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Brown v. Winn

California Court of Appeals, Fourth District, First Division
Jul 22, 2008
No. D050491 (Cal. Ct. App. Jul. 22, 2008)

Opinion


MARK BROWN, as Trustee, etc., Plaintiff and Respondent. v. MICHAEL WINN, Defendant and Appellant, D050491 California Court of Appeal, Fourth District, First Division July 22, 2008

NOT TO BE PUBLISHED

APPEAL from a judgment and order of the Superior Court of San Diego County No. GIC868877, Patricia A. Y. Cowett, Judge.

NARES, J.

BACKGROUND AND CONTENTIONS

In this unlawful detainer action, defendant Michael Winn appeals both the judgment entered against him and the court's order denying his motion for new trial. This case arose after Winn rented two houses located at 940 and 950 Stratford Court (together the Del Mar property) in Del Mar, California. The Del Mar property was the principal asset of the Dorothy McKinnon Brown Trust (the trust). In 1994 Winn and the trustee of the trust, Mark Brown (Mark), entered into a written lease agreement, the two-year term of which commenced on April 15, 1994, under which Winn would pay the specified monthly rent to Mark's brother, Geoffrey Brown (Geoff), who was the beneficiary of the income of the trust. Winn lived in the smaller house and sublet the larger house. Upon the expiration of the two-year lease, Winn rented the Del Mar property on a month-to-month basis without a written lease pursuant to the "Holding Over" clause in paragraph 17 of the written lease.

We use first names for clarity and convenience only and intend no disrespect.

Winn, however, could not pay the rent. In late April 2004 Winn sent to Geoff a draft document titled "Rental Agreement - 940/950 Stratford Court, Del Mar, CA," indicating that he owed Geoff "rent, deferred rent and unpaid rent (from the previous year)" plus interest in the total amount of $29,500 and that it was their "mutual understanding" that funds due to Winn from his share of proceeds from the sale of a property in escrow were "collateral for the payment of the amounts that are indicated as due in October ($17[,]203 + $12[,]297 = $29[,]500)." (Italics added.)

In late October 2005 Winn faxed a letter to Geoff acknowledging he owed $29,500 for "deferred payment of rent per our previous agreement," which was "secured" by his interest in real property in Oceanside (the Oceanside property) that was then in escrow. In that letter, Winn stated that "the amount to be paid to you from my net proceeds from close of escrow on the sale of [the Oceanside property] on March 31, 2006, will be a total of $37,338." In April 2006 Mark met with Winn in San Diego because the March 31, 2006 deadline for bringing the rent payments current had passed and Winn could not pay the balance he owed Geoff.

In late April 2006 Geoff served Winn with a 60-day notice of termination of the tenancy, and thereafter the trust brought this unlawful detainer action against him. Winn vacated the Del Mar property premises on October 5, 2006.

The court conducted a three-day bench trial in this matter on December 4-6, 2006. On the first day of trial, Winn brought a motion to dismiss the unlawful detainer action, contending there was no plaintiff because the trust had no standing to sue him, and thus the complaint failed to allege facts sufficient to constitute a cause of action. The court granted leave to amend the complaint to name Mark as the plaintiff in his capacity of trustee and denied Winn's motion to dismiss. Mark, Geoff, Winn (under Evid. Code, § 776), and Mike Cady, an expert on monthly rental values in Del Mar, testified on behalf of Mark. Following closing arguments, the court took the matter under submission.

On December 20, 2006, the court entered judgment in favor of Mark, awarding him $65,991.13 in damages, plus costs. Thereafter, on January 8, 2007, Winn submitted to the court a request for findings of fact and conclusions of law and filed a motion for new trial on various grounds.

At the February 23, 2007 hearing on his request for findings and new trial motion, Winn asserted this action must be dismissed because there was no plaintiff, there was no trust, and he owed no money because he and Geoff had entered into a "deferred rental agreement" under which Winn owed nothing until he received from escrow his share of the proceeds of the sale of the Oceanside property, but he had not yet received those proceeds. The court denied Winn's new trial motion, finding there was a proper plaintiff and Winn was liable for the unpaid rent even though he did not receive the money he expected from his interest in the Oceanside property. The court also ruled that theories of quasi-contract, restitution and unjust enrichment were sufficiently pleaded in the complaint, but found it did not need to rely on those theories.

Contentions

On appeal, Winn contends (1) there was no legal plaintiff in this lawsuit, and thus there could be no damages because Winn dealt exclusively with Geoff, and Mark completely abandoned his duties as trustee and gave total control over the trust res to Geoff, who thus became the de facto trustee and landlord, such that Mark's legal interest merged with Geoff's equitable interest causing the trust to be extinguished; (2) the oral lease agreement alleged in the complaint was void because Geoff, who was not the trustee, had no authority to enter into a lease agreement of any kind with Winn; (3) the payment to Winn of escrow funds from the sale of the Oceanside property was a condition precedent to his obligation under the deferred rental agreement to pay Geoff the $37,338 that Winn acknowledges he owes, and thus Winn has not breached that agreement because he never received those escrow funds, and thus the deferred rental payment is not yet due; (4) after permitting Mark's counsel to argue an unpleaded theory of unjust enrichment during final argument, the court gave no explanation for its decision, which was unsupported; (5) at trial, the court arbitrarily rushed Winn through his case and unfairly cut short his testimony; and (6) the court should have granted Winn's new trial motion because the court's "[p]ermitting [Mark] to amend [the] Complaint to add a cause of action for unjust enrichment at final argument was impermissible legal surprise," the court unfairly cut short Winn's testimony to meet an 11:45 a.m. deadline, the court failed to determine the trust and proper plaintiff issues, and there was insufficient evidence to support the court's findings. We reject these contentions and affirm the judgment and order.

STANDARD OF REVIEW

"A judgment or order of a lower court is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness." (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.) "The burden of demonstrating error rests on the appellant." (Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 632.)

The trial court is accorded broad discretion in making its ruling on a motion for new trial. (City of Los Angeles v. Decker (1977) 18 Cal.3d 860, 871.) On appeal, there is a strong presumption that the trial court properly exercised its discretion. (People v. Davis (1995) 10 Cal.4th 463, 524.) "The determination of a motion for a new trial rests so completely within the court's discretion that its action will not be disturbed unless a manifest and unmistakable abuse of discretion clearly appears." (Jiminez v. Sears, Roebuck & Co. (1971) 4 Cal.3d 379, 387.)

DISCUSSION

I. LEGAL PLAINTIFF

Winn first contends there was no legal plaintiff in this lawsuit, and thus there could be no damages because he dealt exclusively with Geoff, and Mark completely abandoned his duties as trustee and gave total control over the trust res to Geoff, who thus became the de facto trustee and landlord, such that Mark's legal interest merged with Geoff's equitable interest causing the trust to be extinguished. We reject this contention.

The unlawful detainer complaint in this matter, which named the trust as the sole plaintiff, alleged that Winn agreed to rent the property as a month-to-month tenancy under an oral agreement he made with Geoff and Mark "on behalf of the Trust and its trustees." On December 4, 2006, the first day of trial, Winn brought a motion to dismiss this action, contending there was no plaintiff because the trust had no standing to sue him. The court granted leave to amend the complaint to name Mark as the plaintiff in his capacity as trustee and then denied Winn's motion to dismiss.

Where, as occurred here, "a cause of action is prosecuted on behalf of an express trust, the trustee is the real party in interest because he is the one in whom title to the cause is vested." (Powers v. Ashton (1975) 45 Cal.App.3d 783, 787.) "[A]bsent special circumstances, an action prosecuted for the benefit of a trust estate by a person other than the trustee is not brought in the name of a real party in interest and is demurrable." (Id. at pp. 787-788.) However, a trial court abuses its discretion if it denies leave to amend to substitute the trustee of a trust as the plaintiff. (Id. at pp. 785, 790.) We conclude the court did not abuse its discretion in granting leave to amend the complaint to name Mark, as trustee, as the plaintiff in this matter.

The premise of Winn's contention─his assertion that Mark completely abandoned his duties as trustee─is not supported by the record and is thus unavailing. Mark and Geoff both testified that Mark was the trustee. Geoff testified that Mark "had the ultimate say in matters concerning the Del Mar [property]." Mark testified he had the ultimate decision-making power with respect to the Del Mar property. Exhibit 4, the written two-year lease agreement that the court received in evidence, shows on its face it was executed by Winn as "Lessee" and Mark as "Lessor." Winn himself testified at trial that he entered into the written lease with Mark.

The record also shows that upon the expiration of the two-year lease, Winn rented the Del Mar property on a month-to month basis without a written lease pursuant to the "Holding Over" clause in paragraph 17 of the lease, which stated in part: "If [Winn] with [Mark's] consent remains in possession of the Premises after expiration . . . of this Lease, such possession by [Winn] shall be deemed to be a tenancy from month-to-month at a rental in the amount of the last monthly rental plus all other charges payable." Mark testified that when the two-year lease agreement expired, he and Winn had no further written agreement and "we just basically went month-to-month." Mark also stated that when the March 31, 2006 deadline for Winn to bring the rent payments current passed, he (Mark) is the one who met with Winn. Winn's claim that he dealt exclusively with Geoff is not supported by the record.

Winn also complains the court rendered "no meaningful decision" on his claim there was no plaintiff in this case. The record shows, however, that at the February 23, 2007 hearing on Winn's new trial motion, the court stated, "I do find that there was a proper plaintiff."

II. VALIDITY OF THE ORAL LEASE AGREEMENT

Winn next contends the oral lease agreement alleged in the complaint was void because Geoff, who was not the trustee, had no authority to enter into a lease agreement of any kind with Winn. We reject this contention. As already discussed, the record shows that Winn entered into the two-year written lease agreement with Mark, not with Geoff; there was no other written lease agreement; pursuant to the "Holding Over" clause in paragraph 17 of the lease, Winn's tenancy was month-to-month following the expiration of the two-year term; and Mark had the ultimate decision-making power with respect to the leasing of the Del Mar property.

III. CONDITION PRECEDENT

Winn also contends his receipt of escrow funds from the sale of the Oceanside property was a condition precedent to his obligation under the deferred rental agreement to pay Geoff the $37,338 that Winn acknowledges he owes, he has not breached that agreement because he never received those escrow funds, and thus the deferred rental payment is not yet due. We reject these contentions.

Winn relies on trial exhibits Nos. 9 and 10, which he characterizes as "hard copy e-mails" he sent to Geoff "memorializing their agreement they had written together." Specifically, he relies on the third sentence in exhibit No. 10, the e-mail dated October 24, 2005, which states: "Accordingly, the amount to be paid to you from my net proceeds from close of escrow on the sale of [the Oceanside property] on March 31, 2006, will be a total of $37,338." That e-mail, however, also states in part, "This letter confirms a balance I owe you of $29,500 for deferred payment of rent per our previous agreement memorialized in a letter I sent you on April 30, 2004, is secured by my interest in a property in Oceanside . . . now in escrow with Michael Crews Development." (Italics added.)

Winn also relies on the last two paragraphs in exhibit No. 9, a previous undated e-mail titled "Draft Document," which state in part: "It is also our mutual understanding that funds due to me from my share of proceeds from the sale of a property owned by MJB Development Group, of which I am a General Partner, which property is now in escrow with Michael Crews Development, and which is to close on or before September 27, 2005, are collateral for the payment of the amounts that are indicated as due in October ($17[,]203 + $12[,]297 = $29[,]500). [¶] It is also our mutual understanding that I will request of my partner in MJB Development Group, that we instruct escrow to pay $29[,]000 from net proceeds due to me from the sale, to be paid directly to you." (Italics added.)

Winn's reliance on trial exhibits Nos. 9 and 10 is unavailing. The courts in California have long held that conditions precedent are not favored in the law and are to be strictly construed against parties who assert them. (See Front Street, Mission and Ocean R. Co. v. Butler (1875) 50 Cal. 574, 575; Antonelle v. Kennedy & Shaw Lumber Co. (1903) 140 Cal. 309, 312; Schwab v. Bridge (1915) 27 Cal.App. 204, 207.)

Here, neither exhibit No. 10 nor exhibit No. 9 contains language clearly showing an intent that Winn's receipt of escrow funds from the sale of the Oceanside property was a condition precedent to his obligation to pay the $37,338 he acknowledged he owed. On the contrary, exhibit No. 10 contains language showing that the sum Winn owed for "deferred payment of rent" was "secured" by his interest in the Oceanside property, and exhibit No. 9 contains language showing that it was the "mutual understanding" of the parties that the funds from Winn's share of the proceeds from the sale of Oceanside property were "collateral" for the payment of what he owed. Geoff's trial testimony supported this interpretation of exhibits Nos. 9 and 10. Geoff answered, "No," when asked, "Did you ever agree to not be paid the unpaid past due rent if [Winn] did not receive money from the sale of the property?" When asked whether he would have expected the trust to be paid the money owed if Winn had received money from another source, such as the lottery or a job, Geoff stated, "Of course." In sum, the record does not support Winn's assertions that his obligation to pay the unpaid rent he acknowledges he owes was subject to the claimed condition precedent and that the "deferred rental money is not yet due."

IV. UNJUST ENRICHMENT RULING AND SUFFICIENCY OF THE EVIDENCE

Winn claims that, after the court permitted Mark's counsel to argue an unpleaded theory of unjust enrichment during final argument, the court gave no explanation for its decision, which he maintains was unsupported. These claims are unavailing.

It is true that during closing arguments, the court permitted Mark's trial counsel to argue unjust enrichment as a theory of recovery. Assuming without deciding that the court erred in permitting that argument, Winn has not and cannot show he was prejudiced by any such error. At the February 23, 2007 hearing on Winn's new trial motion, Winn's counsel asked the court, "Is the court of the opinion that a person does not have to plead unjust enrichment in any form whatsoever?" Indicating that the theories of quasi-contract, restitution and unjust enrichment had been sufficiently pleaded in this case, the court then explained, "I don't think we need to rely on those theories. I think we are talking about a lease agreement that was breached and rent that was owing pursuant thereto." In this manner the court clarified that its award of damages was based on a breach of contract theory, not on an equitable theory such as unjust enrichment.

Winn acknowledges he failed to request a statement of decision within the statutory time limit. The California Supreme Court has explained that, when "the parties [do] not request a statement of decision or findings of fact . . ., all intendments favor the ruling below [citation], and we must assume that the trial court made whatever findings are necessary to sustain the judgment." (Michael U. v. Jamie B. (1985) 39 Cal.3d 787, 792-793, superseded by statute on another ground as noted in In re Zacharia D. (1993) 6 Cal.4th 435, 448.) Because of this presumption, a party challenging such judgment has the burden of providing an adequate record to overcome the presumption and to show reversible error. (Ballard v. Uribe (1986) 41 Cal.3d 564, 574-575.) Moreover, to the extent that a challenge is made upon the sufficiency of the evidence, it is necessary "to set forth a fair and adequate statement of the evidence which is claimed to be insufficient." (Hickson v. Thielman (1956) 147 Cal.App.2d 11, 14.) A fair statement of all the evidence includes the evidence supporting the judgment. (Valentine v. Read (1996) 50 Cal.App.4th 787, 796.) When an appellant has not provided a fair statement, we may view such failure as "'tantamount to a concession that the evidence supports the findings'" or deem the issue waived. (Brown v. World Church (1969) 272 Cal.App.2d 684, 691; Valentine, supra, 50 Cal.App.4th at p. 796.)

Code of Civil Procedure section 632 provides in part: "In superior courts, upon the trial of a question of fact by the court, written findings of fact and conclusions of law shall not be required. The court shall issue a statement of decision explaining the factual and legal basis for its decision as to each of the principal controverted issues at trial upon the request of any party appearing at the trial. The request must be made within 10 days after the court announces a tentative decision unless the trial is concluded within one calendar day or in less than eight hours over more than one day in which event the request must be made prior to the submission of the matter for decision." (Italics added.)

Here, like the appellants in Valentine, Winn mounts a perfunctory challenge to the substantiality of the evidence supporting the judgment. He asserts the court's decision is unsupported and complains that "[t]he ruling of the court gave three monetary figures and no explanation." (See Valentine, supra, 50 Cal.App.4th at p. 796.) However, as already noted, he acknowledges he failed to request a statement of decision within the statutory time limit. Accordingly, we must assume that the trial court made whatever findings are necessary to sustain the judgment. (Michael U. v. Jamie B., supra, 39 Cal.3d at pp. 792-793.) Fatal to Winn's claim that the judgment is not supported by substantial evidence is his failure to set forth a fair and adequate statement of the evidence, including the evidence that supports the judgment. (Valentine, supra, 50 Cal.App.4th at p. 796; Brown, supra, 272 Cal.App.2d at p. 691.) As already discussed, Mark, Geoff, Winn, and Cady, an expert on rental values in Del Mar, all testified at trial on behalf of Mark, and numerous exhibits were received in evidence. In his two-page statement of the facts, Winn fails to fairly and adequately summarize the evidence that supports the judgment. We deem this failure to be tantamount to a concession that the evidence supports the presumed findings of the court. (Ibid.)

V. TIME ALLOWED FOR TRIAL

Winn also claims that at trial, the court arbitrarily rushed him through his case and unfairly cut short his testimony. This claim is unavailing. At the end of the second day of trial on December 5, 2006, when the court asked Winn's counsel, Noel Spaid, how much time she would need to question Winn on the last day of trial, December 6, she stated she would need "5 or 10 minutes at most." On December 6, following further questioning of Winn by Mark's counsel, Spaid questioned Winn. Following her last question and Winn's response, Spaid told the court, "No further questions." When Winn stepped down, the court asked Spaid, "Any other defense witnesses?" Spaid replied, "No, Your Honor." We conclude the record does not support Winn's claim that the court arbitrarily rushed him through his case and unfairly cut short his testimony.

VI. NEW TRIAL MOTION

Winn maintains the court should have granted his new trial motion because (1) the court's "[p]ermitting [Mark] to amend [the] Complaint to add a cause of action for unjust enrichment at final argument was impermissible legal surprise," (2) the court unfairly cut short Winn's testimony to meet an 11:45 a.m. deadline, (3) the court failed to determine the trust and proper plaintiff issues, and (4) there was insufficient evidence to support the court's findings. We reject this contention. For reasons already discussed, we have concluded that (1) Winn has not and cannot show prejudice from any error in allowing Mark's counsel to argue the theory of unjust enrichment; (2) the record does not support Winn's claims that the court arbitrarily rushed him through his case and unfairly cut short his testimony, that there was no trust, and that there was no legal plaintiff in this case; and (3) Winn's failure to fairly and adequately summarize the evidence that supports the judgment is deemed tantamount to a concession that the evidence supports the presumed findings of the court.

DISPOSITION

The judgment and order denying Winn's new trial motion are affirmed. Plaintiff shall recover his costs on appeal.

WE CONCUR: BENKE, Acting P. J., McINTYRE, J.


Summaries of

Brown v. Winn

California Court of Appeals, Fourth District, First Division
Jul 22, 2008
No. D050491 (Cal. Ct. App. Jul. 22, 2008)
Case details for

Brown v. Winn

Case Details

Full title:MARK BROWN, as Trustee, etc., Plaintiff and Respondent. v. MICHAEL WINN…

Court:California Court of Appeals, Fourth District, First Division

Date published: Jul 22, 2008

Citations

No. D050491 (Cal. Ct. App. Jul. 22, 2008)