Opinion
B325278
09-05-2024
JEREMY DECUIR, et al., Plaintiffs and Appellants, v. WEST COAST ESCROW, Defendant and Appellant; RONALD G. JACKSON, et al., Defendants and Respondents,
Garrett &Tully, Ryan C. Squire and Scott B. Mahler for Defendant and Appellant West Coast Escrow. Law Offices of Lloyd Kirschbaum and Lloyd Kirschbaum for Plaintiffs and Appellants Jeremy Decuir and Jessica Clark. Gaglione, Dolan, &Kaplan, Robert T. Dolan and Martina A. Silas for Defendants and Respondents Ronald G. Jackson and Pacific Union International, Inc.
NOT TO BE PUBLISHED
APPEAL from orders of the Superior Court of Los Angeles County No. 20STCV16242, Timothy Patrick Dillon, Judge. Affirmed.
Garrett &Tully, Ryan C. Squire and Scott B. Mahler for Defendant and Appellant West Coast Escrow.
Law Offices of Lloyd Kirschbaum and Lloyd Kirschbaum for Plaintiffs and Appellants Jeremy Decuir and Jessica Clark.
Gaglione, Dolan, &Kaplan, Robert T. Dolan and Martina A. Silas for Defendants and Respondents Ronald G. Jackson and Pacific Union International, Inc.
CURREY, P. J.
INTRODUCTION
This is the second appeal arising from a lawsuit brought by Jeremy Decuir and Jessica Clark against Ronald G. Jackson, Pacific Union International, Inc., dba Compass (Compass), and West Coast Escrow (WCE), relating to Decuir and Clark's home purchase. In the first appeal, this court affirmed the summary judgment entered in favor of WCE. (Decuir v. West Coast Escrow (May 2, 2024, B323134) [nonpub. opn.] (Decuir).)
We will refer to Decuir and Clark collectively as the "Buyers," and will refer to Jackson and Compass collectively as the "Compass Defendants."
We take judicial notice of our prior opinion. (Evid. Code, § 452, subd. (d).)
WCE now challenges the trial court's order denying WCE's post-judgment motion for costs under Code of Civil Proceduresection 2033.420. In addition, the Buyers seek reversal of the order determining their settlement with the Compass Defendants was in good faith under sections 877 and 877.6. For the reasons discussed below, we affirm both orders.
All undesignated statutory references are to the Code of Civil Procedure.
BACKGROUND
"On March 5, 2019, the Buyers signed the 'Probate Purchase Agreement and Joint Escrow Instructions' (Purchase Sale Agreement) and agreed to purchase real property in Inglewood from The Estate of Chrispin H. Edwards (the Seller). They also signed 'Contingency Removal No. 1,' which removed all contingencies upon their offer to purchase the property. The next day, WCE opened escrow for the transaction. Based on the 'Confirmation of Real Estate Agency Relationships' signed by the Buyers on March 20, 2019, Ronald G. Jackson and Erik Miles represented the Buyers and the Seller as dual agents in the transaction. Jackson and Miles both worked for the same real estate brokerage firm, Compass.
"Escrow closed on April 5, 2019. Subsequently, on February 18, 2020, while attempting to obtain a permit to repair the property's roof, Decuir received a copy of the 'Report of Building Records and Code Violations' signed by a building inspector on March 14, 2019 (Pre-Sale Report). The Pre-Sale Report contains the following comments by the inspector: 'Exterior inspection only. One story single family dwelling with detached 2-car garage. 4'x8' room addition at the northeast rear of dwelling, built without permit. Must submit plans and obtain permits and inspection to legalize.' The Buyers assert they did not learn of the Pre-Sale Report or its contents until Decuir received it in February 2020." (Decuir, supra, B323134 [nonpub. opn.].)
In their operative second amended complaint (SAC), the Buyers assert the following causes of action: (1) fraud and deceit (against all defendants); (2) negligent misrepresentation (against all defendants); and (3) breach of contract (against the Compass Defendants). In short, the Buyers allege they are entitled to damages because the defendants "falsely and fraudulently misrepresented to [them]" that "the [p]roperty was not in violation of any municipal codes [of] the City of Inglewood regarding any portions of the [p]roperty having been built without a proper permit ...."
They further allege they "justifiably and reasonably relied upon the false information represented by [the defendants] in deciding to proceed with the purchase of the [p]roperty," and that "[h]ad [they] known the true facts, [they] would not have continued with the purchase of the [p]roperty."
A few months after answering the Buyers' complaint, WCE propounded separate but identical sets of Requests for Admissions (RFA) upon Decuir and Clark. Relevant to this appeal, RFA No. 11 asked the Buyers to "[a]dmit that no facts exist to support [their] contention in paragraph 31 of [the SAC] which states: '[h]ad [the Buyers] known the true facts, [they] would not have continued with the purchase of the [p]roperty.'" Relatedly, RFA No. 12 asked the Buyers to "[a]dmit that no facts exist to support [their] contention in paragraph 31 of [the SAC] which states: [they] 'justifiably and reasonably relied upon the false information represented by . . . WCE . . . in deciding to proceed with the purchase of the [p]roperty[.]'" The Buyers denied both RFAs.
Subsequently, "WCE moved for summary judgment [on the claims asserted against it]. In its amended motion, WCE argued that [those claims] fail because [the Buyers] cannot prove they actually or justifiably relied on its alleged misrepresentations regarding the property's unpermitted addition in deciding to purchase it. Specifically, it asserted: (1) before it opened escrow for the transaction, the Buyers waived all contingencies on their purchase offer; (2) the Buyers had imputed knowledge of the PreSale Report and its contents, as Jackson received a copy of it while escrow was still open; and (3) the escrow instructions did not require WCE to disclose any reports relating to the property's compliance with municipal permitting laws." (Decuir, supra, B323134 [nonpub. opn.].)
While WCE's summary judgment motion was pending, the Buyers and the Compass Defendants participated in mediation. As a result, they entered into a settlement agreement, in which the Buyers agreed to dismiss their claims against the Compass Defendants, with prejudice, in exchange for payment of $8,000.
Several months later, the Compass Defendants moved for an order determining their settlement with the Buyers was in good faith, as well as "an order barring any pending or future claims for contribution or equitable indemnity based on the allegations in [the underlying] litigation," under sections 877 and 877.6.
The trial court heard arguments regarding both motions on the same date and took the matters under submission. It then issued separate written orders granting those motions. Later, the court entered judgment for WCE on the claims asserted against it, and dismissed the SAC's remaining claims per a stipulation between the Buyers and the Compass Defendants.
Thereafter, WCE filed a section 2033.420 motion seeking to recover approximately $36,000, the amount of costs, including attorneys' fees, it allegedly incurred in proving true the subjects of several RFAs, including RFA Nos. 11 and 12, which the Buyers had denied. Following a hearing, the trial court denied the motion, finding: (1) the Buyers met their burden under section 2033.420, subdivision (b) by showing they had reasonable grounds for denying RFA Nos. 11 and 12; and (2) WCE produced insufficient evidence showing it was entitled to the amount sought and, therefore, failed to satisfy its burden under subdivision (a).
DISCUSSION
I. Order Denying WCE's Motion for Costs A. Governing Principles and Standard of Review
"A party to a civil action may propound a written request that another party 'admit . . . the truth of specified matters of fact, opinion relating to fact, or application of law to fact."' (City of Glendale v. Marcus Cable Associates, LLC (2015) 235 Cal.App.4th 344, 351-352.) "Section 2033.420, subdivision (a) provides for an award of costs of proof where a party responding to such a request fails to admit the truth of a matter that is later proved: 'If a party fails to admit . . . the truth of any matter when requested to do so under this chapter, and if the party requesting that admission thereafter proves . . . the truth of that matter, the party requesting the admission may move the court for an order requiring the party to whom the request was directed to pay the reasonable expenses incurred in making that proof, including reasonable attorneys' fees.' Such an award must be made unless, among other things, '[t]he party failing to make the admission had reasonable ground to believe that that party would prevail on the matter' or '[t]here was other good reason for the failure to admit.' (§ 2033.420, subd. (b)(3)-(4).)" (Orange County Water Dist. v. The Arnold Engineering Co. (2018) 31 Cal.App.5th 96, 114-115, fn. omitted (OC Water Dist.).)
"'The primary purpose of requests for admissions is to set at rest triable issues so that they will not have to be tried; they are aimed at expediting trial. [Citation.] The basis for imposing sanctions under [the statute] is directly related to that purpose. Unlike other discovery sanctions, an award of expenses pursuant to [the statute] is not a penalty. Instead, it is designed to reimburse reasonable expenses incurred by a party in proving the truth of a requested admission where the admission sought was "of substantial importance" [citations] such that the trial would have been expedited or shortened if the request had been admitted.'" (OC Water Dist., supra, 31 Cal.App.5th at p. 115.)
Costs of proof may be awarded under section 2033.420 if a party proves the truth of a requested admission on a motion for summary judgment. (See Barnett v. Penske Truck Leasing Co. (2001) 90 Cal.App.4th 494, 495, 497-499 (Barnett).)
The analysis governing a party's entitlement to its costs of proof under section 2033.420 proceeds in two steps. In the first step, the court determines whether the moving party has satisfied the requirements of section 2033.420, subdivision (a) by: (1) showing it "ha[s] proven the truth of the matters asserted in its RFAs" (Samsky v. State Farm Mutual Automobile Ins. Co. (2019) 37 Cal.App.5th 517, 523 (Samsky); Grace v. Mansourian (2015) 240 Cal.App.4th 523, 529 (Grace) ["Costs of proof are recoverable only where the moving party actually proves the matters that are the subject of the requests"]); and (2) producing evidence (e.g., a declaration by the moving party's counsel) setting forth the hourly fees and time spent to prove the specific matters denied. (See Garcia v. Hyster Co. (1994) 28 Cal.App.4th 724, 736-737; see also Grace, at p. 529 [movants "must show they spent the amounts claimed to prove the issues [the responding party] should have admitted"].) If the court determines the moving party has carried its burden under section 2033.420, subdivision (a), it proceeds to the second step and ascertains whether the opposing party has shown one of the exceptions listed in subdivision (b) applies to avoid paying the costs sought. (See Samsky, at pp. 519, 523.)
"Courts have uniformly reviewed orders granting or denying cost of proof awards for abuse of discretion." (OC Water Dist., supra, 31 Cal.App.5th at p. 118.)
B. Analysis
WCE contends the trial court abused its discretion by denying its motion for costs because the record lacks evidence demonstrating the Buyers had reasonable grounds for denying RFA Nos. 11 and 12, and WCE produced sufficient evidence showing it incurred the amount sought in proving the matters asserted in those RFAs. As discussed below, we conclude the trial court correctly denied WCE's motion, albeit for reasons different from those stated in its order. (See Doe v. McLaughlin (2022) 83 Cal.App.5th 640, 653, fn. 8 ["[W]e may affirm a decision correct on any theory regardless of the trial court's reasoning . . ."].) Specifically, although not addressed by the trial court, we conclude WCE is not entitled to the costs requested because it failed to prove true the matters it sought to be admitted as required under section 2033.420, subdivision (a).
We begin our analysis with the pertinent RFAs. As noted above, RFA No. 11 asked the Buyers to "[a]dmit that no facts exist to support [their] contention in paragraph 31 of [the SAC] which states: '[h]ad [the Buyers] known the true facts, [they] would not have continued with the purchase of the [p]roperty.'" Similarly, RFA No. 12 asked the Buyers to "[a]dmit that no facts exist to support [their] contention in paragraph 31 of [the SAC] which states: [they] 'justifiably and reasonably relied upon the false information represented by . . . WCE . . . in deciding to proceed with the purchase of the [p]roperty[.]'"
In its motion, WCE also argued it was entitled to its costs of proof based on the Buyers' failure to admit RFA Nos. 2 through 7. The trial court's order, however, did not address those RFAs, and focused entirely on RFA Nos. 11 and 12. On appeal, WCE does not renew its arguments relating to RFA Nos. 2 through 7 and, therefore, has forfeited those contentions. (Doe v. California Dept. of Justice (2009) 173 Cal.App.4th 1095, 1115 "[An appellant . . . forfeits an issue by failing to raise it in his or her opening brief"].)
The question is whether WCE proved the facts asserted in RFA Nos. 11 and 12 when it prevailed on summary judgment. (See § 2033.420, subd. (a); see also Barnett, supra, 90 Cal.App.4th at pp. 495, 497-499.) As detailed in our prior opinion, in support of its summary judgment motion, WCE presented undisputed evidence demonstrating: (1) before WCE's involvement in the transaction, the Buyers agreed to purchase the property as-is, in its present physical condition, and to bear all costs of repairs and corrections required on the property, based on their investigation of the property and review of all relevant reports (Decuir, supra, B323134 [nonpub. opn.]); (2) the Buyers had imputed knowledge of the Pre-Sale Report because Jackson and Compass represented the Buyers and the Seller as dual agents, and Jackson received the Pre-Sale Report in the course and scope of his employment as a salesperson for Compass while escrow was open (ibid.); and (3) the Buyers excused WCE from all obligations concerning the PreSale Report and the information it contained. In so doing, WCE discredited the allegations identified in RFA Nos. 11 and 12, i.e., the Buyers' allegations that they would not have purchased the property had they received the Pre-Sale Report in escrow, and that they reasonably and justifiably relied on the defendants' misrepresentations regarding the property's compliance with local permitting ordinances when deciding to purchase it. (See ibid.)
To satisfy its burden under section 2033.420, subdivision (a), however, WCE had to do more than cast doubt on the truth of the Buyers' allegations. Instead, based on the broad language used in RFA Nos. 11 and 12, WCE had to prove that there are no facts whatsoever tending to show the allegations might be true. In other words, by drafting the RFAs "inartfully"-as the trial court put it-WCE created for itself the difficult task of proving a negative as a prerequisite to an award of costs under section 2033.420. (See Grace, supra, 240 Cal.App.4th at p. 529 ["Costs of proof are recoverable only where the moving party actually proves the matters that are the subject of the requests"]; see also Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854 [acknowledging the difficulty of proving a negative].) And while WCE cast doubt upon the Buyers' ability to prove reliance for purposes of their misrepresentation claims, we are not persuaded that WCE conclusively foreclosed the existence of any and all possible facts with potential to support the two allegations underlying the Buyers' assertion of reliance.
Consequently, WCE failed to carry its burden under section 2033.420, subdivision (a), as it did not "actually prove[ ] the matters that are the subject" of RFA Nos. 11 and 12. (Grace, supra, 240 Cal.App.4th at p. 529.) For this reason, the trial court did not abuse its discretion by denying WCE's motion for costs.
II. Determination of Good Faith Settlement A. Governing Principles and Standard of Review
The parties' stipulation to dismiss the SAC reflects the Buyers intended to challenge not only the order granting the Compass Defendants' motion for determination of good faith settlement, but also the subsequent order granting the Compass Defendants' motion to enforce the settlement agreement. On appeal, however, the Buyers do not mention, let alone seek reversal of, the latter order and, consequently, have forfeited any challenge thereto. (Doe v. California Dept. of Justice, supra, 173 Cal.App.4th at p. 1115.)
"Any party to an action in which it is alleged that two or more parties are joint tortfeasors . . . shall be entitled to a hearing on the issue of the good faith of a settlement entered into by the plaintiff or other claimant and one or more alleged tortfeasors ...." (§ 877.6, subd. (a)(1).) "A determination by the court that the settlement was made in good faith shall bar any other joint tortfeasor . . . from any further claims against the settling tortfeasor . . . for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault." (Id., subd. (c).)
In deciding whether a settlement was in good faith, courts must consider the factors identified by our Supreme Court in Tech-Bilt, Inc. v. Woodward-Clyde &Associates (1985) 38 Cal.3d 488, 499 (Tech-Bilt).) The Tech-Bilt factors include: "a rough approximation of the plaintiff's total recovery and the settlor's proportionate liability, the amount paid in settlement, the allocation of settlement proceeds among the plaintiffs, and a recognition that a settlor should pay less in settlement than if found liable after a trial. [Citation.] Other relevant considerations include the financial conditions and insurance policy limits of settling defendants, as well as the existence of collusion, fraud, or tortious conduct aimed at injuring the interests of nonsettling defendants. [Citation.] The Tech-Bilt factors are nonexhaustive and 'may not apply in all cases.' [Citation.] Further, practical considerations . . . require that the evaluation be made on the basis of information available at the time of settlement." (Dole Food Co., Inc. v. Superior Court (2015) 242 Cal.App.4th 894, 909 (Dole).)
"[W]hether a settlement is in good faith is a matter left to the discretion of the trial court [citations], with the party asserting the lack of good faith having the burden of proof on that issue." (Dole, supra, 242 Cal.App.4th at p. 909.)
B. Analysis
The Buyers assert the trial court's good faith settlement determination must be reversed due to a material change in circumstances occurring after the mediation giving rise to their settlement agreement with the Compass Defendants. On this point, the Buyers argue that, at mediation, they and the Compass Defendants "believed . . . the primary responsibility for the failure to disclose the [Pre-Sale Report] to the [Buyers] rested with [WCE]" and "that the C[ompass] [D]efendants were, likely, at most, tangential in terms of liability." Thus, according to the Buyers, WCE's subsequent victory on summary judgment constituted a material change in circumstances, which tipped the Tech-Bilt factors against a finding that the settlement was in good faith.
The Compass Defendants respond that we should affirm the good faith settlement determination because: (1) the Buyers forfeited their challenge to the order by failing to oppose it in the trial court; (2) the Buyers lack standing to appeal the order; (3) even assuming, arguendo, the Buyers had standing to appeal the order and preserved their right to challenge it in the trial court, we should reject their contention because it is unaccompanied by reasoned arguments supported by citations to legal authority and the record; and (4) the trial court's order was based on a proper consideration of the applicable Tech-Bilt factors. As discussed below, we agree with the Compass Defendants' third argument and, therefore, need not address their other contentions.
"'[I]t is a fundamental principle of appellate procedure that a trial court judgment is ordinarily presumed to be correct and the burden is on an appellant to demonstrate, on the basis of the record presented to the appellate court, that the trial court committed an error that justifies reversal of the judgment. [Citations.]' [Citation.] 'This means that an appellant must do more than assert error and leave it to the appellate court to search the record and the law books to test his claim. The appellant must present an adequate argument including citations to supporting authorities and to relevant portions of the record. [Citations.]' [Citation.] Accordingly, the California Rules of Court expressly require appellate briefs to '[s]tate each point . . . and support each point by argument and, if possible, by citation of authority' and to '[s]upport any reference to a matter in the record by a citation to the volume and page number of the record where the matter appears.' [Citation.]
"'It is not our place to construct theories or arguments to undermine the judgment and defeat the presumption of correctness.' [Citation.] Nor are we 'required to search the record on [our] own seeking error.' [Citation.] Consequently, '[w]hen an appellant fails to raise a point, or asserts it but fails to support it with reasoned argument and citations to authority, we treat the point as [forfeited]. [Citation.]' [Citation.] Likewise, '"[i]f a party fails to support an argument with the necessary citations to the record, . . . the argument [will be] deemed to have been [forfeited]. [Citation.]" [Citations.]'" (L.O. v. Kilrain (2023) 96 Cal.App.5th 616, 619-620.)
In asserting reversible error, the Buyers rely primarily on factual assertions relating to the mediation giving rise to their settlement with the Compass Defendants. None of those assertions, however, are supported by record citations. In addition, although not required to do so, we have reviewed the appellate record and did not locate any evidence supportive of those assertions. Further, the Buyers do not cite any legal authority demonstrating that a good faith settlement determination may be reversed based on a material change in circumstances occurring after the settlement, as they contend. For these reasons, we will deem their argument forfeited and affirm the trial court's good faith settlement determination. (See L.O. v. Kilrain, supra, 96 Cal.App.5th at pp. 618, 620 [affirming challenged orders where appellant "fail[ed] to comply with time-honored rules of appellate procedure" by instead submitting briefs that "d[id] not properly cite the record and [were] replete with unsupported legal and factual assertions"].)
DISPOSITION
The order denying WCE's motion for costs is affirmed. Likewise, the order granting the Compass Defendants' motion for determination of good faith settlement is affirmed. The Compass Defendants are awarded their costs on appeal. In the interests of justice, WCE and the Buyers shall bear their own costs on appeal.
We concur: COLLINS, J., MORI, J.