Opinion
H043595
11-17-2017
JAVIER FLORES, Plaintiff and Respondent, v. AMALIA E. GONZALEZ et al., Defendants and Appellants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Cruz County Super. Ct. No. CV178391)
The present appeal arises out of a dispute over the sale of real property. The trial court ruled that plaintiff Javier Flores could not recover equitable claims of specific performance and quiet title against defendants Amalia Gonzalez, Amalia Avila, and Jorge Oseguera Andrade. However, the trial court ruled that Flores could recover damages against Andrade for breach of contract and against Gonzalez and Avila for intentional interference with economic advantage. Gonzalez and Avila appeal from the judgment. They raise contentions relating to the sufficiency of the evidence, unjust enrichment, attorney's fees, and damages. We find no error and affirm.
Andrade is not a party to this appeal.
I. Factual Background
The record on appeal includes the reporter's transcripts of the hearings held on July 10, September 4, and December 8, 2015 in which the trial court rendered its tentative decisions, statement of decision, and judgment. However, there is no reporter's transcript of the trial. --------
Andrade and Gonzalez were married when they purchased real property located at 328 Herman Avenue in Watsonville in May 2012. Avila, Gonzalez's mother, loaned money to the couple for the down payment. On the day that the property was purchased, Gonzalez executed a grant deed by which she conveyed her interest in the property to Andrade. He took title to the property as "Jorge Andrade, a married man, as his sole and separate property." The transfer was made to enable Andrade to obtain a loan. Andrade and Gonzalez did not intend that the transfer would result in the termination of Gonzalez's community property interest in the property.
Andrade and Gonzalez later began dissolution proceedings. On October 2, 2013, Andrade's counsel proposed terms for settlement, including the sale of the Herman Avenue property. The loan from Avila would be paid from the proceeds of the sale. Shortly thereafter, Avila and Gonzalez asked a real estate agent to list the property for sale, which he did. On October 30, 2013, after Gonzalez authorized Andrade to sell the property, Andrade entered into a contract with Flores. However, Gonzalez and Avila then "wrongfully and in bad faith" induced Andrade to breach the contract. In December 2013, Andrade conveyed his interest in the property to Gonzalez.
II. Discussion
A. Validity of Contract
Gonzalez and Avila first contend that the contract between Andrade and Flores was not valid because Gonzalez neither signed the contract nor gave written authorization to sell her interest in the property. Thus, they contend that they cannot be held liable for breach of contract. However, the trial court did not find that either Gonzalez or Avila was bound by the contract with Flores. The trial court found that Andrade breached the contract. As discussed below, the trial court found that Gonzalez and Avila were liable for interference with prospective economic advantage.
B. Intentional Interference with Prospective Economic Advantage
Gonzalez and Avila next challenge the sufficiency of the evidence to support the finding that they were liable to Flores for intentional interference with prospective economic advantage.
The elements of the tort of intentional interference with prospective economic advantage are: " ' "(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant." [Citations.]' [Citation.]" (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153.) A plaintiff must also show that the defendant's conduct was independently unlawful, that is, "proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard." (Id. at p. 1159.)
Avila argues that there was insufficient evidence to support the finding that her conduct was independently unlawful, since she only loaned money to Gonzalez.
"Where no reporter's transcript has been provided and no error is apparent on the face of the existing appellate record, the judgment must be conclusively presumed correct as to all evidentiary matters. To put it another way, it is presumed that the unreported trial testimony would demonstrate the absence of error. [Citation.] The effect of this rule is that an appellant who attacks a judgment but supplies no reporter's transcript will be precluded from raising an argument as to the sufficiency of the evidence. [Citations.]" (Estate of Fain (1999) 75 Cal.App.4th 973, 992 (Fain).)
Here, the trial court's statement of decision reflects its findings that Avila: (1) asked a real estate agent to list the property for sale; (2) knew that Andrade had agreed to sell the property to Flores with Gonzalez's consent; and (3) Avila "wrongfully and in bad faith" induced Andrade to breach the contract. As a result of Avila's conduct, Flores suffered damages. Since Avila has failed to provide a reporter's transcript of the trial, she is precluded from raising a claim based on the sufficiency of the evidence.
Gonzalez contends that her conduct was protected by the manager's privilege.
"[W]hen a manager stood to reap a tangible personal benefit from the principal's breach of contract, so that it is at least reasonably possible that the manager acted out of self-interest rather than in the interest of the principal, the manager should not enjoy the protection of the manager's privilege unless the trier of fact concludes that the manager's predominant motive was to benefit the principal." (Huynh v. Vu (2003) 111 Cal.App.4th 1183, 1198.)
Here, the trial court found that Gonzalez induced Andrade to breach the contract "to better [her] position." Thus, since Gonzalez acted out of self-interest, the manager's privilege did not apply.
C. Unjust Enrichment
Gonzalez and Avila argue that Andrade was unjustly enriched, because he received $75,000 from them. Thus, they argue that the trial court erred when it failed to deduct this amount from the damages that they owed to Flores.
"The elements of an unjust enrichment claim are the 'receipt of a benefit and [the] unjust retention of the benefit at the expense of another.' [Citation.]" (Peterson v. Cellco Partnership (2008) 164 Cal.App.4th 1583, 1593.)
Here, Gonzalez gave $50,000 to Andrade for the purchase of his interest in the property and Avila loaned Gonzalez and Andrade $25,000 for the down payment on the property. "[I]t is presumed that the unreported trial testimony would demonstrate the absence of error." (Fain, supra, 75 Cal.App.4th at p. 992.) Gonzalez and Avila have failed to show that Andrade was not entitled to $50,000 for his interest. There is also nothing in the record on appeal regarding the terms of the loan agreement or even whether Andrade's obligation under the agreement were considered when Gonzalez paid for his interest in the property. Thus, the record on appeal does not support the claim of unjust enrichment.
D. Attorney's Fees
Gonzalez and Andrade also argue that the trial court erred when it awarded attorney's fees to Flores.
The general rule is that "each party is to bear his [or her] own attorney's fees unless a statute or the agreement of the parties provides otherwise." (Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 504 (Gray).) One of the exceptions to this rule, which is "sometimes referred to as the 'tort of another' . . . exception, allows a plaintiff attorney fees if he [or she] is required to employ counsel to prosecute or defend an action against a third party because of the tort of the defendant. [Citation.]" (Gray, at p. 505.)
In Gray, the plaintiff was told by a real estate salesman that his offer to purchase real property had been accepted by the sellers and he incurred various expenses in arranging for the move. (Gray, supra, 35 Cal.3d at p. 502.) The real estate salesman later told the plaintiff that the sellers had decided not to sell the property. (Ibid.) The plaintiff brought an action against the sellers and the corporation, which employed the real estate salesman, for specific performance and fraud. (Ibid.) The trial court awarded the plaintiff damages for negligent misrepresentation, but denied recovery against the sellers for specific performance. (Id. at pp. 502-503.) The trial court also awarded attorney's fees to the plaintiff. (Id. at p. 502.) The Gray court held that the tort of another doctrine entitled the plaintiff to recover attorney's fees that he incurred in an action against the sellers, which was necessitated by the real estate salesman's misrepresentation. (Id. at p. 507.) The court explained that "[i]f Fitch had not first falsely notified plaintiff that his offer had been accepted and several months later told him that the sellers declined to sell the property, plaintiff would not have incurred attorney fees in seeking to obtain the property in a suit for specific performance against the sellers. Thus, Fitch's misrepresentation was the direct cause of plaintiff's action for specific performance against the sellers." (Id. at p. 507.) The court also rejected the argument that the plaintiff was not required to bring his action against the sellers by stating: "[u]less plaintiff was willing to waive what appeared at the time he filed suit against the sellers to be his right to buy the property, he was required to initiate action against them." (Id. at p. 508.)
Similarly, here, unless Flores was willing to waive his right to buy the property, he was required to bring an action against Andrade. If Gonzalez and Avila had not intentionally interfered with Flores's prospective economic advantage, Flores would not have incurred attorney's fees. Thus, Flores was entitled under the tort of another exception to recover from Gonzalez and Avila the attorney's fees he incurred in his action against Andrade.
E. Calculation of Damages
Gonzalez and Avila also argue that the trial court erred in calculating damages.
"The measure of damages for intentional interference with . . . prospective economic advantage is 'an amount that will reasonably compensate plaintiff for all loss or harm . . . suffered by plaintiff and caused by the defendant's conduct.' [Citations.]" (Sole Energy Co. v. Petrominerals Corp. (2005) 128 Cal.App.4th 212, 232-233.)
The parties stipulated that the purchase price for the property was $370,000 and the fair market value of the property at the time of trial was $450,000. The trial court awarded Flores damages of $80,000, "subject to reduction in amounts paid by defendant Gonzale[z] [for taxes and insurance on the property] during the period January 1, 2014 and December 31, 2015, in addition to the amount the mortgage on the property was reduced between the same period as above." Gonzalez paid $8,399.04 for taxes and insurance during this period. The parties stipulated that the mortgage balance at the time of breach was $209,310.62 and $198,960.73 as of December 31, 2015. The trial court awarded $62,561.74 in damages to Flores.
Gonzalez and Avila point out that Gonzalez made mortgage payments of approximately $33,600 from the time of breach until December 2015. These payments included the interest on the loan and thus they appear to be arguing that the amount of damages must be reduced by the interest paid by Gonzalez rather than the reduction in principal. The trial court initially indicated that it would reduce the amount of damages by this amount, but it stated that this "reduction would be too large, given that Ms. Gonzale[z] would be incurring rental obligations for living in that house, if the home had been transferred."
"[I]t is presumed that the unreported trial testimony would demonstrate the absence of error." (Fain, supra, 75 Cal.App.4th at p. 992.) Without the reporter's transcript of the trial, this court must presume that rental value of the property offset the amount of interest that Gonzalez paid. Accordingly, we find no error in the trial court's calculation of damages.
III. Disposition
The judgment is affirmed.
/s/_________
Mihara, J. WE CONCUR: /s/_________
Elia, Acting P. J. /s/_________
Bamattre-Manoukian, J.