Opinion
G043853 Super. Ct. No. 30-2009-00118253
01-04-2012
DONNA SUMMERS, Plaintiff and Appellant, v. STATE FARM GENERAL INSURANCE COMPANY, Defendant and Respondent.
Law Offices of Randall S. Waier and Randall S. Waier for Plaintiff and Appellant. Robie & Matthai, Michael J. O'Neill and Natalie A. Kouyoumdjian for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
OPINION
Appeals from a judgment and a postjudgment order of the Superior Court of Orange County, Derek W. Hunt, Judge. Affirmed.
Law Offices of Randall S. Waier and Randall S. Waier for Plaintiff and Appellant.
Robie & Matthai, Michael J. O'Neill and Natalie A. Kouyoumdjian for Defendant and Respondent.
INTRODUCTION
A theft occurred at the business office where Donna Summers conducted her marketing and graphic design business. The computer on which Summers's work product was stored was stolen. In the process of investigating Summers's claim, her insurer, State Farm General Insurance Company (State Farm), requested that she provide it with hard copy samples of her work. Summers did so; State Farm lost the samples.
Summers sued State Farm for negligence, conversion, and bailment for the loss of the samples, and for breach of the insurance contract and breach of the implied covenant of good faith and fair dealing for its alleged failure to fully compensate her for her losses due to the theft. During the liability phase of a bifurcated trial, the trial court refused to instruct the jury on the elements of the claims relating to the lost samples because State Farm conceded liability. During the damages phase of the trial, the court instructed the jury, in relevant part, that the damages for the loss of the samples would be their fair market value. The jury awarded Summers $85,000. Summers appeals.
We affirm. The trial court did not err in refusing to instruct the jury regarding the elements of the negligence, conversion, and bailment claims during the liability phase, because liability was conceded. The court properly instructed the jury regarding damages. The lost samples were not unique items lacking any market value, and Summers was therefore not entitled to recover the cost to re-create or replace them. Summers was entitled to, and did, recover the fair market value of the samples.
STATEMENT OF FACTS AND PROCEDURAL HISTORY
Summers is the sole proprietor of a graphic design business, Summers By Design, which creates marketing materials for business entities. On or about June 24, 2007, a theft occurred at Summers's business, resulting in the loss of her computer equipment and other business personal property. She claimed that the computer equipment contained all of her work product, work in progress, invoices, and business records, and that she had no backup for any of this material.
Summers is the named insured under a general commercial insurance policy issued by State Farm. Summers made a claim under the policy for the loss of her business personal property. State Farm paid Summers a total of $45,925.51 for the lost computer equipment and the replacement cost benefits. State Farm also paid Summers in excess of $250,000 for lost income resulting from the loss of the computer equipment.
Summers also claimed a loss for two separate projects involving the production of CD directories of golf courses and wineries in California. State Farm ultimately denied this portion of Summers's claim.
While State Farm was investigating Summers's claim, at State Farm's request, Summers sent samples of the work she had done for former clients. State Farm lost those samples. Summers demanded that State Farm reimburse her $878,578 for the value of the lost samples, claiming that was the amount it would cost her to re-create them. State Farm refused Summers's demand, although it offered to pay her a reasonable sum.
Summers sued State Farm for breach of the insurance contract and breach of the implied covenant of good faith and fair dealing in connection with the losses due to the theft of her computer equipment. Summers also sued State Farm for negligence, conversion, and bailment in connection with State Farm's loss of her samples.
On the first day of trial, the court granted Summers's motion to dismiss an additional cause of action for declaratory relief, without prejudice.
State Farm admitted liability for the loss of the samples. The court bifurcated the trial into two parts: (1) liability for claims based on the insurance policy; and (2) damages.
In phase one of the trial, the jury found State Farm had not breached the insurance policy. In phase two of the trial, the jury determined that the fair market value of the lost samples was $85,000. Judgment was entered, and Summers timely appealed.
Summers filed a second notice of appeal from a postjudgment order awarding attorney fees. That appeal was assigned the same case number as the appeal from the judgment. Summers failed to address the attorney fees issue in her appellate briefs; we therefore deem the issues raised in the appeal of the postjudgment order to have been forfeited. (People v. Stanley (1995) 10 Cal.4th 764, 793; Niko v. Foreman (2006) 144 Cal.App.4th 344, 367-368; In re S.C. (2006) 138 Cal.App.4th 396, 406-407; Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc. (2003) 109 Cal.App.4th 944, 964.)
DISCUSSION
I.
THE TRIAL COURT DID NOT ERR IN FAILING TO INSTRUCT THE JURY IN PHASE
ONE OF THE TRIAL, REGARDING THE LOST SAMPLES CLAIMS, BECAUSE STATE
FARM ADMITTED LIABILITY FOR THOSE CLAIMS.
Summers argues the trial court erred in failing to instruct the jury regarding her claims of negligence, conversion, and bailment with regard to the lost samples. Summers correctly notes that a party "is entitled upon request to correct, nonargumentative instructions on every theory of the case advanced by [her] which is supported by substantial evidence." (Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 572.)
However, State Farm admitted liability for the loss of the samples, and that issue was not before the jury during phase one of the trial. During phase one, the jury was instructed as follows: "Plaintiff also claims that at defendant State Farm's request she sent samples of her work product to assist them in evaluating her loss. Because State Farm acknowledges that it lost the samples, in this phase of the trial you will not be asked to deliver any verdict on that subject, but you will be asked about the communications between the two sides on the subject of plaintiff's samples."
When a defendant admits liability, or concedes an element of a plaintiff's case, it is not error for the court to refuse to instruct the jury on the issue of liability or on that particular conceded element. (Wank v. Richman & Garrett (1985) 165 Cal.App.3d 1103, 1112 [trial court properly rejected instruction on proximate cause, when causation had been stipulated to, and the only issue was whether tortfeasor was acting within the course and scope of his employment with the defendant law firm at the time of the accident]; D'Avanzo v. Manno (1936) 16 Cal.App.2d 346, 349 [instruction regarding "inevitable accident" would be "inapplicable and unwarranted" where the defendant had admitted liability].)
Summers argues that the trial court's failure to instruct the jury regarding the elements of her various legal theories during phase one impermissibly limited the type and amount of damages the jury could award in phase two. Whether the jury was properly instructed regarding damages is a separate issue, which will be discussed post. Summers fails to explain how the failure to instruct on the elements of negligence, conversion, and bailment could have affected anything during phase one of the trial.
Summers does not argue the trial court erred in bifurcating the issues of liability and damages. Bifurcation and the order of proof are matters left to the discretion of the trial court. (Code Civ. Proc., § 1048; Estate of Young (2008) 160 Cal.App.4th 62, 92; Regents of University of California v. Sheily (2004) 122 Cal.App.4th 824, 833.)
The trial court did not err in refusing to instruct the jury regarding the elements of the lost samples claims during phase one of the trial.
II.
THE TRIAL COURT DID NOT ERR IN INSTRUCTING THE JURY REGARDING THE
DAMAGES AVAILABLE ON THE LOST SAMPLES CLAIMS.
Summers argues the trial court erred in its instructions regarding the damages available for her claims based on the lost samples.
In phase two of the trial, the jury was instructed as follows regarding damages for the lost samples claims:
"You must decide how much money will reasonably compensate plaintiff for her harm. This compensation is called 'damages.'
"The amount of damages must include an award for each item of harm that was caused by the defendant's wrongful conduct, even if the particular harm could not have been anticipated.
"Plaintiff does not have to prove the exact amount of damages that will provide reasonable compensation for the harm. However, you must not speculate or guess in awarding damages.
"The following are the specific items of damages claimed by plaintiff:
"1. Economic damages consisting of the fair market value of the samples at the time defendant wrongfully lost them;
"Or
"Non-economic special damages resulting from defendant's loss of the samples; and
"2. Reasonable compensation for the time and money spent by plaintiff in attempting to recover the samples; and
"3. Emotional distress suffered by plaintiff as a result of defendant's conduct.
"In order to recover special damages, plaintiff must prove:
"1. That at the time of the delivery of the samples, State Farm had reason to suppose from sources other than plaintiff that the samples had a peculiar sentimental or emotional value to plaintiff.
"2. That it was reasonably foreseeable that special injury or harm would result from the loss of the samples; and
"3. That reasonable care on plaintiff's part would not have prevented the loss.
"'Fair market value' is the highest price that a willing buyer would have paid to a willing seller, assuming:
"1. That there is no pressure on either one to buy or sell; and
"2. That the buyer and seller know all the uses and purposes for which the [samples are] reasonably capable of being used.
"No fixed standard exists for deciding the amount of damages for mental suffering and emotional distress. You must use your judgment to decide a reasonable amount based on the evidence and your common sense."
Summers complains that the trial court's failure to instruct the jury on her different theories of recovery—negligence, conversion, and bailment—was prejudicial because the jury was not instructed that it could include the costs of re-creation and replacement instead of the fair market value of the samples. The instructions ante correctly set forth the damages available for the causes of action for negligence, conversion, and bailment. (See Civ. Code, § 3336 [damages for conversion are fair market value plus compensation for expenses in attempting to recover the property]; CACI No. 2102 [same]; 13 Witkin, Summary of Cal. Law (10th ed. 2005) Personal Property, § 165, p. 177 [bailee who fails to redeliver property is guilty of conversion]; Hand Electronics, Inc. v. Snowline Joint Unified School Dist. (1994) 21 Cal.App.4th 862, 870 [measure of general tort damages for loss of personal property is fair market value, not replacement cost]; CACI No. 3903K [same].)
Summers cites cases authorizing the use of replacement or re-creation cost as the measure of damages where the item of personal property lost has no market value. Here, however, the lost samples did have a market value, determined by the jury to be $85,000. Summers testified the lost samples had a value of $700,000 on the open market, and could have been sold by her to existing or prospective clients for that sum. However, she admitted she did not "go into the open market and hold those samples for sale." State Farm's expert witness testified the lost samples had a fair market value of zero, but conceded that if the business were sold, the samples would be part of the assets valued to determine a fair sale price. During closing argument, State Farm's counsel suggested the fair market value of each lost sample was $200, for a total damages award of $5,200.
The cases Summers cites are all factually distinguishable. In Zvolanek v. Bodger Seeds, Ltd. (1935) 5 Cal.App.2d 106, 109, the appellate court set forth the California standard for damages where the lost property has no market value, as follows: "Where the article or thing is so unusual in character that market value cannot be predicated on it, its value, or plaintiff's damages, must be ascertained in some other rational way from such elements as are attainable, such as the difficulty and expense to which plaintiff was put in acquiring the property, the nature and character of the use to which it was put by him, and the like. All these elements being shown, the value is to be determined by the court or jury by the exercise of a sound discretion. [Citations.]" In Zvolanek, flooding to the plaintiff's property by the defendant destroyed a special variety of sweet peas which had no current market value, but which might have had a market value in the future if they had fully developed. (Ibid.) The samples lost by State Farm, however, had a value. They were examples of work done by Summers for clients, for which she had already received payment. Summers used examples of that work, for which she had been previously compensated, to market her business to other potential clients by showing what type of work she was capable of performing.
Zvolanek v. Bodger Seeds, Ltd. cited Willard v. Valley Gas & Fuel Co. (1915) 171 Cal. 9, 14-15, in which a homeowner's personal property was destroyed due to the negligence of the defendant's employee. The homeowner was permitted to testify to the value to him of a scrapbook of literary clippings he used in his occupation as a writer, and of a rare book written by one of his ancestors. Summers's lost samples are not one-of-a-kind items such as those, and there is no reason the general rules of damages based on fair market value cannot and should not apply.
Kimes v. Grosser (2011) 195 Cal.App.4th 1556, cited by Summers in her reply brief on appeal, is inapplicable. In that case, the plaintiff sought damages for injury to his personal property—his cat. (Id. at pp. 1558-1559.) The trial court dismissed the plaintiff's lawsuit because the plaintiff would not be able to prove the value of the cat exceeded the costs of its repair. (Kimes v. Grosser, supra, at pp. 1558-1559.) The appellate court reversed the judgment dismissing the case, holding the plaintiff could recover the costs of the cat's medical expenses. (Id. at p. 1558.) "In this case, plaintiff is not plucking a number out of the air for the sentimental value of damaged property; he seeks to present evidence of costs incurred for Pumkin's care and treatment by virtue of the shooting—a 'rational way' of demonstrating a measure of damages apart from the cat's market value. [Citation.] That evidence is admissible as proof of plaintiff's compensable damages, and the trial court erred in granting the motions to exclude it. [Citation.] Plaintiff is entitled to have a jury determine whether the amounts he expended for Pumkin's care because of the shooting were reasonable." (Id. at pp. 1561-1562.) As this description makes clear, Kimes v. Grosser is inapplicable to the issue before us.
CACI No. 3903J, which addresses damages for injury to personal property, rather than loss or destruction of personal property, provides: "To recover damages for harm to personal property, [name of plaintiff ] must prove the reduction in the [item of personal property]'s value or the reasonable cost of repairing it, whichever is less. [If there is evidence of both, [name of plaintiff ] is entitled to the lesser of the two amounts.] To determine the reduction in value, you must determine the fair market value of the [item of personal property] before the harm occurred and then subtract the fair market value of the [item of personal property] immediately after the harm occurred. [¶] 'Fair market value' is the highest price that a willing buyer would have paid to a willing seller, assuming: [¶] 1. That there is no pressure on either one to buy or sell; and [¶] 2. That the buyer and seller are fully informed of the condition and quality of the [item of personal property]. [¶] [If you find that [name of plaintiff ]'s [item of personal property] cannot be completely repaired, the damages are the difference between its value before the harm and its value after the repairs have been made, plus the reasonable cost of making the repairs. The total amount awarded must not exceed the [item of personal property]'s value before the harm occurred.]"
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The trial court did not err in instructing the jury that damages on the lost samples claims were the fair market value of the samples, not their replacement or re-creation cost.
DISPOSITION
The judgment and postjudgment order are affirmed. Respondent to recover costs on appeal.
FYBEL, J. WE CONCUR: BEDSWORTH, ACTING P. J. O'LEARY, J.