Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC368305. Susan Bryant-Deason, Judge.
Martin & McCormick, John D. Martin and Kathy J. McCormick for Defendant and Appellant.
Daniel Gunning for Plaintiff and Respondent.
WOODS, J.
SUMMARY
The plaintiff and the defendant were friends. At the defendant’s request, the plaintiff authorized a single charge on his credit card, and the defendant repaid this amount. Thereafter, without permission, the defendant continued using the plaintiff’s credit card number without repaying him for more than $39,000 in charges. The plaintiff sued the defendant for conversion. After a bench trial, the trial court entered judgment in the plaintiff’s favor. The defendant appeals, claiming the trial court erred in finding he had used the credit card without consent, in determining unauthorized credit card use could constitute conversion and in awarding damages under Civil Code section 3336. We affirm.
FACTUAL AND PROCEDURAL SYNOPSIS
In 2007, Kia Jam filed a complaint against Eric Mitchell, seeking damages for conversion. Beginning in May and continuing through October 2005, Jam alleged, Mitchell used Jam’s American Express “Centurion” credit card to purchase goods and services without Jam’s authorization and consent at a cost in excess of $40,000. In addition, Jam alleged, as a result of Mitchell’s conversion, (1) he (Jam) incurred late fees and other penalties, (2) American Express cancelled his Centurion card, denying him substantial privileges and economic benefits, (3) he incurred interest expense and loss of use of funds incurred in borrowing money to pay off the account to avoid substantial additional penalties and damage to his credit and (4) he expended substantial time, money and resources in pursuit of the converted property. Mitchell answered, the parties conducted discovery, and the matter proceeded to a two-day bench trial in which Jam, Mitchell and one other witness (Chris Roberts) testified.
According to the record, in late 2004, Mitchell told Jam he was “in some trouble” and asked Jam to help him out. He said he needed $6,000 to pay his attorney and would pay Jam back in a couple of weeks. They were good friends and had been for years, so Jam said, “[A]bsolutely.” Jam filled out a form with his personal credit card number and signature authorizing the charge for this amount against his American Express account.
Later, a number of other charges Jam had not made appeared on his American Express statement. Many of the charges were airline charges which expressly identified Mitchell as the passenger. Jam showed Mitchell the statement, and Mitchell verified the charges were his, saying “Hey, sorry, man, I’ll get you next week.” Jam told Mitchell, “Don’t do this again,” and “Please pay me the money.” Mitchell did repay Jam for these initial charges made without permission, but “painfully.” At the time, Jam and Mitchell worked together. (Jam was a producer and chief operating officer at Ascendant Pictures; Mitchell provided financial modeling services for Ascendant (and other clients) as an independent contractor.) Jam had to stop by Mitchell’s office almost daily and say, “Where’s my money? Please pay me.”
They had been friends for a few years before that.
Although Jam told Mitchell not to make any more charges on his credit card, Mitchell made additional charges. Jam “walked down the hall, talked to him, called him,” and said, “What are you doing? Please pay me back and stop using my card.” At one point, when Jam was in Mitchell’s office asking for money, there was an Ascendant Pictures check coming to Mitchell on one of his invoices. Mitchell and Jam agreed to use the money due Mitchell from Ascendant to pay American Express directly.
Jam spoke with Chris Roberts (who owned, capitalized and solely controlled Ascendant Pictures) about writing checks to American Express instead of Mitchell’s company as it was “slightly out of order,” and Roberts (who, like Jam, had considered Mitchell a personal friend for several years) had no objection. (Most of Mitchell’s work was for Roberts, and it was Roberts who oversaw employment and payment issues regarding Mitchell’s work. Mitchell submitted his monthly invoices to Jam, as Ascendant’s chief operating officer, and Jam processed them for payment.)
Mitchell continued making charges against Jam’s American Express account. Jam “was really frustrated with him.” Jam called Mitchell “repeatedly” and would “get in his face” as Mitchell was “just down the hall” because “[he]’d rather look the guy in the eye.” He would say, “[S]top doing this. Please pay me the money you owe me.” It was always “it’s coming, it’s coming. Give me another week. I need till Tuesday. I need till Thursday.” Sometimes, Mitchell would have money to pay Jam, but other times, Mitchell agreed, instead of writing Mitchell an Ascendant Pictures check in the full amount due on his monthly invoice, Jam could write a check to American Express for the amount of outstanding charges Mitchell had made, and then write a check to Mitchell’s company (Epicenter Film Entertainment) for the remaining amount due on the invoice, if any. Jam was concerned that if the money went to Mitchell, there was no guarantee Jam would get it, and he was “desperately” trying to get money to his American Express account. Jam had to carry the balance when the amount Ascendant owed Mitchell on his monthly invoice was insufficient to cover charges Mitchell had made.
By October 2005, Mitchell had made charges totaling more than $39,000 on Jam’s credit card but had not paid Jam. In the beginning, Jam said, he did not contact American Express to dispute the charges because he and Mitchell were “very good friends,” and he “always thought [Mitchell] would do the right thing and pay [him].... [A]t the time [Jam] thought, ‘Aaah, he’ll pay me, it’s Eric [Mitchell]....’” However, “it got to the point where [Jam] couldn’t take it anymore. There were delinquent charges. They were threatening [his] credit. They were demanding [payment]. Tell[ing him] collection agencies [we]re going to get involved. They’d call [him] on the phone at the office. Finally [he] just had it.” He contested the remaining unpaid charges Mitchell had made because he (Jam) “couldn’t keep American Express away from [himself] personally anymore....” He contacted American Express, requesting cancellation of his existing account number and issuance of a new one so Mitchell could no longer make charges.
Through the end of 2005, Jam continued asking Mitchell to pay for the charges he had made, and Mitchell said essentially the same thing each time: “I’[ll] pay you Thursday, I’ll pay you Friday. I’ll pay you next week.” Mitchell never said he thought Jam had authorized the charges. Then, around December, Mitchell said, “I’m not going to pay you.... Ascendant doesn’t pay me.” Jam told Mitchell to talk with Roberts in that regard. “[That’s] between you and Ascendant[; it] has nothing to do with me.”
In September or October 2005, Ascendant Pictures had lost its primary source of financing (a German film fund called VIP) and experienced a “serious cash flow problem.” Mitchell’s financial modeling work “primarily” related to Ascendant’s relationship with VIP. At that time, Roberts told Mitchell Ascendant no longer required and could no longer pay for Mitchell’s financial modeling services, and Ascendant stopped paying Mitchell. Roberts and Mitchell discussed creating Ascendant’s own film fund to replace what VIP had been doing, and Mitchell made a proposal to provide his services “on spec and be rewarded afterwards if the film fund came together.”
In late December, Jam, Mitchell and Roberts exchanged e-mails relating to Jam’s outstanding American Express balance. Jam wrote: “Yes I am annoyed with you re the amex situation – even though I told you for months not to use my card –you did not and have not pa[i]d me. I am in a world of shit with AMEX – all so that you can go stay at a fanc[y] hotel at [C]annes and pay your mortgage and your expenses on my credit.... this is not cool man. They are about to xl this account and ding my credit.... how is this fair? I have been a good friend to you and have helped you out many[,] many times. You [sic] got to fix this and fix it soon.... You are clearly getting money from someplace and choosing not to pay this bill....”
In his response, Mitchell did not deny Jam’s statement he (Mitchell) had made charges to Jam’s account after Jam had told him not to do so or that he owed Jam for these charges. Rather, Mitchell said Ascendant owed him more than he owed Jam. “I did not put money on [Jam’s] card carelessly expecting to never repay the tab[;] I put amounts on his card as I had for the last two years that approximate what I earn at [Ascendant] on a monthly basis assuming that [Jam] can take the payment for the invoice and pay off his card. With [Ascendant] in a cash jam this obviously cannot happen[.] I cannot take the money I am earning elsewhere to payoff [sic] his Amex because I am paying my living expenses with that, so essentially it will be difficult for me to pay any more than small portions of the Amex $3k-$5k until I get paid by [Ascendant]....”
In an effort to help Jam and Mitchell resolve their dispute, Roberts reviewed Mitchell’s claim he was still owed money from Ascendant. He e-mailed Mitchell: “I have to tell you I am going over your time sheets and matching them up to the models you actually mailed me and the meetings I have in my calendar and there are SERIOUS discrepancies... [.] [¶] Additionally you should note that by far the majority of the hours are on the film fund plan which was not meant to be hourly—it was a spec deal with you getting a salary and a piece of the fund if it happened—I still have your proposal on it... [.]” In considerable detail, he cross-referenced Mitchell’s invoices with his own documentation, noting “remember I always communicate by e-mail,” commenting “double billing is not cool,” and concluding, “You may owe us money... [.]
“Please correct me if I’m wrong and pull together my e[-]mail requests and your e[-]mails to me with the models but based on the activity tracked on Borgia, Outlander and BWT—not just against your e[-]mails but my communication with people like Ptak, Bob Norton and Bob Hayward I can only see that you were billing us for work on projects when we were not doing work on it [sic]... [.] I guess because [Jam] was out of the loop on the financial stuff he had no clue and I guess I should have checked but now I look at it I feel like you over[]billed... [.] Maybe you needed the money, but from my perspective it isn’t cool. Sorry, but that’s the way I feel.”
In response, Mitchell said he had to “disagree with every statement” Roberts had made and could support the facts with documentation while Roberts could not, but concluded by saying, “Instead of continuing to go back and forth on this—you have your opinion [and] I have mine, my suggestion is that we drop it, continue our friendship, and try to keep each other from doing any business together.”
Notwithstanding Mitchell’s willingness to “drop” his claim Ascendant owed him money, Roberts again wrote Mitchell: “[J]ust so you know I pro[m]ised you I would go over all your bills, all my e[-]mails and my calendar to give you a fair shake on any discussion of ac[c]urate or appropriate billing,” reiterated that, according to his review of the documentation and communications with others, “by far the majority” of hours Mitchell claimed as unpaid and due him related to the work Mitchell himself proposed to do “on spec for a piece of the fund and a manage[me]nt position in it.... If you review your billing record you will realize this.... [¶] Now look I’m your friend and I don’t want to fight—if the hours and backup are there you’ll have no argument from me—please send me stuff I’m missing [as Mitchell claimed] and I’d be happy to admit I’m wrong and settle up on the bill but I’m just calling it the way I see it from my backup—and based on this you are not owed 47K at all....” Mitchell never followed up with Roberts, never forwarded additional documentation for Roberts to review and never indicated that he wanted further payment from Ascendant.
After notifying American Express that he disputed as unauthorized the outstanding charges Mitchell had made, Jam spent about a year writing letters and talking to various departments within American Express to address the matter, a “very frustrating experience.” “One department didn’t really know what another department was doing. I would think I’ve made progress with one department and then a week later I’d get another call from another department....” On average, he testified, he spent one hour per week communicating with American Express; based on his salary, he estimated his time was worth $150 per hour. In the end, American Express reversed about $16,000 of the charges Jam disputed as unauthorized, leaving a balance of $23,172.10. Then Jam was contacted by a collection agency, threatening to “put a ding on [his] credit” and affect his credit score if he did not pay; although Jam paid the balance as agreed in February 2007 (by taking cash advances on two other credit cards for which he was paying interest), “they put a ding mark” on his credit report, and his credit score “dropped dramatically.”
Although Jam had been paying all of his other obligations and this was the only negative mark on his credit history, he could not refinance his house, interest rates on his other credit cards went up, and he was unable to rent a piano for his girlfriend for $80 a month. He retained Conquer Credit Management to help him address the problems with his credit at a cost of $4,500.
In the past, Jam had been entitled to certain benefits in connection with his American Express account, such as “lead status” on certain airlines, frequent flyer miles and bonus points for every dollar spent which he could use for “anything from hotels to airlines and rental cars and gift certificates and things like that.” Because his account was cancelled, Jam lost 350,000 bonus points which he had primarily used for traveling to and from Europe.
Contrary to Jam’s (and Roberts’s) testimony (as summarized above), Mitchell testified that he and Jam had a conversation in October or November 2004 in which Jam agreed Mitchell could use Jam’s American Express account for his (Mitchell’s) personal charges, Ascendant would pay Mitchell for the work he did and “reimburse the card directly for that work” because there was a “shortage of funds available to make payments to employees and consultant[s].” Beginning about two or three months before that conversation, Mitchell said, there had not been money to pay him. However, presented with copies of his invoices and cashed checks for each month from May through November 2004, Mitchell admitted he had been paid on time every month—on several occasions requesting and receiving payment weeks in advance. “[A]ll the way through 2007,” he acknowledged, “everybody was getting paid.”
Jam testified that before October 2005 (when the VIP financing ended and Ascendant stopped paying Mitchell), Mitchell was “paid on time”—“either the same day [he submitted his invoice] or a day or two later” and was paid “weeks in advance sometimes” when he said he needed the money even before turning in an invoice.
Mitchell testified it was his practice to submit an invoice to Ascendant and then make charges on Jam’s credit card account to offset what he (Mitchell) was owed on his invoice. Presented with an itemization of outstanding charges he had made against Jam’s account for which he had not paid, however, Mitchell acknowledged he had made just one charge – in the amount of $609 – after submitting his October 2005 invoice (the first invoice for which he was not paid by Ascendant); before that, he had made charges totaling more than $39,000 against Jam’s account in payment of his own mortgages, gym membership, hotel accommodations, airline tickets and other charges.
The parties stipulated Mitchell made charges totaling $39,570.37 against Jam’s account between July and October 2005.
Mitchell then said this disparity was attributable to the fact “there was some carry-forward in hours” for which he had not been paid from August, September and October 2005 going forward; he said he only invoiced what Ascendant could pay and then carried over “a few” hours to other invoices submitted in October, November and December 2005. Reviewing invoices for October 2005 through February 2006, however, except for five hours (at $150 per hour) on his October 2005 invoice which he “assumed” must have been carried over because he indicated the monthly invoice was actually “Hours for 6[-]week period,” Mitchell could not identify any other documentation of “carry-forward” hours on any of his invoices. Then he said he “d[id]n’t need to justify [his] billings through hours.”
He first cited August 2004 but then said he was referring to August 2005 forward.
After hearing the evidence on Jam’s conversion claim, the trial court ruled in Jam’s favor, finding it unimaginable Mitchell had not paid Jam, his friend, the money he owed him when there was no reason Mitchell should not have paid. “I found Mr. Mitchell to actually not be very credible in front of the Court and to also not be truthful. [¶] A couple of times in my notes I actually wrote down the word ‘liar’ and... I don’t do that often but he actually did do that. He changed his testimony. He was very evasive,” and went on to cite specific examples.
In its statement of decision, the trial court found Jam had paid American Express $23,172.10 in early 2007 in payment of Mitchell’s unauthorized charges and suffered an additional $21,827.90 in damages authorized under Civil Code section 3336. Mitchell filed no objection to the statement of decision, and judgment was entered in favor of Jam and against Mitchell in the amount of $45,000.
Mitchell appeals.
DISCUSSION
Mitchell Has Failed to Demonstrate Prejudicial Error in the Trial Court’s Determination He Used Jam’s American Express Card Without Consent.
Mitchell argues there was “no evidence presented to the [t]rial [c]ourt to support the finding [Mitchell’s use of Jam’s American Express credit card] was not authorized by [Jam],” and “there is no conflict in the evidence with regard to the issue of consent.” (Original italics.) Citing his own testimony (which the trial court specifically found not credible and demonstrably false) and urging a tortured construction of Jam’s testimony, Mitchell asserts the evidence presented at trial “clearly established that... Jam consented to... Mitchell’s use of [Jam’s] Am[erican Express] card from mid-2004 to October 2005, and that when he withdrew his consent in October[]2005,... Mitchell never used the... card again.” As we have reviewed the record in its entirety, it suffices to say we reject this argument as it ignores the standard of review. (Bowers v. Bernards (1984) 150 Cal.App.3d 870, 873-874.) In any case, Mitchell has failed to demonstrate prejudicial error. (See 5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, § 712, p. 1036, and authorities cited therein [even where property has been lawfully acquired, wrongful withholding is actionable; “where the person entitled to possession demands [the property], the unjustified refusal to give it up is a conversion”].)
Furthermore, Mitchell admitted making the disputed charges on Jam’s credit card and admitted he had not paid for them and acknowledged Jam was entitled to be paid for them. As Jam argued to the trial court (and reiterates on appeal), these facts also support a finding of unjust enrichment inasmuch as Mitchell received a benefit and unjustly retained that benefit. (Lectrodyer v. Seoulbank (2000) 77 Cal.App.4th 723, 726.) Accordingly, even if we concluded the trial court had erred in finding for Jam on his conversion cause of action (which we do not), Mitchell still could not demonstrate prejudicial error. (See Ward v. Taggart (1959) 51 Cal.2d 736, 742 [“Although the facts pleaded and proved by plaintiffs do not sustain the judgment on the theory of tort, they are sufficient to uphold recovery under the quasi-contractual theory of unjust enrichment since that theory does not contemplate any factual situation different from that established by the evidence in the trial court. Defendants were given ample opportunity to present their version of the transaction involved....”].)
After Mitchell’s counsel repeatedly insisted no conversion cause of action had been established, Jam’s counsel sought leave to amend to include an unjust enrichment cause of action as supported by the same facts. Mitchell argued the request was untimely and prejudicial although the trial court observed amendment could actually be made as late as trial. Argument proceeded without the parties or trial court addressing this subject any further.
The Trial Court Did Not Err in Finding Mitchell’s Unauthorized Use of Jam’s Credit Card Constituted Conversion.
In Mitchell’s view, the “[t]rial [c]ourt’s finding that the use of [Jam’s] credit card and the loss of the use of the money was conversion is contrary to law.” We disagree.
As Mitchell necessarily acknowledges, citing Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 451-452, “Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion are the plaintiff’s ownership or right to possession of the property at the time of the conversion; the defendant’s conversion by a wrongful act or disposition of property rights; and damages. It is not necessary that there be a manual taking of the property; it is only necessary to show an assumption of control or ownership over the property, or that the alleged converter has applied the property to his own use.”
Mitchell argues there could be no conversion because he did not take or assume ownership of any item of property; Jam continued using his card throughout the period of time Mitchell was using it, and Jam did not expend time and money in pursuit of allegedly converted property but rather in disputing Mitchell’s charges to buy time to collect the money Mitchell owed without having to pay the outstanding balance. According to Mitchell, Jam’s claim was a claim for money and therefore not a claim for conversion.
First, as recognized in the authority cited in Mitchell’s own brief, money may be the subject of conversion if, as in this case (but not in the case Mitchell cites), a specific, identifiable sum is involved. (Haigler v. Donnelly (1941) 18 Cal.2d 674, 681; Vu v. CaliforniaCommerce Club, Inc. (1997) 58 Cal.App.4th 229, 235.) Moreover, even where property has been lawfully acquired, wrongful withholding is actionable; “where the person entitled to possession demands [the property], the unjustified refusal to give it up is a conversion.” (5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, § 712, p. 1036, and authorities cited therein.) Not only does Mitchell’s claim he established consent as a matter of law ignore the record (and standard of review), but the record further establishes Jam demanded the sum Mitchell owed, and Mitchell, without justification, refused to turn it over.
“Conversion is any act of dominion wrongfully exerted over another’s personal property in denial of or inconsistent with his rights therein.” (Weiss v. Marcus (1975) 51 Cal.App.3d 590, 599.) As the trial court determined, Mitchell charged against Jam’s credit card without authorization, Mitchell refused to pay for the charges he admitted making and the evidence supported a cause of action for conversion. Also, for the reasons addressed in the preceding section, Mitchell cannot establish prejudice in any event. (See Lectrodyer v. Seoulbank, supra, 77 Cal.App.4th at p. 726; Ward v. Taggart, supra, 51 Cal.2d at p. 742.)
The Trial Court Did Not Err in its Award of Damages Pursuant to Civil Code Section 3336.
Citing Krueger v. Bank of America (1983) 145 Cal.App.3d 204, Mitchell asserts the damage award beyond the $23,172.10 balance owed on Jam’s American Express card “was contrary to law and should be reversed.” He says Jam failed to plead and prove and the trial court failed to find special circumstances justifying any further award. We disagree.
Civil Code section 3336 provides as follows: “The detriment caused by the wrongful conversion of personal property is presumed to be: [¶] First – The value of the property at the time of the conversion, with the interest from that time, or, an amount sufficient to indemnify the party injured for the loss which is the natural, reasonable and proximate result of the wrongful act complained of and which a proper degree of prudence on his part would not have averted; and [¶] Second – A fair compensation for the time and money properly expended in pursuit of the property.” (Italics added.)
“As a general rule, the value of the converted property is the appropriate measure of damages, and resort to the alternative occurs only where a determination of damages on the basis of value would be manifestly unjust. [Citation.] Accordingly, a person claiming damages under the alternative provision must plead and prove special circumstances that require a measure of damages other than value, and the [trier of fact] must determine whether it was reasonably foreseeable that special injury or damage would result from the conversion. [Citation.]” (Lueter v. State of California (2002) 94 Cal.App.4th 1285, 1302, citing Krueger v. Bank of America, supra, 145 Cal.App.3d at p. 215.)
In addition to the $23,172.10 amount Jam had to pay American Express in satisfaction of Mitchell’s unauthorized charges, the trial court found Jam was entitled, under Civil Code section 3336, to the following additional damages: $5,904 in interest on the value of the converted property from the date of conversion; $1,287.69 in late payment fees; and $14,636.21 as fair compensation for the time and money properly expended in pursuit of the converted property, including $4,500 paid to Conquer Credit Management to resolve problems with his credit score resulting from Mitchell’s unauthorized use of Jam’s credit card.
Arguably, under the circumstances, the damage award falls within the “general rule” as described in the Lueter case. In addition, however, Jam had alleged entitlement to the categories of damages which the trial court later found Jam had established. The trial court’s statements in making its ruling also support the implicit determination limiting Jam’s damages to the $23,172.10 paid to American Express (plus interest as expressly authorized under the statute) would be “manifestly unjust” in any event. The court expressed dismay that Mitchell had failed to pay Jam, his friend, for these unauthorized charges he admitted running up when there was no reason he did not owe Jam for them. “I don’t even know why this got this far, but it did.” Noting that Jam, as a result of his efforts, was able to reduce the debt to the $23,172 sum, the court commented it was “not sure why... Mitchell should be rewarded for that hard work[;] I can come to [the damage calculation] many ways, and I’m going to come to it this way”
“A judgment or order of a lower court is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness. [Citations.] [Code of Civil Procedure] [s]ections 632 and 634 (both as amended in 1981) set forth the means by which to avoid application of these inferences in favor of the judgment. When the court announces its tentative decision, a party may, under section 632, request the court to issue a statement of decision explaining the basis of its determination, and shall specify the issues on which the party is requesting the statement; following such a request, the party may make proposals relating to the contents of the statement.[] Thereafter, under section 634, the party must state any objection to the statement in order to avoid an implied finding on appeal in favor of the prevailing party.[] The section declares that if omissions or ambiguities in the statement are timely brought to the trial court’s attention, the appellate court will not imply findings in favor of the prevailing party. The clear implication of this provision, of course, is that if a party does not bring such deficiencies to the trial court’s attention, that party waives the right to claim on appeal that the statement was deficient in these regards, and hence the appellate court will imply findings to support the judgment. Furthermore, section 634 clearly refers to a party’s need to point out deficiencies in the trial court’s statement of decision as a condition of avoiding such implied findings, rather than merely to request such a statement initially as provided in section 632.” (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133-1134, citations and fn. omitted.)
Mitchell made no objection to the trial court’s specification of the damage award in its statement of decision. It follows that Mitchell has failed to demonstrate prejudicial error in this regard. (In re Marriage of Arceneaux, supra, 51 Cal.3d at pp. 1133-1134.)
DISPOSITION
The judgment is affirmed. Jam is entitled to recover his costs on appeal.
We concur: PERLUSS, P. J. ZELON, J.