Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
APPEAL from a judgment of the Superior Court of San Diego County, Luis R. Vargas, Judge, Super. Ct. No. GIC856893
O'ROURKE, J.
Carlos Ornelas and Laura Ornelas (hereafter, for clarity, Carlos or Laura or collectively defendants) appeal from a judgment following a bench trial on plaintiff Consuelo Rehder's first amended complaint for specific performance, breach of contract, conversion, fraudulent conveyance and fraud in which she alleged Carlos breached an oral agreement to sell her certain residential property and fraudulently transferred title to his sister Laura. The trial court declared that Carlos's transfer of the property to Laura was a fraudulent conveyance and void, and required Laura as constructive trustee to execute a grant deed to Rehder, who was awarded monetary damages, interest and costs.
On appeal, defendants contend they are entitled to a new trial because (1) the trial court lacked jurisdiction over Carlos at the time it issued a discovery sanction order that deemed certain matters admitted; (2) Laura presented new, material, evidence that could not have been discovered and produced at trial; and (3) the court awarded Rehder excessive damages. Defendants further contend Rehder's action should have been barred by laches for her delay in filing suit against them. We affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
The factual background is taken from the trial testimony in the light most favorable to Rehder, the trial exhibits admitted into evidence, as well as from facts deemed admitted by defendants by virtue of the trial court's July 14, 2006 discovery order, which we uphold in part III, post.
Rehder was born in Mexicali, Baja, California and has lived in the United States since she was 16, when she came to the U.S. to work. At the time of trial, Rehder was 55 years old and employed as a house cleaner. Her schooling since the age of 16 has consisted of one semester of an English-as-a-second-language course.
In 1991, Maria Ornelas approached Rehder asking if she could borrow some money. Maria later told Rehder she and her husband Carlos could not afford to make their home mortgage payments and offered to sell Rehder their house at 3536 Webster Avenue (the property) for $40,000. Rehder accepted, made a $10,000 cash down payment, and began making the mortgage, insurance and tax payments. Rehder moved into the property on August 1, 1991. Rehder made additional payments to Maria in December 1995 and February 1996.
For clarity and intending no disrespect, we refer to Maria Ornelas hereafter as Maria.
In 1999, Rehder finished making her payments to Maria for the house as reflected in a handwritten receipt. Maria handwrote "paid in full" on the receipt and signed it. In Rehder's presence, Maria called the lender, Matrix Financial Services Corporation (hereafter Matrix), and told them she had sold the house and she wanted them to transfer the loan to Rehder. Rehder received documents including one entitled "Assignment of Trust Funds," and forwarded them to Maria so she and her husband could sign them. The documents were returned to Rehder signed by Carlos and Maria, with a check mark indicating that the property had been sold to Rehder under a sales agreement, and that the sellers assigned all funds held in impound or escrow to Rehder. Rehder sent the documents to the finance company.
In or about January 2000, Rehder received a request from Matrix that she provide hazard insurance and a deed transferring title as well as pay certain fees for the loan assumption. Rehder arranged for insurance in her name and made a payment to Matrix to put the loan in her name. She did not forward a deed transferring title to Matrix because she believed it was unimportant: she had been making all of the payments and Maria and Carlos had acknowledged the sale of the house in writing. Nor did she contact Maria or Carlos because they never gave her a phone number. When asked whether she had received a deed from Carlos and Maria transferring title, Rehder testified she did not because Maria told her she would forward it directly to the lender. After moving to the property, Rehder reroofed the house, fixed up one of the bedrooms and installed linoleum.
Maria Ornelas died in June 2003. Her husband Carlos had moved to Sonora, Mexico in 1990 and had only seen his wife three or four times after their separation. Since 1990, Carlos had no contact whatsoever with the property; he had not made mortgage, tax or insurance payments, had not made repairs on or possessed a key, and he had never received a rental agreement for the property. However, in December 2004, following Maria's death, Carlos attempted to refinance the loan on the property because he needed money. He was unable to refinance and abandoned his efforts because the fire insurance was in Rehder's name. Toward the end of November 2004, Rehder received documents indicating Carlos was trying to borrow money on the property. Rehder became worried and hired an attorney, who later told her he had gotten the escrow cancelled.
Thereafter, Carlos offered to sell the property to his sister Laura for $150,000, telling her it was being rented out and was worth about $300,000. She accepted his offer right away. In March 2005, Laura closed escrow on the property without ever having visited it or assessed its condition. Immediately after the close of escrow, she sent Rehder a rental agreement. Rehder refused to sign it on advice of her attorney. However, she paid Laura $654 monthly from March 2005 to September 2006 because she did not want to lose the house.
In September 2005, Laura attempted to refinance the mortgage loan on the property from $120,000 to over $255,000 in order to pay off credit card debt and a line of credit. After Rehder's attorney sent the escrow company a letter concerning the title dispute, the lender advised Laura it needed a release from the attorney to proceed with the escrow. The escrow was eventually cancelled.
In November 2005, Rehder sued Carlos and Laura for specific performance, breach of contract, conversion and fraudulent conveyance. On February 12, 2006, a representative of CalExpress personally served Carlos in Washington State with the summons, complaint and notice of case assignment. Laura filed a general denial on February 3, 2006. On February 24, 2006, Rehder served requests for admissions on Carlos, in part asking him to admit that he and Maria had sold the property to Rehder and had promised to transfer title to her, that Rehder had never paid them rent or signed any rental agreement, and that from August 1991 to the present Rehder had paid all of the mortgage payments, property taxes and insurance owed in connection with the property.
In April 2006, attorney Mark Maasch filed a case management conference statement on Carlos and Laura's behalf. About two weeks later, Maasch notified Rehder's counsel that Carlos and Laura would be proceeding in propria persona, and asked counsel to extend Carlos's time to respond to discovery until May 26, 2006. On June 2, 2006, Carlos and Laura filed substitution forms indicating they would be representing themselves in the matter.
On June 20, 2006, Rehder moved for an order that the matters in her requests for admissions served on Carlos be deemed admitted for Carlos's failure to timely respond. In a sworn declaration, Rehder's counsel explained he had granted numerous extensions for Carlos to respond as reflected in several letters to Carlos's counsel, but after Carlos substituted himself in pro per, he failed to provide responses by June 16, 2006, the last day of the final extension. In July 2006, the court granted Rehder's unopposed motion to deem the matters admitted, and ordered Carlos to pay Rehder $1,000 in sanctions. Thereafter Carlos retained new counsel who executed a stipulation on Carlos and Laura's behalf to continue the trial date to November 2006.
In September 2006, Rehder filed a first amended complaint adding a fraud cause of action. Carlos and Laura thereafter answered the first amended complaint asserting various affirmative defenses including laches. The matter proceeded to a bench trial, after which time the court entered judgment in Rehder's favor. It declared that Carlos's transfer of title to the property to Laura was a fraudulent conveyance and void and Laura held title to the property as constructive trustee for Rehder's benefit, and ordered Laura to execute and deliver a grant deed within 60 days to Rehder. The court awarded Rehder $84,575.97 in damages, interest on that amount from the date of the judgment, and $4,154.39 in costs.
Defendants thereafter moved for a new trial on grounds of irregularity in the proceedings, newly discovered evidence and excessive damages. In part, defendants argued the trial court's July 2006 discovery order was void because Carlos had not appeared in the case and was not a party to the action at that time. The trial court denied the motion. Defendants filed the present appeal.
DISCUSSION
I. Principles of Appellate Review
In resolving defendants' contentions, we apply settled principles of appellate review. Specifically, "it is settled that '[a] judgment or order of the lower court is presumed correct. All intendments and presumptions are indulged to support it on matters as to which the record is silent, and error must be affirmatively shown. This is not only a general principle of appellate practice but an ingredient of the constitutional doctrine of reversible error.' " (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) " 'A necessary corollary to this rule is that if the record is inadequate for meaningful review, the appellant defaults and the decision of the trial court should be affirmed.' " (Gee v. American Realty & Construction, Inc. (2002) 99 Cal.App.4th 1412, 1416.)
It "is counsel's duty by argument and citation of authority to show in what respects rulings complained of are erroneous." (Wint v. Fidelity & Casualty Co. (1973) 9 Cal.3d 257, 265, italics added.) All litigants are bound by the rule that "[t]he reviewing court is not required to make an independent, unassisted study of the record in search of error or grounds to support the judgment. It is entitled to the assistance of counsel. Accordingly, every brief should contain a legal argument with citation of authorities on the points made. If none is furnished on a particular point, the court may treat it as waived, and pass it without consideration." (9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, § 594, p. 627.)
II. Standard of Review
"[A] trial judge is accorded a wide discretion in ruling on a motion for new trial and . . . the exercise of this discretion is given great deference on appeal. [Citations.] However, . . . on an appeal from the judgment it is our duty to review all rulings and proceedings involving the merits or affecting the judgment as substantially affecting the rights of a party [citation], including an order denying a new trial. In our review of such order denying a new trial, as distinguished from an order granting a new trial, we must fulfill our obligation of reviewing the entire record, including the evidence, so as to make an independent determination as to whether the error was prejudicial." (City of Los Angeles v. Decker (1977) 18 Cal.3d 860, 871-872.) As to prejudice, '[T]he trial court is bound by the rule of California Constitution, article VI, section 13, that prejudicial error is the basis for a new trial, and there is no discretion to grant a new trial for harmless error.' " (Sherman v. Kinetic Concepts, Inc. (1998) 67 Cal.App.4th 1152, 1160-1161.) "When the court has denied a motion for a new trial . . . we must determine whether the court abused its discretion by examining the entire record and making an independent assessment of whether there were grounds for granting the motion." (ABF Capital Corp. v. Berglass (2005) 130 Cal.App.4th 825, 832.)
III. Claim of Irregularity in the Proceedings/Lack of Jurisdiction
Carlos contends that the trial court's July 2006 order deeming the factual matters contained in Rehder's requests for admissions admitted is void because the court lacked "jurisdiction" over him. He maintains that at the time of the court's order he had not paid a filing fee or appeared in the proceeding; that his first appearance occurred when he filed an answer on September 28, 2006. In making this argument, Carlos asserts, without record citation or other evidence, that he did not receive Rehder's summons and complaint and thus did not appear within the "mandatory" thirty day period.
Carlos's attack on the trial court's discovery order fails for several fundamental reasons. First, the record contains a proof of service filed in March 2006, and executed under penalty of perjury indicating that on February 12, 2006, Carlos was personally served with the summons and complaint in the action. By personal service of the summons, the court acquired jurisdiction over Carlos. (Code Civ. Proc., § 410.50, subd. (a); 3 Witkin, Cal. Procedure (4th ed. 1997) Actions, § 875, p. 1063.) And absent any showing to the contrary, we indulge all presumptions in favor of the trial court's order, including the validity, accuracy and correctness of documents in the record executed under penalty of perjury. (Denham v. Superior Court, supra, 2 Cal.3d at p. 564.)
Second, as Rehder points out, the record shows Carlos, via attorney Maasch, filed a case management conference statement in April 2006, with Maasch indicating he represented both Carlos and Laura. In that statement, Carlos indicated he denied entering into any agreement with Rehder to sell her the property but rather sold it to his sister. He requested a jury trial, indicated he was willing to participate in mediation, and stated he intended to complete Rehder's and other third party depositions within a specific time frame. Rehder argues that Carlos's case management conference statement, as well as his later execution of a substitution form stating he was substituting Maasch out as his counsel in order to represent himself, constitute general appearances and refute any claim that attorney Maasch acted without Carlos's authority.
We agree. "A general appearance by a party is equivalent to personal service of summons on such party." (Code Civ. Proc., § 410.50, subd. (a).) "A general appearance occurs where a party, either directly or through counsel, participates in an action in some manner which recognizes the authority of the court to proceed. It does not require any formal or technical act. [Citations.] 'If the defendant "raises any other question, or asks for any relief which can only be granted upon the hypothesis that the court has jurisdiction of his person, his appearance is general . . . ." ' " (Mansour v. Superior Court (1975) 38 Cal.App.4th 1750, 1756-1757; see also General Ins. Co. v. Superior Court (1975) 15 Cal.3d 449, 453-454.) Whether a particular act of the defendant reflects an intent to submit to the court's jurisdiction, constituting a general appearance, depends on the circumstances. Here, Carlos's actions via attorney Maasch in participating in the case management evaluation process, including by asserting defenses and indicating his anticipated discovery without any objection as to the validity of jurisdiction over his person, constituted an acknowledgment of the trial court's jurisdiction. (Accord Mansour, supra, 38 Cal.App.4th at p. 1757 [attorney's appearance for a party in preparing a case management conference statement can result in a general appearance].) The case management evaluation procedure is "premised on the trial court having jurisdiction over the parties participating in it." (Ibid.)
We reject Carlos's attempt to distinguish Mansour on the asserted ground he did not retain attorney Maasch and Maasch acted without his authority when he filed the case management conference statement. First, we decline to recognize the argument because it was not made in Carlos's new trial motion. But secondly, there is no indication in the record showing Carlos objected to attorney Maasch's actions on his behalf below or otherwise challenged Maasch's authority; indeed Carlos signed the substitution form and we presume it was validly signed by him in favor of the trial court's order. In sum, Carlos has no shown to basis to overturn the trial court's July 2006 discovery order on jurisdictional grounds.
IV. Newly Discovered Evidence
Laura contends she is entitled to a new trial on grounds of newly discovered evidence that she could not have produced at trial, consisting of changes to the deposition testimony of Ivan Bonilla, the real estate agent who handled the sale between her and Carlos. Specifically, she argues that while at trial the parties submitted potions of Bonilla's September 2006 deposition in which he testified Laura made statements to him indicating she knew of Rehder's claim of ownership before close of escrow, Bonilla later changed his deposition testimony after trial to indicate he had not actually met or spoken with Laura, asserting his deposition testimony was incorrect. Rehder responds that Laura has not shown the information was not available to her before trial with reasonable diligence and thus it is not "new," and it is not material in any event because there was independent evidence at trial showing Laura was aware of Rehder's ownership claim before her purported purchase of the property from Carlos.
Again, we agree with Rehder that Laura has not shown the evidence to be "newly discovered" for purposes of obtaining a new trial. "In ruling on a motion for new trial based on newly discovered evidence, the trial court considers the following factors: ' "1. That the evidence, and not merely its materiality, be newly discovered; 2. That the evidence be not cumulative merely; 3. That it be such as to render a different result probable on a retrial of the cause; 4. That the party could not with reasonable diligence have discovered and produced it at the trial; and 5. That these facts be shown by the best evidence of which the case admits." ' " (People v. Delgado (1993) 5 Cal.4th 312, 328; see also Sherman v. Kinetic Concepts, Inc., supra, 67 Cal.App.4th at p. 1161.) "In addition, 'the trial court may consider the credibility as well as materiality of the evidence in its determination [of] whether introduction of the evidence in a new trial would render a different result reasonably probable.' " (Delgado, at p. 329.) We review the trial court's decision for abuse of discretion. (People v. Musselwhite (1998) 17 Cal.4th 1216, 1252.)
Laura provided no explanation in her new trial motion as to why she could not, with reasonable diligence, have discovered the purported new evidence at trial. In particular, there is no showing Laura was unaware of Bonilla's existence or the materiality of his testimony. (E.g., In re Shepard's Estate (1963) 221 Cal.App.2d 70, 77; Anderson v. Howland (1970) 3 Cal.App.3d 380, 310.) In these circumstances, a party is required to state particular acts or circumstances establishing diligence (In re Marriage of Liu (1987) 197 Cal.App.3d 143, 153-154; accord Garcia v. Hejmadi (1997) 58 Cal.App.4th 674, 690 [holding in the context of asserted new facts to support motion for reconsideration, party must present "a satisfactory explanation for failing to provide the evidence earlier, which can only be described as a strict requirement of diligence"].) Laura made no such showing. This deficiency alone permits us to uphold the trial court's new trial ruling.
Further, we conclude on this record Laura could not make the required showing. Bonilla's deposition was taken in September 2006 and portions of it were read into the record at trial pursuant to the parties' stipulation. Thus, as Rehder points out, Laura knew at the time of trial about Bonilla's testimony implicating her knowledge of Rehder's ownership claim. (In re Marriage of Liu, supra, 197 Cal.App.3d at p. 154 [trial court properly denied motion for new trial because appellant "fail[ed] to explain why she could not have discovered [the evidence] prior to or during trial," italics added].) The purported new evidence – that Laura in fact had never met Bonilla nor made statements to him – was of course within Laura's own knowledge, and even assuming she was not aware of Bonilla's precise deposition testimony, it was readily discoverable to Laura had she exercised reasonable diligence before trial. As stated, Laura must show the trial court abused its discretion in denying her a new trial; she must show the trial court's decision exceeds the bounds of reason and results in a miscarriage of justice. (Denham v. Superior Court, supra, 2 Cal.3d at p. 566; Fassberg Const. Co. v. Housing Authority of City of Los Angeles (2007) 152 Cal.App.4th 720, 762-763.) She has not made that showing here.
V. Excessive Damages
Under Code of Civil Procedure section 657, "[a] new trial shall not be granted upon the ground of insufficiency of the evidence to justify the verdict or other decision, nor upon the ground of excessive or inadequate damages, unless after weighing the evidence the court is convinced from the entire record, including reasonable inferences therefrom, that the court or jury clearly should have reached a different verdict or decision." The reviewing court can reverse the denial of a new trial motion based on insufficiency of the evidence or excessive damages only if there is no substantial conflict in the evidence and the evidence compels the conclusion that the motion should have been granted. (Fassberg Const. Co. v. Housing Authority of City of Los Angeles, supra, 152 Cal.App.4th at pp. 751-752.)
Defendants' entire argument with respect to excessive damages in their new trial motion was the following ipse dixit: "Excessive damages were awarded to [p]laintiff Consuelo Rehder as shown by the minutes of the court and the Judgment After Court Trial." On appeal, defendants give slightly more explanation, arguing that damages were excessive because "the court should have found that if [Rehder] had any interest in the Property, it was not as owner." They assert Rehder testified her purchase "did not include the transfer of title" and that the parties' oral agreement did not intend that title would be transferred to Rehder.
We conclude defendants waived these more specific assertions by (1) failing to raise them in the trial court and (2) failing to provide supporting record citations. (See City of San Diego v. D.R. Horton San Diego Holding Co., Inc. (2005) 126 Cal.App.4th 668, 684-685; In re Marriage of Weaver (1990) 224 Cal.App.3d 478, 488 [party may not raise theory not addressed in new trial motion for the first time on appeal; court in that case relied on public policy exception to address issue]; In re S.C. (2006) 138 Cal.App.4th 396, 406-407 [appellate court can deem a contention unsupported by a record citation to be without foundation and thus forfeited]). But they are without merit in any event. Defendants ignore their admission, among other facts deemed admitted supporting Rehder's claim of ownership, that Carlos and Maria promised to transfer title to the property to Rehder. Defendants do not explain otherwise how the evidence does not support the damages awarded by the trial court or why the evidence compels the conclusion that their motion should have been granted. (Fassberg Const. Co. v. Housing Authority of Los Angeles, supra, 157 Cal.App.4th at p. 752.) They have not shown manifest abuse of discretion.
VI. Laches Defense
Defendants contend the trial court erred in rejecting their laches defense. They maintain they suffered prejudice as a result of Rehder's failure to file her action until two years after Maria died because Maria was the only person privy to the sales transaction with Rehder; that Rehder's cause of action arose in January 2000 when Matrix sent its request for a deed transferring title. Rehder responds that defendants' discovery admissions render Maria's testimony entirely inconsequential to the outcome of the case because the sale was conclusively established. They also point out that laches is an equitable remedy that must be raised by a party having clean hands; to recognize such a defense here would reward defendants for their fraudulent conduct.
We agree that the death of an important witness may constitute prejudice. (Bono v. Clark (2002) 103 Cal.App.4th 1409, 1420 [citing cases].) However, defendants here cannot make an affirmative showing of prejudice given (1) their discovery admission that Carlos and Maria agreed to sell Rehder the property and entered into a sales agreement with her and (2) other evidence in the record, including Rehder's own testimony and trial exhibits, establishing the purchase agreement. "[A] deemed admitted order establishes, by judicial fiat, that a nonresponding party has responded to the requests by admitting the truth of all matters contained therein." (Wilcox v. Birtwhistle (1999) 21 Cal.4th 973, 979.) The admissions in this case rendered Maria's testimony superfluous.
Further, we find nothing indicating defendants offered any evidence at trial to establish how they were prejudiced as a result of Maria's absence. Carlos testified that neither of the signatures on the documents were his or Maria's; the trial court obviously rejected his credibility as a witness. "Prejudice is never presumed; rather it must be affirmatively demonstrated by the defendant in order to sustain his burdens of proof and the production of evidence on the issue." (Miller v. Eisenhower Medical Center (1980) 27 Cal.3d 614, 624.) "Defendant[s] bore the burden of production and the burden of proof on this issue but failed to carry either one, having offered no evidence at trial on the issue of prejudice. '[S]ince we do not presume prejudice, and since respondents did not prove prejudice, the defense of laches fails.' " (Bono v. Clark, supra, 103 Cal.App.4th at p. 1420, quoting Conti v. Board of Civil Service Commissioners (1969) 1 Cal.3d 351, 355.)
Finally, the trial evidence showed Rehder first received documents indicating Carlos was attempting to borrow money off the property in November 2004, immediately obtained legal counsel, and filed suit in November 2005. The trial court was entitled to conclude based on Rehder's limited education and inexperience in real estate matters that she reasonably believed Maria had arranged for the transfer of valid title, and that the absence of a deed transferring title to her was not enough to trigger notice of Rehder's need to seek relief. Substantial evidence thus supports the trial court's implicit finding that Rehder did not exercise unreasonable delay in seeking her remedy to support any laches defense.
DISPOSITION
The judgment is affirmed.
WE CONCUR: McCONNELL, P. J., NARES, J.