Opinion
NOT TO BE PUBLISHED
San Mateo County Super. Ct. No. CIV445976
Haerle, J.
I. INTRODUCTION
After a six-day jury trial, plaintiff and respondent Harold Lightfoot, the owner an Arabian gelding named Crystals Charm (but usually referred to as “Red,” a name we shall use hereafter), was awarded $60,000 in damages as the result of false representations made by the defendants and appellants, an equine veterinarian and his San Mateo County-based company, regarding the consequences of performing “palmar digital neurectomies” on both of Red’s front legs. As a consequence of the performance of these procedures by appellants, Lightfoot alleged, and the jury apparently found, Red was thereafter unable to compete in international competition, a fact which caused Lightfoot monetary damage. Appellants ask this court to reverse, contending there was no substantial evidence of either (1) false statements having been made by appellant, Dr. Russell Peterson, to Lightfoot or (2) any intent on the part of appellants to mislead Lightfoot or induce his reliance on a false representation. We agree with the latter portion of this argument and hence reverse the judgment.
II. FACTUAL AND PROCEDURAL BACKGROUND
Respondent Lightfoot became involved in “equestrian activities” in 1980 and bought Red at a horse auction in 1998 for $600. Thereafter, with the assistance of his rider/trainer, Heather Reynolds, he began using him in various domestic endurance races, generally with good results. However, after a year or so, Red began to manifest lameness after long races. As a result, and also because he wanted to use Red in overseas endurance races, Lightfoot sought opinions from both the University of California at Davis’s Veterinary Medicine Teaching Hospital (VMTH) and, thereafter, from appellant Peterson, a principal at appellant Peninsula Equine Medical and Surgical Group (hereafter Peninsula Group) and one of his colleagues there, as to how Red’s post-race lameness might be cured.
In July 2002, Red was taken to the Davis VMTH for the first such evaluation because Lightfoot was “trying to figure out why every now and then he’d come up lame.” After Red was there a week, the Davis facility issued a report finding that he had an “inflammatory process” in a bone in his foot and recommended that he receive “corrective shoeing” and, additionally, “six to nine months rest.”
Lightfoot, however, only “skimmed” the VMTH report because, he testified, “[t]here was no way I could understand [it]” and, according to his testimony, he preferred to rely on the opinion of Dr. Peterson as to what should be done to improve Red’s sometime lameness. He did, however, send a copy of the Davis report to Peterson.
Sometime after the Davis VMTH examination and report, Lightfoot and his trainer, Reynolds, took Red into the Peninsula Group to see veterinarian Peterson and his assistant, Dr. Elaine Carpenter. Apparently initially via a telephone conversation and thereafter in person, Dr. Carpenter recommended doing “a neurectomy on him.” Lightfoot, however, apparently wanted to get a personal endorsement from Dr. Peterson for this procedure, a procedure which involves “cutting a nerve, going to the bottom of the [horse’s] foot.” Lightfoot testified that a meeting took place in February 2003, at which Lightfoot, Reynolds, and Drs. Peterson and Carpenter were all present. According to Lightfoot, prior to the meeting he had “a real concern whether there were any rules against [the neurectomies] or not” and had so advised Dr. Peterson in a prior telephone call with him. In response to that concern, again according to Lightfoot, Peterson told him at the February 2003 meeting that “there was nothing against doing it, no rules against doing it.”
Peterson denied that any such meeting took place, although he conceded that he approved the procedure in conversations with his colleague, Dr. Carpenter. Carpenter testified that she was the veterinarian at Peninsula Group who recommended and subsequently performed the “bilateral neurectomies” on Red, that she discussed these recommendations with Red’s trainer, Reynolds, and secured the latter’s signature on a “consent form,” but did not recall discussing the procedures with Lightfoot. She also testified that she had no recollection of a meeting with Dr. Peterson, herself, Reynolds and Lightfoot on the subject of the proposed neurectomies, and did not know if Dr. Peterson had ever communicated to Lightfoot or Reynolds his approval of the procedures.
Reynolds’ testimony regarding Peterson’s opinions, although not contradictory of Lightfoot’s, was also not exactly to the same effect: she testified that the conversation between Lightfoot and her on the one hand and Peterson on the other concerned whether there were “any health risks in doing this.” She did not testify about any “rules” against the procedure.
In any event, Lightfoot determined, apparently as a result of his conversations with Peterson and Carpenter, to have the neurectomies performed. The first such procedure was performed on Red on February 19, 2003; two more were performed in early 2004. All were performed by Dr. Carpenter.
It turned out, however, that neurecterized horses are not permitted to perform in international horse races under the rules of an organization known as the Federation Equestre Internationale (FEI), a fact conceded in his testimony by Dr. Peterson. Red, thus, did not thereafter compete internationally, a fact which Lightfoot contended reduced his value to a nominal amount. Red did, however, continue to compete in domestic endurance races; indeed, according to the testimony of Reynolds, Red won the “Death Valley Encounter, Day One” race in December 2005. Reynolds agreed that, in 2005, Red performed “to [her] satisfaction.”
Lightfoot filed an initial complaint against appellants and two other defendants on April 4, 2005. Prior to a hearing on appellants’ demurrer and motion to strike addressed to that complaint, Lightfoot filed a first amended complaint on June 23, 2005. It alleged causes of action for fraud, breach of contract, and professional negligence based on appellants alleged recommendation of neurectomies on Red’s front legs, procedures which disqualified the horse from international endurance competitions held under FEI auspices.
Appellants’ complaint and first amended complaint named both Dr. Carpenter and an organization named “Star Equine Medical Centers” as additional defendants, but neither was apparently ever served and, in any event, never appeared as a defendant in the court below. As noted, however, Carpenter did appear and testify.
The case was, as noted above, tried to a San Mateo jury over six days in May and June 2006. At the conclusion of Lightfoot’s case, appellants moved for a nonsuit on several grounds, all of which the trial court denied.
At the conclusion of appellants’ defense case, Lightfoot’s counsel moved for leave to amend the complaint again to add claims for damages based on negligent misrepresentation or concealment of a material fact. The trial court denied that motion. However, it also reconsidered its earlier denial of appellants’ motion for a nonsuit on the claim for professional negligence and granted that motion. The jury was thus instructed solely on the basis of appellant’s claim for fraud, i.e., intentional misrepresentation.
In their briefs to this court, neither party advises us as to what happened to the breach of contract and rescission cause of action in Lightfoot’s first amended complaint. All we know is that the jury was not instructed regarding it, only regarding intentional misrepresentation. Nor is that issue clarified via the extremely skimpy appendix provided us by the parties.
On June 1, 2006, the jury returned a verdict in favor of Lightfoot in the amount of $60,000, and judgment thereon was entered on June 13, 2006. An amended judgment was entered on June 30, 2006. As amended, the judgment was based solely on the cause of action for intentional misrepresentation, i.e., fraud. Appellants moved for a new trial and for a judgment NOV, both of which motions the trial court denied. Appellants filed a timely notice of appeal.
In his closing argument to the jury, Lightfoot’s counsel contended that his client was entitled to $585,000 in damages. Lightfoot also testified that these were the damages he sustained.
III. DISCUSSION
Appellants make two separate and distinct arguments concerning the lack of substantial evidence to support the judgment against them. First, they contend there was no substantial evidence of what appellant Peterson “actually said” to Lightfoot and, therefore, the trial court erred in submitting the latter’s fraud claims to the jury and, thereafter, by denying their motions for a new trial and for a judgment notwithstanding the verdict. Second, and separately, they argue that there was no substantial evidence to support a finding by the jury of an intent on the part of appellants to mislead Lightfoot and, therefore, the trial court also erred in submitting the fraud claim to the jury and in denying the same two motions.
We disagree with the first argument made by appellants, but agree with the latter. Before elaborating on those conclusions, it is appropriate to quote from a relatively recent decision of this court regarding the substantial evidence standard of review: “‘In determining whether a judgment is supported by substantial evidence, we may not confine our consideration to isolated bits of evidence, but must view the whole record in a light most favorable to the judgment, resolving all evidentiary conflicts and drawing all reasonable inferences in favor of the decision of the trial court. [Citation.] We may not substitute our view of the correct findings for those of the trial court; rather, we must accept any reasonable interpretation of the evidence which supports the trial court’s decision. However, we may not defer to that decision entirely. “[I]f the word ‘substantial’ means anything at all, it clearly implies that such evidence must be of ponderable legal significance. Obviously the word cannot be deemed synonymous with ‘any’ evidence. It must be reasonable in nature, credible, and of solid value; it must actually be ‘substantial’ proof of the essentials which the law requires in a particular case.” [Citations.]’” (DiMartino v. City of Orinda (2000) 80 Cal.App.4th 329, 336; see also, Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 651-652, and Kuhn v. Department of General Services (1994) 22 Cal.App.4th 1627, 1633.)
As noted above, appellants first argue that, assuming there was a meeting between Lightfoot and Peterson (plus Carpenter and Reynolds) in February 2003, there was nothing “in the record to show what Dr. Peterson may have actually said in that meeting.” We disagree. Although many objections were made, and often sustained, during the several direct examinations of Lightfoot regarding what he recalled Peterson saying at that meeting, Lightfoot was allowed to testify that Peterson said to him that “there were no rules against [the procedure], and that was the thing to do.” A few minutes later, Lightfoot was permitted to expand on this answer, and repeated his statement that Peterson had told him “there were no problems doing it.” After his counsel set the stage a bit more regarding the time of the week, others present, etc., that counsel was then allowed to repeat the inquiry to his client:
On various evidentiary grounds, the trial court repeatedly took pains to see that Lightfoot did not testify as to the content or substance of the FEI’s purported “rule” against horses with neurectomies participating in endurance contests in international venues within its jurisdiction.
“Q. [by counsel for Lightfoot]: Do you remember what Dr. Peterson said?
“A. Yes.
“Q. What did he say?
“A. He said that there was nothing against doing it, no rules against doing it.” And, it should be noted, the preceding inquiries of and responses by Lightfoot made clear to the jury that “it” meant the procedure being recommended by Dr. Carpenter, i.e., the neurectomies on Red’s two front legs.
Finally, during the course of his counsel’s presentation of rebuttal evidence, Lightfoot again reiterated that Peterson had told him, at that meeting, that “yes, that was the thing to do.”
We conclude that this repeated testimony of plaintiff Lightfoot as to the statements of Peterson at the February 2003 meeting between them (and others) as to the propriety, at least as regards FEI rules, of doing the proposed neurectomies is substantial evidence that such statements were, in fact, made, and that the substance of them is sufficiently established in the record.
We feel quite differently, however, regarding whether there was substantial evidence as to whether these statements constituted intentional misrepresentation, i.e., fraud. Division Four of this court described the elements of that tort thusly: “The well-established common law elements of fraud which give rise to the tort action for deceit are: (1) misrepresentation of a material fact (consisting of false representation, concealment or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to deceive and induce reliance; (4) justifiable reliance on the misrepresentation; and (5) resulting damage. [Citations.] It is not essential to liability for fraud that the person charged have received any advantage from the fraud. Thus, a person may be liable for fraudulent misrepresentations even if he or she gains no benefit or profit of any kind from them. [Citations.] It is essential, however, that the person complaining of fraud actually have relied on the alleged fraud, and suffered damages as a result. [Citations.] What distinguishes actionable fraudulent deceit is the element of knowing intent to induce someone’s action to his or her detriment with false representations of fact. Fraud is an intentional tort; it is the element of fraudulent intent, or intent to deceive, that distinguishes it from actionable negligent misrepresentation and from nonactionable innocent misrepresentation. It is the element of intent which makes fraud actionable, irrespective of any contractual or fiduciary duty one party might owe to the other. [Citations.]” (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 481-482, fns. omitted; see also Civ. Code §§ 1709 & 1710; Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 173; and Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.)
Referencing the five numbered factors listed in City of Atascadero, we find not only no substantial evidence regarding factors (2) and (3), but frankly no evidence whatsoever. Moreover, we think the record below suggests rather strongly that Lightfoot’s counsel thought as much, too. Such is evidenced by his arguments to the trial court in support of his motion––brought at the close of the plaintiff’s case––to amend his complaint to add a cause of action for negligent misrepresentation.
Factor (2) above, scienter, means, of course, “knowledge [by the speaker] that the representation is false.” (Schultz v. Harney (1994) 27 Cal.App.4th 1611, 1622.) In order to recover for intentional misrepresentation, the plaintiff must plead and then prove “facts which show [the representation] was knowingly false.” (Id. at p. 1622.) Regarding factor (3), “in order to establish fraud it must be shown that the defendant thereby intended to induce the plaintiff to act to his detriment in reliance upon the false representation,” i.e., the defendant “must intend to induce a particular act of the plaintiff . . . .” (Conrad v. Bank of America (1996) 45 Cal.App.4th 133, 157.)
As noted above, Peterson denied that any such meeting as that testified to by Lightfoot ever took place and, thus, that any representation was ever made by him regarding whether performing the neurectomies would violate any “rule.” Indeed, according to Peterson’s testimony, the only times he ever examined Red were in August of 2000 and June of 2002, the latter examination being just before the horse was taken, on his recommendation to the Davis VMTH. He specifically denied ever “evaluating” Red after the horse had been at the VMTH. Peterson did admit that he knew, starting in the 1970’s and continuing to the relevant years (2000-2002), that neurectomized horses were precluded from participating in FEI-sanctioned endurance races, but repeatedly testified that this issue was never discussed between him and Lightfoot. According to his testimony, after the VMTH examination his only role regarding the performance of this procedure on Red was to confirm to Dr. Carpenter “that it was the correct medical thing to do.”
Further, and more importantly, there was absolutely no testimony by Lightfoot with regard to either the scienter or intent-to-induce elements. His various responses to his counsel’s questions regarding the discussions he had had with Peterson, first over the phone and later in person with Carpenter and Reynolds also present, have been described above. And Lightfoot also confirmed that it was Carpenter who had first recommended the neurectomy procedure. But a review of all of his testimony reveals no evidence pertinent to either the intentional nature of Peterson’s misrepresentation or the intention-to-induce factor.
The only evidence cited by Lightfoot in his brief to us deals with the “sequelae from the neurectomies about which Dr. Peterson also failed to warn Mr. Lightfoot or Ms. Reynolds, including neuromas, hoof wall sloughing, rupturing deep flexor tendons, or other potential trauma. Some of these problems did later develop.” But this sort of evidence clearly came in as relevant to the-then extant professional negligence cause of action, a cause of action later dismissed by the trial court. In any event, it is irrelevant to both the scienter and intent-to-induce reliance factors of the sole surviving (intentional misrepresentation) cause of action.
Although the two other participants in the alleged February 2003 meeting testified, neither of them was asked, much less opined, concerning either scienter on the part of Peterson or any intention on his part to induce reliance by Lightfoot.
Reynolds, Red’s trainer, confirmed Lightfoot’s testimony that there was a four-way meeting in that month. In the course of so doing, she was examined by Lightfoot’s counsel regarding the lead-up to that meeting and the meeting itself. But, interestingly, she was never asked any questions concerning whether Lightfoot and Peterson had discussed any “rules” or whether the neurectomies being considered might violate any such “rules.” Her testimony was only that (1) she and Peterson had discussed the “options for Red” after receiving the Davis VTMH report, (2) she and Lightfoot did meet with Peterson and Carpenter before the neurectomies, and (3) at that meeting, they discussed “health risks” in doing the proposed procedure. And the only substantive testimony from her along the latter lines was that Peterson had told Lightfoot and her that “it would be okay for the horse and there shouldn’t be any risk.”
Dr. Carpenter, Peterson’s associate at the Peninsula Group, and the veterinarian who actually performed all three of the neurectomies, was called as a defense witness. She testified that she was the veterinarian who recommended the procedure to Ms. Reynolds and secured the latter’s signature to the Peninsula Group’s consent form. But, consistently with Peterson, she testified that she recalled no meeting among her, Peterson, Lightfoot and Reynolds on the subject of the proposed procedure. On cross-examination, Lightfoot’s counsel did not question Carpenter at all about discussions she may have heard or learned about regarding whether the procedures she was recommending, and later doing, might have been inconsistent with any kind of “rule.”
Finally, the record rather strongly suggests that, at the close of his case-in-chief, Lightfoot’s counsel recognized the possible “intent problem” in his case. It was at that point, as noted above, that he unsuccessfully sought to add a count of negligent misrepresentation to his first amended complaint. In the course of arguing for such an addition, he stated to the trial court: “I will always argue as plaintiffs [sic] lawyer that every action that we take is an intentional act, because we chose to take it where we have other --chose particularly not to take it or to take an alternative action. I don’t think that under the circumstances of this case that the, that there isn’t the -- I don’t think that doctor -- I truthfully don’t believe that Dr. Peterson intended to harm -- I just don’t see that he -- he just doesn’t strike me as that kind of guy, if you’ll pardon me for taking an interest that may even appear adverse to the evidence, but I don’t believe that. Okay. And I think that, that Dr. Peterson simply failed to take into account that, that, that Skip Lightfoot was relying on him. I don’t think he intended to harm Skip Lightfoot or Red. I just don’t see that.” (Emphasis supplied.)
Finally, in their brief to this court, Lightfoot and his counsel offer no citations to any evidence adduced at trial regarding either scienter or an intent on the part of Peterson to induce Lightfoot’s reliance on any representation made by him regarding any “rule” violated by the performance of the neurectomies.
For all of these reasons, we find that there was no substantial evidence supporting the elements of either (1) scienter or (2) intention to induce reliance, essential elements of a cause of action for intentional misrepresentation. Lightfoot’s fraud claim thus fails.
IV. DISPOSITION
The judgment is reversed and the case remanded to the trial court with instructions to vacate the judgment entered against appellants and, instead, to enter judgment in their favor. (See Code Civ. Proc., § 629.) Costs on appeal are awarded to appellants.
We concur: Kline, P.J. Richman, J.