Opinion
NOT TO BE PUBLISHED
Santa Clara County Super.Ct. Nos. CV810761, CV020857
Duffy, J.
Richard J. Bunch appeals from the trial court’s judgment after a court trial determining that he committed promissory fraud by making misrepresentations to Peggy Bell that induced her to transfer real property to him for a below-market price. Peggy Bell held legal title to the property as trustee of the Bell Family Trust, and her son, Burton Bell, retained the beneficial interest in the property. As a result of Bunch’s fraud, the court determined that he held the property in a constructive trust for the benefit of Peggy and Burton Bell, and directed Bunch to convey the property back to Peggy Bell, with a right to reimbursement of the purchase price, less a deduction for its rental value during the time Bunch had possession. The judgment also determined that because Bunch had defrauded Peggy, an elder under the Elder Abuse and Dependent Adult Civil Protection Act (Welf. & Inst. Code, § 15600 et seq.), he had also committed financial elder abuse within the meaning of former Welfare and Institutions Code section 15610.30, subdivision (a), entitling Peggy to an award of statutory attorney fees and costs under Welfare and Institutions Code section 15657.5, subdivision (a). The judgment finally awarded punitive damages in the amount of $25,000 each to both Peggy and Burton Bell. Bunch appeals from the judgment raising numerous challenges to it. Rejecting those challenges, we affirm the judgment.
The statute was amended in relevant part in 2008 but in this case we apply the version in effect when events transpired in 2002 (see Stats. 2000, ch. 442, § 5) because the changes were substantive rather than procedural and the Legislature did not provide for their retroactive effect. (Stats. 2008, ch. 475, § 1; ARA Living Centers-Pacific, Inc. v. Superior Court (1993) 18 Cal.App.4th 1556, 1560-1562 [substantive amendments to elder abuse statute not retroactive in effect absent clear expression of legislative intent].) Further references to Welfare & institutions Code section 15610.30, or any part of it, are to this former version of the statute.
Bunch separately appeals from the postjudgment order awarding attorney fees and costs to Peggy Bell under Welfare and Institutions Code section 15657.5, subdivision (a). We dispose of that appeal by separate opinion filed this date. (Bell et al v. Bunch (H032980, app. pending, argued Jan. 25, 2011).)
STATEMENT OF THE CASE
We take the facts from the evidence adduced at trial. In many instances, the testimony was conflicting. Where this is the case, we adopt the version of the facts that supports the judgment except where noted.
A. The Bells and the Property
Burton Bell, in his late 40’s at the time of trial, is the son of Peggy Bell. He is in the auto body business, having first opened a shop in 1982 at the age of 22 and a larger one the following year. In 1988, Burton, through his parents, bought a townhouse in Campbell for about $200,000. Although he made the down payment to purchase the property, Burton was not creditworthy and couldn’t obtain financing so his parents, Gilbert and Peggy Bell, applied for the loan securing the property and took legal title to it. But, per the agreement with his parents, they all considered the property to be Burton’s and he treated it as his own, living there and paying the costs related to it.
Because the Bells share their surname, for clarity we use their given names and mean no disrespect in doing so.
Peggy Bell was born in 1930, relevant to her being an “elder” under Welfare and Institutions Code section 15610.27.
In 1990, the Bells sold the townhouse, realizing a profit of $117,742. With that profit, along with $25,000 cash supplied by Burton and new financing, the elder Bells purchased a new single family residence located at 1180 San Thomas Aquino Road in Campbell for $560,000, encumbering it with a first deed of trust that secured a debt in their names alone of $423,700. Because Burton was still unable to obtain financing, the elder Bells took legal title to the property under the same arrangement they had had with him with respect to the townhouse: As between them, the property was considered Burton’s. He selected construction upgrades to the house through the developer, moved into the house and maintained it, paid property-related expenses, and annually claimed the tax deduction for interest payments made. Over the course of time, Burton also improved the property, installing an elaborate pool and backyard entertainment area complete with grotto, hot tub, barbeque, and other amenities.
Soon after they purchased the property, the elder Bells transferred it into an inter vivos trust they had previously established as an estate-planning device. The trust document provided that, unlike the rest of their assets that would be equally split between Burton and his sister upon the last of their parents’ deaths, the property would pass solely to Burton. Gilbert Bell passed away in 1990. After that, legal title to the property was held by Peggy Bell, as trustee of the Bell Family Trust, but Burton was the equitable or beneficial owner. In 1996, Peggy Bell wrote to the lender to request that monthly mortgage statements be sent directly to Burton, as she considered him to be the one responsible for mortgage payments.
B. Burton’s Financial Fall and His Friendship with Bunch
Although at one point Burton had a successful auto body shop with some 17 employees, in 1996, he lost his lease and was forced to relocate his business and equipment to commercial property he owned on Curtner Avenue in San Jose. He went through an exhaustive process to get permits to operate his shop there but needed to obtain financing to construct necessary improvements. He was unable to get it and as a result, his business and income precipitously dropped. Burton consequently began to have difficulty paying the monthly mortgages on both his house and his business property. On several occasions from about 1996 through 2001, the loan on the house went into default and the lender initiated foreclosure proceedings. But Burton regularly borrowed money from his mother to cure these defaults. During this time, Peggy Bell saved Burton’s house from foreclosure approximately five times, expending in excess of $100,000 of her own funds to do so, only some of which Burton paid back. She was unhappy about having to come up with these funds and Burton knew of her unhappiness. On at least several of these occasions, she told Burton it would be the last time that she provided funds for his house payments, but then she would do so again.
Burton met Richard Bunch around 1997 as a result of Bunch responding to an advertisement Burton had placed for the sale of a motorcycle. They became good friends. Bunch was educated and had experience in real estate. He generally had access to money and he oversaw the management of his family real estate holdings, which included multiple parcels of rental properties in Santa Clara County. Bunch acquired a collection of specialty motorcycles and he arranged with Burton to store them at Burton’s business at no cost, supplying about $10,000 for the construction of a particular area in which to do so. Bunch also stored his motor home at Burton’s shop and Burton performed some minor repairs on Bunch’s various vehicles, also at no cost. Bunch sometimes went to Burton’s house and the two men discussed various and personal aspects of their lives, including Burton’s financial troubles and the fact that he had borrowed money from his mother to pay the mortgage on his house. Burton complained about the high payments required to service the loan and at times suggested that he could live instead at his Curtner Avenue business property, as it was more important to keep than the house because he could generate money from his business there. Bunch frequently loaned money to Burton for his business or to make payments on his house, though always on an informal basis and without documentation or any true record-keeping and without a specific plan for repayment. But Burton understood that their respective obligations would get “worked out, ” though they never did. According to Burton, over time he had borrowed about $58,000 from Bunch and had repaid all but $7,000. According to Bunch, he had lent Burton over $100,000, which remained outstanding. According to Burton, Bunch knew that Burton’s mother held legal title to his house but that he was its true beneficial owner and had personally made, designed, and invested in improvements to the property.
Burton petitioned for relief in bankruptcy (Chapter 13) in 1998 and again in 2000. In neither case did he include the property in his schedules or otherwise identify it as one of his assets. Nor did he list the mortgage lender as a creditor. Both petitions were ultimately dismissed.
Bunch met Peggy Bell at Burton’s house in 1999 after Burton was at home recovering from injuries sustained as a result of his having been beaten up. Bunch had taken him to the hospital and was visiting Burton at home after his discharge. Peggy understood that Burton and Bunch were “good friends” and that Bunch “seemed to care about Burton.” According to Bunch, Peggy complained about having to make mortgage payments on Burton’s house and she said she was tired of subsidizing her grown son. After they met, Bunch and Peggy sometimes spoke over the phone, discussing, among other things, health, religious, and spiritual matters and Bunch sent her literature on these topics.
C. The Transfer of the House to Bunch in March 2002
Toward the end of 2001, Burton’s financial troubles persisted. He was unable to remain current in his obligations and in January 2002, his commercial property where his shop was located was sold through foreclosure. He was forced through a subsequent unlawful detainer proceeding to again relocate his business. Peggy visited him around this time and barely saw him because he was working such long hours. She was concerned about his behavior and physical condition and he appeared to her to be tired, upset, depressed, and withdrawn. Bunch felt the same concerns about Burton and he and Peggy discussed this over the phone. Burton later admitted that at times from 2000 to 2002, including at this time, he had used “uppers” or methamphetamines when he had to work all night to finish jobs he was doing by himself. But he did not consider this to mean he was a drug addict, which to him was someone who used drugs recreationally. Although they were friends, Bunch never saw Burton use drugs.
Based on the trial testimony, which is unclear on the point, we surmise that the foreclosure wiped out an IRS lien recorded against the property. The IRS apparently either challenged the sale or somehow redeemed the property, which ultimately resulted in surplus proceeds being paid to Burton, as noted below.
Toward the end of 2001, Burton was also unable to pay the mortgage on his house and that loan again went into default. The property was scheduled to be sold through a foreclosure proceeding on February 11, 2002. Burton began to work on the property so he could either sell it or get a loan secured by it, and then redeem his commercial property with the proceeds. Unknown to Burton, in the beginning of February, Bunch ordered a preliminary title report on the property through Old Republic Title Company, which indicated that Peggy Bell, as trustee, held legal title to the property.
On February 10, 2001, the day before the scheduled sale, Burton contacted his mother by phone and asked her for the money to reinstate the loan-$11,428.35. According to Peggy, she received a call from Bunch shortly after her conversation with Burton. Bunch told her he would buy the house from her. Peggy had previously brushed off people who had contacted her about purchasing the property before previously scheduled foreclosures, calling them “vultures.” Peggy was upset about having to bail the property out of foreclosure again but she told Bunch, as she had told Burton before, that she would cure the default for Burton “one more time” but would not put any more money into the house. She provided the funds and told Burton that she would not do so again.
According to Peggy, Bunch called again a few days later. They again discussed their mutual concern about Burton’s behavior, which Bunch thought was bizarre and which had Peggy very upset, and Bunch again relayed that he would buy the property. In the conversation, Bunch told her that Burton was a drug addict, or that he thought he was because of his behavior, and that Burton could no longer function. Bunch said his own son had found and pricked himself with a hypodermic needle where Bunch’s motorcycles were stored at Burton’s shop and that others had said that Burton was “way out.” He also said that he, Bunch, had a friend who was an addiction intervention counselor whom he could contact to help with an intervention for Burton. Peggy became “just totally absorbed with this fact that [her] son was a drug addict and was a danger to himself and maybe to others” and she needed to help him. She felt lucky to have Bunch, “an angel, ” who would help her with Burton. Bunch had said he would buy the property and her “focus was on getting help for Burton, ” which Bunch was going to assist her with. She trusted Bunch and he gained her confidence. Peggy subsequently spent lots of time researching the subject of addiction and contacting recovery groups in an effort to help Burton.
In another conversation around February 22, 2002, Bunch and Peggy agreed that he would buy the property from her but no specific terms were then discussed. Bunch sent her a check by Federal Express for $5,000, which she considered a deposit on the deal. Bunch arranged for an informal appraisal of the property, which, according to him, revealed its value to be about $550,000.
On March 1, 2002, the existing mortgage lender on the property wrote to Peggy and informed her that the loan was once again past due in the amount of $4,485.94. She did not contact the lender because she understood at that point that she had already agreed to sell Bunch the property, which would relieve her of this payment obligation, and that Bunch was going to help her with Burton.
On March 7, 2002, Bunch called Peggy and dictated the terms of an agreement that, at his direction, she typed out, signed, and took to Old Republic Title Company-the same company through which Bunch had previously ordered a title report on the property. The agreement, the terms of which were not negotiated, said, “I, Peggy J. Bell, wish to sell property at 1180 San Tomas Aquino Road, Campbell, CA 95008. I wish to sell the above-mentioned property for the full cash price of $460,000 (four hundred sixty thousand dollars) to Jerome Bunch or assignee. This is to be a cash sale of no terms. Escrow is to go through Old Republic Title Company. Transaction is to be completed on or before March 15, 2002. Closing costs will be paid by seller and buyer as is customary.” As the one holding title to the property, Peggy believed she had the right to sell it even though she considered the beneficial interest in the property to be Burton’s.
Jerome Bunch is Richard Bunch’s father. Jerome is also Bunch’s middle name and he sometimes went by that name in business dealings.
Peggy understood that $460,000 was a low price for the property, which she thought was then worth about $750,000, but Bunch was going to help her with Burton and she did not think it proper under the circumstances to negotiate terms. Peggy also knew that the property needed work and repairs after having recently visited Burton and seen its condition. And Bunch had said in the conversation that he would sell the property to Burton for the same price he had paid for it within a “reasonable amount of time, ” though what was meant by this was not discussed. Peggy assumed it meant that enough time could go by for Burton to get an appraisal of the property and secure a loan to purchase it from Bunch on his own after getting on his feet. She did not add this re-sale term to the written agreement she signed because she just typed what Bunch had dictated, which did not include this provision. Peggy and Bunch did not discuss whether Bunch planned to live in the house while he owned it or whether Burton would have to pay rent if he stayed there, though Bunch did mention that Burton could perhaps do maintenance work on some of Bunch’s family-held apartments and that he may be able to stay in one of the units. Finally, Peggy and Bunch agreed that Bunch, and not Peggy, would tell Burton about their deal for the sale of the property to Bunch.
Bunch denied that he ever said to her that he would sell the property to Burton for the same price.
Peggy had believed Bunch when he told her that Burton was a drug addict, that Bunch would help her with an intervention, that Bunch would inform Burton of the sale, and that Bunch would later sell the property to Burton at the same price, and these representations influenced her decision to enter into the transaction.
During the escrow period, Burton was busy removing his property and equipment from his auto body shop on Curtner Avenue following the eviction that forced him to surrender possession of the premises after the foreclosure sale. This process took several weeks during which Bunch also frequented Burton’s shop to remove his own motorcycles. But Bunch did not tell Burton about the impending sale of the house to him during their regular contact at the shop. Bunch instead told Peggy during one of their many telephone conversations during this period that he could not locate Burton and therefore did not tell him about the sale agreement.
Escrow closed on the transaction on March 19, 2002. Bunch had borrowed much of the cash with which to purchase the property from his father. Escrow documents signed by Peggy included her attestation that “there is no one in possession of or has access to the premises other than” herself and that no one else “ha[d] any rights, easements, licenses, or agreements allowing them to use, encroach on, or travel over said real property.” Peggy netted some $67,000 in cash from the sale, which she later remitted to Burton.
D. After the Sale
About a week after the sale was completed, Bunch went to the house and told Burton that he was its new owner. Burton became extremely upset and angry. Bunch told Burton that he had bought the house so Burton would not have to worry about the lender foreclosing. He told him not to worry, that he just needed to obtain from Burton the (unspecified) amount of money he had borrowed from his father to purchase it. Burton did not believe that Bunch would sell him the property and he told Bunch to leave. Burton then called Peggy to confirm whether it was true that she had sold the house to Bunch. Peggy confirmed that it was true and told Burton not to worry because Bunch was going to sell him the house within a reasonable period of time for the same price Bunch had paid for it.
Burton later repeatedly implored Peggy to rescind the sale with Bunch and get the property back. But she would not and Burton knew that this was because she didn’t want to pay for the property any more and felt that at that point, he could not either. Peggy never approached Bunch about selling the property back to her, although they continued to speak by phone as friends on many occasions. But Burton met with Bunch and demanded that he undo the transaction and transfer the property back to Peggy.
Burton called Peggy several more times in the following weeks, threatening her with physical harm and telling her he would burn her house down. According to Burton, Peggy misconstrued his anger as threats, as he would never harm her. But Burton also threatened Bunch, members of Bunch’s family, and the man Bunch had hired to perform pool maintenance at the property, as well as that man’s family.
Burton continued to live in the house and work on it because he still intended to use it to get financing to purchase and then possibly sell it. He apparently had a friend or customer, whose name he could not remember, who had told Burton that he would borrow the money from a line of credit for Burton to buy the property from Bunch, as Burton could still not himself qualify for financing. But Burton never actually received funds with which to buy the property from Bunch and did not directly make an offer to purchase it because, as he testified, Bunch never told him exactly what the sales price would be.
This anonymous friend had apparently first made this offer so that Burton could redeem his Curtner Avenue property after it had been sold through foreclosure. But when the friend found out that Burton had also lost his house, the friend said, “[L]et’s take care of your house first.” In the end, Burton did not redeem his commercial property, which would have required him to pay $189,000 to the IRS, and he told the IRS that he could not come up with the money. In 2005, the IRS paid Burton surplus proceeds from a sale of the commercial property in the amount of $304,000.
Meanwhile, Peggy pursued efforts to set up a drug intervention for Burton, engaging an intervention counselor in Campbell herself as Bunch told her that his friend whom he had previously mentioned was no longer performing this service. The counselor met with her, Burton’s sister, and Bunch in June 2002 and after discussion about Burton’s addiction problem, instructed each of them to write letters to Burton that the counselor would deliver as part of intervention efforts. Bunch did not mention at the meeting that he had already served Burton with a 30-day notice to quit the premises. And, according to Peggy, Bunch was critical to their intervention efforts but he did not write the letter even though she called him twice in the week after the meeting with the drug counselor to remind him to do so. According to Bunch, he was busy with work during that week but wrote the letter later. Peggy nevertheless had concluded after that first week subsequent to the meeting that the intervention could not go forward without Bunch’s letter. The intervention accordingly did not take place. Peggy instead contacted Burton directly and asked him if he had a drug problem, which Burton denied. She also confirmed with the Campbell Police Department that Burton had no record of drug arrests.
On July 3, 2002, Bunch filed an unlawful detainer proceeding to evict Burton from the house. Among the complaint’s allegations was that the current rental value of the property was $116.60 per day. Burton was not paying rent because, as he testified, Bunch did not tell him how much the monthly rent would be, just like with the purchase price for the property.
On July 21, 2002, Peggy e-mailed Burton. She told him that she had called Bunch to tell him that Burton wanted to buy the house from him “per [the] verbal agreement” between her and Bunch that Burton could buy the house from Bunch for “a reasonable amount of time at the price it was sold.” The next day, Peggy was “beginning to realize that [Bunch] was not going to honor his commitment.” She sent him a letter via Federal Express that enclosed a written agreement she had drafted with the help of an attorney Burton had hired. She asked Bunch to sign and return the agreement. The agreement said that Peggy had sold the property to Bunch on the condition that Bunch would “allow [Burton] reasonable time to get an appraisal in order to secure a loan and purchase [the property] from [Bunch] for the same purchase price as sold to him.” Bunch never responded to Peggy’s phone calls or the letter. According to Bunch, he never got the letter.
On July 26, 2002, the unlawful detainer trial took place and judgment was entered in favor of Bunch. A writ of possession was issued the same day. Just after the trial, a discussion took place between respective counsel for Bunch and Burton regarding the sale of the house to Burton. According to Burton, his attorney attempted to negotiate a price of $460,000, the price Bunch had paid, plus $5,000 to $10,000 for the time value of his money. But Bunch counter-offered to sell the property to Burton for some $200,000 more than he had paid for it, an offer that Burton rejected. Although Burton testified that he made unspecified attempts to purchase the property from Bunch, other than this, he did not directly make a formal offer to do so at any price. Nor did he tender, or offer to tender, $460,000 to Bunch in accordance with Peggy’s understanding of their agreement. Nor did Burton ever tell Peggy that he had $460,000 available with which to purchase the property from Bunch in accordance with that agreement.
After the trial, Burton was very upset and Peggy was afraid he might do harm to himself or others. This prompted her to contact the Campbell Police Department so Burton could be subjected to an involuntary psychiatric evaluation. He was taken to a psychiatric hospital and was released after 10 hours. Burton was drug tested in connection with this evaluation and the results showed he was drug free. But Burton was still very angry with Peggy. At the advice of authorities who listened to messages Burton had left on her answering machine, she got a restraining order against him, which was later dissolved at her request. Bunch told Peggy that Burton was also stalking his family. And Bunch said that his father was upset with him because after loaning him money to buy the house, Burton remained in it and was not paying rent.
On July 30, 2002, Peggy e-mailed Burton. She said, “I am very sorry about selling the house as I could not make any more $3800 payments and thought I was helping you out by selling it to Rich as he was your best friend and would try to help you through your problems even making sure you would have a place to stay at his Father’s apartments. Yes, I am sorry things have not worked out-I am really sorry. I did not sell the house to get the money you owed me. I am holding the proceeds of $67,638 for you....” She also pointed out that if Bunch did sell the property to Burton, Burton would have “large mortgage payments” and he was “going to need employment.” She was trying to get Burton to step up and “accept some responsibility.”
Burton sought and received from the court in the unlawful detainer proceeding a stay of execution on the writ of possession, for which he was required to deposit $4,664 in court. This amount was later released to Bunch. In the end, Burton remained in the house for about six months after the sale of the property to Bunch and this was all the rent he paid. Bunch eventually had him forcibly evicted in September 2002 and then gave him limited access to the house to remove his possessions. Burton was unable to remove everything and was forced to leave many items, including a pool table, appliances, clothing, a motorcycle, and personal things such as a video of his deceased father. According to Burton, the personal property he left was valued in the range of $200,000. According to Bunch, what was left was just “junk.” Bunch later disposed of many of Burton’s possessions without providing him with statutory notice under Code of Civil Procedure section 1174, subdivision (f) and Civil Code sections 1983-1984 and without storing the property or selling it as required by Code of Civil Procedure section 1174, subdivisions (g) and (i) and Civil Code sections 1986-1988. He kept other items, some of which remained in the house.
According to Bunch, Burton damaged the house before he was evicted. It also needed general repairs when Bunch took possession. Bunch spent approximately $110,000 to make repairs and return the property to a “reasonably habitable” state, $70,000 of which was not for “enhancement” but for work necessary to make it “livable and presentable and comfortable, ” both interior and exterior. According to Burton, he did not damage the house and wouldn’t have done so because he thought he was getting it back. And when he later viewed the house in the course of the litigation, much of this described work had not been done and Bunch had failed to maintain the property, particularly the pool and exterior drainage systems, which caused damage to the house.
According to expert testimony at trial, the value of the property at the time Peggy transferred it to Bunch was in the range of $560,000 to $840,000 to $1,100,000.
According to Bunch, his net worth at the time of trial was approximately $1,300,000.
II. Procedural Background
A. The Pleadings
Burton filed his verified complaint against Peggy and Bunch on September 3, 2002. He alleged that he was the beneficial owner of the property through a resulting trust, that Peggy had had only legal title, and that she had breached her fiduciary obligation to him by selling the property to Bunch. He further alleged that Bunch had induced the sale by falsely representing to Peggy that he would hold the property for Burton’s benefit and would sell it to Burton for the same price he had paid and that Bunch had refused to cooperate with Burton’s efforts to finance the transfer of the property to him. For the first cause of action, he sought the imposition of a “purchase money resulting trust.” For his second cause of action, he sought cancellation of the grant deed from Peggy to Bunch, offering to restore all consideration that Bunch had provided to Peggy on the condition that Bunch convey the property to him. For the third cause of action, Burton sought to quiet title to the property in him. And for the fourth cause of action, he sought to enforce, as a third party beneficiary, Bunch’s alleged promise to Peggy to sell the property to him for the same price Bunch had paid, “plus a reasonable return on the funds he paid her for his purchase.” He finally sought declaratory and injunctive relief in his fifth and sixth causes of action. The ultimate relief prayed for with respect to the property under any theory was that Bunch be ordered to convey it to Peggy and that she, in turn, be ordered to convey it to Burton so that he could be restored in the end as the true owner of the property.
Bunch answered and cross-complained against Burton and Peggy for declaratory relief and indemnification, respectively. Then, both Burton and Bunch dismissed Peggy from the action. After the court denied Burton’s application for a preliminary injunction, on October 29, 2004, he amended his complaint against Bunch to eliminate the cause of action for injunctive relief and to add a cause of action for conversion of Burton’s personal property, which he alleged was worth $100,000. He re-alleged the same misrepresentation by Bunch that he would hold the property and sell it to Burton at the same purchase price and further alleged that Peggy had demanded that Bunch sell the property to Burton in accordance with the agreement between her and Bunch, but that Bunch had refused. The ultimate relief sought with respect to the property was that it be declared to be held in trust for Burton’s benefit and that Bunch be ordered to convey it back to Peggy, with the right of possession restored to Burton.
Meanwhile, in June 2004, Peggy filed a separate action against Bunch for fraud, seeking the imposition of a constructive trust for the benefit of the Bell Family Trust and its beneficiaries and for declaratory relief. She alleged that Bunch had induced her to sell him the property by representing that he would hold it in trust for Burton and would sell it to Burton for the same purchase price “within a reasonable period of time.” She further alleged that Bunch represented that he was Burton’s friend and would help him, that Burton was in financial need, that he would assist Peggy in the discharge of her fiduciary duties to Burton as trustee of the Bell Family Trust, and that he would tell Burton of the terms of the agreement, all of which representations were false. The pleading also alleged that Peggy had demanded that Bunch sell the property to Burton but that he had refused and it invoked remedies for statutory elder financial abuse in view of Peggy’s age. The ultimate relief sought with respect to the property was that Bunch be ordered to convey it back to Peggy as trustee of the Bell Family Trust.
In July 2004, Peggy filed an amended complaint that restated the same causes of action but also sought specific performance of Bunch’s alleged agreement to sell the property to Burton. It alleged that Peggy and Burton had offered to purchase the property from Bunch for $460,000 but that he refused to sell it in breach of the agreement. The pleading ultimately sought an order “compelling [Bunch] to convey [the property] to [Peggy Bell as trustee of the Bell Family Trust] and/or Burton Bell.”
The actions were consolidated in November 2004.
On the first day of trial, March 12, 2007, Peggy and Burton, who were then jointly represented by new counsel, each filed second amended complaints. Their new pleadings included as an alleged fact that in order to induce Peggy to sell him the property, Bunch had also represented that Burton was a drug addict and that Bunch had a friend who was an addiction counselor who could help Burton with this problem. Peggy’s amended complaint pleaded causes of action for fraud, for imposition of a constructive trust for Peggy’s benefit, for declaratory relief, for specific performance of Bunch’s alleged promise to sell the property to Burton, and for statutory financial abuse of an elder. The ultimate relief sought with respect to the property was for a decree that Bunch held the property in trust for Peggy as trustee of the Bell Family Trust and that Bunch be compelled to convey it to Peggy Bell as trustee, “and/or Burton Bell.” Burton’s amended complaint similarly alleged causes of action for imposition of a constructive trust but for Burton’s benefit, for imposition of a purchase money resulting trust, for cancellation of the grant deed from Peggy to Bunch, for quiet title of the property in Burton as the beneficial and equitable owner of the property, for breach of contract as the third party beneficiary of Bunch’s promise to convey the property to Burton, for declaratory relief, and for conversion. The ultimate relief sought with respect to the property was for a decree that Bunch held it in trust for Burton.
The record does not include any written application or motion by either of the Bells to file amended pleadings. Nor does it include any written objection or opposition by Bunch raised before the amendments were filed. The court later orally referenced that it had allowed the plaintiffs’ complaints to be amended and confirmed that this was on their counsel’s representation that the amendments “did not state any additional facts but are rather causes of action under additional theories, ” a representation that counsel then reaffirmed. Counsel for Bunch did not at that point raise any objection, but he did request to be served with signed and conformed copies of the newly allowed pleadings as he only possessed proposed amendments that were attached to the plaintiffs’ “motion, ” presumably to amend their complaints. When the court and counsel were discussing available remedies at the conclusion of the trial, the court referenced that Bunch had timely objected to the proposed amendments, rhetorically inquiring of Bunch’s counsel how the changes in pleaded legal theories and remedies sought had deleteriously affected Bunch or the presentation of his case. No direct response was given.
B. The Trial
The action was tried by the court for some five days in March 2007 with evidence of Bunch’s wealth relative to punitive damages bifurcated for later. At the end of the first phase of trial, the court requested the parties to submit their respective versions of a proposed statement of decision rather than the court first rendering a tentative decision. They agreed to do so, in effect waiving the procedure outlined in rule 3.1590 of the California Rules of Court concerning statements of decision.
C. The Statement of Decision
Each side later submitted their proposed statements of decision. Peggy and Burton’s proposed statement of decision reflected the determinations that because of Bunch’s fraud, the property was held by him in a constructive trust for their benefit and that they were entitled to an immediate conveyance of the property back to Peggy as trustee of the Bell Family Trust. They alternatively proposed that Bunch be found liable to Peggy for compensatory damages caused by his fraud.
On June 8, 2007, the court issued an order directing Peggy to “make an election of remedies regarding her fraud cause of action, ” citing Buist v. C. Dudley De Velbiss Corp. (1960) 182 Cal.App.2d 325, 333, a case in which the plaintiff did not seek a constructive trust as a remedy for fraud and the court instead awarded money damages. In response, Peggy filed a document stating her election of “the remedy of rescission” regarding her fraud cause of action, a contractual remedy she had not previously sought by her pleadings or otherwise.
In her brief on appeal, Peggy offers that the use of the word “rescission” in her election of remedies was a “misnomer, ” acknowledging that this remedy was not one she had pursued. She clarifies that “restitution” is the correct term for the remedy elected, an equitable concept connoting the restoration of money or property, which would include the constructive trust remedy provided for in this case.
The court issued its statement of decision on September 7, 2007, determining, among other things, that Bunch had committed fraud by misrepresentations to Peggy, on which she relied and which induced her to sell the property to Bunch. The statement of decision provided as a remedy for the fraud that Peggy was “entitled to an immediate re-conveyance of the Property to her as Trustee of the [Bell Family Trust]. [Bunch] is entitled [to] reimbursement for the amount he paid for the Property, less the fair rental value of the Property at the rate of $116 per day from September 4, 2002, the date [Bunch] took possession, through the date of entry of judgment.” The statement of decision further determined that Bunch had not complied with statutory notice procedures governing a landlord’s disposition of a tenant’s personal property and he had wrongfully disposed of Burton’s property. He was therefore liable to Burton for conversion of his personal property in the amount of $20,000, plus interest. Finally, the statement of decision determined that by reason of his fraud on Peggy, Bunch had committed financial elder abuse under Welfare and Institutions Code section 15600 et seq. and Peggy was thus entitled to an award of attorney fees according to proof.
Two weeks later, Bunch filed a written request for statement of decision in an attempt to “adapt” to the court’s procedure that had deviated from rule 3.1590 of the California Rules of Court in that the court had not issued a tentative decision. Bunch also filed objections to the court’s issued statement of decision, which challenged, among other things, what Bunch perceived as the court having improperly forced Peggy to elect remedies and having afforded her the remedy of rescission, which she had not ever pleaded or prayed for. The objections also raised that the statement of decision had not addressed and disposed of all causes of action.
D. The Judgment
After the court heard additional evidence in a single day regarding Bunch’s wealth as relevant to punitive damages, the court entered judgment on January 16, 2008. It provided that plaintiffs Peggy and Burton were “entitled to the imposition of a constructive trust” on the property, and that Bunch had no right, title, or interest in it. Bunch was directed, upon service of notice of entry of judgment, to immediately convey the property to Peggy as trustee of the Bell Family Trust. He was “entitled to reimbursement in the sum of $460,000.00, i.e., the amount he paid for [the property], less the fair rental value of the property for the time [Bunch] had possession thereof, calculated at the rate of $116 per day from September 4, 2002, ” the day Burton was evicted. The judgment awarded Burton damages in the amount of $20,000 for Bunch’s conversion of his personal property, plus $4600.20, which was to compensate Burton for money he had had to pay to Bunch as a result of the judgment in the unlawful detainer proceeding. Burton and Peggy were each awarded punitive damages in the amount of $25,000, and Peggy was determined to be entitled to an award of attorney fees under Welfare and Institutions Code section 15657.5, subdivision (a). Bunch was awarded nothing on his cross-complaint. A writ of possession to evict Bunch from the property was later issued per the judgment.
E. The Amended Statement of Decision
After entry of judgment, the court sua sponte issued an amended statement of decision. This varied in material respects from the original statement of decision in its rejection of Bunch’s claim of entitlement to interest on the funds he had tendered to Peggy to purchase the property and to recovery of costs for improvements he had made to the property after taking possession of it, and its addition of the punitive damage awards already provided in the judgment.
We surmise that the court did so in response to Bunch’s previous request for a statement of decision and his filed objections to the original statement of decision. This unstructured chronology involving the statement of decision in this case displays the downside of deviating from the precise procedure set out at rule 3.1590 of the California Rules of Court.
DISCUSSION
I. Issues on Appeal
Bunch timely appealed from both the judgment and the order awarding attorney and expert fees.
By separate order, this court ordered the two appeals considered together for purposes of briefing, argument, and opinion. The court also issued a writ of supersedeas staying enforcement of the judgment and the attorney fee order pending final disposition of the appeals.
With respect to the judgment, the subject of this appeal, Bunch contends that the record does not contain substantial evidence that he committed fraud in that (1) there was no reasonable reliance by Peggy on Bunch’s representations that he would later sell the house to Burton for the same price and that he would tell Burton about his purchase of the property during the escrow period; (2) Bunch did not intentionally mislead Peggy with respect to Burton’s drug use or Bunch’s intention to assist in an intervention; and (3) the representation that Burton was a drug addict was not actionable in any event and was also not supported by substantial evidence. There being insufficient evidence to establish fraud, according to Bunch, he further contends that the determination that he committed financial elder abuse as provided in Welfare and Institutions Code section 15610.30 likewise cannot stand. He also contends that the property did not constitute “property of an elder” under Welfare and Institutions Code section 15610.30, subdivision (a)(1) because the property actually belonged to Burton, not Peggy, defeating any claim for financial elder abuse. And he contends that Peggy suffered no damages from Bunch’s misrepresentations in any event, and that Peggy and Burton failed to mitigate damages. He finally contends that the court abused its discretion by granting the equitable remedy of a constructive trust, Peggy and Burton having failed to do equity and having unclean hands, and Peggy having waived her equitable rights through laches and her retention of the benefits of the transaction-Bunch’s $460,000.
II. The Record Contains Substantial Evidence of Bunch’s Fraud
As Bunch acknowledges, we review the factual question whether he committed fraud under the substantial evidence test, under which we will affirm the trial court’s resolution of disputed facts if substantial evidence, in light of the whole record, supports the judgment. (Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 632.)
The substantial evidence standard has been described by our high court as follows: “ ‘In reviewing the evidence on … appeal all conflicts must be resolved in favor of the [prevailing party], and all legitimate and reasonable inferences indulged in to uphold the [finding] if possible. It is an elementary, but often overlooked principle of law, that when a [finding] is attacked as being unsupported, the power of the appellate court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted, which will support the [finding]. When two or more inferences can be reasonably deduced from the facts, the reviewing court is without power to substitute its deductions for those of the trial court.’ [Citation.]” (Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 571, quoting Crawford v. Southern Pacific Co. (1935) 3 Cal.2d 427, 429.) Although the record must be viewed in its entirety, “all of the evidence must be examined, but it is not weighed. All of the evidence most favorable to the respondent must be accepted as true, and that unfavorable discarded as not having sufficient verity to be accepted by the trier of fact. If the evidence so viewed is sufficient as a matter of law, the judgment must be affirmed.” (Estate of Teel (1944) 25 Cal.2d 520, 527.)
Thus, as long as there is substantial evidence, the appellate court must affirm, even if the reviewing justices personally would have ruled differently if they had presided over the proceedings below and even if other substantial evidence supports a different result. (Bowers v. Bernards (1984) 150 Cal.App.3d 870, 874.) “ ‘Substantial evidence’ is evidence of a ponderable legal significance, evidence that is reasonable, credible and of solid value. [Citations.] ‘Substantial evidence is not synonymous with “any” evidence.’ Instead, it is ‘ “ ‘substantial’ proof of the essentials [that] the law requires.” ’ [Citations.] The focus is on the quality, rather than the quantity, of the evidence. ‘Very little solid evidence may be “substantial, ” while a lot of extremely weak evidence might be “insubstantial.” ’ ” (Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 651.) It is the appellant’s burden to establish that the judgment or order is not supported by substantial evidence. (Adoption of Allison C. (2008) 164 Cal.App.4th 1004, 1011.)
Applying this standard of review, as we must, we have little difficulty concluding on this record that the trial court’s determination that Bunch fraudulently induced Peggy to sell him the property must be upheld. Although the court cited four separate fraudulent representations by Bunch in its statement of decision and Bunch challenges all of them in some respect, we need only reach one of them-Bunch’s statement that for a reasonable amount of time after the transaction, he would, in turn, sell Burton the property for the same price-to conclude our review of this issue.
It is accordingly unnecessary for us to address the parties’ arguments concerning the other three representations, including arguments about the propriety of the court’s consideration of those representations that were first alleged at the beginning of trial in the second amended complaints.
Civil Code section 1572 concerns the vitiation of contractual consent by actual fraud. It provides in relevant part that actual fraud “consists in any of the following acts, committed by a party to the contract, or with his connivance, with intent to deceive another party thereto, or to induce him to enter into the contract: [¶] 1. The suggestion, as a fact, of that which is not true, by one who does not believe it to be true; [¶]... [¶]... [¶] 4. A promise made without any intention of performing it; or, [¶] 5. Any other act fitted to deceive.” In addition, Civil Code section 1709 provides that one “who willfully deceives another with the intent to induce him to alter his position to his injury or risk, is liable for any damage which he thereby suffers.” A “deceit” within the meaning of this section is defined in relevant part in the next section as either “1. The suggestion, as a fact, of that which is not true, by one who does not believe it to be true; [¶]... [¶]... or, [¶] 4. A promise, made without any intention of performing it.” (Civ. Code, § 1710.)
Thus, “ ‘[a]n action for promissory fraud may lie where a defendant fraudulently induces the plaintiff to enter into a contract.’ (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) The action is one of deceit, which requires proof that the defendant made a misrepresentation of fact or a promise without any intention of performing it. (Civ. Code, § 1710.)” (Service by Medallion, Inc. v. Clorox Co. (1996) 44 Cal.App.4th 1807, 1816.) The elements of the tort that must be pleaded and proved are “(1) a knowingly false representation by the defendant; (2) an intent to deceive or induce reliance; (3) justifiable reliance by the plaintiff; and (4) resulting damages. [Citation.]” (Ibid.)
The trial court’s statement of decision found all of the following, which establish the elements of Bunch’s fraud in this case: On or about February 22, 2002, Bunch, having previously obtained a title report and an appraisal on the property and having told Peggy that he would buy it from her, sent Peggy a deposit of $5,000. On March 7, 2002, Bunch called Peggy and dictated the terms of an agreement for his purchase of the property for $460,000, lower than the appraised value. In the conversation, he told her that he would sell the property to Burton for the same price. This was said in the context of expressed concern for Burton and the problems he was then facing in his life. Peggy believed this representation, among others, and believed that Bunch was Burton’s friend, acting on altruistic motives. This representation was knowingly false and made with the “intention of inducing an elderly woman to sell the property to him at a price considerably below market price. If Peggy Bell had known the truth she would not have sold the property to Bunch.” Each of these findings is supported by substantial evidence in the record.
The record establishes specifically that Peggy knew the purchase price was below value, and that Bunch told her he would sell the property to Burton for the same price “in a reasonable amount of time.” To her, this meant that Burton’s option to purchase would remain open long enough for him “to get his problems taken care of, ” and the low price would make it “easier” for him to get a loan to buy the property from Bunch, an arrangement she considered “fair.” In other words, she was willing to sell the property at a price below value because Burton could in turn purchase the property at the same low price, protecting the equity in the property. After the sale, Peggy told Burton that this term was part of the agreement between her and Bunch. And she called Bunch and wrote to him to confirm this aspect of their agreement, but he did not respond.
Contrary to Bunch’s contention, the value differential establishes that Peggy suffered damage as a result of his fraud, even though the sale relieved her of any obligation to pay the mortgage or otherwise deal with the property that she considered Burton’s. The property could have been sold for a higher price without Peggy or Burton, as the legal and equitable owners, respectively, experiencing a loss of equity or the consequences of such a loss. And there was evidence to the effect that at the time Peggy sold the property to Bunch, Burton was contemplating selling it for a profit and was performing repairs in preparation for that.
Bunch specifically challenges the sufficiency of the evidence that Peggy reasonably and justifiably relied on Bunch’s false promise. He contends that her reliance on it could not have been reasonable or justifiable because Burton was not conventionally creditworthy and she knew from her own experience that he would be unable to qualify for a loan on his own with which to purchase the property from Bunch, even at the low price of $460,000. He acknowledges that whether reliance is reasonable is generally a question of fact. (Blankenheim v. E. F. Hutton & Co. (1990) 217 Cal.App.3d 1463, 1473.) But he points outs that the question becomes one of law if the facts permit reasonable minds to come to but one conclusion, citing Seeger v. Odell (1941) 18 Cal.2d 409, 415 [plaintiff will be denied recovery only if his conduct in reliance was manifestly unreasonable], and contends that such is the case here.
But there is evidence in the record, viewed in the light most favorable to the judgment, that Burton was arranging for financing, albeit of an unconventional sort. He testified that he was securing access to sufficient funds through a customer or friend who had a line of credit and was willing to, in turn, loan him the money. And Peggy thought that the property was worth more-nearly $300,000 more-than the purchase price, which would make it “easier” for Burton to get financing once he got back on his feet. Thus, in spite of evidence that he was not then creditworthy in a conventional sense, it was not as a matter of law manifestly unreasonable for Peggy to believe that he might, in a reasonable amount of time, overcome his problems and get himself in a position to purchase the property from Bunch for $460,000. She also testified that in spite of having said that she would put no more of her own money into saving Burton’s house from foreclosure, she was at the same time not willing to let it go to “vultures.” She did not place Bunch in that category because she believed that he had Burton’s best interests at heart, and she was reassured about his intentions by his representation that he would sell Burton the house for the same price. Thus, in light of Peggy’s own knowledge and experience, we cannot say that she was not justified in believing that Burton, within a reasonable period of time and perhaps even in the end with her help, could find a way to buy the property from Bunch at the same low price rather than suffer a total loss of equity in it. (Whiteley v. Philip Harris, Inc. (2004) 117 Cal.App.4th 635, 684.) The evidence Bunch cites to show that Peggy could not have reasonably believed that Burton would ever be in a position to purchase the property from Bunch for $460,000 does support a lack of justifiable reliance. But on this record, it does not compel that determination as a matter of law.
As the trier of fact, it was the trial court’s role, and not ours, to assess and weigh the credibility of the evidence. As a reviewing court bound by the substantial evidence rule, we are not in a position to second guess the lower court’s factual conclusions. Substantial evidence supports the conclusion that Bunch committed promissory fraud by his representation to Peggy that he would later sell the property to Burton at the same price, and this encompasses proof of the element of Peggy’s justifiable reliance in selling the property to Bunch for less than its value.
III. The Court Did Not Abuse its Discretion by Imposing the Equitable Remedy of a Constructive Trust
Bunch challenges the trial court’s imposition of a constructive trust as a fraud-rectifying remedy. He acknowledges that the court’s decision to grant equitable relief is reviewed for abuse of discretion. (Rivero v. Thomas (1948) 86 Cal.App.2d 225, 238.)
The parties dispute whether the facts giving rise to the remedy of a constructive trust must be proven by clear and convincing evidence rather than a preponderance of the evidence. For our purposes, this is in essence a distinction without a difference. Even if one establishing a constructive trust in the trial court must present full, clear, and convincing proof, whether evidence meets this quantum is a question for the that court; when substantial evidence supports its conclusion, the trial court’s determination is not open to review on appeal. (Marshall v. Marshall (1965) 232 Cal.App.2d 232, 246; Adams v. Young (1967) 255 Cal.App.2d 145, 155.)
Civil Code sections 2223 and 2224 authorize the imposition of a constructive trust. Section 2223 provides that “[o]ne who wrongfully detains a thing is an involuntary trustee thereof, for the benefit of the owner.” Section 2224 provides in pertinent part that “[o]ne who gains a thing by fraud … or other wrongful act, is, unless he or she has some other and better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it.” These sections state general principles for a court’s guidance rather than restrictive rules, as flexibility is necessary to apply an equitable doctrine to individual cases. Thus, “ ‘a constructive trust may be imposed in practically any case where there is a wrongful acquisition or detention of property to which another is entitled.’ ” (Martin v. Kehl (1983) 145 Cal.App.3d 228, 238; GHK Associates v. Mayer Group, Inc. (1990) 224 Cal.App.3d 856, 878.)
The constructive trust remedy is alternative to the recovery of a money judgment, and it arises by operation of law. (Alder v. Drudis (1947) 30 Cal.2d 372, 383; Weightman v. Hadley (1952) 113 Cal.App.2d 598, 607.) “In order to create a constructive or involuntary trust as defined in [Civil Code] section 2224, no conditions other than the three stated in that section are necessary: the existence of a res (property or some interest in property), the plaintiff’s right to that res, and the defendant’s gain of the res by fraud... or other wrongful act [citation]. A constructive trust is a remedial device primarily created to prevent unjust enrichment; equity compels the restoration to another of property to which the holder thereof is not justly entitled [citations].” (Kraus v. Willow Park Public Golf Course (1977) 73 Cal.App.3d 354, 373.) The remedy compels the transfer of property from the person wrongfully holding it to the rightful owner. (Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 990.) If the plaintiff is entitled to an immediate reconveyance of the property, the court will order the defendant to make the conveyance, but the plaintiff is usually required to pay the defendant for any sums advanced by the defendant for the acquisition of the property and to reimburse him for any amounts paid for repairs, maintenance, and operating costs, less any income received or the value of the defendant’s possession if he occupied the property. (Adams v. Talbott (1943) 61 Cal.App.2d 315, 324; Martin v. Kehl, supra, 145 Cal.App.3d at pp. 242-243; Neet v. Holmes (1944) 25 Cal.2d 447, 466.)
Having already concluded that substantial evidence supports the trial court’s determination that Bunch defrauded Peggy into selling him the property for a price below its true value, we observe that this determination also satisfies the requirements for the imposition of a constructive trust under Civil Code section 2224. We accordingly reject Bunch’s first attack on the remedy for fraud that the court imposed based on the argument that there is no factual or evidentiary basis for its imposition.
Bunch also contends that the court’s imposition of a constructive was an abuse of discretion by the assertion of equitable defenses: Peggy had waived the right to the remedy by accepting the benefits of the contract and was guilty of laches, she and Burton had unclean hands, and there was no proof that they could do equity by returning the $460,000 Bunch had paid to Peggy to purchase the property.
Our first observation is that Bunch did not raise these affirmative defenses at trial and they are therefore waived or forfeited on appeal. (Mattco Forge, Inc. v. Arthur Young & Co. (1997) 52 Cal.App.4th 820, 847; Bardis v. Oates (2004) 119 Cal.App.4th 1, 13, fn. 6 [applying waiver principle to affirmative defense urged for the first time on appeal].)
But reaching the merits as to Bunch’s waiver argument based on Peggy’s acceptance of contractual benefits, this goes to the remedy of rescission, which the court did not order, instead imposing a constructive trust as a form of restitution. Consequently, the argument lacks merit.
As to laches, Bunch contends that Peggy’s two-year delay in bringing suit and her amended pleading at trial prejudiced him because, in the interim, he invested over $100,000 in repairs and improvements to the property and litigated against Burton’s pleaded theories only. But Bunch offered evidence of his investment into the property at trial and the court rejected it, as it was free to do. And construing Burton’s early pleadings broadly, he sought a declaration from the very beginning that the property was held in trust for his benefit and he alleged sufficient facts of Bunch’s fraud on Peggy to warrant the imposition of a constructive trust, thus placing Bunch on notice from the beginning of this theory and request for relief. The defense of laches, in any event, is not designed to punish a plaintiff and is invoked only where to refuse it would be to permit an unwarranted injustice. It is never permitted to “merely to aid a faithless trustee in consummating his wrong.” (Berniker v. Berniker (1947) 30 Cal.2d 439, 449.) Simply put, Bunch has not shown that on this record, the trial court abused its discretion by failing to apply the doctrine of laches to defeat the imposition of a constructive trust as a remedy for fraud.
The same is true as to the equitable defense of unclean hands. The doctrine applies not in every instance where the plaintiff has committed some misconduct but only where it would be inequitable to grant the plaintiff any relief, considering the degree of harm caused by the plaintiff’s misconduct with respect to the transaction and the extent of plaintiff’s alleged damages. (Dickson, Carlson & Campillo v. Pole (2000) 83 Cal.App.4th 436, 446-447, fn. 7; Taylor v. Fields (1986) 178 Cal.App.3d 653, 663.) To apply the doctrine, the trial court must exercise its discretion in considering the material facts affecting the equities as between the parties and find it inequitable and prejudicial to the defendant to award the plaintiff the requested relief. (Estate of Blanco (1978) 86 Cal.App.3d 826, 833-834; Wiley v. Wiley (1943) 59 Cal.App.2d 840-842; Bradley Co. v. Bradley (1913) 165 Cal. 237, 242.) Where both parties are guilty of misfeasance relative to the transaction but the defendant is more culpable by superior position or plaintiff’s weakness, a court may be lenient to the plaintiff and grant relief despite his or her participation. (Warren v. Merrill (2006) 143 Cal.App.4th 96, 115, citing Watson v. Poore (1941) 18 Cal.2d 302, 312-313.)
Arguing for the application of the doctrine of unclean hands here, Bunch contends that Peggy and Burton’s “unconscionable” conduct provided him a complete defense against equitable remedies. He cites Peggy’s having conveyed the property in breach of her fiduciary duty to Burton, its equitable owner, and her having made misrepresentations in escrow documents to the effect that no one had an interest in the property but herself. And he cites Burton’s financial and emotional abuse of Peggy, his having excluded the property from bankruptcy schedules to hide it from his creditors, his failure to pay his lawyers in the course of this litigation, and his failure to make an offer to purchase the property from Bunch. But Peggy’s asserted misconduct did not prejudice Bunch in the transaction-he was not affected by any derogation by her of Burton’s rights, which Bunch induced her to commit in any event, and there is no evidence that Bunch even knew about Peggy’s representations in escrow documents, let alone relied on them. Burton’s cited conduct is even more remote or completely unrelated to the transaction at hand. And none of the cited conduct rises to the moral culpability of the intentional fraud that the trial court found Bunch had committed. Accordingly, there is no factual basis on this record to invoke the defense of unclean hands as a bar to equitable remedies.
Finally, Bunch contends for the first time on appeal that the trial court abused its discretion by imposing a constructive trust without proof that Peggy and Burton could “ ‘do equity, ’ ” i.e., that they had the ability to restore Bunch’s $460,000 so his rights arising from the transaction could be protected.
“ ‘One who seeks equity must do equity’ is a fundamental maxim of equity jurisprudence. [Citation.] It is often stated that a court will not grant equitable relief unless the plaintiff acknowledges or provides for the defendant’s equitable rights arising from the same subject matter. [Citation.] A more accurate description of the maxim in operation is that a court can compel a plaintiff seeking equitable relief to accommodate the equities favoring the defendant by conditioning the plaintiff’s relief upon the enforcement of those equities. [Citations.] The plaintiff need not have acted inequitably for the maxim to be given effect, as long as equitable rights favoring the defendant arise from the same matter in controversy. [Citation.]” (Dickson, Carlson & Campillo v. Pole, supra, 83 Cal.App.4th at pp. 445-446.) The maxim thus does not assume inequitable conduct by the plaintiff, as with unclean hands, but instead grants the plaintiff the remedy to which he or she is entitled, on the condition that the defendant’s equitable rights are protected by means of the remedy to which he is entitled. (Ibid, fn. 7.)
Consistently with the statement of decision, the judgment in this case provides that Bunch must convey the property to Peggy as trustee of the Bell Family Trust but that he is entitled to “reimbursement in the sum of $460,000.00, i.e., the amount he paid for said real property, less the fair rental value of the property for the time [Bunch] had possession thereof, calculated at the rate of $116 per day from September 4, 2002 [through entry of judgment on January 16, 2008].” Although Bunch requested it, the court declined to award him interest on those funds or reimbursement for repairs and improvements he testified he had made, rejecting his proffered evidence in this regard. Thus, the court did require Peggy and Burton to “do equity” to the extent the court thought it was warranted. As we read the judgment, Bunch’s transfer of the property back to Peggy is subject to Bunch’s reimbursement as ordered and in this respect, Bunch may enforce the judgment against the property as a source for payment of the amount adjudged to be due him. Accordingly, the trial court did not abuse its discretion because it impliedly did require Peggy and Burton to “do equity” in exchange for their being granted equitable relief.
We observe that even though the trial court declined to award Bunch pre-judgment interest as a return on his money, he is entitled to postjudgment interest on the amount to be reimbursed to him as determined by the judgment, assuming he has not yet been paid.
IV. The Court Did Not Err by Determining That Peggy Was a Victim of Financial Elder Abuse Under Welfare and Institutions Code Section 15610.30
The Elder Abuse and Dependent Adult Protection Act is codified at Welfare and Institutions Code sections 15600-15675 (the Act). Its purpose “ ‘ “is essentially to protect a particularly vulnerable portion of the population from gross mistreatment in the form of abuse and custodial neglect.” [Citation.]’ (Benun v. Superior Court (2004) 123 Cal.App.4th 113, 123, quoting Delaney v. Baker (1999) 20 Cal.4th 23, 33.) [The Act] addresses ‘[p]hysical’ or ‘financial abuse, ’ ‘neglect, ... abandonment, isolation, abduction, or other treatment with resulting physical harm or pain or mental suffering, ’ ‘[t]he deprivation by a care custodian of goods or services that are necessary to avoid physical harm or mental suffering’ (Welf. & Inst. Code, § 15610.07), or the ‘negligent failure of any person having the care or custody of an elder or dependent adult to exercise that degree of care that a reasonable person in a like position would exercise.’ (Welf. & Inst. Code, § 15610.57, subd. (a)(1)).” (Cotton v. StarCare Medical Group, Inc. (2010) 183 Cal.App.4th 437, 451.)
The Act creates an independent cause of action, the elements of which are statutory. (Intrieri v. Superior Court (2004) 117 Cal.App.4th 72, 82.) Reflecting the Legislature’s intent to encourage private, civil enforcement of laws against elder abuse and neglect, the Act provides heightened civil remedies, including attorney fees and costs. (Ibid.) A person is considered an “elder” under the Act at 65 years of age or older, which means that Peggy was protected by the Act at the time Bunch defrauded her by virtue of her age. (Welf. & Inst. Code, § 15610.27.)
Financial elder abuse is defined at Welfare and Institutions Code section 15610.30, subdivision (a)(1), the former and applicable version of which provided in pertinent part that it occurs when a person or entity “[t]akes, secretes, appropriates, or retains real or personal property of an elder or dependent adult to a wrongful use or with intent to defraud, or both.” Thus, financial abuse of an elder, as defined, is not limited to the conduct of caretakers or those who stand in a position of trust to the elder and it is committed, as relevant here, by the taking, appropriating, or retention of an elder’s property with intent to defraud.
Based on Peggy and Burton’s theory of the case, which was that the property actually belonged to Burton and that Peggy held only bare legal title, Bunch challenges that the property was Peggy’s such that it constituted “property of an elder” within the meaning of Welfare and Institutions Code section 15610.30, subdivision (a). The evidence was undisputed that Peggy, as trustee of the Bell Family Trust, held legal title to the property but that Burton retained the equitable interest in it. As Burton has sometimes argued, Peggy held the property in a resulting trust for him, an intention-enforcing trust that arises by operation of law when one person acquires title to property belonging to another, who holds the beneficial interest. (Estate of Yool (2007) 151 Cal.App.4th 867, 874.) The question before us is therefore whether property held by an elder for the benefit of another is still property of the elder within the meaning of the statute, an issue of first impression but one that is ultimately resolved by resort to the statutory language itself and the remedial nature of the Act. An appellate court engages in independent review in the construction and application of a statute. (People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 432; In re Clarissa H. (2003) 105 Cal.App.4th 120, 125.)
As we have noted, Welfare and Institutions Code section 15610.30, subdivision (a) broadly uses the phrase “property of an elder” without delineation or specification of the elder’s particular interest in the property as equitable and beneficial or merely legal. As Peggy points out, the Act is remedial and therefore must be liberally construed for the protection of persons within its purview, affording relief unless expressly prohibited. (Tammen v. County of San Diego (1967) 66 Cal.2d 468, 480.) A legal interest in real estate is property and Bunch does not generally contend otherwise, acknowledging that a legal interest or estate in property can provide the holder with some beneficial interest in it. He does contend, however, that because Peggy held only “ ‘naked legal title’ ” to the property in a resulting trust for Burton, she had no property interest whatsoever, citing Estate of Raphael (1953) 115 Cal.App.2d 525, 532. But Bunch paints with too broad a brush. What the court said in Estate of Raphael was that where a husband held “only the naked legal title... as trustee for [another] there was no substantial property interest in [the husband] which could become the community property” of himself and his wife. (Ibid, italics added.) Thus even there, although the court qualified the property interest held by the trustor of a resulting trust as insubstantial, it still did not characterize the interest as nonexistent. To hold bare legal title to real estate as Peggy did here is to own a legal interest in property. (Soulard v. United States (1830) 29 U.S. 511, 512 [“The term property, as applied to lands, comprehends every species of title, inchoate or complete. It is supposed to embrace those rights which lie in contracts; those which are executory; as well as those which are executed”]; Watson v. Sutro (1890) 86 Cal.500, 527.) And such an interest is encompassed within the protections of the Act against financial elder abuse, as defined.
Bunch cites no compelling reason to interpret the statute otherwise so as to limit what constitutes an elder’s “property.” And the remedial nature of the Act would not be served by limiting the statute’s protection to only certain forms of property or certain kinds of interests in property. Many people hold legal interests in property or own legal title to property that is held in trust for the benefit of others. In fact, this is a common form of ownership for estate-planning purposes.
In sum, the phrase “property of an elder” as used in Welfare and Institutions Code section 15610.30, subdivision (a)(1) is clear and is so broad as to encompass a legal interest in property held by an elder and even bare legal title. The Legislature did not limit the phrase to mean only property in which the elder has a beneficial or equitable interest. And construing the statute as we do comports with the remedial and protective purpose of the Act, which with respect to financial abuse is to protect the elder’s assets from being drained. Accordingly, having concluded that Bunch fraudulently induced Peggy to transfer the property to him, the trial court did not err by determining that such conduct also constituted statutory financial abuse of an elder under Welfare and Institutions Code section 15610.30.
We note that protection of assets can be indirect as well direct. Even if an elder’s interest in property as the holder of bare legal title could be characterized as insubstantial, depriving the elder of it through fraud can expose the elder to potential liability to trust beneficiaries. Such liability, or even defending against it, can drain an elder’s assets to the same effect as stealing.
Bunch also contends that this finding was error because there was no proof of his bad faith within the meaning of subdivision (b)(1) of Welfare and Institutions Code section 15610.30. But the statute only required proof of bad faith if the conduct at issue was the taking, secreting, appropriating, or retention of property to a wrongful use. If the same conduct was with intent to defraud, no proof of bad faith was required. (Stats. 2000, ch. 442, § 5)
DISPOSITION
The judgment is affirmed.
WE CONCUR: Mihara, Acting P.J. McAdams, J.
We also reject Bunch’s argument, raised for the first time on appeal, that the defrauded Peggy failed to mitigate her damages, an affirmative defense that must be interposed at trial by pleading and proof. (Hunter v. Croysdill (1959) 169 Cal.App.2d 307, 318.) She attempted to get Bunch to confirm his oral promise in writing and she knew that a few months after the sale, Bunch had demanded from Burton some $200,000 more than his own purchase price. Peggy was not required to purchase the property back from Bunch herself, or offer to do so, in order to prevail on her fraud claim. “The doctrine of mitigation of damages holds that ‘[a] plaintiff who suffers damage as a result of either a breach of contract or a tort has a duty to take reasonable steps to mitigate those damages and will not be able to recover for any losses which could have been thus avoided.’ ” (Valle de Oro Bank v. Gamboa (1994) 26 Cal.App.4th 1686, 1691.) The “duty to mitigate damages does not require an injured party to do what is unreasonable or impracticable. [Citation.] ‘The rule of mitigation of damages has no application where its effect would be to require the innocent party to sacrifice and surrender important and valuable rights.’ ” (Ibid., quoting Seaboard Music Co. v. Germano (1972) 24 Cal.App.3d 618, 623.) And the doctrine “does not require the injured party to take measures which are unreasonable or impractical or which would involve expenditures disproportionate to the loss sought to be avoided or which may be beyond his financial means. [Citations.]... The fact that reasonable measures other than the one taken would have avoided damage is not, in and of itself, proof of the fact that the one taken, though unsuccessful, was unreasonable. [Citation.]... The standard by which the reasonableness of the injured party’s efforts is to be measured is not as high as the standard required in other areas of the law. [Citations.] It is sufficient if he acts reasonably and with due diligence, in good faith. [Citations.]” (Green v. Smith (1968) 261 Cal.App.2d 392, 396-397.) Judging by this standard, Peggy’s conduct was reasonable and her fraud claim would not be barred by any failure to mitigate damages.