Opinion
B293642
02-04-2020
KYMM MCCARTER et al., Plaintiffs and Respondents, v. MOHAMMED AHSAN et al., Defendants and Appellants.
Stephen M. Martin for Defendants and Appellants. Elder & Spencer, Chandra Gehri Spencer, Margaret A. Elder and Luis M. Inocente for Plaintiffs and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Los Angeles County Super. Ct. No. BC564088) APPEAL from a judgment of the Superior Court of Los Angeles County. Holly E. Kendig, Judge. Affirmed. Stephen M. Martin for Defendants and Appellants. Elder & Spencer, Chandra Gehri Spencer, Margaret A. Elder and Luis M. Inocente for Plaintiffs and Respondents.
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Defendants and appellants Mohammed Ahsan (Ahsan) and Mohsin Mohammed (Mohammed) (collectively defendants) appeal from a judgment following a bench trial. We affirm.
Although the notice of appeal lists only Ahsan, the opening brief argues on behalf of both defendants. Because there is no resulting prejudice to plaintiffs, we liberally construe the notice to include Mohammed. (See Chung Sing v. Southern Pacific Co. (1918) 178 Cal. 261, 263-264; Toal v. Tardif (2009) 178 Cal.App.4th 1208, 1216-1217; Beltram v. Appellate Department (1977) 66 Cal.App.3d 711, 715-716.)
BACKGROUND
In November 2014, plaintiffs and respondents Kymm McCarter (McCarter) and Gilbert Raul Montoya (Montoya) (collectively plaintiffs) filed a complaint against defendants alleging failure to provide habitable dwelling, breach of covenant and right to quiet enjoyment and possession of the property, nuisance, and negligence.
The matter was called for trial on September 26, 2017. Before opening statements, defendants' counsel announced that he had just been told by his client that a settlement was reached with plaintiffs 20 days earlier, on September 6, 2017.
This development took the trial court and plaintiffs' counsel by surprise. Defendants' September 12, 2017, trial brief failed to include the alleged settlement as a defense. Nor was the settlement mentioned at the final status conferences held on September 18 and 25, 2017, which were attended by one or both defendants. The court described defendants' last-minute settlement defense as "highly irregular[,]" "improper[,]" and "[p]erhaps . . . a fraud on the court." The court decided to proceed with the trial on the merits of plaintiffs' complaint and to address the settlement issue in a second phase.
After the first phase of the trial on liability and damages was complete, the parties submitted briefs discussing the validity and enforceability of the purported settlement. According to defendants, on September 6, 2017, Montoya and McCarter each signed a valid settlement and release of this action. In consideration, defendants paid Montoya $2,500 and McCarter $500. Plaintiffs contended that the settlement agreements were invalid because they "were obtained by fraud, duress and undue influence." When plaintiffs signed them, McCarter "was intoxicated and suffering from heroin withdrawal" and Montoya "was under the influence of Tramadol and not able to think clearly."
The purported settlement agreements consist of short statements by each plaintiff indicating that he or she had "reached a settlement with [defendants] on September 6, 2017" and received payment "to dismiss and not pursue any further legal action for law suit case No. BC564088, or anything related to case No. BC564088 against [defendants]."
Evidentiary hearings on the settlement issue were held in November 2017 and January 2018. The parties submitted closing briefs in March 2018, and the trial court entertained further argument at a hearing in May 2018.
On August 2, 2018, the trial court issued a detailed, 18-page statement of decision. The court found in favor of plaintiffs on all issues and awarded them general and special damages totaling $165,430. The court found "clear and credible evidence of fraud, duress, undue influence and connivance" by defendants to induce plaintiffs to sign the settlement agreements. Accordingly, the agreements were "voidable, invalid and rescinded[.]" The court ordered plaintiffs to return the settlement payments by way of a setoff from the total damages award.
Thus, on September 7, 2018, judgment was entered in favor of McCarter in the amount of $82,215 and in favor of Montoya in the amount of $80,215. This timely appeal followed.
DISCUSSION
On appeal, defendants argue that the trial court (1) abused its discretion by conducting the trial on liability and damages before holding a hearing on the validity of the settlement agreement; (2) erred by failing to require plaintiffs to return the settlement payment prior to issuing the statement of decision; and (3) was biased against them. We conclude that each of these arguments is meritless.
I. The Trial Court Did Not Abuse Its Discretion by Proceeding with the Trial on Liability and Damages Before Hearing the Settlement Issue.
A trial court's broad power to manage the cases that come before it includes the "discretion to order separate trials of issues and determine the order in which those issues are to be decided. [Citation.]" (Huff v. Securitas Security Services USA, Inc. (2018) 23 Cal.App.5th 745, 762-763 (Huff); see also Code Civ. Proc., § 1048, subd. (b) ["The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial . . . of any separate issue"].) Absent a manifest abuse of this discretion, we will not disturb a court's decision. (Huff, supra, at p. 763.)
We find no abuse of discretion here.
Defendants failed to notify the trial court of the alleged settlement until 20 days later—when the matter was called for trial. As the court explained in its statement of decision, there had been no previous suggestion "that the pretrial work could be stopped, that the trial scheduling could be stopped, that the arrangements for a court reporter could be stopped, [or] that motions in limine could be stopped." Thus, the matter was ready for trial on the merits of the complaint—a trial that had previously been delayed based on defendants' lack of preparation. Under these circumstances, the decision to proceed directly with the trial on liability and damages and to address the settlement issue at a later juncture was a reasonable exercise of the court's discretion over case management.
Defendants' arguments to the contrary are unpersuasive. By failing to cite to the record or any authority, defendants have forfeited their contention that they were prejudiced because the court could not be fair-minded regarding the settlement issue after having heard the evidence on liability. (See Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 852 [assertion in appellant's brief deemed waived if not accompanied by reasoned argument or citations to authority].) Forfeiture aside, any purported prejudice was of defendants' own making and, thus, not a ground for reversal. (See People v. Bell (2019) 7 Cal.5th 70, 121.) And, contrary to defendants' assertion, plaintiffs did not request a continuance of the trial upon learning of the purported settlement. Rather, plaintiffs' counsel expressed willingness to brief the settlement issue but stated that "the trial should continue . . . ." We agree with plaintiffs that, based on the context, counsel meant "continue" in the sense that the trial should proceed, not that it be continued to a later date.
Because it cannot be said that the trial court exceeded the bounds of reason by moving forward with the trial on the merits of plaintiffs' complaint, we conclude that there was no abuse of discretion. (See Shamblin v. Brattain (1988) 44 Cal.3d 474, 478 ["The appropriate test for abuse of discretion is whether the trial court exceeded the bounds of reason"].)
II. The Trial Court Did Not Err by Ordering Plaintiffs to Return the Settlement Payment as a Setoff of Their Damages Award.
Defendants argue that the return of the consideration paid to plaintiffs was a "condition precedent" to rescission of the settlement agreement and, therefore, the trial court erred by ordering plaintiffs to return the settlement by way of a setoff of the damages award rather than requiring the restoration of the consideration before issuing the statement of decision. Defendants fail to cite authority for such strict requirements, and we are aware of none. To the contrary, the law does not support defendants' position.
Rescission extinguishes a contract. (Civ. Code, § 1688.) Its purpose is "to restore the parties as nearly as possible to their former positions 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.]" (Sharabianlou v. Karp (2010) 181 Cal.App.4th 1133, 1144.) "A rescission is effected under . . . section 1691 by giving notice of rescission and restoring, or offering to restore, everything of value received under the contract." (Southern Ins. Co. v. Workers' Comp. Appeals Bd. (2017) 11 Cal.App.5th 961, 971.) "A party who has received benefits by reason of a contract that is subject to rescission and who in an action or proceeding seeks relief based upon rescission shall not be denied relief because of a delay in restoring or in tendering restoration of such benefits before judgment unless such delay has been substantially prejudicial to the other party . . . ." (§ 1693.)
All further statutory references are to the Civil Code unless otherwise indicated. --------
Here, the trial court found "that the settlement agreements were induced by fraud and undue influence[,]" which is among the statutory grounds for rescission. (§ 1689, subd. (b)(1).) As required to effectuate rescission under section 1691, plaintiffs offered to return the $3,000 settlement amount to defendants in their October 2017 briefs regarding the settlement issue and in their March 2018 closing brief. Defendants have not argued—let alone established—that they were substantially prejudiced by any delay in the restoration of consideration caused by the trial court's order that the payment be returned to defendants by way of a setoff of the $165,430 in damages they owe to plaintiffs. (See § 1693.)
Defendants have failed to meet their burden of establishing prejudicial error. (See Vaughn v. Jonas (1948) 31 Cal.2d 586, 601 ["The burden is on the appellant in every case affirmatively to show error and to show further that the error is prejudicial"].)
III. Defendants Have Not Demonstrated That the Trial Court Was Biased.
Defendants contend that the trial court exhibited bias against them. We do not agree. Instead, the record indicates that the trial court acted in a fair manner and provided ample opportunity for defendants to present their defenses, including those related to the settlement. We find all of defendants' arguments to the contrary unpersuasive.
Defendants find "[t]he most obvious evidence of bias" in the statement of decision, which explains that, on September 26, 2017, plaintiffs requested that the trial proceed on the merits of the complaint because their witnesses were ready to testify. According to defendants, this was inaccurate because plaintiffs' counsel had requested a continuance of the trial to allow for briefing of the settlement issue. As discussed above in section I, defendants misconstrue the record. Plaintiffs' counsel opined that "the trial should continue"—as in proceed—not that it should be continued.
Defendants also argue that the trial court's use of the term "'monkey business'" to describe "their efforts to obtain a settlement" raises the appearance of bias because, as defendants describe themselves, they "are short men of South Asian heritage with Muslim names." Judges, of course, have a duty "to render decisions free from any influence or consideration of the race, ethnic origin or gender of the parties." (Betz v. Pankow (1993) 16 Cal.App.4th 919, 926.) In a footnote to its statement of decision, the court used the term to describe "[p]laintiffs' contention that [d]efendants were engaged in some monkey-business of trying to trick [p]laintiff McCarter into settlement." In this context, we find no racial or religious animus connected with the court's use of the term, "monkey business," which is a colloquialism meaning "deceitful acts" (American Heritage Dict. (2d college ed. 1985) p. 810). Nor have defendants established the appearance of racial or religious bias.
Finally, defendants point to examples of the trial court's unfavorable credibility determinations toward them. "When making a ruling, a judge interprets the evidence, weighs credibility, and makes findings. In doing so, the judge necessarily makes and expresses determinations in favor of and against parties. How could it be otherwise? We will not hold that every statement a judge makes to explain his or her reasons for ruling against a party constitutes evidence of judicial bias." (Moulton Niguel Water Dist. v. Colombo (2003) 111 Cal.App.4th 1210, 1219.) That the court discounted defendants' credibility—which it was entitled to do as the trier of fact (see Shields v. Shields (1962) 200 Cal.App.2d 99, 101)—is not evidence of improper bias. (See Kreling v. Superior Court of Los Angeles County (1944) 25 Cal.2d 305, 310-311 ["the expressions of opinion uttered by a judge, in what he conceives to be a discharge of his official duties, are not evidence of bias or prejudice"].)
Accordingly, we reject defendants' claim of judicial bias.
DISPOSITION
The judgment is affirmed. Plaintiffs are entitled to their costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
/s/_________, J.
ASHMANN-GERST We concur: /s/_________, P. J.
LUI /s/_________, J.
CHAVEZ