Hogan v. Deangelis Construction, Inc.

Full title: RONALD HOGAN, et al., Plaintiffs and Appellants, v. DEANGELIS…

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

Date published: May 20, 2009

A117321, A118257, A120840 (Cal. Ct. App. May. 20, 2009)

Opinion

RONALD HOGAN, et al., Plaintiffs and Appellants, v. DEANGELIS CONSTRUCTION, INC., et al., Defendants and Appellants. A117321, A118257, A120840 California Court of Appeal, First District, Second Division May 20, 2009

NOT TO BE PUBLISHED

Sonoma County Super. Ct. No. SCV 230846

Haerle, J.

I. INTRODUCTION

In May 2000, Ronald and Victoria Hogan (the Hogans) purchased a home on Gardenview Place in Santa Rosa (the Gardenview property) for a price of $499,000. In August 2002, the Hogans filed a complaint against the sellers and property developers, Marvin De Angelis, Gary Pope, DeAngelis Constructi on, Inc. (collectively, the Developers¹), as well as the real estate agents for the sale, Clayton and Mary Engstrom (the Engstroms). Pursuant to a variety of tort and contract theories, the Hogans alleged that the defendants wrongfully induced them to purchase the Gardenview property. The Hogans sought both legal damages and relief based on rescission.

1 Also included in this group of respondents is DeAngeles Pope Homes, an entity that was named as a Doe defendant in the Hogans’ third amended complaint.

During the course of litigation, the Developers formally accepted the rescission and offered to restore the Hogans’ consideration. In May 2004, the superior court filed an order confirming that the Gardenview purchase agreement was rescinded. Nevertheless, the Hogans retained possession of the Gardenview property and the litigation continued, culminating in a jury trial and the amended judgment which is the subject of the three appeals and two-cross appeals before us now. The amended judgment awards the Hogans (1) consequential damages relating to the rescission, (2) damages against the Developers for intentional concealment, and (3) damages against the Engstroms for breach of contract and intentional concealment.

The Developers appeal a post-judgment order denying their motion to correct this amended judgment to conform to the special verdicts of the jury. They contend that the jury verdicts establish that the two awards against them, one for consequential damages and the other for intentional concealment damages, were alternative remedies. We reject this contention.

The Hogans appeal the amended judgment and both sets of respondents cross-appeal. The Hogans’ primary contention is that the trial court committed reversible error by limiting their recovery to relief based on rescission. The Developers challenge the sufficiency of the evidence to support the separate award against them for intentional concealment damages. The Engstroms contend that the rescission of the Gardenview purchase agreement precludes any recovery against them as a matter of law. As we will explain, the Gardenview purchase agreement was rescinded and, therefore, the trial court did not err to the extent it limited the Hogans’ recovery to relief based on rescission. However, the amended judgment must be modified to provide that (1) damages against the Engstroms are the Hogans’ consequential damages relating to the rescission, and (2) the liability of the two sets of defendants/respondents in this case is joint and several. Furthermore, the separate award of damages against the Developers for intentional concealment must be stricken.

The final appeal before us is from a post-judgment order granting a defense motion to tax the Hogans’ memorandum of costs. The Hogans contend the superior court erred by finding they were not the prevailing party in this action. We reject this contention and affirm the post-judgment order.

II. STATEMENT OF FACTS

A. The Hogans’ Complaint

In a complaint filed August 23, 2002, the Hogans alleged that they became interested in purchasing the Gardenview property from the Developers in April 2000, and that they entered into two distinct contracts with the two sets of respondents in May 2000. First, the Hogans’ alleged, they entered into an agreement with the Engstroms, pursuant to which the parties agreed that the Engstroms would represent both the Hogans and the Developers with respect to the sale of the Gardenview property (the dual agency agreement). The Hogans claimed they entered into this dual agency agreement because they were told that the Developers were unwilling to negotiate with any other real estate broker. Thereafter, the Hogans alleged, they entered into a written agreement with the Developers to purchase the Gardenview property (the purchase agreement).

The Hogans alleged that, as part of the purchase agreement, disclosures were made to them about the condition of the Gardenview property, and the fact that it was part of a subdivision which was controlled by a Homeowners Association that was responsible for maintaining and repairing certain common areas. However, after they purchased the Gardenview property, the Hogans discovered several additional conditions that had not been previously disclosed to them, including that: (1) a “common area” that the Association was responsible for maintaining was a non-contiguous lot that was a known slide area; (2) the Rogers Creek Fault line runs within one mile of the Gardenview property; (3) a portion of the Gardenview home is built within and in violation of a State proscribed “setback” zone for a fault line that is ancillary to the Rogers Creek Fault; (4) there is an underground natural spring on the property which has deposited water into the crawl space of the Gardenview home; (5) the Gardenview property is in an emergency helicopter flight path used by Santa Rosa hospitals; (6) plans to build a three-story apartment structure near to and within the view of the Gardenview property would require the removal of a canopy of oak trees standing alongside the Gardenview property.

The Hogans further alleged that the Gardenview property suffered from various defects and deficiencies which were not readily apparent upon inspection, including structural damage to the crawl space, roof leaks, flooding in the garage, water in the crawl space, and heating and air conditioning problems. The Hogans alleged that, although the Developers had attempted some repairs, the defective conditions were ongoing.

The complaint alleged, or purported to allege, the following causes of action: (first) breach of the purchase agreement against the Developers; (second) breach of the dual agency agreement against the Engstroms; (third) intentional misrepresentation by concealment against all defendants; (fourth) negligent misrepresentation against all defendants; (fifth) negligence against the Developers; (sixth) breach of implied warranty against the Developers; (seventh) strict liability against the Developers; (eighth) fraud in the inducement against the Developers; and (ninth) mutual mistake against the Developers. Pursuant to their eighth and ninth causes of action for fraud and mutual mistake, the Hogans expressly sought rescission of the purchase agreement. They also sought rescission in their prayer for relief.

B. Rescission

On December 2, 2003, the Developers’ attorney, John Wasinda, sent a letter to the Hogans’ attorney which was titled “NOTICE OF ACCEPTANCE OF RESCISSION OF CONTRACT.” Wasinda construed the Hogans’ complaint as an offer to rescind the purchase agreement, which Wasinda accepted on behalf of the Developers. Wasdina also agreed to restore to the Hogans the value of the benefits bestowed on his clients.

On December 4, 2003, the Developers filed a “Petition to Confirm Acceptance of Offer to Rescind Contract and to Dismiss Action” (the rescission petition). The Hogans opposed the rescission petition, arguing that they were entitled to plead inconsistent theories of recovery and that the Developers could not force them to accept rescission and/or make any other election of remedies until entry of judgment.

A hearing on the rescission petition was held on February 4, 2004, before the Honorable Raymond Giordano. The court’s tentative ruling was to grant the petition and confirm that the purchase agreement had been rescinded. The court heard argument and then continued the hearing so the Hogans could submit supplemental briefing. At the continued hearing, on March 3, 2004, the court raised the question whether the Hogans could dismiss their eighth and ninth causes of action if they were no longer interested in obtaining rescission, and then proceed to trial on their damages claims. Defense attorneys responded that the rescission was already complete and the Hogans no longer had the option to affirm the contract and seek damages. The Hogans’ attorney responded with an oral motion to dismiss the eighth and ninth causes of action. Not wanting its question to lead the parties “astray,” the court continued the hearing again so the parties could discuss the matter further.

On March 15, 2004, the Hogans filed a request for dismissal with prejudice of the eighth and ninth causes of action in their complaint. On March 30, the Hogans filed a peremptory challenge to the assignment of Judge Giordano to hear matters in this case. In response to the challenge, the case was re-assigned to the Honorable Robert S. Boyd.

On April 22, 2004, the continued hearing on the rescission petition was conducted by Judge Boyd who, like Judge Giordano before him, issued a tentative decision to grant the petition. At the hearing, the court opined that the eighth and ninth causes of action in the Hogans’ complaint constituted statutory offers to rescind the purchase agreement (see Civ. Code, § 1691), and that the rescission was effectuated when the Developers accepted the Hogans’ offer, notwithstanding that the eighth and ninth causes of action were subsequently dismissed. On May 17, 2004, the court filed an order formally granting the petition to confirm rescission of the purchase agreement (the 2004 rescission order).²

2 On June 24, 2004, the Hogans filed a petition for writ of mandate in this court pursuant to which they sought to overturn the 2004 rescission order. On August 2, 2004, this court summarily denied the Hogans’ writ petition. (See Hogan v. Superior Court, A106918.)

C. The Amended Complaints

The Hogans filed a first amended complaint in September 2004, a second amended complaint in January 2005, and a third amended complaint in April 2005. Each of these pleadings sought relief based on rescission of the purchase agreement and also sought contract and tort damages.

The third amended complaint, which became the operative pleading at trial, alleged or purported to allege the following causes of action: (first) breach of the purchase agreement against the Developers; (second) breach of the dual agency agreement against the Engstroms; (third) intentional misrepresentation by concealment against all defendants; (forth) intentional infliction of emotional distress against all defendants; (fifth) negligent misrepresentation against all defendants; (sixth) negligence against the Developers; (seventh) breach of implied warranty against the Developers; (eighth) strict liability against the Developers; (ninth) fraud in the inducement and rescission against the Developers; (tenth) none³; (eleventh) negligence against the Engstroms; (twelfth) breach of fiduciary duty against the Engstroms; (thirteenth) breach of fiduciary duty against the Developers; (fourteenth) tort of another against the Engstroms; (fifteenth) tort of another against the Developers.

3 The third amended complaint does not contain a tenth cause of action.

The prayer for relief in the third amended complaint sought compensatory damages for repair of construction defects; compensation for the diminished value of the Gardenview property; rescission, including restitution and consequential damages; the value of the lost appreciation of the property; general damages; punitive damages; interest; attorney fees and costs of suit.

On August 10, 2005, the lower court granted a defense motion to strike from the third amended complaint the Hogans’ prayer for damages for loss of the appreciation in value of the Gardenview property.

D. Orders Regarding Enforcement of Rescission

In May 2006, the Developers filed a motion to enforce rescission of the purchase agreement. By their motion, defendants sought to compel the Hogans to either vacate the Gardenview property or to pay rent to the Developers. The Hogans opposed the motion, arguing that they were entitled to a trial on their damages claims before the rescission could be enforced. A hearing on the motion was held on June 21, 2006, before the trial judge, the Honorable Alan Hardcastle. On July 24, 2006, the court filed an order denying the motion to enforce rescission on the ground that the motion was untimely “because the issues in this litigation have not been fully resolved and the rights and duties of the parties are not clear.”

In December 2006, Judge Hardcastle conducted hearings on motions in limine. At a December 14 hearing, the court advised the parties of its intention to issue a “conditional” judgment effectuating rescission of the purchase agreement. The court explained that, now that the trial was set to commence, “[w]e’re outside the land of theory and we’re moving to the real, and that’s why you can anticipate before either this day’s over or tomorrow’s over, there is going to be an order that the Hogans move out, there is going to be an order that the defendants return consideration to the Hogans, and there are going to be dates for each of those....”⁴

4 The Hogans’ counsel made objections for the record, including that rescission could not properly be enforced prior to judgment. The court responded with “the old expression[,] be careful what you wish for because you just might get it.” The court explained that the Hogans had expressly conceded, in one of their in limine briefs, that the court had the power to issue a conditional judgment, and the court advised that the order it intended to issue would be interlocutory and subject to adjustment in the future depending on the jury’s findings.

On December 14, 2006, the court filed an order after hearing, directing that (1) the Gardenview property deed was to be reformed and title was to be returned to the Developers; (2) the Hogans were to vacate the Gardenview property and restore possession to the Developers by February 1, 2007; (3) the Developers were to return the Hogans’ consideration in the amount of $606,245, for the purchase of the Gardenview property; and (4) both the return of consideration to the Hogans and of the real property to the Developers was “without prejudice to each side to pursue its claims against the other.”

On January 5, 2007, the Hogans filed a petition for writ of mandate in this court, pursuant to which they sought to compel the superior court to vacate both the December 14, 2006, order effectuating the rescission, as well as the 2004 rescission order which confirmed that the purchase agreement was rescinded. (A116324). On January 8, 2007, this court filed an order granting the Hogans’ request to temporarily stay enforcement of the December 14, 2006, order. However, the trial was not stayed.⁵

5 The writ petition was still pending when judgment was entered. After we were informed of this fact, we notified the parties, in an April 4, 2007, order, that it appeared the temporary stay was no longer necessary and that the petition was moot. On April 19, 2007, we formally denied the petition and discharged the temporary stay of the December 14, 2006, order.

E. Trial

1. Evidentiary Rulings Regarding Damages

On December 19, 2006, the court filed its orders after hearings on motions in limine. Among other things, the court resolved numerous disputes regarding the categories of damages that the Hogans could seek. The court found that “[t]he law is clear that the rescinding buyer is entitled to return of the purchase price and to reimbursement for reasonable expenses, costs of repairs and improvements, and taxes paid, minus the reasonable rental value of the premises during the period of the occupancy.”

Accordingly, the court ruled that the Hogans could offer evidence of (1) out-of-pocket expenses incurred in the course of the transaction; (2) interest at the legal rate on sums paid to the defendants; (3) the value of improvements made to the property; (4) expenses incurred in preparing the property for the Hogans’ intended use; (5) escrow and closing costs.

However, the court precluded the Hogans from presenting evidence of (1) increased property taxes; (2) lost tax basis; (3) lost time; (4) defense of tort of another; (5) increased mortgage interest; (6) lost wages; (7) “general” damages, including damages for mental distress resulting from the sale of property; (8) lost profits (past and future) on the Gardenview property; (9) lost appreciation or diminution in value of the Gardenview property.

The evidence of increased property taxes and lost tax basis that was excluded by the court’s in limine ruling related to the Hogans’ claim that their damages included the loss of a favorable property tax obligation and tax basis on either the Gardenview property and/or on the home that Ron Hogan owned before the Hogans’ purchased Gardenview. The Hogans’ theory was that an anticipated purchase of a replacement home for Gardenview would likely result in higher interest payments and property taxes and that the difference was part of their damages for future transition costs.

As noted above, the trial court also excluded evidence of lost time and lost wages. This evidence related to the Hogans’ attempt to recover “approximately $430,000 for plaintiffs’ alleged lost wages for time spent on property and litigation management.” The Hogans’ theory was that, in order to be made whole, they needed to be financially compensated for all the time they spent purchasing the Gardenview property, moving in, maintaining it and then moving out, as well as compensation for the time spent on this litigation. The time records allegedly documenting these activities dated back to April 2000, the month before the Gardenview purchase agreement was executed.⁶

6 Examples of entries in the record of Ron Hogans’ time spent away from work in order to manage this litigation include: (1) 24 hours on November 25, 2002 (Thanksgiving Day) “reviewing legal issues,” (2) 32 hours on December 23, 2002, “reviewing legal issues,” (3) 24 hours on November 24, 2003, “reviewing legal issue,” and (4) 48 hours on December 22, 2003, “answering interrogatories.”

2. Nonsuit

The Hogans called their first witness on February 27, 2007, and completed the presentation of their case on March 8, 2007. That day, all defendants moved for a nonsuit as to all causes of action. After argument, the trial court granted nonsuit except as to (1) the second cause of action for breach of the dual agency agreement against the Engstroms, (2) the third cause of action for intentional misrepresentation by concealment against all the defendants, and (3) the twelfth cause of action for breach of fiduciary duty against the Engstroms.

3. Special Verdicts

On March 21, 2007, the jury completed a 33-page special verdict form. Their detailed findings are summarized below.

a. Rescission

The jury was given five pages of questions regarding the “balancing of the equities” in connection with the rescission of the purchase agreement. The answers to the questions resulted in the following findings:

The Developers are required to assume the balance of the mortgage obligation on the Gardenview property.

The Hogans are entitled to recover the following amounts from the Developers: (1) $252,000, for their down payment; (2) $216,754 as interest on the down payment; (3) $12,644 for upgrades; (4) $10,875 as interest on upgrades; (5) $27,433 for improvements; (6) $127,784 for mortgage payments; (7) $41,530 for interest on the mortgage payments; (8) $6,478 for insurance payments; (9) $2,105 for interest on insurance payments; (10) $2,265 for landscape maintenance; (11) $10,000 for the current value of landscaping; (12) $39,461 for property taxes paid; (13) $12,825 for interest on property taxes; (14) $6,441 for Homeowners Association fees; (15) $2,093 for interest on Association fees; (16) $22,000 for transition costs.

The Developers are entitled to the following off-sets from the Hogans: (1) $178,000 for the fair rental value of the property; (2) $60,907 for interest on the fair rental value; (3) $21,048 for escrow and closing costs; (4) $18,104 for interest on the closing costs; (5) $165,000 for increase in mortgage obligation attributable to the Hogans’ refinancing; (6) $15,000 for repairs necessary to prepare property for re-sale.

These findings established, and the jury expressly confirmed, that the Hogans damages in connection with the rescission are $792,688, the Developers are entitled to total off-sets in the amount of $458,229, and, therefore, the Hogans are entitled to a net award of $334,459 against the Developers for their consequential damages in connection with the rescission.

b. Breach of Contract

Special verdict questions regarding the second cause of action for breach of contract against the Engstroms resulted in the following findings:

Ronald Hogan and Clayton Engstrom entered into a contract and Clayton breached the contract and caused Ronald to suffer economic damages in the amount of $10,000. Ronald also entered into a contract with Mary Engstrom, but Mary did not breach that contract.

Victoria Hogan entered into a contract with Clayton Engstrom, and Clayton breached the contract causing her to suffer economic damages in the amount of $10,000. Furthermore, Victoria also entered into a contract with Mary Engstrom and Mary breached that contract causing Victoria economic damages in the amount of $10,000.

c. Intentional Concealment

The jury’s answers to questions about the third cause of action for intentional concealment, alleged against all of the defendants, resulted in the following findings:

Clayton Engstrom did not intentionally fail to disclose any material fact to Ronald Hogan or to Victoria Hogan. Mary Engstrom did not intentionally fail to disclose any material fact to Ronald Hogan. Mary Engstrom did intentionally fail to disclose a material fact to Victoria Hogan with the intent to deceive, Victoria reasonably relied on Mary’s deception and was damaged in the amount of $35,000.

DeAngeles-Pope Homes did intentionally fail to disclose a material fact to Ronald Hogan with the intent to deceive, Ronald reasonably relied on the deception and was damaged in the amount of $57,500. DeAngeles-Pope Homes also intentionally failed to disclose a material fact to Victoria Hogan with the intent to deceive, Victoria reasonably relied on the deception and was damaged in the amount of $57,500.

DeAngeles Construction, Inc. did intentionally fail to disclose a material fact to Ronald Hogan with the intent to deceive, Ronald reasonably relied on the deception and was damaged in the amount of $200. DeAngeles Construction, Inc. also intentionally failed to disclose a material fact to Victoria Hogan with the intent to deceive, Victoria reasonably relied on the deception and was damaged in the amount of $200.

Marvin DeAngelis did not intentionally fail to disclose any material fact to either Ronald or Victoria Hogan. However, Gary Pope did fail to disclose a material fact to both Ronald and to Victoria, both of whom reasonably relied on the deception(s) and both of whom suffered damages in the amount of $200.

d. Breach of Fiduciary Duty

The jury’s answers to questions about the twelfth cause of action for breach of fiduciary duty against the Engstroms resulted in the following findings:

Clayton Engstrom owed Ronald Hogan a fiduciary duty and he breached that duty, but Ronald did not suffer any economic damages as a result of the breach. Clayton Engstrom owed Victoria Hogan a fiduciary duty and also breached that duty but, again, Victoria did not suffer any economic damage.

Mary Engstrom owed Ronald Hogan a fiduciary duty and she breached that duty but her breach did not cause Ronald to suffer any economic damage. Mary Engstrom owed Victoria Hogan a fiduciary duty and she breached that duty, but the breach of duty did not cause Victoria to suffer any economic damage.

e. Punitive Damages

The special verdict forms required the jury to answer specific questions about each individual defendant’s conduct with respect to each individual plaintiff. The jury found that no defendant committed any act of oppression, malice, or fraud against either of the plaintiffs and that the Hogans were not entitled to punitive damages.

F. The Judgments

1. The Original Judgment

A judgment on the special verdicts was filed March 22, 2007. The judgment contains a brief procedural summary of the trial, incorporates the jury verdicts on special issues and states that, by virtue of the special verdicts, the Hogans are entitled to judgment against the Developer defendants. The Judgment then sets forth the following specific orders: “That plaintiffs [the Hogans] have judgment for economic damage against [the Developer defendants] for a total Judgment in the amount of the Special Verdict forms attached. [¶] Plaintiffs [the Hogans] to return the home at 2014 Gardenview Place, Santa Rosa California to Defendants MARVIN DeANGELIS and GARY POPE.”

2. The Corrected Judgment

On April 3, 2007, the trial court filed an ex parte order after hearing pursuant to which it (1) stayed execution of the judgment until 10 days after the last day to file a notice of appeal and (2) directed that “[a] corrected judgment will be entered nunc pro tunc by the court correcting clerical errors. Marvin DeAngelis, individually, will be removed from the judgment. Clayton Engstrom, and Mary Engstrom, dba Signature Properties will be added to the judgment as defendants. In all other respects, the judgment remains unchanged.”

A court “notice,” dated and filed on April 5, 2007, states that the court entered a “corrected judgment on special verdict nunc pro tunc March 22, 2007.” However, we have been unable to locate a copy of that corrected judgment anywhere in the appellate record.

3. Judgment Notwithstanding the Verdict

Both sets of defendants filed motions for judgment notwithstanding the verdict and/or a new trial. One of the Developers’ arguments was that the jury had miscalculated the interest components of the Hogans’ consequential damages, at least with respect to the $216,754 award for interest on the down payment and the $10,875 award for interest on the upgrades. Since the Hogans were entitled to recover interest at the legal rate of 10 percent per annum, the most the jury could properly have awarded, according to the Developers’ calculations, was $163,417.68 for the down payment, and $8,199.29 for the upgrades.

In an order filed May 18, 2007, the superior court granted, in part, the Developers’ motion for judgment notwithstanding the verdict, solely as to the jury’s interest award. The order states that “[t]he amount of interest should have been a simple 10% per annum award totaling $171,616.97.” The court denied the motions for JNOV in all other respects and also denied the new trial motions. The Hogans’ counsel was instructed to prepare the amended judgment.

4. The Amended Judgment

On June 6, 2007, the court filed an amended judgment on special verdict which had been drafted by the Hogans’ counsel. The amended judgment contains the following material provisions:

“1. Plaintiffs RONALD HOGAN and VICTORIA HOGAN shall recover judgment against DEVELOPER DEFENDANTS, jointly and severally, in the amount of $394,246.41⁷;

7 The parties appear to agree that this figure in the amended judgment combines the award of consequential damages against the Developers with the award of intentional concealment damages against the Developers. However, we are unable to confirm that this figure is accurate. As best we can determine, the Hogans never discuss this calculation in their appellate briefs. The Developers do challenge the propriety of this specific award. However, they erroneously state that the amended judgment imposes a total award against them of $390,471.09.

“2. DEVELOPER DEFENDANTS, jointly and severally, shall pay the existing mortgage debt in the amount of $417,000.00;

“3. Plaintiff RONALD HOGAN shall recover judgment against CLAYTON ENGSTRO[M], dba SIGNATURE PROPERTIES, in the amount of $10,000.

“4. Plaintiff VICTORIA HOGAN shall recover judgment against CLAYTON ENGSTROM, dba SIGNATURE PROPERTIES, in the amount of $10,000.

“5. Plaintiff VICTORIA HOGAN shall recover judgment against MARY ENGSTROM, dba SIGNATURE PROPERTIES, and against CLAYTON ENGSTROM, dba SIGNATURE PROPERTIES as broker and employer of his agent MARY ENGSTROM, in the amount of $45,000.⁸

8 This amount constitutes the sum of the $10,000 damage award against Mary Engstrom for breach of contract and the $35,000 damage award against Mary Engstrom for intentional concealment.

“6. Plaintiffs RONALD HOGAN and VICTORIA HOGAN to return the home at 2014 Gardenview Place, Santa Rosa, California to DEVELOPER DEFENDANTS.”

III. THE DEVELOPERS’ APPEAL

The Developers appeal from a post-judgment order denying their motion to correct the amended judgment nunc pro tunc.

A. Background

On October 12, 2007, the Developers moved to correct the amended judgment pursuant to Code of Civil Procedure, section 473, subdivision (d), which states: “The court may, upon motion of the injured party or its own motion, correct clerical mistakes in the judgment or orders as entered, so as to conform to the judgment or order directed, and may, on motion of either party after notice to the other party, set aside any void judgment or order.”

In the trial court, the Developers argued that the sole purpose of the amended judgment was to reduce the amount of two interest items relating to consequential damages as required by the trial court’s ruling on the motions for judgment notwithstanding the verdict. However, the Developers complained, the Hogans’ counsel improperly used the opportunity to make substantive changes to the judgment by combining all the awards against them and adding language to hold them all jointly and severally liable for the entire combined amount. The Developers sought to correct the amended judgment to make it consistent with the original judgment and the special jury verdicts which allegedly did not hold the Developers jointly and severally liable for all of the damages awarded against any one of them. The Developers also requested that the amended judgment be corrected to expressly state that their obligation to pay consequential damages was conditional on the Hogans’ return of the Gardenview property.

On February 5, 2008, the court issued a tentative decision to grant the Developers’ motion in part, “only for clarification and to more accurately reflect the verdict.” At a February 6 hearing on the matter, the Hogans argued the amended judgment did not conflict with the jury’s verdicts because joint and several liability was a purely legal issue and, in any event, the lower court no longer had jurisdiction to change the judgment because the Hogans had already filed an appeal. That same day, the trial court denied the Developers’ motion to correct the amended judgment.

B. Analysis

On appeal, the Developers argue, as they did below, that the sole reason that the trial court ordered that an amended judgment be prepared was to reduce the interest awards relating to the down payment and property upgrades as required by the partial grant of the Developers’ motion for judgment notwithstanding the verdict. The Developers also continue to complain that the Hogans’ counsel drafted an amended judgment that made other substantive and improper alterations to the original judgment. However, the Developers no longer dispute their joint and several liability.

The Developers now argue that the amended judgment is inconsistent with the original judgment and jury special verdicts because it requires the Developers to pay the Hogans both consequential damages and concealment damages. According to the Developers, “[t]here is a verdict for liability for the remedy of damages based on concealment, which collectively amounts to $115,800 in favor of the Hogans. Alternatively, if the Hogans choose to exercise their entitlement to rescission, then they have the remedy of collecting $274,471.09 and payment of their mortgage in exchange for the real property.” Therefore, the Developers conclude, the jury found the Hogans were entitled to recover either consequential damages or intentional concealment damages, but not both.

Since the Developers did not raise this argument in the trial court, it obviously cannot be the basis for establishing error with respect to the denial of their motion to correct the amended judgment. Implicitly acknowledging this fact, the Developers expressly request that this court correct the amended judgment, arguing that “[e]rrors appearing on the face of the judgment, such as here where the special verdict differs from the amended judgment, may be corrected at any time.” (Citing In re Goldberg’s Estate (1938) 10 Cal.2d 709, 716-717.)

However, the Developers do not refer us to any finding by the jury or any language in the 33 pages of special verdict forms which supports their new argument that the jury made alternative awards in this case. We have reviewed the special verdict forms, but find nothing in them to even suggest that the question of alternative remedies was brought to the attention of the jury. We have also reviewed the language of every version of the judgment that appears in the appellate record. Again, it appears clear to us that there was never any intention on the part of the jury or the trial court to make the Hogans’ elect between the concealment damages award and the relief based on rescission.

The Developers make the separate argument that the amended judgment must be corrected to clarify that the Hogans must return the Gardenview property as a condition of obtaining relief based on rescission. Although we appreciate why the Developers are concerned about this issue, the amended judgment clearly does require the Hogans to return the Gardenview property.

To summarize, the Developers have failed to identify any clerical error in the judgment that can be corrected pursuant to section 473, subdivision (d), of the Code of Civil Procedure. Neither the jury verdicts nor any version of the judgment under review today imposed an obligation on the Hogans to elect between any of the relief awarded by the jury.

IV. THE HOGANS’ FIRST APPEAL AND THE CROSS-APPEALS

A. The Parties Theories and Preliminary Considerations

The three sets of parties before us have each developed fundamentally different theories about the nature of this case. The Hogans’ theory is that the Gardenview purchase agreement was not rescinded, and they challenge virtually every ruling by the lower court which had the effect of limiting their recovery to relief based on rescission. In the trial court, the Developers and the Engstroms steadfastly maintained that the purchase agreement was rescinded. On appeal, the Engstroms continue to defend the rescission order and argue that it precludes a finding of liability against them. The Developers embrace a new theory on appeal. They now maintain that the Hogans were essentially allowed to pursue two alternate remedies throughout the lower court proceedings and that the fundamental error in the amended judgment is that it does not require the Hogans to elect between those remedies.

In their effort to pursue these individual theories and interests, the parties have lost sight of their obligations as appellants and respondents. We appreciate the complexity of this case and respect the right of each of these parties to present their point of view and argue their case. However, particularly when the appellate record is as voluminous as this one, the parties have an obligation to the court and to themselves to clearly state their claims and support them with references to the record and relevant authority.⁹ We note for the record that the hundreds of pages of briefing generated by these parties contain many arguments that either lack sufficient factual or legal support, are not coherent, or are not responsive to the actual judgment before us today. Nevertheless, we have made every effort to decipher and respond to all substantive claims of error raised by the parties in this case.

9 Furthermore, arguments that divert our attention from substantive claims of error, whether or not they can be supported by a procedural rule, do not serve anyone in the end. In this regard, we deny the Developers’ motion to strike portions of the Hogans’ reply brief. To the extent that brief contains improper statements or arguments, we will ignore them, just as we would ignore new issues and contentions raised in a motion to strike.

For clarity, we first address issues that relate to rescission regardless where those issues may appear in the many briefs filed in connection with the appeal and cross-appeals. Then we will turn to issues pertaining to the Hogans’ legal claims and damages awards.

B. Rescission Issues

1. The 2004 Rescission Order

The Hogans’ first and primary contention is that the 2004 rescission order is erroneous and that the error permeated the entire trial, requiring reversal of the amended judgment.¹⁰

10 The Engstroms contend that the 2004 rescission order is not subject to review on appeal from the amended judgment. However, they provide neither relevant authority nor reasoned analysis to support this claim. Their suggestion that the 2004 order may have been appealable as a collateral order is unsound on this record, which so clearly demonstrates that the order is an integral part of the amended judgment.

a. Legal Principles

“A contract is extinguished by its rescission.” (Civ. Code, § 1688.¹¹) “Rescission not only terminates further liability but restores the parties to their former position by requiring each to return whatever he or she received as consideration under the contract, or, where specific restoration cannot be had, its value. [Citations.]” (1 Witkin, Summary of Cal. Law (10th ed. 2005) Contracts, § 926, p. 1023.) An action for rescission and an action for breach of contract are alternative remedies because rescission is based on the disaffirmance of the contract while a damages award for breach of contract is based on its affirmance. Therefore, the election of one of these alternative remedies bars recovery under the other. (Akin v. Certain Underwriters at Llloyd’s London (2006) 140 Cal.App.4th 291, 296 (Akin).)

11 All statutory references in this section of our opinion are to the Civil Code.

Prior to 1961, California recognized two methods by which a party to a contract could obtain rescissionary relief: (1) unilateral rescission by a party, followed by an action to enforce the out-of-court rescission; or (2) an action for judicial rescission pursuant to which specific judicial relief was granted for the wrong giving rise to the right of rescission. (Runyan v. Pacific Air Industries, Inc. (1970) 2 Cal.3d 304, 311-312 (Runyan).) However, in 1961, the Legislature abolished the action to obtain judicial rescission and left only an action to obtain relief based upon a party effecting rescission. (Id. at p. 313; see also Paularena v. Superior Court (1965) 231 Cal.App.2d 906, 913 (Paularena).)

Therefore, any post-1961 rescission must necessarily be accomplished by a party to the contract. The court does not rescind contracts but only affords relief based on a party effecting rescission. Both the grounds for rescission and the means by which parties may rescind their contract are governed by statute. (See § 1688, et seq.)

The circumstances which entitle a party to rescission are set forth in section 1689. Subdivision (a) of this statute states that “[a] contract may be rescinded if all the parties thereto consent.” Subdivision (b)(1) codifies the contracting party’s right to unilaterally rescind the contract under specified circumstances which include cases in which the consent of the rescinding party was “given by mistake, or obtained through duress, menace, fraud, or undue influence, exercised by or with the connivance of the party as to who he rescinds, or of any other party to the contract jointly interested with such party.”¹²

12 Section 1689, subdivision (b) states, in full: “A party to a contract may rescind the contract in the following cases: [¶] “(1) If the consent of the party rescinding, or of any party jointly contracting with him, was given by mistake, or obtained through duress, menace, fraud, or undue influence, exercised by or with the connivance of the party as to whom he rescinds, or of any other party to the contract jointly interested with such party. [¶] (2) If the consideration for the obligation of the rescinding party fails, in whole or in part, through the fault of the party as to whom he rescinds. [¶] (3) If the consideration for the obligation of the rescinding party becomes entirely void from any cause. [¶] (4) If the consideration for the obligation of the rescinding party, before it is rendered to him, fails in a material respect from any cause. [¶] (5) If the contract is unlawful for causes which do not appear in its terms or conditions, and the parties are not equally at fault. [¶] (6) If the public interest will be prejudiced by permitting the contract to stand. [¶] (7) Under the circumstances provided for in Sections 39, 1533, 1566, 1785, 1789, 1930 and 2314 of this code, Section 2470 of the Corporations Code, Sections 331, 338, 359, 447, 1904 and 2030 of the Insurance Code or any other statute providing for rescission.” (§ 1689, subd. (b), fns. omitted.)

The steps that a party must take in order to effect a rescission of the contract are set forth in section 1691, which states, in part: “Subject to Section 1693,¹³ to effect a rescission a party to the contract must, promptly upon discovering the facts which entitle him to rescind if he is free from duress, menace, undue influence or disability and is aware of his right to rescind: [¶] (a) Give notice of rescission to the party as to whom he rescinds; and [¶] (b) Restore to the other party everything of value which he has received from him under the contract or offer to restore the same upon condition that the other party do likewise, unless the latter is unable or positively refuses to do so.”

13 Section 1693 provides that, as a general matter, delay in giving notice of rescission or in restoring benefits will not preclude relief based upon rescission absent substantial prejudice to the other party.

Section 1691, subdivision (b), also expressly states: “When notice of rescission has not otherwise been given or an offer to restore the benefits received under the contract has not otherwise been made, the service of a pleading in an action or proceeding that seeks relief based on rescission shall be deemed to be such notice or offer or both.”

Once a contract has been rescinded, any party to the disaffirmed contract may seek relief in the court based upon the rescission, either by “bringing an action to recover any money or thing owing to him by any other party to the contract as a consequence of such rescission or for any other relief to which he may be entitled under the circumstances,” or by asserting the rescission as a defense, counterclaim or cross complaint. (§ 1692.)

Section 1692 also provides that “[i]f in an action or proceeding a party seeks relief based upon rescission and the court determines that the contract has not been rescinded, the court may grant any party to the action any other relief to which he may be entitled under the circumstances.” We think it is important to note that this provision has two distinct functions. It imposes an obligation on the trial court to determine whether the rescission underlying the cause of action for relief based on rescission was effectual, and it also expressly confers authority on the court to provide alternate relief if the rescission was not effective.

Finally, section 1692 describes the nature of judicial relief available in an action for relief based on rescission: “A claim for damages is not inconsistent with a claim for relief based upon rescission. The aggrieved party shall be awarded complete relief, including restitution of benefits, if any, conferred by him as a result of the transaction and any consequential damages to which he is entitled; but such relief shall not include duplicate or inconsistent items of recovery. [¶] If in an action or proceeding a party seeks relief based upon rescission, the court may require the party to whom such relief is granted to make any compensation to the other which justice may require and may otherwise in its judgment adjust the equities between the parties.”

In Runyan, supra, 2 Cal.3d 304, our Supreme Court reviewed and discussed the impact of the 1961 revisions to the rescission statutes, noting, among other things, that the “simple procedure furnished by Section 1692” authorizes the trial court to invoke traditional and deep-rooted principles of courts of equity in order to award a rescinding party complete relief and to otherwise adjust the equities between the parties. (Id. at p. 318.) The court recognized that a monetary award of restitution and consequential damages was a valid means of affording complete relief to the rescinding party, but it also confirmed that the trial court has an express statutory obligation to ensure that any monetary award does not include duplicate or inconsistent items of recovery. (Id. at p. 319.)

b. The Purchase Agreement was Rescinded

Despite the overwhelming and convoluted record generated by these parties, a straightforward application of the rescission statutes compels the conclusion that the Gardenview property purchase agreement was unilaterally rescinded by the Hogans.

As reflected in our factual summary, the Hogans filed a complaint in which they expressly (1) alleged two distinct grounds entitling them to rescind the purchase agreement, mutual mistake and fraud, and (2) sought relief based on rescission. By serving this complaint on the Developers, the Hogans satisfied all of the requirements of section 1691, i.e., they gave notice of rescission to the Developers and they offered to restore “everything of value” which they had received under the contract. (§ 1691, subd. (b).) At that point, pursuant to the clear language of the rescission statutes, the Hogans declared a unilateral rescission of the Gardenview purchase agreement. (See Holmes v. Steele (1969) 269 Cal.App.2d 675, 677 (Holmes) [“‘[I]f facts exist that justify a rescission by one party, and he declares a rescission in some effectual manner, he terminates the contract.’”]; Wilson v. Lewis (1980) 106 Cal.App.3d 802, 809 [quoting Holmes]; C. Norman Peterson Co. v. Container Corp. of America (1985) 172 Cal.App.3d 628, 642-643 [“In recission cases the Civil Code now prescribes the method by which one party may unilaterally rescind the contract on explicit notice to the other. (See Civ. Code, § 1691.)”]; Harrison v. Connecticut Mutual Life Ins. Co. (1991) 771 F.Supp. 1053, 1056 [“Where the procedural prerequisites of section 1691 are met, and there is a valid substantive ground for rescission, unilateral rescission occurs.”].)

Once the Hogans rescinded the purchase agreement and sought relief based upon that rescission, the court was required, by section 1692, to determine whether the rescission was effectual, e.g., whether there was a valid substantive ground for the rescission and/or whether delay and resulting prejudice precluded rescission under section 1693. However, these issues disappeared and the substantive validity of the rescission was established once the Developers “accepted” the rescission in December 2003, and thereby conceded that there was a valid basis for the Hogans’ unilateral rescission of the purchase agreement. Therefore, we hold that the trial court did not err by issuing the 2004 rescission order which confirmed that the purchase agreement had, indeed, been rescinded.

Paularena, supra, 231 Cal.App.2d 906, reinforces our conclusion. In that case, several sets of home purchasers sued the sellers for breach of statutory and common law duties, fraud and rescission. (Id. at p. 909.) The defendants responded to the complaint by sending plaintiffs a letter in which they accepted the plaintiffs’ notice of rescission and offer to restore all consideration and agreed to restore the value of benefits conferred upon them by the plaintiffs. The defendants also filed an answer in which they again accepted the rescission. Despite these circumstances, “[a]pparently, restoration was not effected,” and the litigation continued. (Id. at p. 910.)

The Paularena trial court filed a pre-trial order in which it determined, among other things, that all of the purchase agreements had been rescinded and that the effect of the rescission was to “‘limit the issue to be tried to a determination and offsetting of the value of the respective benefits conferred in each instance.’” (Paularena, supra, 231 Cal.App.2dat p. 910.) Thereafter, the trial judge made a ruling that the action was “one in equity” and that plaintiffs were not entitled to a jury. Plaintiffs filed an alternative writ, seeking to compel a trial by jury. (Id. at p. 911.)

The Paularena court found that the plaintiffs’ action was at law and they were, therefore, entitled to a jury. It discussed the 1961 revisions to the rescission statutes and recognized that this 1961 legislation effectively abolished the equitable action to obtain a court rescission and left only the legal action to obtain relief based upon a party effected rescission. (Paularena, supra, 231 Cal.App.2d at pp. 912-913.) The court also found that the plaintiffs’ rescission cause of action was “obviously” a “cause of action to obtain relief on account of a rescission by the plaintiffs” and that the “bringing of this action, as well as the allegations contained therein, constituted compliance with the requirements [of section 1691] that the party rescinding must give notice of rescission and an offer to restore the benefits received under the contract.” (Id. at p. 913.)

The Paularena court also concluded that the lower court had already properly determined that the rescission of the agreements was effectual, which left only the question of consequential damages, which was a jury question: “The allegations in the complaint clearly indicate that the plaintiffs seek to obtain the value of the benefits they had conferred upon the defendants. The defendants by letter, and by pleading, accepted the rescission. Under the circumstances, the trial court properly concluded that by virtue of the facts and the pleading before it no issue respecting the accomplished rescission was pending. This result left for determination only the issue respecting amount of damages, if any, to be awarded the plaintiffs.” (Paularena, supra, 231 Cal.App.2d at p. 913.) Under these circumstances, the court found, “the basic relief” sought by the plaintiffs through their rescission claim and the issues relating thereto gave rise to an action at law. (Ibid.)

Like the claims at issue in Paularena, the Hogans’ causes of action for rescission were causes of action to obtain relief on account of a rescission by the plaintiffs. Like the Paularena plaintiffs, the Hogans complied with all the section 1691 requirements for effectuating such a rescission. Further, like the defendants in Paularena, the Developers accepted the rescission. Therefore, in this case, as in Paularena, “the trial court properly concluded that by virtue of the facts and pleadings before it no issue respecting the accomplished rescission was pending.” (Paularena, supra, 231 Cal.App.2d at p. 913.)¹⁴

14 While we are on this subject, we also follow Paularena in rejecting the Engstroms’ contention that the Hogans were not entitled to a jury trial in this case.

c. The Hogans’ Theories

The Hogans contend that, once they dismissed their eighth and ninth causes of action “for rescission,” the trial court no longer had “jurisdiction” to try a rescission claim. This argument is based on a fundamental misconception of California law. Under the post-1961 statutory scheme, all actions which seek relief based on rescission are actions to “‘enforce a rescission,’” not to obtain one. (Runyan, supra, 2 Cal.3d at p. 313.) Therefore, regardless of the label the Hogans employ, they never did plead any cause of action “for rescission.” Rather, they sought judicial relief as parties who had effected rescission. The Hogans’ subsequent strategic decisions to dismiss the causes of action that set forth the legal grounds for the rescission and then to re-allege them in amended pleadings surely added confusion to the proceedings. However, as the lower court found, this rather bizarre litigation strategy had no substantive effect on the already-completed rescission.

By the same token, this case does not raise any issue regarding the trial court’s “jurisdiction” to try a rescission claim because the court did no such thing. Rather, prior to trial, the court issued the 2004 rescission order which confirmed that the Gardenview purchase agreement had been rescinded. As discussed more fully above, section 1692 expressly confers on trial courts the obligation to determine whether the rescission that gives rise to a cause of action for relief based on rescission was effectual or not. (See also Fowler v. Ross (1983) 142 Cal.App.3d 472, 478 [determination whether a contract was rescinded is for the court to decide, not a jury].) If the Hogans are suggesting the dismissal of their eighth and ninth causes of action deprived the court of jurisdiction to grant the Hogans’ relief based on rescission, we disagree. The Hogans sought relief based on their rescission in every prayer for relief in every complaint filed in this action.

The Hogans next contend that election of remedies principles mandate reversal of the judgment. In support of this contention, they direct our attention to Roam v. Koop (1974) 41 Cal.App.3d 1035 (Roam), a case which is factually inapposite, in that it did not involve a rescission, but which nevertheless offers the following articulation of the election of remedy principles upon which the Hogans rely:

“Broadly speaking, election of remedies is the act of choosing between two or more concurrent but inconsistent remedies based upon the same state of facts. Ordinarily a plaintiff need not elect, and cannot be compelled to elect, between inconsistent remedies during the course of trial prior to judgment. [Citations.] However, if a plaintiff has unequivocally and knowledgeably elected to proceed on one of the remedies he is pursuing, he may be barred recourse to the other. [Citation.] It is to such a situation that the doctrine of election of remedies pertains. The doctrine of election of remedies acts as a bar precluding a plaintiff from seeking an inconsistent remedy as the result of his previous conduct or election.” (Roam, supra, 41 Cal.App.3d at p. 1039.)

Throughout these lengthy proceedings, the Hogans have developed three slightly different arguments based on their election of remedies theory. First, they contend these principles preclude a finding that they rescinded the purchase agreement by filing a complaint in which they sought the alternative remedies of rescission and legal damages for breach of contract and fraud. Second, the Hogans assert that the trial court committed reversible error by forcing them to elect the remedy of rescission prior to judgment. Finally, and most recently, the Hogans take the position that they did elect their remedy prior to trial but that their chosen remedy was legal damages, not rescission.

The first two versions of the Hogans’ argument rest on the faulty premise that a civil litigant can plead a cause of action for rescission of a contract. As we have already explained, the only judicial remedy available under the post-1961 rescission statutes is relief for a party effected rescission. Since there is no such thing as a cause of action for rescission, the Hogans did not and, indeed, could not have sought rescission as an alternate potential remedy in their complaint. Rather, the Hogans elected rescission as their remedy when they filed an action in which they alleged facts entitling them to rescind the purchase agreement and then complied with the section 1691 requirements for unilaterally rescinding a contract by serving their complaint on the Developers. Furthermore, the trial court did not force the Hogans to elect their remedy; they did so independently by following the procedure set forth in section 1691.

Again, Paularena, supra, 231 Cal.App.2d 906 , reinforces our conclusion. As discussed earlier, the Paularena trial court issued a pre-trial order which limited the pending trial to the issue of damages relating to the rescission. During the writ proceeding before the Court of Appeal, the plaintiffs argued that the lower court lacked “jurisdiction” to make the pre-trial order because plaintiffs were not required to elect the remedy of rescission rather than damages for violating statutory duties, negligence, breach of warranty or fraud. (Id. at p. 914-915.) The Paularena court found that the election had already been made. As the court explained, “[a] party who seeks to disaffirm a contract but does so ineffectively, does not lose his right to maintain an action based upon its affirmance. [Citation.] However, it is wholly inconsistent for him to ask for damages based upon an affirmance of the contract and, if he cannot have such, for damages for relief based on disaffirmance, i.e., rescission. [Citation.]” (Id. at p. 915.) The Paularena plaintiffs had elected to rescind their purchase agreement and, because rescission is a remedy based on disaffirmance of the contact, their election precluded them from seeking remedies based on affirmance of the underlying contract. (Id. at p. 915.) As that court recognized, these rules are now codified in section 1692 which expressly precludes any award of damages based on inconsistent causes of action. (Id. at p. 915-916.)

Jahn v. Brickey (1985) 168 Cal.App.3d 399, 406 (Jahn), a case cited to us by the Hogans, only further reinforces our conclusion. In Jahn, the plaintiff-seller rescinded a real estate sales contract, filed a complaint seeking relief based on rescission, and obtained consequential damages pursuant to a jury award. On appeal, respondents challenged the damages award, arguing that, once the lower court determined that rescission was appropriate, the plaintiff was required to “choose his remedy because ‘the remedies of rescission, being based upon a disaffirmance of an agreement, and damages, being based upon an affirmance, are classicly [sic] inconsistent.’” (Id. at p. 406.) The Jahn court rejected this mischaracterization of the jury’s award of consequential damages. Applying the rule set forth in section 1692 that “‘[a] claim for damages is not inconsistent with a claim for relief based upon rescission,’” the court reasoned that, notwithstanding the fact that the plaintiff accepted rescission as his remedy, he was nevertheless entitled to a jury determination and award of consequential damages in order to make him whole. (Id. at p. 406.) However, the Jahn court did not hold or intimate that a party who rescinds a contract may thereafter pursue consequential damages relating to the rescission as well as damages for breach of the non-existent contract. We find no authority supportive of that proposition.

The Hogans’ third alternative theory is that they did make an election, but it was to affirm the contract and seek damages for its breach. This new argument is premised on the notion that the dismissal of the eighth and ninth causes of action from the original complaint constituted an election not to rescind. The obvious problem with this argument is one of timing. As we have already explained, the rescission causes of action were dismissed from the complaint after the Hogans had already elected rescission as their remedy. The Hogans have persistently failed to acknowledge this fact and, therefore, offer no rebuttal. However, our own research has uncovered an additional issue that merits discussion here.

There is authority that an election to rescind a contract may be revocable under certain circumstances. (See Karapetian v. Carolan (1948) 83 Cal.App.2d 344 (Karapetian), and authority discussed therein.) Arguably, this authority has continuing force, to the extent it does not conflict with the post-1961 rescission statutes. For example, pre-1961 case law holds that if a party rescinds a contract and files an action for relief based on that rescission, but the court determines that the rescission was not effective, the party’s election of the rescission remedy is not irrevocable and he or she may pursue a claim for damages for breach of contract. (Id. at p. 352; see also Williams v. Marshall (1951) 37 Cal.2d 445, 457 [not improper to seek damages based on rescission and alternatively for breach of contract if rescission has not been effected.].) This rule is consistent with, if not codified in, section 1692, which authorizes the trial court to grant a party “any other relief to which he may be entitled” if it determines that the contract has not been rescinded. However, this rule does not assist the Hogans because the trial court in this case expressly found that the rescission was accomplished.

There is also authority for the somewhat more controversial proposition that an election to rescind can be revoked when the nonrescinding party has taken some action which has “made the attempted rescission ineffectual.” (Karapetian, supra, 83 Cal.App.2d at p. 354-355.) In Karapetian, for example, the plaintiff home buyers sent two notices of rescission to the sellers after discovering defects in the home that they believed had been fraudulently concealed. The sellers refused to return the consideration received by them and, after the buyers moved out, refused to accept the house key from the buyers. Thereafter, the buyers filed an action for damages for fraud and deceit and obtained a favorable jury verdict. On appeal, the Karapetian court rejected the sellers’ contention that the buyers made an irrevocable election when they served their notice of rescission. The Court of Appeal reviewed the conflicting authority on this issue and ultimately concluded that the plaintiffs’ initial election had been revoked: “The notice of rescission should not be held to be an ‘irrevocable’ election until it is made ‘effectual’ by the innocent party receiving back the consideration with which he has parted. Where the fraudulent party prevents that from happening, either by parting with the property or by refusing to disgorge his ill-gotten gains, or otherwise, and the innocent party is forced to an action, he should be permitted, if he so desires, to then affirm the contract and sue for damages or to disaffirm and sue for rescission.” (Id. at p. 355.)

Assuming that the rule applied in Karapetian in 1948 remains viable today, and that there are circumstances in which a unilateral rescission can properly be revoked by the rescinding party, we hold that the Hogans’ election of the remedy of rescission was not revocable at the time they dismissed their eighth and ninth causes of action. By that time, the Developers had already acknowledged and accepted the Hogans’ rescission and had formally offered to restore all consideration and benefits that they had received under the purchase agreement.

Every permutation of the Hogans’ election of remedies theory is premised on the faulty conception of rescission as a remedy conferred by a court judgment. However, as discussed above, rescission can only be accomplished by the parties and, when a party complies with the statutory requirements for effecting a unilateral rescission, he thereby effects that election.

d. The Independently Enforceable Rescission Contract Theory

In the lower court, the Developers’ theory was that the Hogans’ complaint gave rise to an independently enforceable contract of rescission. Thus, for example, in his December 2, 2003, letter to the Hogans’ counsel, the Developers’ counsel purported to accept the “offer of rescission” in the Hogans’ complaint. Although the Developers appear to have abandoned this theory on appeal, the Engstroms continue to embrace it. Indeed, this independent contract theory is the cornerstone of most of the arguments the Engstroms make in this court. For their part, the Hogans also spend significant time on this argument, although their goal is to convince us that there is no separate, independently enforceable, contract which effectuated a rescission of the purchase agreement.

As our analysis above should make clear, the rescission of the Gardenview purchase agreement was not effectuated by an agreement between these parties but, rather, was a unilateral rescission by the Hogans. The plain language of the rescission statutes makes clear that the service of the Hogans’ complaint on the Developers did not constitute a statutory offer to enter into a new rescission agreement. Rather, that act constituted a statutory notice of rescission and a statutory offer to restore benefits. (§ 1691.) As such, this act of service of the complaint on the Developers satisfied the requirements of section 1691 for effecting a unilateral rescission of the purchase agreement.

Therefore, we agree with the Hogans that the service of their complaint did not give rise to a separate, independently enforceable contract. Nor do we find that the Developers’ “acceptance” of the rescission somehow transformed the fundamental nature of this proceeding from that of a unilateral rescission to a contractual one. Rather, by their “acceptance,” the Developers made an admission that the Hogans had rescinded the purchase agreement; this concession eliminated the need for judicial scrutiny as to whether the rescission had been properly accomplished.

Our rejection of the independently enforceable contract theory in this particular case should be construed as nothing more than that. We by no means suggest that such a contract could not arise under different circumstances. Indeed, as we have already discussed, consent of all of the parties is a statutory ground for rescission. (§ 1689, subd. (a).) Rescission by agreement gives rise to an action to enforce the agreement or to procure a decree of rescission because of that agreement. (Runyan, supra, 2 Cal.3d at p. 317, fn. 16, citing Commission’s Recommendations and Study Relating to Rescission of Contracts (1960) 3 Cal. Law Revision Com. Rep. (1961) at p. D-15, fn 1.) But the facts presented to us here make clear that there was no agreement to rescind the purchase agreement prior to the initiation of litigation by the Hogans. Rather, this entire litigation grew out of a unilateral rescission effectuated by the service of the Hogans’ complaint. ¹⁵

15 Our conclusion that there was no separate rescission contract in this case makes it unnecessary to resolve numerous disputes between the Hogans and the Engstroms relating to this separate contract theory, including whether any purported offer was rejected prior to its acceptance or whether a valid acceptance of said offer was precluded by the doctrine of laches.

The Engstroms contend that Paularena supports their theory that the Developers’ “acceptance” of the Hogans’ “statutory offer” to rescind gave rise to a binding rescission contract. We disagree. There is language in the Paularena opinion suggesting that the trial court applied an “offer” and “acceptance” analysis to find an independent rescission contract. However, the appellate court did not adopt that reasoning. Instead, the Paularena court expressly found that the plaintiffs’ rescission claim was a cause of action for relief based on rescission pursuant to section 1691, that plaintiffs satisfied all the requirements of that statute and that the defendants’ acceptance of the rescission eliminated the need for further judicial inquiry as to whether the rescission had been accomplished. (Paularena, supra, 231 Cal.App.2d at pp. 913-914.)¹⁶

16 The Hogans attempt to distinguish Paularena by mischaracterizing it as a mutual rescission case. Reading between the lines of the opinion, the Hogans surmise that the Paularena parties all agreed, during the course of litigation, that the purchase agreements would be rescinded. In fact, the language of the opinion makes clear that the parties agreed to permit the court to resolve their disagreement as to whether rescission had been effected by the parties. (Paularena, supra, 231 Cal.App.2d at p. 910.) The trial court did resolve that disagreement--to the dissatisfaction of the plaintiffs who then sought but were denied relief in the Court of Appeal.

To summarize, we hold that the Hogans’ complied with all of the statutory requirements for effecting a unilateral rescission of the Gardenview purchase agreement, the Developers made a formal concession in the lower court that the rescission was effective, and, therefore, the trial court did not err by issuing the 2004 rescission order.

2. Consequential Damages

The Hogans contend that, even if the purchase agreement was rescinded, the trial court committed reversible error by precluding them from obtaining a full recovery of their consequential damages. In addressing these contentions, we are mindful that the purpose of relief based on rescission is to put “the rescinding party in the status quo ante, returning him to his economic position before he entered the contract.” (Runyan, supra, 2 Cal.3d at p. 316, fn. 15.) The trial court’s authority to award money damages or such other relief as justice may require stems from the very “purpose” of rescission, “‘to restore both parties to their former position as far as possible’ [citations] and ‘to bring about substantial justice by adjusting the equities between the parties’ despite the fact that ‘the status quo cannot be exactly reproduced.’ [Citations.]” (Id. at p. 316.) These principles are codified in section 1692, which (1) establishes that a claim for damages is not inconsistent with a claim for relief based upon rescission, (2) affords the rescinding party complete relief, including consequential damages, but also (3) expressly bars an award of “duplicate or inconsistent items of recovery.” (§ 1692.)

a. The Blake Place Property

According to the Hogans, their consequential damages include the loss of the appreciated value of a residence located on Blake Place in Santa Rosa, the home they sold before they purchased the Gardenview property. The Hogans further contend that they enjoyed a favorable tax basis when they owned the Blake Place property and that they should be compensated for that loss. Therefore, the Hogans’ posit, the trial court committed reversible error when it precluded them from seeking these damages by striking their claim for loss of appreciation damages from the prayer in their third amended complaint.

The trial court did not preclude the Hogans from seeking damages relating to Blake Place by striking the request for appreciation in value damages from the third amended complaint. That request, which was stricken from both the second and third amended complaints, was for loss of the appreciated value of the Gardenview property, not the Blake Place property.¹⁷ Moreover, we are troubled by the characterization of alleged damages relating to the loss of Blake Place as a material issue in this litigation. The Hogans did not seek damages relating to the loss of Blake Place in any of their complaints. Indeed, we have not found a single allegation in any pleading that makes any reference to that property.

17 At the hearing on the motion to strike this request from the second amended complaint, the Hogans’ counsel essentially conceded that these were benefit of the bargain damages that could not be recovered from the Developers, but he claimed that these legal damages could be recovered from the Realtor defendants. The trial court rejected this theory.

As best we can determine, the Hogans developed their theory that the loss of Blake Place was a component of consequential damages in response to the Developers’ in limine motion to exclude evidence of future damages. Specifically, the Hogans argued that they were entitled to compensation for the loss of a favorable property tax basis and the loss of the appreciated value in Blake Place from the time they sold it until the time that they would be required to return Gardenview. As reflected in our factual summary above, on December 19, 2006, the trial court filed orders after hearing in limine motions. Although the court did not expressly address Blake Place, it did rule that the Hogans were precluded from offering evidence “about alleged losses related to increased property taxes, [or] lost tax basis,” among other things.

Subsequently, on January 16, 2007, the day jury selection began, the trial court acknowledged receipt of a request from the Hogans to take judicial notice of documents relating to a 2005 sale of Blake Place. The court then offered the following comment to plaintiff's counsel: “[H]aving been given the opportunity to look further at the claim of consequential damages, the court is going to take a rather restrictive, rather than an expansive, view. And I frankly at this point am inclined to sustain any objection as to damages relating to loss of appreciation of Blake Place or any evidence about Blake Place. Let me tell you why that is. [¶] I think it is completely collateral. I think it's irrelevant. If I were to flip the issue it would be completely collateral, completely irrelevant, if the defendant were in here seeking to establish that plaintiffs sold the Blake Place and took half of it and put in a down payment and took the other half and invested it in some hot IPO and made a lot of money in the stock market. That would be completely irrelevant. I think it’s completely irrelevant to flip the issue and say, well, they lost money because they sold the Blake Place. [¶] So you just need to factor that into how you’re going to make your opening statement so that you don’t overpromise anything to the jury. But I am going to take a rather restrictive and not an expansive view as to what consequential damages are.”

Assuming, for purposes of argument, that the court’s comment on January 16 can be construed as an evidentiary ruling, the Hogans have not established error. Without the benefit of any supporting case authority, the Hogans suggest these losses are consequential damages because “[t]hey sold Blake Place in reliance on closing escrow on Gardenview.” We question this essential premise of their otherwise flawed theory, which is not supported by any allegation in any of their pleadings or by any reference to the evidence at trial. Indeed, according to the statement of facts in Appellants’ Opening Brief (which is supported by record citations) the Hogans decided that Ron Hogan would sell Blake Place because the couple were recently married and wanted to purchase a home together, because Blake Place was located in an airport flight path, and because the Hogans wanted to live in a higher quality home.

In any event, a more fundamental problem with this damages theory is that the relief sought is not available in connection with a rescission. As discussed above, the purpose of rescission and consequential damages is to return the parties to the status quo, as if the contract had never occurred. This particular damages claim, however, seeks to compensate the Hogans for what they now claim would have happened in the future if they had not purchased Gardenview. These potential future damages are not only inconsistent with the concept of rescission, they are, as the trial court expressly found, wholly speculative.

For all these reasons, we hold that the trial court did not err by concluding that the perceived loss of the financial advantages that may have arisen if the Hogans had not sold the Blake Place property did not give rise to a claim for consequential damages in connection with the rescission of the Gardenview property purchase agreement.

b. Interest Awards

The Hogans contend that the trial court denied them a full recovery of their consequential damages by reducing the jury awards of interest on their down payment and interest for property upgrades.

As discussed in our factual summary, the trial court granted, in part, the Developers’ motion for judgment notwithstanding the verdict by reducing the awards of interest on the down payment and on the property upgrades. The trial court reduced these two items because it found that “[t]he amount of interest should have been a simple 10% per annum award....” The Hogans challenge this ruling. They contend that the jury awarded them compound prejudgment interest and that they are legally entitled to that award because the Developers were fiduciaries.

First, we find nothing in the record to support the Hogans’ assumption that these two particular damages items were awards of compound interest. The Hogans did not expressly seek or present any evidence regarding compounding interest with respect to any of the alleged consequential damages. During oral argument, the Hogans’ counsel did ask the jury to award interest on the down payment and improvements, but he also stated that “[t]he law allows simple interest at 10 percent.” Furthermore, other interest awards made by the jury appear to be based on the 10 percent per annum calculation. Even now, the Hogans make no effort to articulate an evidentiary basis for the specific jury awards at issue here. Absent such evidence, they cannot establish that the trial court erred by reducing these two items of damages. ¹⁸

18 During his closing argument, the Developers’ counsel conceded that the Hogans were entitled to interest, although he argued that the award should be limited to the period before the rescission became effective. Thus, the parties offered different evidence regarding the amount of interest that should be awarded to the Hogans. However, as best we can determine, albeit without any assistance from the parties, the two jury awards at issue here were not consistent with any calculation discussed at trial.

Second, and alternatively, the Hogans have not established that they were entitled to recover compound prejudgment interest as part of their damages relating to the rescission. Their sole authority is Michelson v. Hamada (1994) 29 Cal.App.4th 1566, 1586-1587 (Michelson). Michelson is inapposite because it is not a rescission case and it did not involve an award of consequential damages. The Michelson court affirmed a jury award of compound prejudgment interest as part of the plaintiff’s damages for a breach of fiduciary duty. Although the Hogans contend the Developers had and breached such a duty, that cause of action was dismissed by the trial court. In any event, consequential damages relating to a rescission are governed by the rescission statutes summarized above, statutes which confer discretion on the court to do equity between the parties. The Hogans have completely failed to show that the court abused that discretion here.

C. The Nonsuit

As reflected in our factual summary, the defendants made oral motions for nonsuit

after the Hogans presented their case. After argument, the trial court granted a nonsuit as to all of the Hogans’ claims with the exception of three causes of action. ¹⁹ The Hogans contend the nonsuit order constitutes reversible error because they made a prima facie case as to all of their causes of action.

19 The Engstroms challenge the denial of their motion for nonsuit as to the three causes of action that went to the jury. We do not address this argument for several reasons. First, it appears in the Engstroms’ respondents’ brief instead of their cross-appellants’ brief. Second, the denial of a nonsuit is not an appealable order. (Hozz v. Felder (1959) 167 Cal.App.2d 197, 201.) Finally, the Engstroms make essentially the same arguments in connection with their challenge to the denial of the motion for judgment notwithstanding the verdict.

1. Breach of Contract, Warranty and Strict Liability

The Hogans contend the lower court committed “clear error” by dismissing the first cause of action for breach of contract against the Developers, the seventh cause of action for breach of warranty against the Developers, and the eighth cause of action for strict liability against the Developers. They maintain they made their prima facie case as to these causes of action by producing substantial evidence that the house had construction defects and that it was built illegally within an earthquake fault set-back.

We reject the Hogans’ substantial evidence argument because it is not supported by any reference to evidence presented at trial. In any event, all of these causes of action seek damages that depend on an affirmance of the purchase agreement. As we have already discussed, rescission is based on a disaffirmance of the contract and an election to rescind precludes recovery of damages based on an affirmance of the contract. (Akin, supra, 140 Cal.App.4th at p. 296.) Indeed, at the hearing on the nonsuit motions, the Hogans’ counsel expressly conceded that, if the 2004 rescission order was valid, these three causes of action were properly dismissed.

2. Negligent Misrepresentation and Negligent Construction

The Hogans challenge the nonsuit as to the fifth cause of action which alleged that all of the defendants made negligent misrepresentations regarding the condition of the Gardenview property, the sixth cause of action which alleged that the Developers negligently designed and constructed the Gardenview property, and the eleventh cause of action which alleged that the Engstroms were negligent when they inspected the subject property and prepared inaccurate disclosure documents.

The Hogans’ sole contention is that these causes of action must have been supported by sufficient evidence to withstand a nonsuit because the jury found many of the defendants liable for intentional misrepresentation and the evidence supporting those jury findings necessarily support these claims as well. There are several problems with this argument.

First, we reject the contention these claims were supported by adequate evidence because the Hogans fail to supply us with actual references to the trial evidence. Second, this claim of error disproves itself; to the extent the evidence supported findings of intentional fraud, it would not have also supported separate additional awards for negligence. Finally, the Hogans’ negligence claims were all based on allegations that the Hogans’ were harmed because they purchased the Gardenview property. However, prior to trial, the Hogans disaffirmed the Gardenview purchase agreement and, thus, were not entitled to recover damages allegedly resulting from an affirmance of the agreement. At the hearing on the nonsuit motion, the Hogans’ counsel conceded that, if the 2004 rescission order was valid, these causes of action were properly dismissed.

3. Emotional Distress

The Hogans contend that the trial court erred by eliminating their fourth cause of action for intentional infliction of emotional distress. Although the court granted a nonsuit as to this claim, it had previously granted the Developers’ in limine motion to exclude evidence of alleged mental suffering. Therefore, the Hogans’ argument on appeal is that the trial court committed reversible error by eliminating this cause of action at the in limine stage.

The Developers’ pre-trial motion to preclude evidence of mental distress was based on two distinct arguments. First, they argued that the Hogans’ could not establish causation, an essential element of a cause of action for intentional infliction of emotional distress.²⁰ The Developers’ theory was that the plaintiffs’ failure to designate a witness who could competently testify as to causation precluded them from proving this claim. The second point of the Developers’ motion was that emotional distress damages could not be recovered pursuant to the Hogans’ claims for relief based on rescission or for real estate fraud. The trial court granted this in limine motion, stating that emotional distress damages were not recoverable under Civil Code sections 3343 or 1692. (Citing O’Neil v. Spillane (1975) 45 Cal.App.3d 147 [mental suffering not an element of consequential damages relating to a rescission or part of out-of-pocket recovery in real estate fraud action].)

20 The elements of the tort of intentional infliction of emotional distress are: “‘(1) outrageous conduct by the defendant; (2) the defendant's intention of causing or reckless disregard of the probability of causing emotional distress; (3) the plaintiff’s suffering severe or extreme emotional distress; and (4) actual and proximate causation of the emotional distress by the defendant’s outrageous conduct.’ [Citation.] ‘Conduct, to be “‘outrageous’” must be so extreme as to exceed all bounds of that usually tolerated in a civilized society.’ [Citation.]” (Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc. (2005) 129 Cal.App.4th 1228, 1259; see also Potter v. Firestone Tire & Rubber Co. (1993) 6 Cal.4th 965, 1001-1002.)

On appeal, the Hogans purport to challenge the dismissal of their cause of action for intentional infliction of emotional distress. However, they do not defend or even address the sufficiency of their pleading in their fourth cause of action. Nor do they address or challenge the Developers’ theory that causation was lacking as a matter of law. Indeed, the Hogans fail to substantively address this claim at all. Instead, their sole argument is that mental distress damages were recoverable pursuant to other causes of action alleged against these defendants. This argument has no bearing on the question whether the fourth cause of action should have been dismissed.

Therefore, we summarily deny the Hogans’ unsupported contention that the trial court erred by dismissing their cause of action for intentional infliction of emotional distress.

4. Breach of Fiduciary Duty Against the Developers

In their thirteenth cause of action, the Hogans attempted to allege a claim for breach of fiduciary duty against the Developers. The theory they pled was that the Developers acted as fiduciaries because they were officers and directors of the Fountainview Homeowners Association. The Hogans further alleged that the Developers breached their fiduciary duties by (1) improperly transferring a noncontiguous parcel of property, sometimes referred to as Parcel D, to the Homeowners Association, and (2) failing to disclose to the Hogans information about the allegedly dangerous and uninsurable Parcel D property.

On appeal, the Hogans contend they made a prima facie case of breach of fiduciary duty against the Developers.

The first alleged breach of a fiduciary obligation was the transfer of Parcel D to the Homeowners Association, which apparently occurred during the period that the Hogans were members of that association. The Hogans fail to provide us with any references to the trial evidence which pertain to this allegedly improper transfer. Without providing record citations, the Hogans do discuss this matter in their factual summary. From that, we learn that the Homeowners Association sued the Developers over this transfer, and that a settlement was reached in 2006 pursuant to which Parcel D was transferred back to the Developers. In light of this admission, we fail to see how the Hogans can continue to claim that this portion of their breach of fiduciary duty claim was a viable part of the present action.

This leaves the allegation that the Developers failed to disclose information about Parcel D to the Hogans before they purchased the Gardenview property and became members of the Homeowners Association. The Hogans cite Raven’s Cove Townhomes, Inc. v. Knuppe Development Co. (1981) 114 Cal.App.3d 783 (Raven’s Cove) to support their contention that the Developers owed them a fiduciary duty as potential purchasers of the Gardenview property.

Ravens Cove, supra, 114 Cal.App.3d 783, which was decided by this court, was an action by a homeowners association against a developer for strict liability and breach of warranty as to defects in common area landscaping and against the developer and initial directors for breach of fiduciary duty. The trial court granted a defense motion for nonsuit, finding the association did not have standing to maintain the action. We reversed. Although our standing analysis is not relevant here, we also made the following observation about the fiduciary obligations of the directors of the homeowners association:

“Here, the initial directors and officers of the Association had a fiduciary relationship to the homeowner members analogous to that of a corporate promoter to the shareholders. These duties take on a greater magnitude in view of the mandatory association membership required of the homeowner. We conclude that since the Association’s original directors (comprised of the owners of the Developer and the Developer’s employees) admittedly failed to exercise their supervisory and managerial responsibilities to assess each unit for an adequate reserve fund and acted with a conflict of interest, they abdicated their obligation as initial directors of the Association to establish such a fund for the purposes of maintenance and repair. Thus, the individual initial directors are liable to the Association for breach of basic fiduciary duties of acting in good faith and exercising basic duties of good management.” (Raven’s Cove, supra, 114 Cal.App.3d at p. 800-801.)

The Hogans erroneously contend that Ravens’ Cove holds that members of an Association’s board of directors owe a fiduciary duty to prospective purchasers. As our summary reflects, no party to that case was a potential purchaser. We did observe, at one point, that “[i]n most jurisdictions, the developer is a fiduciary acting on behalf of unknown persons who will purchase and become members of the association.” (Ravens Cove, supra, 114 Cal.App.3d at p. 799.) This observation, no matter how broadly construed, simply does not constitute authority for the proposition that the Developers in this case owed the Hogans a fiduciary duty to disclose information about Parcel D. Indeed, Ravens Cove had nothing whatsoever to do with disclosure obligations.

In any event, there is a more fundamental problem with the Hogans’ breach of fiduciary duty theory. When a plaintiff and defendant have a dual relationship, the two relationships and their respective standards must be analyzed separately. (Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, 513-514 (Frances T.) In Frances T., our Supreme Court rejected a plaintiff condominium owner’s breach of fiduciary duty claim against members of her condominium board and found, among other things, that the plaintiff’s reliance on Raven’s Cove was misplaced. The court reasoned that Ravens Cove supported a finding that the defendants were fiduciaries with respect to their duties as members of the board of the Condominium association. The claim alleged by the Frances T. plaintiff, however, was not based on those duties, but rather on a breach of an obligation to use reasonable care with respect to a construction project in a common area. In that context, there was no fiduciary relationship between the parties. (Ibid.)

Frances T. confirms our conclusion that the Developers’ duty to disclose information about the condition of the Gardenview property was not a fiduciary obligation. The Hogans’ claim is that the Developers’ failure to disclose information about Parcel D damaged them by inducing them to purchase the Gardenview property. But, when that nondisclosure occurred, the Developers were acting in their capacity as sellers of real property, not as members of the board of directors of the Homeowners Association. A property seller does not owe a fiduciary duty to prospective purchasers. (Daly v. Yessne (2005) 131 Cal.App.4th 52, 61-63; Kovich v. Paseo Del Mar Homeowners’ Assn. (1996) 41 Cal.App.4th 863, 866-867.) Therefore, the Developers were not acting as fiduciaries when they engaged in the conduct that allegedly supported this cause of action.

For all these reasons, we conclude that the trial court did not err by granting the nonsuit as to the breach of fiduciary duty claim against the Developers.

5. Tort of Another

The trial court granted a nonsuit as to the fourteenth cause of action, for tort of another against the Engstroms, and the fifteenth cause of action, for tort of another against the Developers, because it found that the Hogans’ theory of liability failed as a matter of law. The Hogans challenge this ruling.

The tort of another doctrine applies in cases in which the defendant has wrongfully made it necessary for a plaintiff to sue a third person. It provides that a person “who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover compensation for the reasonably necessary loss of time, attorney’s fees, and other expenditures thereby suffered or incurred. [Citations.]” (Prentice v. North American Title Guaranty Corp. (1963) 59 Cal.2d 618, 620-621 (Prentice).) This doctrine is an established exception to the general rule in California that attorney fees are to be paid by the party who employs the attorney. (Ibid.)

The Hogans’ tort of another theory is that they would not have had to sue the Developers if the Engstroms had not made misrepresentations, and that they would not have had to sue the Engstroms if the Developers had not made misrepresentations. Therefore, the Hogans reason, they can collect attorney fees from each defendant for the cost of suing the other.

The Hogans conveniently ignore the fact that all of their causes of action, whether alleged against the Developers, the Engstroms, or both, arise out of the same set of operative facts and are for a single harm, i.e., the allegedly wrongful inducement to purchase the Gardenview property. Thus, neither set of defendants can properly be characterized as a third party and the tort of another doctrine does not apply, as a matter of law.

The Hogans erroneously contend that this case is analogous to Prentice, supra, 59 Cal.2d 618, where the tort of another doctrine was found to apply. Prentice involved the following situation: Prentice agreed to sell property to Horton, to accept a deed of trust for most of the purchase price and to subordinate the deed to a loan Horton intended to obtain in order to build an apartment on the property. Horton obtained the loan from Neal, which was secured by a first deed of trust on the property. The escrow holder, North American Title, closed escrow which gave Horton title to the property subject to a first deed of trust in favor of Neal and a second deed of trust in favor of Prentice. Horton used the loan from Neal for some purpose other than to build an apartment and later filed for bankruptcy. Prentice sued Horton, Neal and North American Title in a single action. He alleged various causes against Horton and Neal which yielded a judgment in his favor quieting his title against their claims. Prentice’s separate claims against North American were based “purely on the ground of negligence.” (Id. at p. 620.) The trial court found that North American was negligent by closing the sale, and awarded damages to Prentice in “the amount of attorney’s fees incurred by them in the prosecution of the counts in the complaint against defendants Horton and Neal.” (Ibid.)

The Prentice court affirmed the damages award against North American. The court reasoned that the general rule prohibiting recovery of attorney fees against a defendant in an ordinary two-party lawsuit is not applicable to cases where a defendant has wrongfully made it necessary for a plaintiff to sue a third person. The court also found that “we are not dealing with ‘the measure and mode of compensation of attorneys’ but with damages wrongfully caused by defendant's improper actions.” (Prentice, supra, 59 Cal.2d at pp. 620-621.)

Prentice is inapposite. There, the plaintiff alleged and proved that North American was negligent and that its negligence damaged him by requiring that he sue third parties, i.e. Horton and Neal, in order to quiet his title, a remedy that was not available against North American. Here, by contrast, all of the Hogans’ claims sought remedies for the alleged failure to disclose information about the condition of the Gardenview property and both sets of defendants were held liable for causing this same harm. Thus, this is not a case where the damages resulting from the tortuous conduct of either set of defendants included the costs of having to sue the other set.

Vacco Industries, Inc. v. Van Den Berg (1992) 5 Cal.App.4th 34, illustrates our point. There, the court refused to apply the tort of another doctrine in a case in which three sets of defendants worked together and “jointly committed the tortious acts of which Vacco complained.” The court found that there was nothing about the relationship among the defendants or their conduct that justified singling out one of them as the one whose conduct caused the plaintiff to have to prosecute a legal action against the other two. Furthermore, the court reasoned, “[t]he rule of Prentice was not intended to apply to one of several joint tortfeasors in order to justify additional attorney fee damages. If that were the rule there is no reason why it could not be applied in every multiple tortfeasor case with the plaintiff simply choosing the one with the deepest pocket as the ‘Prentice target.’ Such a result would be a total emasculation of Code of Civil Procedure section 1021 in tort cases.” (Id. at p. 57.)

The Hogans direct our attention to Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498 (Gray), a case which only reinforces our conclusion that the tort of another doctrine does not, as a matter of law, apply in the present case. The Gray plaintiff made an offer to purchase property and was told by his real estate agent that the offer was accepted. After expending time and resources preparing for construction of a new home and business on the property, the realtor told Gray that the sellers changed their minds. Gray sued the sellers for specific performance and the realtor for fraud. The lower court denied recovery against the sellers, finding they never accepted Gray’s offer. However, the court found the realtor committed fraud and awarded damages including attorney fees. (Id. at p. 502-503.) The Gray court affirmed the fee award pursuant to the tort of another doctrine, finding that the plaintiff “was required to protect his interest by bringing an action against the sellers as the result of [the realtor’s] wrongdoing.” (Id. at p. 507.) If the realtor had not falsely represented that the sellers accepted Gray’s offer and then several months later refused to sell, Gray would not have incurred attorney fees by seeking specific performance against the sellers. (Ibid.)

In Gray, an independent tort committed by one of the defendants caused the plaintiff to incur attorney fees in his suit against the other innocent defendants. Here, by contrast, the Hogans sued both sets of defendants for the same wrong and all were found liable. Under these circumstances, the tort of another doctrine simply does not apply.

D. Denial of the Engstroms’ Motion for Judgment Notwithstanding the Verdict

Via their cross-appeal, the Engstroms challenge the denial of the motion for judgment notwithstanding the verdict as to the findings holding them liable to the Hogans for breach of contract and intentional concealment. As the Engstroms concede, if substantial evidence supports the jury’s conclusions, we will uphold the trial court’s denial of the motion. (See Carrau v. Marvin Lumber and Cedar Co. (2001) 93 Cal.App.4th 281, 289.)

1. Breach of Contract

Pursuant to their second cause of action, the Hogans alleged that they entered into a contract with the Engstroms pursuant to which the parties agreed that the Engstroms would serve as real estate agents and brokers in a dual agency capacity for buyer and seller, that the Engstroms breached this dual agency agreement by failing to disclose information about the Gardenview property, and that the Hogans suffered damages as a result of the breach. The jury found that the Hogans and the Engstroms entered into a contract, that the Engstroms breached that contract and that the Hogans were damaged in the total amount of $30,000.

The Engstroms contend that the breach of contract verdict must be dismissed because there was insufficient evidence of a contractual relationship between them and the Hogans.²¹ According to the Engstroms, the Hogans’ sole evidence of a contract was a statutory agency disclosure document signed by the parties which was not a contract. Indeed, the Engstroms contend that this court “must make a determination, as a matter of law, whether or not the identified agency disclosure document is a contract between Cross-Appellants and Cross-Respondents or a disclosure mandated by Civil Code § 2079.16.”

21 Denying the very existence of a contract with the Hogans, the Engstroms do not now contend, nor have they have contended, that the dual agency agreement was rescinded.

As noted above, the Hogans’ second cause of action against the Engstroms was for breach of the dual agency agreement, not breach of a statutory disclosure statement. The Hogans presented substantial evidence of this contract through the trial testimony of Ron Hogan, Victoria Hogan, and Ann Webb, the agent who represented the Hogans until she was replaced by the Engstroms. The Hogans also produced documentary evidence of the dual agency agreement. Although the two-page document contains statutory disclosures, as the Engstroms contend, it also sets forth obligations, acknowledgements, and a lengthy provision titled “Consent to Dual Agency,” which includes language of agreement. The document was supplied to the Hogans by the Engstroms and was signed by both Ron Hogan and Clayton Engstrom. This evidence supports the jury’s express finding that there was a contractual relationship between the Hogans and the Engstroms.

2. Intentional Concealment

In their very confusing and poorly-organized opening brief, the Engstroms include a section with the following descriptive heading: “CROSS-RESPONDENT VICTORIA HOGAN’S CAUSE OF ACTION FOR CONCEALMENT AND RESULTING VERDICT WAS NOT SUPPORTED BY THE EVIDENCE OR THE FACT THAT THERE WAS A PRIOR COURT ORDERED RESCISSION” The one sentence argument in support of this contention is virtually incoherent and can not, in our opinion, be construed as an actual challenge to the sufficiency of the evidence to support the substantive finding of fraud. Thus, any challenge to that finding is waived.

The Engstroms contend that the 2004 rescission order bars this fraud claim against them. However, they cite no authority supportive of such a proposition. We fail to see how or why the Engstroms should be permitted to use the rescission as a free pass to escape the consequences of their fraudulent conduct.

E. Legal Damages

As reflected in our factual summary, the jury found that several of the Developer respondents intentionally failed to disclose material facts to the Hogans and awarded damages for each act of concealment. The jury also awarded damages against the Engstroms for intentional concealment and breach of contract. Further, although it found that the Engstroms breached their fiduciary duties, the jury concluded that the Hogans did not suffer any economic damage as a result of those breaches.

1. The Hogans’ Damages Theory

On appeal, the Hogans seek a re-trial of the three causes of action that went to the jury. In a nutshell, the Hogans’ argument is that the trial court committed reversible error by precluding them from recovering their benefit of the bargain damages from both the Developers and the Engstroms. This argument takes many forms, as the Hogans challenge both evidentiary rulings and several jury instructions. Parsing those arguments and revealing their individual flaws is unnecessary here because we reject the premise that the Hogans were entitled to recover benefit of the bargain damages from either set of respondents.²²

22 We note that the Hogans have failed to make an adequate record of the specific damages evidence they were allegedly prevented from offering at trial. Their argument is that they were precluded from introducing evidence of appreciation or diminution in value, a concept that means different things to them at different times.

The benefit of the bargain is one of two measures of damages applied by courts in cases in which the plaintiff seeks legal damages for intentional wrongdoing. “The ‘benefit of the bargain’ measure of damages is the difference between the actual value of what the plaintiff has received and that which he expected to receive. An ‘out of pocket’ measure of damages is the difference between the actual value received and the actual value conveyed. [Citations.]” (Salahutdin v Valley of California, Inc. (1994) 24 Cal.App.4th 555, 564 (Salahutdin).) In Salahutdin, another panel of this court affirmed a judgment that awarded plaintiffs benefit of the bargain damages for breach of fiduciary duty and fraud against a realtor who made false representations about property that the plaintiffs’ purchased. (Id. at p. 567.) We reasoned that this broader measure of damages should apply in cases of fiduciary fraud so that “the faithless fiduciary shall make good the full amount of the loss of which his breach of faith is a cause.” (Ibid.)

Relying on Salahutdin and other authority, the Hogans contend that it is “settled in this district that the measure of damages in a real estate fraud case against a fiduciary defendant is ‘benefit of the bargain’ under Civil Code sections 1709 and 3333, not the out of pocket measure under section 3343.” Therefore, the Hogans contend they are entitled to a re-trial so they can seek benefit of the bargain damages against both sets of respondents.

2. Damages Against the Developers

The rule applied in Salahutdin does not apply to the Developers for two independent reasons. First, as we have already explained, the Hogans failed to support their theory that the Developers acted as fiduciaries in the context of the transaction which gave rise to this cause of action.

Second, and more fundamentally, this case is not an action for damages for real estate fraud. This is an action pursuant to which the Hogans sought relief based on rescission of a real estate contract. “[A] person claiming to be defrauded by false representation has a choice of two inconsistent remedies, to wit, he may elect to rescind the contract; or, to affirm it and claim damages. He cannot do both. The right to damages exists unless and until the transaction is effectually disaffirmed.” (Evans v. Rancho Royale Hotel Co. (1952) 114 Cal.App.2d 503, 507; see also Karapetian, supra, 83 Cal.App.2d at p. 347 [“There can be no doubt that the remedies of rescission and an action for damages are inconsistent and that a completed or effectual rescission terminates the contract and bars an action for fraud.”]; Alton v. Rogers (1954) 127 Cal.App.2d 667, 680 [“The point need not be labored that causes of action based on fraud, rescission and damages are inconsistent and require an election of remedies.”].)

In the present case, the Hogans’ election to rescind the Gardenview purchase agreement gave rise to a claim against the Developers for relief based on rescission. However, that election also limited the Hogans’ relief to those damages which are recoverable in an action for rescission. The benefit of the bargain measure, by its very definition, can only result from an affirmance of the bargain itself, something the Hogans very specifically elected not to do.

That is not to say that the intentional concealment claim should not have been tried to the jury. As discussed in our factual summary, the Hogans sought punitive damages against these respondents. Punitive damages are recoverable as part of a party’s relief based on rescission when the rescission is grounded in fraud. (See, e.g., Mahon v. Berg (1968) 267 Cal.App.2d 588; see generally Cal. Real Property: Remedies and Damages (Cont.Ed.Bar 2d. ed. 2008) Rescission, § 1.50, p. 54.) Therefore, as the Hogans counsel argued below during the hearing on the motion for nonsuit, the intentional concealment claim survived as the basis for the request for punitive damages.

Pursuant to their cross-appeal, the Developers challenge the sufficiency of the evidence to support the separate award of damages against them for intentional concealment. They point out that the Hogans did not seek any damages at trial other than consequential damages relating to rescission and, therefore, there is no evidentiary support for the separate and additional award for intentional concealment. In response to this argument, the Hogans’ state: “Plaintiffs below never presented a case for damages at law because the court’s prior rescission orders precluded such a case. Even the concealment damages were argued as an element of damage under Civil Code section 1692.” This statement reflects the reality of the situation and highlights the dilemma we must resolve on appeal.

The Hogans were precluded from presenting evidence of benefit of the bargain damages because they were not entitled to such an award, which would have been inconsistent with relief based on rescission. This circumstance begs the question, however, as to whether the separate awards for intentional concealment were additional components of the Hogans’ consequential damages or duplicative of the components awarded as part of the jury’s so-called balancing of the equities.

At oral argument before this court, the Hogans’ counsel was adamant that there was substantial evidence to support a separate award for fraud damages. However, the Hogans’ have never made any effort to support this claim with actual evidence that was presented at trial. Our own review of the record discloses the following relevant facts: First, the Hogans explicitly sought specific items of consequential damages, each of which was separately identified in the special verdict forms and the subject of an express jury ruling. Second, the jury was told, both by the trial court’s instructions, and by the Hogans’ trial counsel, that the intentional concealment damages sought by the plaintiffs were the consequential damages resulting from the rescission. Finally, as best we can determine, again without any assistance from the parties, there was no evidence of any additional consequential damages other than the specific items listed in the verdict forms pertaining to the balancing of the equities. Under these circumstances, the separate awards of intentional concealment damages against the Developers ($115,800) were necessarily duplicative of the damages awarded in connection with the balancing of the equities. Therefore, pursuant to the Developers’ cross-appeal, the separate award of concealment damages against the Developers is stricken from the judgment.

3. Damages Against the Engstroms

By a parity of reasoning, the Hogans may not recover a separate award of legal damages from the Engstroms. Although the Hogans alleged or attempted to allege several causes of action against the two sets of defendants in this case, all of their claims sought redress for a single harm: the purchase of the Gardenview property. Further, although there were numerous potential remedies for that harm, the Hogans elected the remedy of rescission and sought and obtained relief from the court based on that rescission.

The Hogans contend that their claims against the Engstroms are not barred by the rescission because they are based on distinct contract, statutory and fiduciary disclosure duties. As our analysis above makes clear, however, we do not hold that the Hogans’ claims against the Engstroms are barred, but only that they cannot recover twice for the same harm. The Hogans also contend that their claims against the Engstroms survive, apart from the rescission, because they are based on conduct that occurred before the Hogans even entered into the Gardenview purchase agreement. Regardless when the challenged conduct occurred, the alleged harm resulting from that conduct was the purchase of the Gardenview property.

Our conclusion does not release the Engstroms from liability, which has been established by express jury findings. It simply means that the recovery obtained against the Engstroms must be consistent with the Hogans’ elected remedy. As discussed above, section 1692 provides that a party who effectively rescinds a contract and seeks relief from the court “shall be awarded complete relief.” (§ 1692.) This statute also confers wide discretion on the trial court to adjust the equities between the parties. Therefore, a tortfeasor who is not a party to the contract, but whose conduct nevertheless gave right to a cause of action for relief based on rescission, can properly be held liable for consequential damages relating to that rescission. (Snelson v. Ondulando Highlands Corp. (1970) 5 Cal.App.3d 243, 254 (Snelson).)

In Snelson, the plaintiffs gave notice of rescission of their purchase of residential property, and then brought suit against the sellers, realtors and others alleging a cause of action for relief based on rescission for fraudulent misrepresentation, negligence, and breach of warranties. The rescission claim was bifurcated and tried before the court which affirmed the rescission based on findings that the sellers and realtor defendants had made fraudulent misrepresentations upon which the plaintiffs had relied. The trial court also ruled that all defendants were jointly and severally liable for the plaintiffs’ consequential damages. (Snelson, supra, 5 Cal.App.3d at p. 254.)

On appeal, the Snelson court rejected the realtor defendants contention that they were not liable for rescission damages because they were not parties to the purchase agreement. The court reasoned that “[r]egardless of the equities between the defendants inter se, if the innocent plaintiffs are to be restored to their status quo ante they must be reimbursed for these items of consequential damages. It would appear not improper to hold all of the guilty defendants (who would be liable in an action for damages) jointly and severally liable on these damages as an ancillary remedy to the principal remedy of rescission restoring plaintiffs to their status quo ante.” (Snelson, supra, 5 Cal.App.3dat p. 254.)

Snelson undermines the Engstroms’ claim that they are not liable to the Hogans as a matter of law. Contrary to the Engstroms’ theory on their cross-appeal, the rescission order does not release them from liability. In the exercise of its equitable powers, a court may hold all defendants who would have been liable to the plaintiffs in an action at law jointly and severally liable for the innocent plaintiff’s consequential damages “as an ancillary remedy to the principal remedy of rescission restoring plaintiffs to their status quo ante.” (Snelson, supra, 5 Cal.App.3d at p. 254.) Here, the record establishes that the Engstroms would have been liable to the Hogans in an action at law and that they can be held jointly and severally liable for the Hogans’ consequential damages.

The question remains whether the trial court actually exercised its equitable authority to hold the Engstroms jointly and severally liable. If so, the judgment must be modified to reflect this fact and, if not, the case must be remanded so the lower court can make the decision in the first instance. Several circumstances lead us to conclude that the trial court exercised its authority to hold the Engstroms jointly and severally liable for a portion of the consequential damages awarded against the Developers.

First, despite the very confusing state of the record provided to us, we are comfortable that the trial court absolutely understood that the liability of both sets of respondents in this case was limited by the rescission order. Through its evidentiary rulings, the court limited the Hogans’ damages case against both respondents to consequential damages relating to the rescission. Then, through a series of instructions, the court adequately conveyed to the jury that the liability of both the Developers and the Engstroms was limited to the specified items of economic damages claimed by the Hogans as their consequential damages resulting from the rescission of the Gardenview purchase agreement.

Further, the closing arguments of counsel reinforced the jury instructions with respect to the nature and type of damages that could be awarded. For example, during his closing argument, the Hogans’ counsel repeatedly acknowledged to the jury that the damages they sought against the Engstroms were consequential damages relating to the rescission. ²³

23 We reject the Engstroms’ rote challenge to the sufficiency of the evidence to support the damages awards against them. This argument, which is not supported by any factual analysis of the evidence itself, is based on the erroneous legal proposition that the awards against them must be supported by evidence of some damages separate from and in addition to the consequential damages awarded in connection with the rescission.

Second, in light of the lower court’s rulings and the damages theories that were presented to the jury, we are confident that the damages charged to the Engstroms for breach of contract and intentional concealment constitute the jury’s assessment of the amount of the Hogans’ consequential damages that are attributable to the Engstroms’ actionable conduct.

Third, although the original judgment did not impose any liability against the Engstroms, the trial court corrected the judgment to add the Engstroms as defendants. By taking this action the court exercised its discretion to hold the Engstroms’ liable for consequential damages flowing from the rescission. Then, by filing the amended judgment that had been drafted by the Hogans’ counsel, the court adopted the jury’s findings as its own measure for assessing the Engstroms’ share of liability for the Hogans’ consequential damages.

Piecing these components together, it appears that the court exercised its equitable authority to hold the Engstroms jointly and severally liable for a portion of the Hogans’ consequential damages. On this record, that decision is clearly affirmable. However, the judgment must be modified to expressly clarify that the awards against the Engstroms represent a portion of the total consequential damages award against the Developers and that the liability of the two sets of respondents is joint and several.

V. THE HOGANS’ SECOND APPEAL

The Hogans’ second appeal is from an April 5, 2007, post-judgment order granting the defendants’ motion to strike the Hogans’ memorandum of costs, pursuant to which they sought $41,058 as the prevailing parties in the action.

On June 20, 2007, the trial court issued the following order on the motions to tax costs: “There is no appearance by either side. [¶] There being no opposition, Court adopts its previously published tentative ruling as follows: [¶] Motions granted to strike the costs memorandum because the court finds that under the circumstances it is unable to determine whether any party has truly obtained a net monetary recovery or that there is a ‘prevailing party’ under any definition. The court is not convinced that there was a ‘net recovery’ by the Plaintiffs. The court is convinced that there was no prevailing party in either fact or law; each side is to bear their own fees and costs.”

Charging the trial court with “clear error,” the Hogans refer us to section 1032, subdivision (a)(4), of the Code of Civil Procedure (section 1032(a)(4)) which states: “‘Prevailing party’ includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant. When any party recovers other than monetary relief and in situations other than as specified, the ‘prevailing party’ shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not and, if allowed may apportion costs between the parties on the same or adverse sides pursuant to rules adopted under Section 1034.”

The Hogans argue that “[o]n the basis of the Hogans’ recovery for fraud against defendants alone, totaling in excess of $150,000.00, the Hogans had a net monetary recovery.” The Hogans thus contend that they are the prevailing parties in this case as a matter of law and that, pursuant to section 1032, subdivision (b), they are “entitled as a matter of right to recover costs in any action or proceeding.”

The Hogan’s mathematics no longer work in light of our conclusions that the concealment damages against the Developers must be stricken and that the damages against the Engstroms represent the portion of the consequential damages award for which they are jointly and severally liable. Indeed, as our opinion makes clear, the Hogans did not recover any monetary damages with respect to their legal claims for breach of contract, breach of fiduciary duty, and intentional concealment. The only relief afforded by the judgment was relief based on rescission. Furthermore, although a monetary award to the Hogans was one component of that relief, the defendants obtained relief based on rescission as well.

Section 1032 establishes that “[w]hen any party recovers other than monetary relief” the court has discretion to allow costs or not. (§ 1032(a)(4).) The Hogans, apparently confident of their entitlement to costs, do not articulate any ground upon which to disturb the trial court’s exercise of discretion in this case. We find that the trial court did not abuse its discretion by determining not to allow costs on the ground that there was no true prevailing party. Although the Hogans initiated an action seeking relief based on rescission, they thoroughly resisted accepting rescission in accordance with their election. Furthermore, their efforts at trial to increase their monetary recovery by expanding the concept of consequential damages, though extremely time consuming, were largely unsuccessful. Indeed, on this record, the trial court could reasonably have concluded that the Hogans’ primary goal at trial was to obtain legal damages to which they were not entitled.

The Hogans also overlook the fact that section 1032, subdivision (b) confers a “right” to recover costs as a prevailing party “[e]xcept as otherwise expressly provided by statute.” As discussed above, the rescission statutes expressly confer broad discretion on the trial court to balance the equities between these parties. Thus, even if the Hogans were the prevailing party, the trial court had discretion to balance the equities and decide that plaintiffs were not, under the circumstances, entitled to recover their costs of suit. In this regard, we note by way of example that, while the Hogans resisted the consequences of their own election for several years, thereby generating significant costs to the parties and the court, the Developers’ early acknowledgement and acceptance of the rescission could have led to a speedy resolution of this entire dispute if not for the Hogans’ resistance to that outcome.

For all these reasons, we reject the challenge to the post-judgment order striking the Hogans’ memorandum of costs.

VI. DISPOSITION

The post-judgment order appealed by the Developers and the post-judgment order appealed by the Hogans are both affirmed. This case is remanded to the trial court with instructions to modify the amended judgment to (1) strike the award of damages against the Developers for intentional concealment; (2) provide that the Engstroms are jointly and severally liable for a portion of the Hogans’ consequential damages awarded against the Developers, and that the Engstroms’ share of that joint and several liability is equivalent to the damages awarded against them for intentional concealment and breach of contract.

We concur: Kline, P.J., Richman, J.

According to our calculations, the sum of the net consequential damages award, adjusted downward as required by the lower court’s ruling on the motion for judgment notwithstanding the verdict ($278,446.97) plus the sum of the intentional concealment damages awarded against Marvin DeAngelis, DeAngelis Construction, Inc. and DeAngelis-Pope Homes ($115,800) equals $394,246.97. In any event, when this case is remanded, the trial court should recalculate the consequential damages award to ensure its accuracy.

The request for loss of appreciation damages was re-alleged in the third amended complaint. The Hogans’ new theory was that the Gardenview property had increased in value during the course of the litigation and that rescission would give the Developers a windfall unless they were required to pay the Hogans for the value of the appreciation. The trial court rejected this theory as well.

In the lower court, during argument on in limine motions, the Hogans’ theory, rejected by the trial court, was that they were entitled to recover the actual appreciated value of the Gardenview property during the lengthy period of this litigation so as to prevent the Developers from obtaining a windfall when the property was transferred back to them. In this court, the Hogans’ have already used the term “appreciation evidence” to refer to damages evidence relating to Blake Place. Now, they contend that appreciation/diminution evidence would have established (1) the appreciated value of the Gardenview property if the concealed conditions had not existed and/or (2) the diminished value of the Gardenview property in light of the concealed conditions.