed to him. JT maintains that he is the title-holder to the property and that Craig has forfeited any legal or equitable interest that Craig may have had in the property.
The parties will be referred to in this decision by their first names for the purpose of clarity and because three of them share the same last name. No familiarity or disrespect is intended by the use of the parties first names.
“Craig alleges causes of action for (1) Quiet Title (2) Breach of Contract (3) Declaratory Relief (4) Breach of Fiduciary Duty (5) Constructive Fraud (6) Making a Promise without intent to perform (7) Unjust Enrichment and (8) Imposition of and Foreclosure on an Equitable Lien. JT and Georgina have cross complained and request (l) Rescission (2) Breach of Contract (3) Breach of Contract (4) Promise without intent to perform (5) Unjust enrichment (6) Quiet Title and (7) Declaratory Relief. Each of the parties assert a number of legal and equitable defenses to the relief sought, including Estoppel and waiver, ratification, wrongful conduct, unclean hands, and laches.
“The principal actors in this case are Craig age 50, his parents, JT, 80, Georgina 75, Jeanine, Craig’s second wife, and Jennifer, Craig’s third wife.
“A skeletonized statement of the facts for this litigation is as follows: A 4.58 acre parcel of property in Colfax was purchased in December, 1997 for $130,000. Although Craig and Jennifer were married at the time, title was taken in Jennifer’s name alone. Craig executed an interspousal transfer deed to divest himself of any legal title. The down payment was paid with a combination of money provided by both Jennifer and Craig (Craig’s portion was funded by a gift of $10,000 from JT). The balance of the purchase price was funded by a promissory note secured by a first deed of trust on the property payable to a commercial lender, Matrix Financial. Over the next year or so, JT loaned money to Craig for which Craig used to improve the property. In 1998, Jennifer executed a promissory note and deed of trust secured by the Colfax property in favor of JT for $88,250, which represented sums advanced by JT to Craig. In 2001, Craig filed an action for dissolution of his marriage to Jennifer. In the course of the dissolution action Craig and Jennifer entered into a stipulation awarding the property to JT. The stipulation provided that (l) Jennifer would convey the Colfax property to JT, (2) Craig agreed to remain responsible for paying off the $88,250 note to JT, and (3) Craig agreed that he or JT would pay off the promissory note and first deed of trust to Matrix. By this agreement Jennifer was to be absolved from any liability in connection with the Colfax property. This stipulation was reduced to a formal Marital Settlement Agreement on December 21, 2001. Craig and JT had an oral agreement that when Craig paid $88,250 to JT, with interest, that JT would convey title to Craig. In January, 2002, Jennifer deeded the property to JT, and Craig paid off the promissory note secured by the first deed of trust. The effect of these transfers was to vest unencumbered title to the property in JT. The promissory note for $88,250 payable to JT was merged into the title.
“Craig continued to live on the property and collected the rent from tenants who occupied a guest house on the property. In late 2002 a dispute arose between JT and Craig concerning whether JT had been paid the $88,250 which he claimed he was owed. Craig claimed that the sum had been satisfied and that pursuant to his and JT’s oral agreement JT would grant Craig title to the property free and clear. JT claimed that the obligation to him was not satisfied and refused conveyance. This litigation started shortly afterward.
“In contrast to the foregoing benign recitation of the facts, the analysis which follows reveals a complex set of circumstances which demonstrate various frauds, schemes and contrivances - all designed to insulate Craig from claims of his creditors - including his former spouses. In the end, because he has spun such a complex web of machinations, Craig has found himself hoist with his own petard.
“II. DISCUSSION
“The relationship between Craig Wilkes and his parents can best be described as turbulent. Craig left the family home when he was 14 or 15 years of age. Although he claims that he was essentially self-supporting after that, evidence shows that he received substantial assistance from his parents. Craig worked his way through college and podiatry school from the late 1970’s through 1986. He married Jeanine in March 1986. He began his practice of podiatry in the Inland Empire in 1987. He was initially successful, and opened branch offices in Fountain Valley, Corona, Lake Elsinor, and Newport. He had surgical privileges in approximately l0 hospitals.
“Craig grossed up to $300,000 per year from his practice. Craig’s marriage to Jeanine was dissolved in 1989. There were two children of this marriage and Jeanine had primary custody of the children. After their separation, Jeanine moved to Corning, Tehama County, and Craig was ordered to pay child support. The initial amount of child support was quite low, but it was later increased to over $2000 per month. The court also issued an order retroactively modifying child support which created an arrearage of approximately $30,000.
“Craig claimed disabling health problems after his divorce from Jeanine, which included symptoms of chest pains, depression and anxiety. He was diagnosed with a type of atrial fibrillation. As a result of the combination of his medical issues, he was convinced by his physicians to sell his podiatry practices. He thereupon began reducing his schedule, closing his offices and selling his practices. He was 37 years old at the time. The last practice which he held was sold in March 1993.
“Craig owned a professional disability insurance policy. He began to receive disability payments in the latter part of 1993, and stopped practicing podiatry altogether. He received disability payments from 1993 through 1998. Those payments started out at approximately $5,000 per month, and when they were stopped, were over $7,500 per month. When the insurance company ceased paying Craig disability payments, he sued them, and in May, 2001, recovered a settlement from them netting him $400,000.
“By June, 1993, the Tehama County District Attorney had obtained an assignment order for ongoing child support in the amount of $2,196 per month, and an arrearage of $47,011. Craig decided to take time off, and traveled to places such as the Bahamas, and Guernsey.
See Marriage of Johnson-Wilkes v. Wilkes (1996) 48 Cal.App.4th 1569”
“Craig then began a pattern of transferring or taking assets in the names of others, primarily his parents. In December, 1993, Craig purchased a double-wide mobile home on beachfront property called the Lido Mobile Home Park. The monthly rental on the space exceeded $1,500. Craig claims to have paid $40,000 cash for the mobile home, but placed the title to the mobile home in his father’s name. Claiming that he had ‘credit problems’, he also had his father sign as the lessee on the lease of the mobile home space. JT tells, however, a different story. JT testified that he flew to Southern California to assist Craig in the purchase of the mobile home, and that he paid the $40,000 cash for the mobile home. JT stated that Craig had agreed to repay JT for the purchase of the mobile home.
Craig abandoned his house in Huntington Beach, and indicated at trial that he ‘let it go back to the lender.’
“On January l, 1994, Craig assigned the proceeds of one of the sales of his practice to his father ostensibly for money he had previously borrowed from his father.
“At or near the same time frame, Craig set up a bank account at First Interstate Bank in Newport Beach with JT as the owner of the account. Craig arranged with his father to obtain a ‘power of attorney’ on the account which allowed Craig to sign the checks in JT’s name. Craig’s name did not appear anywhere on the account. Craig arranged for his disability checks to be sent to his parents home, and these checks were deposited by JT into the First Interstate account. Craig implausibly suggested that the checks for the mobile home space payments had to come from an account in JT’s name, since JT was the lessee of the property.
“In August, 1994, the Tehama County District Attorney obtained an assignment order on Paul Revere Insurance company, the company paying on Craig’s disability policy.
In August, 1996, the Court of Appeal held that Craig’s disability checks were exempt from attachment Marriage of Johnson-Wilkes v. Wilkes, supra, 48 Cal.App.4th 1569.
“Craig arranged for JT to open a bank account at the Arden-Morse Branch of Bank of America. Once again, the account was solely in JT’s name, and Craig obtained a power of attorney so that he could sign JT’s name to the checks.
“In 1995 Craig had the mobile home moved to a lot owned by JT adjacent to JT’s home in Auburn. Craig testified that he agreed to purchase the ‘upper lot’ next to his father’s house for $125,000. He claims that he paid his father $77,000 as a down payment. There was no paperwork introduced to verify any of the details of this transaction. Craig testified that his father later decided that he wanted to have the property appraised for valuation purposes, and that the sale of the property to Craig was never completed. In essence, Craig testified that he lost the $77,000 down payment to his father and never recovered it. JT steadfastly denied that Craig ever paid or advanced money on the ‘upper lot’.
“Craig moved around quite a bit in 1995 and 1996, living in Newport Beach, at his parents home in Auburn, and in Hawaii. During this period he met his third wife, Jennifer, and they married in Hawaii. Jennifer was a flight attendant, but her job made living in Hawaii difficult. As a consequence, she and Craig moved to Phoenix, Arizona and leased a house.
“In October, 1997, Craig made preparations to declare bankruptcy. He retained an attorney, and paid the fee for document preparation on November 4, 1997. At or near the same time, Craig and Jennifer found a parcel of real property in Colfax consisting of 4.58 acres. Craig and Jennifer entered into a contract for a purchase of the Colfax property for $130,000. On December 17, 1997 $21,643 was deposited into escrow. This down payment was funded by Jennifer depositing $11,646 from her separate property bank account in Illinois, and $10,000 paid to Jennifer from the B of A account in JT’s name. The $10,000 from the B of A account was funded by money given to Craig and Jennifer by JT.
5238 07457
“On December 18, 1997 the escrow closed on the Colfax property. Title to the property was taken by Jennifer as a married woman as her sole and separate property. At the close of escrow, Craig’s interspousal transfer deed was also recorded, transferring any interest he may have had in the property to Jennifer.
“Four days later, on December 22, 1997, Craig’s bankruptcy was filed in Arizona. The petition was a farce and a sham. Claiming over $800,000 in debts to be discharged, Craig claimed the value of all of his assets was $1,010. He failed to disclose the existence of bank accounts, interests in real property, or property which was held for him by others. He denied making transfers within one year of the filing date, and made other material, false, and perjurious representations.
“For example:
“1. In the bankruptcy petition, page 36, question 7, he states that he has not given any gifts, and in answer to question 6 he states no one is holding property for him. Yet in his supplemental declaration in support of reconsideration in his dissolution case with Jennifer he listed over $20,400 in contributions given to Jennifer and $9,300 in his cash which he says that he gave Jennifer to deposit in her Illinois bank prior to filing bankruptcy.
“2. He deliberately hid the existence of the bank accounts in JT’s name or Jennifer’s name (He testified that he had given Jennifer money to hold in her account prior to the filing of the bankruptcy petition).
“3. Craig concealed his interest in the Colfax property, his mobile home, and the payment he advanced to his father for the purchase of the ‘upper lot’
In this proceeding Craig unequivocally stated that the mobile home was his, and that he, not JT, had paid $40,000 cash for the mobile home. Assuming that to be the case, it is clear that Craig committed perjury in the completion of his bankruptcy petition. Assuming that JT is correct, it is equally clear that Craig is unabashedly lying in this proceeding. Again, assuming that Craig had advanced $77,000 for the ‘upper lot’, this was similarly not disclosed in bankruptcy. The more probable, however, is JT’s testimony that Craig did not give him $77,000 or any amount of cash as a deposit on the upper lot.
“Craig signed the bankruptcy petition under penalty of perjury, but has the temerity in this proceeding to state that he signed the penalty of perjury declaration ‘In error’, and unknowingly.
“After escrow on the Colfax property closed in December 1997, Craig began a process of improving the property. Beside the ‘main house’, the property contained a small ‘rental unit’, and a partial foundation for another house. Craig began to improve the structures.
“Craig agreed to allow his children from his marriage to Jeanine to be adopted, thus terminating his responsibility for ongoing child support. On May 15, 1998, the District Attorney for Tehama County signed a release of lien for child support arrears, and the release was recorded on November 5, 1998.
“In the latter part of 1998, Craig testified that the improvements on the rental unit and the main house were completed, and he and Jennifer and their first child moved into the house. On December 24, 1998, Craig had his wife, Jennifer, sign a promissory note in the amount of $88,250, payable to JT. This note represented what Craig told Jennifer that JT had advanced to Craig for the cost of improvements which had been made to the Colfax Property. Jennifer executed a deed of trust at the same time, although the deed of trust was not recorded until July 6, 1999.
“From 1999 to 2001, Craig operated a business called AAA Services, which was a handyman and minor repair service.
“At the heart of Craig’s case is his claim that he has satisfied any obligation to JT for the $88,250 by expenditures Craig made to improve his parents property in Auburn. As such, Craig alleges that pursuant to his oral agreement with JT, he is entitled to have the property deeded to him. Craig states that since he was unable to pay JT in cash, that he and JT agreed that that [sic] Craig would perform improvements to JT and Georgina’s residence in Auburn in order to pay of[f] the $88,250 obligation. Craig testified at trial that beginning in 1999, he began doing work on JT and Georgina’s property in order to repay the $88,250 note. Craig testified to his belief that his parents were going to sell their Auburn property, and in order to make the property saleable, improvements were necessary. Craig states that the oral agreement between himself and his parents was that he would provide labor and materials for the upgrading of JT and Georgina’s Auburn property, and in this way pay off the $88,250 note. In the early stages of this litigation, Craig maintained that he paid off the note balance through a combination of materials and labor. When it was pointed out to him that he did not have a contractor’s license, and could not recover the value of his labor in this action, Craig changed his story and maintained that he incurred costs of materials and gave cash to JT in order to retire the debt. Craig stated that he saved receipts for materials, and made copies, and provided his mother with copies of all of the expenses he incurred in improving his parents property. He reproduced these receipts at trial as embodied in Exhibit 230, a compilation of copies of receipts and documents which Craig testified were expended on his parents property, or documents which evidenced sums allegedly owed by JT or Georgina to Craig.
“Craig provided the testimony of an accountant who reviewed the receipts and claims and concluded that Craig provided evidence that $82,261 had been expended on the [sic] JT and Georgina’s Auburn property. Similarly, the accountant provided testimony that Craig’s cost basis in the Colfax property, including purchase price, fees and permits, materials and supplies, and work of subcontractors and day laborers amounted to $262,584. The accountant also provided a compilation of Craig’s ownership expenses, including mortgage interest, property taxes, and insurance, those items totaling $48,975.
“The testimony of Craig’s accountant regarding charges attributable to the Auburn property provided no weight to Craig’s claim. Essentially the accountant testified that he took Craig’s word for the fact that the expenses incurred were attributable to the Auburn property. In the end, his testimony only showed that he had been provided receipts by Craig, and that he added them up. He performed no audit to trace the receipts to actual expenditures made to improve either the Auburn property or the Colfax property. The extent of his investigation was to spot-check certain receipts to make sure that the receipts represented actual sales, but no further investigation was done to follow the trail of money. Additionally the account [sic] could identify various handwritten notations written on the receipts themselves, and did not inquire of Craig what the notations meant. Consequently, the expert testimony of the accountant on this issue was of absolutely no assistance to the court, and the court now disregards that testimony, except in one regard. Craig insisted that he kept receipts for the work which he did on both the Colfax property and the Auburn property in separate accordion files. He also indicated he kept receipts for work for AAA Services separate as well. He further indicated that when he expended money for his parents property, he kept the receipts, had them photocopied at Kinko’s, and delivered the copies to his mother. The accountant, however, indicated that the receipts which he received from Craig came to him piecemeal - as a result of 10-12 separate meetings. Had the receipts actually existed in the fashion which Craig described, it is clear that he could have provided them to the accountant on a single visit. It is clear that Craig has lied about the manner in which he kept records of expenditures allegedly made on behalf of his parents home, and this conclusion is buttressed by the testimony of Craig’s accountant.
“At the time that Craig alleges that he made improvements on his parents property, Craig was involved in the improvement of the Colfax property. Substantial improvements were made to the Colfax property. At the same time, Craig operated a handyman business. Other than Craig’s testimony, it is nearly impossible to determine what, if any, of the alleged expenditures made to the Auburn property were actually made, or whether the receipts or statements provided as evidence were for the improvement of the Colfax property or used for clients of AAA. In fact, some of the alleged payments were clearly not used for the purposes claimed by Craig.
For example, Craig claimed that two checks were drawn on the B of A account in JT’s name, each for $3,250, and these were funds used by JT to pay for a horse. Craig claimed that the checks were never reimbursed by JT. Georgina produced a credit card statement which showed that JT transferred $6,500 to the B of A account within days of the drawing of the two checks, to cover the amounts for which they were written. See infra, page 14 [page 18, post].
“Craig planned to subdivide the Colfax property into four parcels, and began clearing brush, cutting roads, and grading the land for home sites. He did much of the work himself, and also hired others to assist. He had a contactor assist in some of the work which was beyond his expertise. He used the partial foundation as the basis for building a 3 story house containing over 3,000 sq.’. He progressed in the building of the house to the extent of getting it fully enclosed. He obtained drawings showing the proposed lot splits. He did not, however, progress to the point of obtaining percolation or soil mantle tests, which are prerequisite to processing a parcel map. Since there is no sewer or water service to the property, each lot will require provision for adequate well water and septic capacity.
“Craig hired an appraiser to testify about the value of the Colfax property. The appraiser’s value assumed that the property would be split into four parcels, and that proper water and sewer facilities could be installed as a prerequisite to a parcel split. Based upon these assumptions, the valuation of the appraiser of the lots and the improvements exceeded $900,000. That valuation, however, depends upon factors which were never established, that is the ability of the property to be split. As such, that proffered valuation is unsupported by the evidence and unreliable. The expert had no opinion of the property’s value in its current condition. He opined that similar properties would most likely be valued at between $400,000 and $500,000, but as opposed to being a formal opinion, this valuation was simply a guess. Because the valuation was entirely based upon the occurrence of future events, including the approval of government agencies, none of which can be guaranteed, the court dismisses consideration of the appraiser’s opinion on value of the Colfax property.
“A. Credibility Issues. The proof of most of the issues in Craig’s lawsuit against his parents depends upon his credibility. This court specifically finds that Craig’s credibility in this case is an empty vessel - he has no credibility. A common instruction given to jurors regarding credibility states that ‘if you decide that a witness has deliberately testified untruthfully about something important, you may choose not to believe anything that witness said. On the other hand, if you think the witness testified untruthfully about some things but told the truth about others, you may accept the part you think is true and ignore the rest.’
CACI 107. See also BAJI 2.22 ‘A witness, who is willfully false in one material part of his or her testimony, is to be distrusted in others. You may reject the whole testimony of a witness who willfully has testified falsely as to a material point, unless, from all the evidence, you believe the probability of truth favors his or her testimony in other particulars.’
“In this case, the court chooses to disbelieve the entirety of Craig’s testimony on all material issues, save and except one issue. That issue deals with that portion of his testimony where he has proven that he paid off the first deed of trust on the Colfax property, which totaled $100,786.26. Where his testimony otherwise attempts to sustain his burden of proof, the court discounts that testimony given the fact that Craig is an inveterate liar.
“The following examples are illustrative of how Craig has manipulated the truth and has crafted his testimony and statements to the venue he is in:
“The Horse Purchase: Craig claimed in this proceeding that he advanced $6500 to his parents to purchase a horse. He produced two checks drawn on the Bank of America account in JT’s name for $3,250 each, drawn August 27, 2000 and September l, 2000. Craig stated that he gave his mother $6500 in cash, which she then deposited into the B of A account, and then drew checks against it. On direct examination, Georgina produced documents from JT’s MBNA credit account showing a withdrawal of $6500 on August 28, 2000 and a transfer of those funds to the Bank of America Account. Craig had no explanation as to where he allegedly obtained the $6,500 in cash, other than the fact that he may have ‘sold something’. It is clear that Craig lied, claiming that his parents owed him $6,500 because JT drew two checks on his account for $3,250 each, and it is equally clear that JT provided the funds from his own account to cover the checks drawn against the account.
“Craig falsifies evidence in his dissolution case with Jennifer relating to the Colfax property: On June 6, 2003, in answer to a special interrogatory in his dissolution case from Jennifer, he was asked.
“‘Who is the owner of title to the residence in which you live? If other than you, please provide the following information: . . . B. If you are not the owner, under what authority do you there reside? (For example, are you a renter or lessee?’
“Craig answered that JT was the owner of the property. Craig further answered that he was living on the property ‘By the grace of J.T. Wilkes.’ Less than two months later, Craig filed suit in the instant case and in his verified complaint filed July 30, 2003, alleged in paragraph 7 that ‘Within the last four years, plaintiff and Defendant entered into an agreement by which Defendant would hold title to the subject property described above as trustee for Plaintiff subject to Plaintiff reimbursing Defendant certain sums of money.’ The complaint further alleged all obligations to JT had been satisfied and that he was entitled to the deed to the property. In his Amended Verified Complaint filed November 7, 2003, Craig further clarified that ‘8. At all times relevant to this action, Plaintiff held and now holds an interest in the Property as a fee simple owner. That basis of Plaintiff’s title is a Judgment dated February 5, 2002 (the ‘Judgment’). The Judgment provided for dissolution of Plaintiff’s marriage and for a property settlement.’ It is clear that Craig disavowed his legal or beneficial ownership in the Colfax property in the marital dissolution litigation, but claimed to be the beneficial and legal owner of the property in the instant litigation. These irreconcilable positions were both asserted by Craig under penalty of perjury.
“Craig lies to obtain a bond waiver in this case: In the instant case, Craig attempted to obtain a bond waiver pursuant to CCP 995.240. In his declaration, Craig alleges that he had paid ‘cash monies’ to JT and Georgina between December 2000 and April 2003 in the total sum of $93,700. At trial he admitted that ‘I did a poor job with that’, referring to having alleged the payment of cash to his father.
“In another instance of lying to support his application for waiver of bond, Craig alleged that he deposited $50,500 into Georgina Wilkes account, implying that he had paid her those funds toward a reduction of the obligation owed to JT. In fact the deposits were made to the Schools Credit Union, which was an account which Craig set up with his mother to receive and disburse the funds Craig received from his disability insurance settlement. It is undisputed that Georgina never made a significant withdrawal of money from this account, and that Craig used the account exclusively for his own purposes. His explanation of this patent misrepresentation was: ‘It was a poor way to do it.’
“Craig misrepresents payments to his parents to one court or another: In his 3rd amended complaint, Craig alleged that the $88,250 obligation to his parents had been fully satisfied by late 2002. In the answers to interrogatories in his dissolution case, There were only 31 entries which related to payments to JT Wilkes, which totaled somewhere in the neighborhood of $15,857.59.
“Craig lies in his dissolution case as to the source of funds used for the down payment on the Colfax property: On December 17, 2003, Craig filed a declaration in support of his motion for reconsideration in his dissolution case. His declaration asserted that he opened checking accounts with his wife Jennifer and deposited cash so that Respondent [Jennifer] could manage his money. He then claimed that he provided all of the cash for the down payment on the Colfax property of $35,052. In his third amended complaint in this action he alleges the amount he put down as $17,000. The evidence at trial showed that Jennifer paid over $11,000 of the down payment with a check on her own bank, and that the remainder of $10,000 was paid by a check drawn on the B of A account in JT’s name, with JT having deposited $10,000 of his own money as a gift to Jennifer and Craig.
‘In December 1997, Craig and Jennifer Wilkes purchased the Colfax Property. The Colfax Property was purchased for approximately $130,000. Craig put approximately $17,000 of his own money down for the purchase price and received a gift of approximately $10,000 from his father, John Wilkes, for the remaining purchase price.’ Exhibit 528
“Craig lies to the court in his dissolution action regarding payments to his parents: Craig alleged in a motion for reconsideration in his dissolution case that he paid a total of $93,700 in ‘cash monies’ into his parents bank accounts. These turned out to be the accounts which Craig had set up in his parent’s names so that they could ‘manage his affairs’. As noted above, he was the exclusive user of the bank account which was in his and his mother’s name. In this trial he testified that his mother ‘probably took some of the money, and to be sure I’d have to go through the checks there. I’d have to see if she wrote checks.’ Later in his testimony, where he was confronted with the fact that his mother never withdrew any money from the account, he was forced to concede the point. He then changed his testimony and stated that he had used the money in the account to purchase building materials for his parent’s home in Auburn.
“Craig lies about authorship of documents: Craig denies making a complaint to Placer County against his parents as set forth in exhibit 547, but this latter complaint contains the same exact backup document as exhibit 548. He then responds to questions concerning exhibit 548, acknowledging that document as his complaint and acknowledges that the language in the document is what he said. Craig denies that he can identify exhibit 548 as being authored by him. Comparing it with exhibit 5 for handwriting, it is apparent to the court that Craig authored both documents.
In an effort to create problems for his parents after filing this lawsuit, Craig caused a complaint to be made to Placer County concerning the fact that the mobile home on the ‘upper lot’ was being maintained in violation of Placer County Code. Craig prepared a at least [sic] one complaint in his own handwriting and sent it to the county, triggering an investigation.
“Craig conceals property from the bankruptcy court (or lies to the family law court): In the bankruptcy petition, page 36, question 7, Craig states that he has not given any gifts, and in 6 he states no one is holding property for him. In his supplemental declaration in support of reconsideration in his dissolution case (exhibit 528) he lists over $20,400 in contributions allegedly given to Jennifer and $9,300 in cash which he says that he gave Jennifer to deposit in her Illinois bank. He did not disclose to the Bankruptcy court any of the accounts in JT’s name or Jennifer’s name. Craig signs the bankruptcy petition under penalty of perjury (he says that he signed the penalty of perjury section ‘In error’. Says he did not sign it knowingly).
See question 10 on the bankruptcy petition as well.
“Craig tries (or succeeds) in reducing his equity in the Colfax property by lying about what is owed to his father on the $88,250 promissory note: Craig claims in this case that he began accumulating credits toward the $88,250 loan from his father from 1999 onward by performing improvements and making expenditures on his parents Auburn property. However, in his family law case, he claimed that none of the principal had been paid, only interest. This fabrication was made because in his dissolution Craig wanted to receive full credit against the value of the property for the $88,250 which Jennifer signed the note for. The exhibits which Craig now contends represent advances on the property began in January 1999 and continued throughout 2000 and 2001, before the dissolution with Jennifer commenced.
“Craig lies in his lawsuit against Paul Revere Insurance Company concerning the Colfax property: Obviously, it was in Craig’s interest to perpetuate the claim that he was disabled from working. His deposition was taken December 12, 2000, well after he testified that he began working on his father’s property to ‘pay off’ the $88,250 note. But in this lawsuit, the story changed. He testified in the deposition that: ‘I was going to help him around his ranch a little.’
Page 270 Deposition taken December 12, 2000.
“Craig lies about who owns the mobile home: Referring to the mobile home in his deposition in the Paul Revere case:
“‘Q: Was that something you owned?
A Oh, my dad owned it.
Q Whose name was it in?
A My dad’s.
Q John Wilkes?
A Yeah
Q Did you rent it from him?
A Basically.
Q How much was the rent?
A Well, he pretty much let me stay there for free for a bunch of work that I was going to do for him, and I didn’t do any.’
“Then in this case, at his deposition in August, 2005, he states:
“‘A I put a deposit on a modular home that I purchased in Newport Beach.
[Q.] And it was your money that you used to - you didn’t borrow the money from your father?
A. No
Q And is that - that $40,000, does that refer to that $40000 modular home that you purchased?
A. Yeah. Total purchase price of 40,000, that’s correct.’”
“The foregoing are merely a select few instances where Craig falsified his testimony or answers made under penalty of perjury. His testimony, the pleadings which he prepared while representing himself, and his testimony and answers in other litigation compel the conclusion that Craig simply cannot be believed. Regrettably, this court concludes that in over 2l years on the bench, Craig Wilkes is stands out [sic] as the least credible witness ever encountered.
“JT’s credibility suffers also, but not to the extent that it has destroyed his credibility. The issues surrounding JT’s lack of truthfulness deal with his attempts to protect Craig’s interests. In the dissolution action between Craig and Jennifer, Jennifer’s attorney, Gary Smathers, took JT’s deposition on May 15, 2003. In that deposition, JT unequivocally denied that he was holding money or property on behalf of Craig. He deliberately concealed the existence of the Bank of America account, and cash transfers which he had made to Craig. JT recollects that before the deposition that there was some sort of agreement between the attorneys (Smathers, JT’s attorney and Claude Heavin) that the B of A account would not be brought up. To his credit, JT ‘fessed up’ to having lied in his deposition.
“Throughout the ten years before this litigation began JT and Georgina accommodated Craig by agreeing to become entwined in his financial affairs. They enabled him in keeping his assets from the reach of creditors and ex-spouses. JT agreed to open the First Interstate Bank account in Newport Beach as a front for Craig’s financial activities. The same is true of the Bank of America account in Sacramento. The court finds that it is strangely coincidental that these accounts hid Craig’s financial dealings while he was embroiled in his divorce from Jeanine. That Craig owed huge sums in past child support at these times does not escape the court’s notice.
“When it became apparent that Craig and Jennifer’s marriage was failing, Craig convinced his father to begin foreclosure proceedings on the $88,250 note in order to force Jennifer off the title. JT agreed to proceed with the foreclosure because Craig was concerned and unsure what Jennifer would do with the property since it was in her name alone. JT testified that he was ‘trying to do everything [he] could for [Craig].’
“JT took title to the mobile home sitting on Beachfront property in Newport Beach. The checks for the $1500 space rental came from an account in JT’s name, although the money in the account was deposited by Craig.
“Craig used Jennifer to hold title to the Colfax property, and had her execute the $88,250 note and deed of trust to JT. At no time was Craig ever on title to that property. Craig agreed to deeding the property to JT in his divorce action with Jennifer, continuing his effort to avoid holding title in his own name. When Craig received a settlement with Paul Revere Insurance company, netting $400,000, he and Georgina opened an account at Schools Credit Union, where Georgina was a member, and deposited the funds in that account. Georgina allowed her name to be on the account because of Craig’s representation to her that he wanted to insure that his children were taken care of in the event that something happened to him.
“The latter excuse was a common theme in Craig’s habit of using others to conceal his financial dealings. When he opened the First Interstate and B of A accounts he did so ostensibly to have his parents ‘manage’ his money for him. In contrast to Craig’s reasoning, however, there is not one shred of evidence that his parents managed any of Craig’s financial affairs. Similarly, when Craig married Jennifer, he apparently transferred money to her as well, reasoning that this would further cement their relationship.
“B. Equitable Issues. The foregoing makes it clear that the equitable defenses proffered by JT and Georgina have merit. That Craig comes to this court with unclean hands is a given. His patent attempts to lie and cheat his way through the instant proceedings, and the related proceedings nullifies any sympathy which this court might have for his current plight.
“‘The defense of unclean hands arises from the maxim, “‘He who comes into Equity must come with clean hands.’” (Blain v. Doctor’s Co. (1990) 222 Cal.App.3d 1048, 1059, 272 Cal.Rptr. 250 (Blain).) The doctrine demands that a plaintiff act fairly in the matter for which he seeks a remedy. He must come into court with clean hands, and keep them clean, or he will be denied relief, regardless of the merits of his claim. (Precision Co. v. Automotive Co. (1945) 324 U.S. 806, 814-815, 65 S.Ct. 993, 89 L.Ed. 1381; Hall v. Wright (9th Cir.1957) 240 F.2d 787, 794-795.) The defense is available in legal as well as equitable actions. (Fibreboard Paper Products Corp. v. East Bay Union of Machinists (1964) 227 Cal.App.2d 675, 728, 39 Cal.Rptr. 64 (Fibreboard); Burton v. Sosinsky (1988) 203 Cal.App.3d 562, 574, 250 Cal.Rptr. 33.) Whether the doctrine of unclean hands applies is a question of fact. (CrossTalk Productions, Inc. v. Jacobson (1998) 65 Cal.App.4th 63l, 639, 76 Cal.Rptr.2d 6l5.)
“‘The unclean hands doctrine protects judicial integrity and promotes justice. It protects judicial integrity because allowing a plaintiff with unclean hands to recover in an action creates doubts as to the justice provided by the judicial system. Thus, precluding recovery to the unclean plaintiff protects the court’s, rather than the opposing party’s interests. (Fibreboard, supra, 227 Cal.App.2d at p. 727, 39 Cal.Rptr. 64; Gaudiosi v. Mellon (3d Cir.1959) 269 F.2d 873, 881.) The doctrine promotes justice by making a plaintiff answer for his own misconduct in the action. It prevents ‘a wrongdoer from enjoying the fruits of his transgression.’ (Precision Co. v. Automotive Co., supra, 324 U.S. at p. 815, 65 S.Ct. 993; Keystone Co. v. Excavator Co. (1933) 290 U.S. 240, 245, 54 S.Ct. 146, 78 L.Ed. 293.)’
“‘. . . Not every wrongful act constitutes unclean hands. But, the misconduct need not be a crime or an actionable tort. Any conduct that violates conscience, or good faith, or other equitable standards of conduct is sufficient cause to invoke the doctrine. (DeRosa v. Transamerica Title Ins. Co. (1989) 213 Cal.App.3d 1390, 1395-1396, 262 Cal.Rptr. 370; Precision Co. v. Automotive Co., supra, 324 U.S. at pp. 814-815, 65 S.Ct. 993.) The misconduct that only indirectly affects the problem before the court does not suffice. The determination of the unclean hands defense cannot be distorted into a proceeding to try the general morals of the parties. (Fibreboard, supra, 227 Cal.App.2d at pp. 728-729, 39 Cal.Rptr. 64.) Courts have expressed this relationship requirement in various ways. The misconduct ‘must relate directly to the transaction concerning which the complaint is made, i.e., it must pertain to the very subject matter involved and affect the equitable relations between the litigants.’ (Id. at p. 728, 39 Cal.Rptr. 64.) ‘[T]here must be a direct relationship between the misconduct and the claimed injuries “‘. . .so that it would be inequitable to grant [the requested] relief.’”’ (Mattco Forge, Inc. v. Arthur Young & Co. (1997) 52 Cal.App.4th 820, 846, 60 Cal.Rptr.2d 780.) “The issue is not that the plaintiffs hands are dirty, but rather ‘“‘that the manner of dirtying renders inequitable the assertion of such rights against the defendant.’”’” (Ibid.) The misconduct must “‘“prejudicially affect the rights of the person against whom the relief is sought so that it would be inequitable to grant such relief.”’” (Ibid.) Kendall-Jackson Winery, Ltd. v. Superior Court (1999) 76 Cal.App.4th 970, 978-979.’
“The equitable defense of unclean hands does not work to deny plaintiff relief for past misconduct which is unrelated to the current controversy. ‘[O]nly misconduct directly related to the matter in which he seeks relief triggers the defense.’ 11 Witkin, Summary of Cal.Law (9th ed. 1990) Equity, $10, p. 686. The court is not unmindful that the unclean hands must relate to the issues before the court in the instant action. While that is certainly true here, the court cannot overlook the fact that the Colfax property, the primary issue at hand, is the res over which Craig has engaged in his machinations to distort the truth in this case, the bankruptcy case, and Craig’s dissolution from Jennifer. Secondarily, Craig has used his parents to hide his financial activities, and lied about his financial dealings with his parents, depending on which case it suited him to do so.
“From a practical standpoint, Craig has failed to provide the court with any substantial proof that he will be substantially injured by denying him all relief in this action. First, there is no credible evidence that he ever paid JT and Georgina anything on the $88,250 which he acknowledges that was owed (except for the sum of $1,500 for interest due). While no total was discussed, it is also apparent that some amount of interest on the $88,250 accrued, and was unpaid. From a legal standpoint that interest, whatever amount it was, merged into the title when JT acquired it.
“Secondly, there is no credible testimony as to the current value of the Colfax property. Craig has failed to prove the current value of the Colfax property. He contends that he has spent substantial sums improving the property (exhibit 231), but the expenditure of money on the property is not a measure of the property’s current value. The testimony of his appraiser, discussed above at page 13 [pages 16-17, ante], establishes that there is no reliable estimate of current market value. The only evidence of value assumed the existence of future contingencies and additional expenditures. The potential improvements necessary to a obtain [sic] a legal subdivision on the property are both uncertain as to extent and cost. No doubt Craig spent time and money attempting to improve the property as evidenced by the enclosed shell of a two-story building, grading and preparation of pads for construction and installation and improvement of roads, and improvements made to two existing structures on the property. But these improvements have not been valued. Further complicating the issue of current market value of the property is the fact that almost none of the improvements or systems are permitted for a parcel split. It simply cannot be determined from the proof in this case whether Craig has substantially increased the value of the property or has spent time and effort attempting to ‘make a silk purse out of a sow’s ear.’ In sum, there is no credible evidence upon which the court may determine the probable value of the Colfax property.
“The record is clear, however, that on January 15, 2002, Craig paid $100,760.20 to Matrix financial, in retirement of the first deed of trust on the property, thus vesting JT with clear title to the property. Three weeks later, on February 7, 2002, Craig was granted a final judgment of discharge in bankruptcy.
“The court has considered the issue whether simply denying Craig any relief does equity in this case. The fact that one party to an action will receive a windfall by application of the ‘clean hands’ doctrine is not an absolute bar to unclean hands defense. Adler v. Federal Republic of Nigeria (2000) 219 F.3d 869; see also Wallace v. Opinham (1946) 73 Calo.App.2d 25 [sic]. As noted above, in Fibreboard Paper Products Corp. v. East Bay Union of Machinists, supra, 227 Cal.App.2nd 675, 728, the doctrine ‘. . . protects judicial integrity because allowing a plaintiff with unclean hands to recover in an action creates doubts as to the justice provided by the judicial system. Thus, precluding recovery to the unclean plaintiff protects the court’s, rather than the opposing party’s, interests.’ At the same time, it is also true that the persons that Craig attempt[ed] to manipulate in this action are his mother and father, the persons against whom he has brought this action, and against whom his lies have had the most impact in this case. It is apparent that Craig’s influence over his aged parents was a substantial cause of their agreement to assist Craig by allowing their financial accounts to be used to mask his financial transactions. They provided him with financial assistance when he needed money, and the evidence shows that they received only $1500 from the money which Craig borrowed from them. Since the filing of this suit, they have borne the burden of maintaining the taxes on the Colfax property, despite the fact that Craig continues to collect the profits from the rental on the property. They have been forced to defend this litigation, which the evidence shows has impacted their financial security, a situation which is compounded by their respective ages of 75, and 80. They are the persons most directly damaged by his conduct.
“Accordingly, the court deems that equity is served by denying Craig all relief herein because of his ‘unclean hands’. He is denied relief on each of his causes of action for quiet title, breach of contract, declaratory relief, breach of fiduciary duty, constructive fraud, making a promise without intent to perform, unjust enrichment, and imposition of a foreclosure of an equitable lien.
“1. Craig’s Claim that JT is a Secured Mortgagee. Craig claims that JT is a secured mortgagee under the theory that the transfer to JT was a security device to guarantee payment of the $88,250 note from Craig. JT points out, with some merit, in the court’s opinion, that Craig was never on title to the property at any time. At the time of the acquisition of the property by Jennifer, Craig provided an interspousal transfer deed transferring all interest he may have had in the property to Jennifer. Thereafter, Craig never appeared on title. Craig denied an interest in the property at all times mentioned above until the time came for him to change [h]is position regarding ownership was ripe - he was clear of bankruptcy proceedings and his dissolution by Jennifer was concluded - only then did he claim an interest in the property. Equity now prevents Craig from claiming that he had an interest in the property which can only be eradicated by foreclosure. The court declines to declare that John Wilkes holds title to the Colfax property as secured mortgagee.
“2. Remaining Balance on obligation to JT. Craig requests that the court declare the remaining balance on the $88,250 originally owed to JT. The rulings of the court render this issue moot. There is no mortgage in existence, therefore, there is no need to determine any remaining balance.
“3. Craig’s claim of JT’s Unclean Hands. The court discussed above at page 20 that JT’s credibility was not as pristine as it should have been, given his performance in his deposition in Craig’s dissolution. In this case the parties are not in pare delicto as Craig would have the court find. JT’s actions which may have fallen below the standard of those of an upstanding citizen pale in comparison to the mountain of bad conduct, prevarication and bad faith exhibited by Craig. As the court has reasoned previously, JT and Georgina ‘enabled’ Craig by their conduct, but were not co-conspirators. In light of the disastrous financial consequences which this litigation has had upon JT and Georgina it is not possible to maintain that they will gain a windfall from this court’s decision herein.
“4. Unjust Enrichment pled by Craig. For the reasons expressed in the paragraph above, and throughout this opinion JT and Georgina are not unjustly enriched by the decision in this case. Craig’s objections to the tentative decision incorporate what the court already has determined is untrustworthy estimates of the property’s value. The suggestion that the property’s value is simply awaiting the results of perfunctory tests which run $3,000 to $5,000 is ill-conceived. It cannot be determined whether the property will support splitting into four because of the lack of percolation and soil mantle tests. Craig would have the court assume the property is splittable. There is insufficient evidence to justify that conclusion. What is certain is that the property still consists of one undivided parcel. There is insufficient evidence to justify the conclusion that JT will be unjustly enriched.
“5. Court view of the scene. The court previously ruled that a view of the scene was not needed given the large number of photographs provided by Craig as to the nature and extent of the physical improvements which were made to the Colfax property. This request is untimely, and has been denied previously.
“6. Craig’s arguments regarding motions in limine. Craig claims that two motions in limine were unresolved. This is simply not true. The court ruled on the motions in question. The ruling on Motion in Limine #3 was as follows:
“‘3. Preclude evidence or argument regarding claim of rescission
Motion is denied. While Craig is suing to enforce the oral agreement to transfer the land, he alleges that he has paid all consideration prerequisite to that transfer. If he is wrong, or has concocted a story to attempt to show that he has paid the required money to John, then it may be argued that he has repudiated the agreement. No additional evidence is required to prove or disprove the entitlement to rescission.’
“The ruling on Motion in Limine #7 was as follows:
“‘7. To preclude reliance regarding claim for breach of contract for failure to pay attorney fees to Watson
The motion is denied. The court does not preclude evidence which might tend to show that there was consideration for Craig’s alleged promise to pay for the services of attorney Watson. The payment of attorney fees to Watson seems to be part of the ‘transactional’ nature of how the Colfax property was acquired, title held, title transferred, and obligations incurred concerning the property. If Craig agreed to pay for the attorney fees, this is the proper lawsuit in which to enforce that obligation, since Craig claims a right to the property, and Watson’s representation related to issues concerning the parties agreements regarding that property.’
“Craig wishes this court to tailor a decision based upon whether the court initially ruled to limit or allow evidence on certain issues covered by the in limine motions. The in limine motions were not dispositive of the issues. They were merely dispositive as to whether evidence would come in on certain issues. That evidence came in. After having considered all of the evidence, the court ruled as it has in this Statement of Decision. The rulings on the motions in limine did not preclude Craig from making any claims nor did those rulings prevent him from introducing evidence. Relating to the latter claim, Craig now argues that since he has seemingly lost everything having to do with the Colfax property, there could not have been any consideration for his promise to reimburse JT the sum of Watson’s fees. This is rubbish. Craig conveniently forgets that Watson was the sword used in Craig’s fight against Jennifer. Consideration for payment of attorney fees does not rest on the success of the litigation or the ultimate decision of the court. The consideration is the fact of representation - not whether the claim was ultimately successful.
“C. The Cross-complaint. JT and Georgina have cross-complained for various forms of relief. Some causes of action are made moot by denying Craig the relief which he sought.
“1. Rescission. JT and Georgina are entitled to rescission. The agreement which existed between JT and Craig to convey title upon the payment of the $88,250 plus interest was breached by Craig.
“2. Breach of Contract - Failure to pay obligation and interest. JT and Georgina are entitled to recover judgment for breach of contract to pay $88,250 plus interest. The amount was never paid.
“3. Breach of Contract - failure to pay Watson’s fees. JT and Georgina are entitled to recover for oral breach of contract for Craig’s failure to pay for the entirety of the fees paid to attorney Watson, $12,369.15.
“4. Promise without intent to perform. JT and Georgina shall prevail on this cause of action, and the relief on this cause of action shall form an additional basis for granting restitution.
“5. Unjust enrichment. JT and Georgina shall prevail on this cause of action, and the relief on this cause of action shall form an additional basis for granting restitution.
“6. Quiet Title. JT has been the title holder of the property since January 10, 2002. Craig has never appeared on title. There are no liens against the property, save and except those for the usual property taxes. Craig’s interests in the property have been decided adversely to him, rendering his equitable claims a nullity. There is no legal or equitable reason why JT should not have title to the property quieted. The court hereby quiets title in JT.
“7. Declaratory Relief. By virtue of this court’s decisions, JT is entitled to all legal and equitable interests in the property, rents, issues and profits. Craig occupies one home on the property, and he now truly occupies the property ‘By the grace of J.T. Wilkes.’ (see above, p. l5 [page 19, ante]). Should JT wish to do so, he has the full and unimpaired right to eject Craig from the property. Craig does not hold any legal tenancy on the property, it having been determined herein that he occupies the property now as a mere trespasser.
“III. CONCLUSION
“1. Plaintiff Craig Wilkes takes nothing by his action.
“2. Cross-complainants JT and Georgina Wilkes shall prevail on their claims for rescission, breach of contact, promise without intent to perform, unjust enrichment, quiet title and declaratory relief.
“a. Title to the Colfax property is hereby quieted in JT Wilkes.
“b. JT Wilkes is the legal and equitable owner of the Colfax property, and is entitled to full possession thereof, including the rents, issues, and profits. Craig Wilkes occupies the property as a trespasser, and has no legal or equitable rights to the ownership or occupancy of the property.
“3. Defendants and Cross-complainants are entitled to their costs of suit.
“4. Counsel for the defendants and cross-complainants is directed to prepare and serve the proposed judgment herein.
“Dated: Jun [sic] 29 2006
“James D. Garbolino
“Superior Court Judge, Assigned [END OF STATEMENT OF DECISION]”
Craig’s “Objection to Statement of Decision”
Craig filed a voluminous “Objection to Statement of Decision,” citing California Rules of Court, former rule 232(d) (now rule 3.1590(f)), which authorizes only objections to a proposed statement of decision. Here, for the first time, he asserted that the trial court could not award J.T. and Georgina both rescission and contract damages as to the disputed $88,250.
The court’s response
In a minute order, the court pointed out that it had filed a statement of decision, not a proposed statement of decision. After stating that it had read Craig’s “objection,” it reaffirmed the statement of decision.
Craig’s “Objection to Proposed Judgment”
Craig filed an objection to the proposed judgment prepared by J.T. and Georgina (which is not in the record), again asserting that to award them both rescission and contract damages as to the $88,250 sum was an inconsistent or double recovery.
J.T.’s and Georgina’s response
Although disputing Craig’s inconsistent/double recovery claim, J.T. and Georgina stated that they had agreed to waive recovery of the $88,250 for breach of contract and had submitted an “Amended Judgment After Trial” which deleted this provision.
Judgment
The trial court entered the so-called amended judgment after trial as its judgment. The amended judgment deleted the $88,250 damages for breach of contract. The judgment rescinded J.T.’s agreement to convey title to Craig on payment of $88,250 plus interest; it also awarded breach of contract damages of $12,369.15 plus 10 percent postjudgment interest as to Watson’s attorney fees. It found that Craig promised to pay both the $88,250 and the attorney fees without the intent to perform. It further found that Craig was unjustly enriched by not turning over rents collected and not paying the fair market value of the structure which he was occupying to J.T. and Georgina. It quieted title to the Colfax property in J.T. and Georgina. Lastly, it awarded declaratory relief as follows: “John T. Wilkes is the legal and equitable owner of the Colfax property . . ., and is entitled to full possession thereof, including the rents, issues, and profits. Craig Wilkes occupies the property as a trespasser and has no legal or equitable rights to the ownership or occupancy of the property. John T. Wilkes has the full and unimpaired right to eject Craig A. Wilkes from the property.”
DISCUSSION
“Where no reporter’s transcript has been provided and no error is apparent on the face of the existing record, the judgment must be conclusively presumed correct as to all evidentiary matters. To put it another way, it is presumed that the unreported trial testimony would demonstrate the absence of error. [Citation.] The effect of this rule is that an appellant who attacks a judgment but supplies no reporter’s transcript will be precluded from raising an argument as to the sufficiency of the evidence.” (Estate of Fain (1999) 75 Cal.App.4th 973, 992.) With this standard in mind, we turn to Craig’s claims of error.
Craig contends: (1) He had an ownership interest in the Colfax property as a matter of law. (2) The trial court had no legal authority to rescind the agreement without requiring J.T. and Georgina to reimburse Craig for the benefits he had conferred upon them. (3) The trial court erred as a matter of law in awarding J.T. and Georgina the property outright based upon unclean hands. (4) To the extent the Colfax property was security for the loan, J.T. and Georgina were required to foreclose on the property and Craig had a right of redemption. (5) The court’s statement of decision is inconsistent in granting both rescission and damages for breach of contract.
We are not persuaded by any of these contentions of error.
I
Craig claims that he had an ownership interest in the Colfax property as a matter of law, either because his agreement with J.T. gave him such an interest or because he paid off the first deed of trust and made substantial improvements to the property. We disagree.
Craig’s first contention -- that his agreement with J.T. in itself gave him “equitable title” and an ownership interest in the property -- fails because it was never raised below and Craig may not change his theory of the case on appeal. (Brown v. Boren (1999) 74 Cal.App.4th 1303, 1316.)
Craig’s third amended complaint did not allege that he obtained “equitable title” or an ownership interest in the property through his agreement with J.T. It alleged first that he already somehow had title to the property, even though his name had never been on title, before making the agreement. It alleged alternatively that he met his obligations to J.T. under the agreement and became entitled to legal possession of the property by paying off both deeds of trust. Craig did not state any claim for relief on the theory that the agreement with J.T. in itself gave him either a legal or an equitable “ownership interest” he did not have before. He may not so argue for the first time on appeal.
As noted above, the complaint alleged that under the agreement Craig would “retain title” to the property, without explaining how one can “retain” title to a property where one’s name has never been on title.
In any event, assuming the issue was raised in the trial court, it fails on the merits. When Craig asks to have “equitable title” recognized, he is appealing to the equitable power of the courts. Craig’s unclean hands block this argument. Allowing Craig to obtain title to the Colfax property would constitute a fraud on the bankruptcy court and on the family court, where Craig failed to disclose any ownership interest in the Colfax property.
Craig’s second contention -- that he gained an ownership interest by paying off the first deed of trust and making substantial improvements to the property -- misstates the trial court’s factual findings as to the alleged improvements. Although the court stated at several points in the statement of decision that Craig had “improved” the property, the court ultimately found that these “improvements” could not be valued because Craig’s proposed valuation lacked credible evidentiary support. Since Craig sought to prove that he had met his financial obligations to J.T. through the alleged value of the “improvements,” that proof failed if they had no ascertainable value. On a judgment roll appeal we must accept as conclusive the trial court’s finding that they did not. (Estate of Fain, supra, 75 Cal.App.4th at p. 992.)
So far as Craig contends that he acquired an ownership interest merely by paying off the first deed of trust, this claim was not pleaded below and may not be raised first in this court. (Brown v. Boren, supra, 74 Cal.App.4th at p. 1316.) In any event, that contention fails on the merits for the reasons explained above and in part III of the Discussion (Craig’s unclean hands).
Craig has shown no grounds for reversal on this issue.
II
Craig contends that the trial court could not lawfully rescind the agreement between himself and his parents without requiring them to reimburse him for the benefits he conferred on them. This contention fails because it mischaracterizes the agreement and the court’s factual findings.
Craig asserts that rescission requires the parties to be placed in their original positions before the rescinded agreement was made, including the restitution of any amounts paid there under. (Civ. Code, §§ 1688, 1691-1692; Akin v. Certain Underwriters at Lloyd’s London (2006) 140 Cal.App.4th 291, 298.) We agree. Craig then asserts that rescission here required the restitution to him of the $101,000 he paid on the first deed of trust on the Colfax property and the value his improvements added to the property. We disagree.
The trial court found as a matter of fact that payment of the first deed of trust was not a term of Craig’s oral agreement with his parents, which encompassed only his promise to pay off the second deed of trust. Craig paid off the first deed of trust pursuant to the three-way stipulation in the divorce proceedings (under which he bought Jennifer out and caused title to be conveyed from her to J.T. in return for the right to remain in occupancy and the hope of eventually obtaining title) and to the related agreement between J.T. and Jennifer. Therefore, rescission of the oral contract between Craig and his parents did not require restitution of the sum he paid on the first deed of trust, which was not a part of the contract that was rescinded.
Craig was not entitled to restitution of the value his improvements added to the property for the reason already stated: the trial court found as a matter of fact that they added no ascertainable value.
III
Craig contends that the trial court erred as a matter of law in awarding J.T. and Georgina the property outright based on Craig’s unclean hands. He is wrong.
First, although the court found that equity justified denying Craig all relief due to unclean hands, the court did not quiet title in J.T. and Georgina solely or mainly on this ground. Rather, the court found first of all that Craig had failed to prove any legal basis for his claim of title.
Second, given the court’s factual findings as to “unclean hands,” which we must accept as conclusive on a judgment roll appeal (Estate of Fain, supra, 75 Cal.App.4th at p. 992), we see no reason to overturn the court’s equitable determination.
IV
Craig contends: “To the extent the Colfax Property was security for the loan, respondents were required to foreclose on the property and Craig had a right of redemption.” (Capitalization omitted.) This contention fails.
In response to this contention below, urged in Craig’s request for statement of decision, the trial court rejected Craig’s claim that J.T. was “a secured mortgagee [and] that the transfer to [J.T.] was a security device to guarantee payment of the $88,250 note from Craig.” The court found that because Craig had denied any interest in the property “until the time . . . for him to change [h]is position regarding ownership was ripe - he was clear of bankruptcy proceedings and his dissolution from Jennifer was concluded” -- equity prevented him from claiming an interest which could be eradicated only by foreclosure.
Craig asserts that the trial court found such a security contract existed. However, he cites only to the statement of decision’s introductory, neutrally phrased, “skeletonized” overview of the facts, ignoring the court’s express conclusion quoted above.
Thus, as a matter of fact and law, the court found that the property was not “security for the loan” to any “extent.” Craig has shown no grounds to set aside that finding.
V
Craig contends in his opening brief that the statement of decision is inconsistent because it grants both rescission and damages for breach of contract as to the same promised payment of $88,250. In his reply brief, he recasts the contention as an attack on the judgment (which, as explained above, omitted the contract damages award in this amount) for failure to conform to the statement of decision. In either form, the contention fails.
Assuming for argument’s sake that the statement of decision awarded an inconsistent or double recovery of both rescission and contract damages, Craig cannot show prejudice because the judgment actually entered removed any inconsistency by deleting the $88,250 in contract damages. A claim of error which does not establish prejudice does not require reversal. (Cal. Const., art. VI, § 13.)
VI
We commend the trial judge, the Honorable James D. Garbolino, for doing an exemplary job on a factually challenging case.
DISPOSITION
The judgment is affirmed. John T. and Georgina Wilkes shall receive their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
We concur: DAVIS, J., MORRISON, J.