Opinion
A126965
08-31-2011
MEHRDAD ELIE, Plaintiff and Respondent, v. KATHLEEN SMITH, Defendant and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
San Mateo County Super. Ct. No. CIV 471364
I. INTRODUCTION
Appellant Kathleen Smith and respondent Mehrdad Elie were co-owners of a real estate financial services corporation. Elie contends, and Smith denies, that they had an oral or implied agreement that they would each be responsible for funding half of the investments or loans they infused into the corporation, and, in turn, each would receive half of any resultant profits. During the life of the business, Elie advanced more funds to the corporation than did Smith.
After the corporation went bankrupt in July 2007, Elie sued Smith, seeking repayment of what he contended was her half of the funds he had invested in an effort to keep the corporation afloat. Smith cross-complained, contending that Elie had diverted corporate funds to his personal account, and had converted other funds she had advanced for the corporation's benefit.
The jury returned a general verdict finding that each party owed the other money. Elie was the net victor by some $4.5 million. On appeal, Smith argues that the verdict is not supported by substantial evidence. We affirm the judgment.
II. FACTS AND PROCEDURAL BACKGROUND
A. Inception of Elie and Smith's Business Relationship
During the late 1980's, Elie worked as a real estate loan broker. During the same period, Smith worked for a savings and loan that funded many of the loans Elie procured on behalf of his clients. Elie and Smith met through their business relationship, but eventually began a romantic relationship as well.
In 1990, the savings and loan for which Smith was working closed down. She and Elie then incorporated a business, initially named Alliance Mortgage and later renamed Alliance Bancorp ("Alliance"). Alliance's original business consisted of preparing mortgage loan application packages for the clients of real estate brokers, in exchange for a portion of the broker's commission. Starting in late 1991, Alliance began issuing real estate loans in its own name, first with funds provided by Countrywide Savings, and later with funds drawn on lines of credit provided by "warehouse" lenders. The lines of credit were replenished, at a profit to Alliance, by selling the loans to banks at a premium. By the mid-1990's, Elie and Smith no longer had a personal relationship, but they continued to work together as co-owners of Alliance.
B. Evolution of Alliance's Business
Starting in 1998, Alliance began to sell packages of real estate loans to Wall Street investment houses, rather than to banks and quasi-governmental home mortgage agencies. By 2004, Alliance's profits had soared, and in 2005, a large interest in Alliance was sold to an investment entity known as the Airlie Group. Elie and Smith remained part owners of Alliance, and continued to manage the business. In December 2005, the Airlie Group purchased another mortgage lender, United Financial Mortgage Corporation (UFMC). As part of the same transaction, Alliance and UFMC became subsidiaries of ARH Mortgage (ARH), a holding corporation. Elie and Smith ended up each owning 15 percent of the stock of ARH.
Adopting the terminology used in the briefs, we will continue to refer to the business managed by Elie and Smith as Alliance, except where it is necessary to distinguish between Alliance and its parent company, ARH.
In late 2006, Alliance began to experience difficulty in reselling nonsecuritized loans to investment houses. Alliance's troubles increased in early 2007, when investors began to assert that loans Alliance had sold them did not meet the criteria specified by the investors. If the criteria were not met, the investors had the contractual right to require Alliance to buy them back. In addition, because of changes in the market, Alliance was no longer able to sell loans at a premium; instead, some were sold at a loss, and others proved to be entirely unmarketable.
At around the same time, Alliance began making efforts to sell bundled packages of loans that had been "securitized." In April 2007, these efforts bore fruit for the first time, in a transaction involving Deutsche Bank. In order to induce Deutsche Bank to consummate the transaction, however, during the first quarter of 2007 Alliance was required to repurchase $16.7 million worth of loans that it had previously sold to Deutsche Bank. Alliance was forced to take losses on the sale of these loans, and it also needed money to repay its warehouse lender on other loans it had not been able to sell.
C. Infusions of Cash by Alliance Principals
As already noted, the conditions placed on Alliance's loan securitization transaction by Deutsche Bank included Alliance's repurchase of millions of dollars worth of loans. During 2007, in order to fund the repurchase and otherwise meet Alliance's cash needs, the principals of ARH, including Elie and Smith, repeatedly transferred their own personal funds to the corporation, or took other steps to make cash available to Alliance. These transactions were sometimes in the form of short-term loans, but more often, the intended legal character of the transaction was undocumented and/or unclear. Even when the intent was clear, Alliance did not always abide by the terms under which it received its principals' funds.
All further references to dates are to the year 2007 unless otherwise noted.
In early June, Elie retired from his position as Alliance's CEO, and stopped working for the company, though he remained on its board. On July 13, Alliance declared bankruptcy. Elie and Smith then became embroiled in a dispute regarding their responsibility, vis-à-vis one another, for the loss of the funds each of them lent to Alliance, or otherwise made available for Alliance's benefit, prior to the bankruptcy. Elie's position was that regardless of whether he or Smith was the actual source of a particular infusion of funds, they had a standing oral or implied agreement that each of them would be responsible for half of the sum. Smith denied that the parties had any such agreement. The dispute culminated in the litigation giving rise to this appeal.
Following the terminology used in the record and in the briefs, we will refer to the agreement Elie contends he had with Smith as the 50/50 split agreement.
The specific four transactions at issue in the litigation, each of which is described in more detail below, are referred to in the record and briefs as: (1) the Subordinated ARH Loans; (2) the Deutsche Bank/Steel Mountain Transaction (or, more briefly, the Steel Mountain Transaction); (3) the Second Repurchase Arrangement; and (4) the Winter Group Guarantee.
1. The Subordinated ARH Loans. In February and March, Elie made a series of cash transfers to ARH totaling $25 million. The intent of the transfers was not documented when each one was made. In May, however, Alliance's CFO, a former CPA named Tom Sullivan, sent Smith and Elie a set of promissory notes and subscription agreements documenting the advances as loans made in equal amounts by Elie and Smith, and obligating ARH to repay the money in equal shares to Elie and Smith. Smith went over the documents with Sullivan and signed them, without objecting to their characterization of the funds advanced by Elie as having come in equal shares from both Elie and Smith.
2. The Steel Mountain Transaction. As already noted, in order to induce Deutsche Bank to participate in Alliance's securitized loan transaction, Alliance was required to repurchase $16.7 million worth of loans that it had previously sold to Deutsche Bank. Alliance arranged with an entity called Steel Mountain to recoup part of the cost of the repurchase by reselling the repurchased loan portfolio, at a loss, to Steel Mountain. The repurchase from Deutsche Bank had to be consummated first, however, and Alliance did not have the funds to accomplish this, nor did Elie. On March 26, at Elie's request, Smith wired $10 million of her personal funds to Elie's account. This was combined with $6.735 million from Elie, and transmitted to Deutsche Bank.
Neither party prepared any contemporaneous document to memorialize the intent or terms of this transaction. Smith testified she did not understand that the money would be used to repurchase loans that Alliance had sold to Deutsche Bank, and that before making the transfer, she asked Lisa Duehring, Alliance's president, to make sure she would get the money back. Duehring, however, denied that she had made any promise to Smith that the $10 million would be returned to her.
Ultimately, the transaction with Steel Mountain was structured to show that the $10 million was advanced by an entity called E&S LLC, and Steel Mountain was to transmit its payment to E&S LLC's bank account. The evidence is in conflict as to whether Smith was informed about, or consented to, this change.
E&S LLC was originally set up as a California limited liability company to hold title to certain property owned jointly by Elie and Smith. By 2007, its California charter had lapsed, but it still had an open bank account. In order to facilitate Steel Mountain's transfer of the funds to that bank account, Elie flew to Hawaii to set up a Hawaii-chartered limited liability company with the same name.
Shortly after Steel Mountain wired the funds to the E&S LLC bank account, Elie transferred them to his own personal account. He maintained that he told Smith he had done so, but there was no contemporaneous written document authorizing the transfer. Smith maintained in the litigation that the money received from Steel Mountain belonged to her.
3. The Second Repurchase Arrangement. In April, Elie transferred $3 million to Alliance to purchase a portfolio of loans owned outright by Alliance, in a transaction referred to as the second repurchase arrangement. Alliance had originally funded these loans with money from a warehouse lender, planning to repay the warehouse lender by reselling the loans to investors. However, Alliance was unable to market them, and the warehouse lender required Alliance to purchase them itself. In order to provide Alliance with cash, Elie decided to repurchase the loans on behalf of himself and/or Smith, planning to sell them back to Alliance when it could find an investor to buy them.
Elie did not discuss this plan with Smith before transferring the $3 million. However, Sullivan discussed it with her, and Smith herself entered into two similar transactions involving other portfolios of Alliance loans totaling over $4 million.
Elie succeeded in reselling some $1.45 million worth of the loans. After he did so, however, Alliance's counsel determined that Smith and Elie had to return this $1.45 million to Alliance rather than keep it. They were never repaid. No documentation was prepared regarding the rights of the various parties with respect to these transactions. Sullivan kept an accounting of them, however, which indicated that the funds involved were half Elie's and half Smith's.
4. The Winter Group Guarantee. In June, an investment entity called the Winter Group, which had previously bought loans from Alliance, agreed to advance $1 million to Alliance, anticipating that Alliance would later transfer a portfolio of second mortgages in return. The advance was conditioned on Smith's personal guarantee. Due to Alliance's bankruptcy, the second mortgages could not be transferred to the Winter Group, and Smith was forced to use her personal funds to make good on the guarantee.
D. Litigation
On March 20, 2008, Elie sued Smith. Smith filed a cross-complaint on May 19, 2008. At the time of trial, the operative pleadings were Elie's first amended complaint (the complaint) and Smith's third amended cross-complaint (the cross-complaint), both of which were filed on April 16, 2009.
The complaint pleaded causes of action for money lent; money had and received; breach of oral and/or implied contract, restitution and unjust enrichment; constructive and actual fraud; an accounting; and declaratory relief. It alleged that in addition to founding Alliance, Elie and Smith "were also joint venturers in various other endeavors," and that they "each invested fifty [percent] (50%) of the total contribution," not only for Alliance Bancorp, but also for these "other ventures," and that they "split the resulting gains or losses equally." It alleged further that between February and July 2007, Elie and Smith made loans to Alliance in the total sum of $30,537,500, and that "[t]hey made these loans . . . with the understanding and agreement that they would share equally in the risks and returns stemming from those transactions." In other words, Elie and Smith's "conduct and . . . communications" gave rise to "an express and/or implied agreement that they would share in the profits and losses of these transactions with respect to the money loaned to [Alliance]." The complaint averred that "[b]ecause of their long-standing partnership relationship, and based on the 50/50 [s]plit agreement," half of the amount that Elie advanced to Alliance in connection with the Subordinated ARH Loans—a total of $12.5 million—was advanced "on behalf of Smith, for Smith's benefit." The complaint also alleged that Elie and Smith had made other loans and advances to Alliance in 2007, as a result of which, Smith might be entitled to an offset against what she owed Elie in connection with the Subordinated ARH Loans.
Smith's cross-complaint pleaded causes of action for money had and received, restitution and unjust enrichment, and conversion. It was based solely on the Steel Mountain Transaction.
The case went to trial in July 2009. By agreement, the legal causes of action were tried to the jury first, and the trial court ruled on Smith's equitable causes of action after the jury returned its verdicts. The jury returned general verdicts awarding $14 million to Elie on his causes of action for money lent and breach of oral and/or implied contract, and $9,429,664 to Smith on her cause of action for money had and received, which resulted in a net award to Elie of $4,570,336. With Elie's consent, the trial court dismissed his equitable claims as moot. Smith offered no additional evidence in support of her equitable causes of action, but contended that as to the Winter Group Guarantee, Smith should be awarded the full $10 million rather than only half of it. The trial court ruled against her, finding that it was "evident from the jury's verdicts that they decided that there was a 50/50 agreement between the parties and they divided things on a 50/50 basis," and that "what [Smith] has been awarded [was] consistent with that concept which would not be inequitable."
The trial court added prejudgment interest to each party's damages, and offset the amount awarded to Smith against the amount awarded to Elie, resulting in a net judgment in favor of Elie in the amount of $5,814,452. After the trial court denied Smith's posttrial motions, she filed this timely appeal.
III. DISCUSSION
Smith's arguments on appeal all rest on a single premise: the jury's verdict can be upheld only on the theory that Smith and Elie did business together as an implied general partnership. Smith argues that since the existence of such a partnership was neither pleaded nor proven based on substantial evidence, the judgment must be reversed. Smith also complains that the trial court's rulings on motions in limine, and its decision to give a jury instruction over Smith's objection, contributed to the error.
In order to assess Smith's arguments, it is helpful first to examine what the jury determined. Fortunately, the parties agree—as did the trial court—on how the jury must have arrived at the amounts it awarded. Essentially, the jury added up the amount of money each party had provided for Alliance's benefit in connection with all of the transactions described above (i.e., the Subordinated ARH Loans, the Steel Mountain Transaction, the Second Repurchase Arrangement, and the Winter Group Guarantee). After subtracting from Elie's contribution the amount he had already recouped from the proceeds of the Steel Mountain Transaction, the jury awarded Elie the right to recover against Smith half of the sum contributed by Elie, and vice versa. This calculation resulted in awards of $14 million to Elie and $9,429,665 to Smith, making Elie the net victor by $4,570,335.
With the parties' shared understanding of the jury's implied factual findings in mind, we proceed to examine Smith's contentions that the verdict is not supported by substantial evidence, and/or was the product of error in the trial judge's rulings on motions in limine and jury instructions.
A. Substantial Evidence to Support Verdict
In reviewing the verdict under the substantial evidence test, we view the evidence most favorably to the prevailing party, giving it the benefit of every reasonable inference and resolving all conflicts in its favor. (Jessup Farms v. Baldwin (1983) 33 Cal.3d 639, 660; Oregel v. American Isuzu Motors, Inc. (2001) 90 Cal.App.4th 1094, 1100.) The testimony of a single credible witness is sufficient to constitute substantial evidence, even if that witness is a party to the action. (Dart Industries, Inc. v. Commercial Union Ins. Co. (2002) 28 Cal.4th 1059, 1075; In re Marriage of Mix (1975) 14 Cal.3d 604, 614.) We do not reweigh the credibility of witnesses or resolve conflicts in the evidence. (Rufo v. Simpson (2001) 86 Cal.App.4th 573, 622.) In short, "[a] judgment will not be reversed based on an evaluation of the strength of the opposing evidence or the relative weakness of supporting evidence when compared to opposing evidence. It can be reversed based only on the absence or insubstantiality of supporting evidence, as determined from a review of all related evidence in the record. [Citation.]" (Rivard v. Board of Pension Commissioners (1985) 164 Cal.App.3d 405, 413, italics & fn. omitted.)
The substantial evidence test was summarized as follows by our Supreme Court in Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559: " '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.]" (Id. at p. 571, quoting Crawford v. Southern Pac. Co. (1935) 3 Cal.2d 427, 429.) To put it another way, "[w]hen a judgment is attacked for insufficiency of the evidence, the appellate court must review the whole record in the light most favorable to the judgment below to determine whether it discloses substantial evidence—that is, evidence which is reasonable, credible, and of solid value—such that some reasonable trier of fact could find that the judgment and each essential element thereof was established by the appropriate burden of proof." (Rivard v. Board of Pension Commissioners, supra, 164 Cal.App.3d at p. 414.)
The effect of this standard is that to prevail, Smith must demonstrate that the record does not contain evidence from which a reasonable trier of fact could derive the findings she seeks to overturn. (See Kuhn v. Department of General Services (1994) 22 Cal.App.4th 1627, 1632-1633.) "The ultimate determination is whether a reasonable trier of fact could have found for the respondent based on the whole record. [Citation.]" (Id. at p. 1633, italics omitted.)
Moreover, "[w]here the appellant challenges the sufficiency of the evidence, the reviewing court starts with the presumption that the record contains evidence sufficient to support the judgment; it is the appellant's affirmative burden to demonstrate otherwise. [Citations.] The appellant's brief must set forth all of the material evidence bearing on the issue, not merely the evidence favorable to the appellant, and must show how the evidence does not sustain the challenged finding. [Citations.]" (Garlock Sealing Technologies, LLC v. NAK Sealing Technologies Corp. (2007) 148 Cal.App.4th 937, 951 (Garlock).)"[A]n attack on the evidence without a fair statement of the evidence is entitled to no consideration when it is apparent that a substantial amount of evidence was received on behalf of the respondent. [Citation.] Thus, appellants who challenge the decision of the trial court based upon the absence of substantial evidence to support it ' "are required to set forth in their brief all the material evidence on the point and not merely their own evidence.'. . ." (Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1246, italics omitted.) Appellants who fail to comply with this well-established rule of appellate procedure risk forfeiture of their challenge to the sufficiency of the evidence. (Ibid.; cf. Garlock, supra, 148 Cal.App.4th at p. 951 ["If the appellant fails to set forth all of the material evidence, its claim of insufficiency of the evidence is forfeited. [Citations.]"].)
Appellant's statement of facts in the present case does not fully comply with this rule. For example, her opening brief states that in contrast to Elie's testimony regarding the other infusions of funds into Alliance, he did not testify that he discussed with Smith the $3 million transfer he made in connection with the Second Repurchase Arrangement. In fact, Elie testified that every time he advanced funds to Alliance, he discussed it with Smith, and she agreed she would be responsible for half of the amount advanced. Similarly, the statement of facts in Smith's opening brief does not mention that Sullivan and Duehring both testified they were told Elie and Smith had a 50/50 split agreement. Nor does Smith's brief acknowledge her admission at trial that she received written accountings of the funds she and Elie had advanced to Alliance, listing the advances as being half from Elie and half from herself, and she never objected or told anyone that the accountings were erroneous. Despite deficiencies such as these, which are normally fatal to a challenge to the jury's factual findings, we have exercised our discretion, in the interest of justice, to consider Smith's substantial evidence argument on its merits.
As already noted, Elie testified at trial that every time he advanced funds to Alliance, he discussed it with Smith, and she agreed she would be responsible for half of the amount advanced. Elie's contention that the parties had an ongoing 50/50 split agreement is also supported by Sullivan and Duehring's testimony that they were told such an arrangement existed. Finally, accountings and other documents prepared before the bankruptcy listed the sums advanced to Alliance by Elie and Smith as coming half from each of them, and Smith never objected to these documents as inaccurate. We need not examine the record further, as this evidence alone is sufficient to uphold the jury's verdict impliedly finding that there was a 50/50 split agreement.
B. Consistency of Damages Verdicts with Breach of Contract Theory
As Smith's own trial counsel noted in closing argument, Elie's contention that he and Smith had an oral and/or implied 50/50 split agreement was the "theme . . . central to this case," which "everyone understood the controversy was [about]." Nonetheless, Smith now argues on appeal that the verdict is fatally inconsistent with a breach of contract claim based on the 50/50 split agreement, and can only have been based on a finding that Elie and Smith did business together as a general partnership.
Smith's argument is essentially that the use at trial of the term "partnership" to describe the relationship between Elie and Smith converted Elie's breach of contract cause of action into one premised on the existence of a full-fledged general partnership, which Smith argues Elie failed to plead or prove. Smith's briefs, however, do not explain how the jury's verdict is inconsistent with Elie's contention that he and Smith had a 50/50 split agreement.
In attempting to characterize the verdict as inconsistent with the 50/50 split agreement theory, Smith points first to the jury's inclusion in the verdict of amounts due to Elie on account of the Second Repurchase Arrangement and the Steel Mountain Transaction. Smith argues that because Elie's complaint did not expressly plead that these transactions were part of the 50/50 split agreement, their inclusion in the verdict is inconsistent with anything other than a general partnership theory. As Elie's brief points out, however, Elie's complaint included a general allegation that "Elie and Smith made other loans and advances in 2007 to [Alliance]," for which Smith might be entitled to a setoff; incorporated by reference an exhibit that listed the Second Repurchase Arrangement and the Steel Mountain Transaction, among others, and characterizing the funds involved as coming half from Elie and half from Smith; and demanded in the prayer that the court determine "the rights and obligations of the parties with respect to the payments outlined in" the exhibit. Moreover, there was substantial evidence, as already outlined, that all of Elie's infusions of funds into Alliance were intended to be subject to the 50/50 split agreement. Thus, Smith has not persuaded us that the jury's inclusion of the Second Repurchase Arrangement and Steel Mountain Transactions in the calculations underlying its damages verdict is inconsistent with its finding that Smith was liable to Elie for breach of contract.
Smith also challenges the jury's inclusion of the Winter Group Guarantee as part of the 50/50 split agreement. However, this portion of the verdict was supported by the testimony of Smith's own damages expert, Everett Harry. During Harry's direct examination, Smith's trial counsel asked Harry to assume for the purpose of his damages calculation that the Winter Group Guarantee was part of the 50/50 split agreement. Smith also introduced an exhibit, prepared by Harry, showing the Winter Group Guarantee as one of the transactions at issue in the case, and treating it consistently with the 50/50 split agreement. If the jury was misled by this evidence, the error was invited by Smith, and she cannot seek reversal on this basis. (See Hasson v. Ford Motor Co. (1982) 32 Cal.3d 388, 419-421, disapproved on other grounds in Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 574 [counsel who suggested language adopted in judge's order could not argue on appeal that order was deficient]; Estate of Armstrong (1966) 241 Cal.App.2d 1, 7 [party who argued in proceeding below that probate court should determine separate versus community property status of decedent's assets could not contend on appeal that characterization of property was beyond scope of issues submitted to probate court]; Zarafonitis v. Yellow Cab Company (1932) 127 Cal.App. 607, 609 [where defendant's counsel told jury defendant had insurance, defendant could not argue on appeal that defendant was prejudiced by reference in plaintiff's testimony to defendant's insurance company].)
Smith alternatively argues that the jury's inclusion of the Winter Group Guarantee in its damages calculation was inconsistent with the breach of contract verdict because neither Elie nor Smith included this transaction in their pleadings. This contention boils down to an argument that there was a variance between the pleadings and the proof at trial. We find no reversible error on this ground, for two reasons.
First, Elie's complaint alleged that the full amount of the setoff to which Smith was entitled, based on the funds she contributed to Alliance, was unknown to him, because of his lack of access to documents in the control of Smith and Alliance. This allegation is broad enough to encompass a setoff to Smith on account of the Winter Group Guarantee.
Second, under Code of Civil Procedure section 469, "[n]o variance between the allegation in a pleading and the proof is to be deemed material, unless it has actually misled the adverse party to his prejudice in maintaining his action or defense upon the merits." (See Lujan v. Minagar (2004) 124 Cal.App.4th 1040, 1047-1048; Thrifty-Tel, Inc. v. Bezenek (1996) 46 Cal.App.4th 1559, 1572; Walker v. Belvedere (1993) 16 Cal.App.4th 1663, 1669-1670.) Here, because Smith's own trial counsel asked her damages expert to treat the Winter Group Guarantee as part of the 50/50 split agreement, Smith cannot now complain that Elie's failure to mention that transaction expressly in his complaint amounted to a prejudicial variance, or rendered the jury's damages verdict inconsistent with Elie's theory of the case at trial.
At oral argument, Smith's counsel contended that the Winter Group Guarantee could not have been part of the 50/50 split agreement because Elie left his CEO position at Alliance on June 1, before the Winter Group Guarantee transaction occurred. Elie remained a director of Alliance between June 1 and July 13, however, and—more importantly—continued to infuse funds into the corporation. It is undisputed that on July 13, when Alliance filed for bankruptcy, Elie and Smith each advanced personal funds, in equal amounts, to cover part of the cost of Alliance's final payroll. This fact constitutes evidence from which the jury was entitled to infer that the 50/50 split agreement survived the termination of Elie's employment at Alliance.
C. Asserted Error in Ruling on Motions in Limine
Smith argues that the trial court erred in granting (in whole or in part) certain of Elie's motions in limine, resulting in the exclusion of evidence as to Elie's business decisions regarding Alliance; Elie's personnel decisions at Alliance; the tone and volume of voice that Elie employed in interacting with Alliance's employees; and whether Alliance was doing business in states where it was not licensed. Smith sought to introduce this evidence in order to show that it was unlikely she would have entered into a general business partnership with Elie because of her "view of [his conduct] with regard to his ethics and wisdom." Smith also complains of the trial court's refusal to allow her expert, Harry, to testify that the relationship between Elie and Smith did not have the "indicia" of a full-fledged partnership.
In fact, the trial court permitted testimony about this aspect of Elie's demeanor in his interactions with Smith herself, and with other Alliance employees if it occurred in Smith's presence.
Smith acknowledges that these rulings were reasonable with respect to the theory that Elie and Smith had a 50/50 split agreement. Her argument that the rulings were an abuse of discretion rests on the premise that the jury's verdict is inconsistent with the 50/50 split agreement theory, and entails a finding that Smith and Elie had a general partnership. As discussed ante, however, this premise is incorrect. Nothing in the jury's verdict requires us to interpret it as resting on a general partnership theory rather than a 50/50 split agreement theory. Accordingly, Smith has not shown that she was prejudiced by any asserted errors in the trial court's rulings on the motions in limine.
D. Asserted Error in Jury Instruction
As an additional basis for her attack on the verdict, Smith contends that the trial court erred in instructing the jury on the theory of implied general partnership. Smith does not argue that the instruction was substantively incorrect. She also impliedly concedes that the instruction was relevant to Elie's cause of action for fraud on the theory of concealment by a fiduciary, which was the reason the trial judge decided to include it in the instructions. However, Smith contends that the jury should have been informed that the theory of implied general partnership was limited to this single cause of action. Again, we find no reversible error on this ground, for two reasons.
First, an objection to a legally correct instruction based on its form or language is forfeited if not raised at trial. (Agarwal v. Johnson (1979) 25 Cal.3d 932, 948, disapproved on other grounds in White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 574, fn. 4 ["a party may not complain on appeal that an instruction correct in law is too general or incomplete unless he had requested an additional or qualifying instruction"].) In the present case, at the conclusion of the in-chambers colloquy regarding the instruction, the trial judge asked both parties' counsel whether they objected to the form of the instruction. Both counsel affirmatively stated that they had no such objection. Smith is therefore precluded from arguing on appeal that the instruction should have contained language explaining that it applied only to the concealment cause of action.
Second, it is settled law in California that a " 'judgment may not be reversed for instructional error in a civil case "unless, after an examination of the entire cause, including the evidence, the court shall be of the opinion that the error complained of has resulted in a miscarriage of justice." [Citation.]' [Citation.]" (Casella v. SouthWest Dealer Services, Inc. (2007) 157 Cal.App.4th 1127, 1156, quoting Soule v. General Motors Corp., supra, 8 Cal.4th at p. 580.) In the present case, for the reasons we have already explained, we reject Smith's arguments that the jury's verdict was not supported by substantial evidence. Thus, even assuming Smith's argument challenging this jury instruction was correct, she has failed to demonstrate that any error resulted in prejudice to her. Certainly any claimed error did not rise to the "miscarriage of justice" measure of prejudice required.
IV. DISPOSITION
The judgment is affirmed. Elie shall recover his costs on appeal.
RUVOLO, P. J. We concur:
SEPULVEDA, J.
RIVERA, J.