Opinion
A150372
02-10-2020
VILLASPORT, LLC, Plaintiff, Appellant, and Cross-Respondent, v. COLORADO STRUCTURES, INC., Defendant, Respondent, and Cross-Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Marin County Super. Ct. No. CIV1305053)
In 2008, plaintiff VillaSport, LLC (VillaSport) and defendant Colorado Structures, Inc. (CSI) entered into a contract according to which VillaSport agreed to pay CSI approximately $17 million to build an athletic club in The Woodlands, Texas. After the project was completed, VillaSport discovered numerous problems with the construction, and ultimately paid almost $4 million to have those problems investigated and repaired. VillaSport then sued CSI for negligence and breach of contract, and a jury awarded VillaSport approximately $1.7 million in damages on its negligence claim using a special verdict form—damages that were then reduced according to the jury's finding that VillaSport was 80% responsible for its own harm.
Both parties appeal. VillaSport argues that the special verdict form resulted in an inconsistent verdict, and that CSI should not have been permitted to amend its answer after the close of the evidence to assert an affirmative defense that it complied with VillaSport's plans and specifications for the project, because such amendment was prejudicial and because the defense was not supported by substantial evidence. In its cross-appeal, CSI argues that VillaSport lacks standing to pursue a negligence claim because it did not own the property at issue during the period in question. We affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
The Parties
CSI is a Colorado corporation with its principal place of business in Colorado Springs, Colorado. VillaSport is a Colorado limited liability company headquartered in San Rafael, California. VillaSport TW, LLC (VillaSport TW) is a Texas limited liability company and VillaSport is its sole member, i.e., VillaSport TW is a wholly-owned subsidiary of VillaSport.
Woodland-Lootens, LLC (Woodland-Lootens) is a California limited liability company and the owner of the property at 4141 Technology Forest Boulevard, The Woodlands, Texas (the property).
The Project and The Contract
On April 1, 2008, Woodland-Lootens leased the property to VillaSport TW.
On April 8, 2008, VillaSport (as Owner) and CSI (as Contractor) entered into a fixed price construction contract for the construction of the VillaSport Athletic Club & Spa on the property (the project). VillaSport agreed to pay $17,647,361 to CSI to complete the project. The contract incorporated an Exhibit C with "Drawings and Specifications" for the project.
Exhibit C is not part of the record on appeal.
As part of the "Responsibilities of Contractor," the contract provided: "Contractor shall perform and complete all of the Work without any Defects, in accordance and compliance with the terms of this Contract, Industry Standards, Applicable Laws and Applicable Permits; provided that where any such standard, law, or permit or other requirement provides for less stringent standards than or those specifically stated in this Contract and the standards specifically stated in this Contract shall govern."
In a section entitled "Warranties Concerning the Work," the contract also provided: "EXCEPT FOR THE EXPRESS WARRANTIES AND REPRESENTATIONS SET FORTH IN THIS CONTRACT, CONTRACTOR DOES NOT MAKE ANY OTHER EXPRESS WARRANTIES OR REPRESENTATIONS, OR ANY IMPLIED WARRANTIES OR REPRESENTATIONS, OF ANY KIND WHATEVER RELATING TO THIS CONTRACT, THE WORK, OR DESIGN, EQUIPMENT, OR MATERIALS TO BE SUPPLIED BY CONTRACTOR UNDER THIS CONTRACT OR TO THE PROJECT, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY."
The contract also provided that "Final Completion of the Work" would not be deemed to have occurred until, among other things, VillaSport was provided with several copies of "final as-built drawings of the Work." And the contract required CSI to "retain for a period of seven (7) years from the Final Completion Date all records relating to its performance of the Work."
The project as completed is approximately 88,000 square feet and features two indoor and one outdoor swimming pools, an NBA-compliant basketball court, a facility for children, meeting rooms, and a cafe.
CSI began work on the project on April 15, 2008, and hired between 30 and 35 subcontractors to perform the work. CSI completed the project on time, around April 15, 2009.
Problems with the Project
In 2011 and 2012, VillaSport began to have problems with the building, including stone veneer coming loose and water leaking from the roof. In June of 2012, VillaSport hired Stephen Mack, a forensic engineer with CASE Forensics, to investigate why stone veneer was falling off the building. In September, VillaSport retained a forensic engineering firm, Richard Avelar & Associates, to perform an inspection of the building and recommend repairs. VillaSport ultimately paid a firm called Reconstruction Experts approximately $3.4 million to perform various repairs on the building.
This Action
On December 11, 2013, VillaSport filed this action against CSI in Marin County Superior Court, asserting two causes of action: breach of contract and negligence.
The amended complaint alleged that CSI had breached the contract and performed defective and inadequate work by: "(a) Installing the exterior stone veneer product in a defective manner (improper attachment, improper mortar application, improper installation of weather resistive barrier and absence of flashings and sealant to create a weather-tight exterior), requiring the removal and replacement of the exterior stone veneer product; (b) No metal flashing at cement plaster to stone veneer transition as shown on the plans; (c) Defects in the stucco, including installing only one layer of Grade D 60 minute building paper instead of the two layers required by code and per industry standard, which has contributed to water intrusion, and which will require complete removal and reinstallation of stucco; (d) Improper flashing and sealant and lack of caulking and sealants which allows water intrusion; (e) Defective installation of storefront windows and doors and curtainwall system, which allows water intrusion, including not sealing these systems to the wall openings, lack of improperly [sic] installed or integrated end dams, lack of weepholes at storefront, gaps and openings at curtainwall panel to post and panel to wall locations, lack of sill flashing with the stone veneer and lack of weather striping at door openings; (f) Defects in the roof and roofing systems, with leaks and resulting damage, which will require replacement of the entire roof system; (g) Defects in site conditions, including improper slope and improper drainage which allows water intrusion; (h) Gym hardwood floors have excessive moisture content and have buckled and warped and will need to be completely replaced with a panelized system to match the existing system and replacement with a traditional system would take far too long and would have a major disruption on facility revenues; and (i) Defects in the mechanical, plumbing and electrical systems."
VillaSport sought total damages of $3,875,673.10, consisting of various investigation and repair expenses, including the money paid to Reconstruction Experts.
On July 2, 2014, CSI filed its answer. Both parties submitted initial sets of proposed jury instructions and verdict forms on September 26, 2016. And trial began with jury selection on October 11.
Opening Statements
VillaSport's counsel began his opening statement on October 14. As he described the case:
"This case is really simple. VillaSport contracted with Colorado Structures Inc. to build this facility. They paid $17.6 million for that to be accomplished, and they did that pursuant to a contract that we will be talking about in a little bit.
"They did not get what they bargained for. What they were supposed to get was supposed to be a fully functional property without defects. And, in fact, that's not what occurred.
"And in the course of investigation and repair, they have spent over $4 million fixing the problems that should not been there in the first instance. That's what this case is about."
And VillaSport's counsel anticipated CSI's case: "Now, you're going to hear from Colorado Structures that they think the plans or the design by the architect was the problem and not their workmanship. You will hear from our experts that that is, in fact, not correct." VillaSport's counsel went on: "[T]he contractor had the obligation, if it saw something in the plans which either confused them or caused them to question what they were supposed to do . . . . [T]hey have the right to and did, in fact, ask for clarification. It's called a request for information which then gets submitted to the owner, to the architect, and hopefully gets resolved."
In his opening statement, CSI's counsel characterized the case differently:
"If there are problems associated with [defects in the construction], those problems are minor compared to all the changes that were made to the facility as a result of the repairs that were done by the plaintiff. Repairs that did not have the original design to them. They changed the design. [¶] . . . [¶]
"Colorado Structures was not the designer of the project. And as counsel alluded to, there were many requests for information, dozens and dozens of them. [¶] And usually that's handled pretty efficiently and smoothly. Sometimes, depending on a case-by-case basis, maybe not so much. And the architect also issues what is called supplemental instructions. And the more supplemental instructions there are, the more design changes there are. And keep that in mind in this case the number of supplemental instructions that will be discussed. [¶] . . . [¶]
"Counsel [for VillaSport] said that they spent over $4 million in total damages to fix this facility. We are saying when you look at the evidence, all that could be chalked up to their design choices, the way the club operates, or betterment."
The Evidence
VillaSport's case-in-chief was presented over the next seven days of trial, with testimony from Joe Syufy, CEO of VillaSport, Alan Veenendaal, formerly the general manager of the club, Stephen Mack, senior forensic engineer at Case Forensics, Steven Foster, vice president of construction at VillaSport's parent company, Richard Avelar of the forensic architecture firm Richard Avelar & Associates, and Jeremiah Franks, regional vice president of Reconstruction Experts.
CSI's case also took seven days, with testimony from Christopher Downs, CSI's project manager, Matthew Nardella, a forensic architect, David Mendiola, CSI's project superintendent, Robert Brockway, a construction estimator, and Aaron Lavy, CSI's assistant project manager.
VillaSport then presented a rebuttal case that included testimony from Foster, Colin Russell, an architect who worked on the project, and Avelar.
Amendment to the Answer
On October 31, after the close of the evidence and before closing arguments, the court indicated that "[w]e will be here tomorrow morning at 9:15 to work on jury instructions and verdict forms."
The next day, November 1, CSI made an oral motion to amend its answer to add an affirmative defense—that CSI had followed the plans and specifications provided by VillaSport. VillaSport opposed the motion, and the court heard argument. CSI's counsel argued that the amendment conformed to the evidence at trial and appeared to indicate that the failure to seek an amendment earlier had been an oversight. VillaSport's counsel argued that there was no excuse for the delay and that VillaSport would be prejudiced by the amendment because it could have introduced additional facts related to the defense. The trial court granted the motion, indicating that it did "not see any prejudice" and the defense was "part of the facts of the case that were established before the jury."
Jury Instructions and the Special Verdict Form
Later in the afternoon of November 1, the court clerk emailed counsel for the parties a set of draft jury instructions and a special verdict form. Instead of using either of the proposed special verdict forms prepared by the parties, the court had drafted its own version of the form.
The instructions included CACI No. 4511—"Contractor Followed Plans and Specifications," providing as follows: "VillaSport, LLC claims that Colorado Structures, Inc. failed to perform the work for the project competently or use the proper materials for the project. Colorado Structures, Inc. claims that it followed the plans and specifications and that Colorado Structures, Inc.'s alleged deficiency in performance was because of the plans and specifications that VillaSport, LLC provided to Colorado Structures, Inc. for the project. [¶] To succeed on this defense, Colorado Structures, Inc. must prove all the following: [¶] 1. That VillaSport, LLC provided Colorado Structures, Inc. with the plans and specifications for the project; [¶] 2. That VillaSport, LLC required Colorado Structures, Inc. to follow the plans and specifications in constructing the project; [¶] 3. That Colorado Structures, Inc. substantially complied with the plans and specifications that VillaSport, LLC provided for the project; and [¶] 4. That Colorado Structures, Inc.'s alleged deficiency in performance was because of Colorado Structures, Inc.'s use of the plans and specifications."
The special verdict form contained five sections: "Contract," "Negligence," "Damages," "VillaSport, LLC's Negligence," and "Allocation of Responsibility." The Contract section contained the following six questions or interrogatories: "1. Did Colorado Structures, Inc. fail to do something that the contract with VillaSport, LLC required it to do? . . . 2. Was VillaSport, LLC harmed by that failure? . . . 3. Did VillaSport, LLC provide Colorado Structures, Inc. with plans and specifications for the project? . . . 4. Did VillaSport, LLC require Colorado Structures, Inc. to follow the plans and specifications in constructing the project? . . . 5. Did Colorado Structures, Inc. substantially comply with the plans and specifications for the project? . . . 6. Was Colorado Structures, Inc.'s alleged deficiency in performance because of Colorado Structures, Inc.'s use of the plans and specifications for the project?"
The "Negligence" section contained three interrogatories: "7. Was Colorado Structures, Inc. negligent? . . . 8. Was VillaSport, LLC harmed as a result of Colorado Structures, Inc.'s negligence? . . . 9. Was Colorado Structures, Inc.'s negligence a substantial factor in causing harm to VillaSport, LLC?"
The "Damages" section began: "If you answered 'Yes' to question 2 AND if you answered 'No' to question 6 OR If you answered 'Yes' to question 9, then you must assess VillaSport, LLC's damages." It then provided a blank with the prompt: "10. What are VillaSport, LLC's total damages? Do not reduce the damages based on the fault, if any, of VillaSport, LLC or others."
The "VillaSport, LLC's Negligence" section asked "11. Was VillaSport, LLC negligent?" and "12. Was VillaSport, LLC's negligence a substantial factor in causing its harm?" The "Allocation of Responsibility" section then asked what "percentage of responsibility for VillaSport, LLC's harm" should be assigned to CSI and VillaSport, respectively.
The next day, the court and counsel discussed the instructions and special verdict form. The court indicated that it had received and reviewed CSI's written objections to the instructions and the verdict form. Notably, VillaSport did not file any objections. The court then asked counsel for the parties to meet and confer to see if they could agree on any modifications before hearing oral argument. After the meet and confer, counsel for CSI indicated that the parties had agreed to a few modifications to instructions not relevant here.
Counsel for CSI then indicated that the parties did not agree on the special verdict form. CSI wanted to itemize the various categories of damages on the form, in part so that it would be clear which damages should be reduced by a jury finding of comparative negligence. VillaSport's counsel disagreed, finding no "reason at all to break this damage calculation down into fine bits." After hearing argument, the trial court decided it would not modify the verdict form and would keep a single figure for the amount of damages.
The jury was then instructed, and counsel presented their closing arguments.
Jury Deliberations and Questions
Jury deliberations began the next morning, November 3.
At around noon, the jury gave a note to the bailiff. The note contained two questions, the first of which was: "Can you please clarify question 6? There are different interpretations in the room."
The jury's second question concerned the cost of repair and is not at issue in this appeal.
The trial court discussed with counsel how to respond. CSI's counsel suggested modifying question 6 to read: "Are the claims by VillaSport the result of Colorado Structures Inc.'s use of the plans and specifications?" VillaSport's counsel responded "I think that's fine." The court suggested revising to "Are VillaSport's claims the result of Colorado Structures Inc.'s use of the plans and specifications for the project?" Counsel for the parties agreed to this wording, the jury was so instructed, and the special verdict form was revised accordingly.
Later that afternoon, the jury asked another question: "Question 6, this question implies 'all or nothing.' We need further clarification. 1. Can we eliminate it? If no, 2. What are the implications of a yes answer? 3. What are the implications of a no answer? 4. Please clarify the word 'use' in question 6?"
Again the court and counsel discussed how to respond to the question. Counsel for VillaSport suggested that the court define "use" as meaning "that they followed the plans and specifications" and that the court reread jury instruction 4511 concerning the affirmative defense. CSI's counsel then sought to modify instruction 4511 in order to "break it out based on the specific alleged defect in the work," a modification which VillaSport's counsel opposed. The court concluded that it would tell the jury that "use" meant followed the plans and specifications and reread instruction 4511, and the parties could meet and confer that evening regarding possible modifications to instruction 4511. The jury was brought back and the court defined "use" and reread instruction 4511.
The next morning, outside the presence of the jury, the court indicated it had received a revised version of instruction 4511 and a revised special verdict form from CSI. VillaSport's counsel did not "think it's necessary to go beyond what the court did yesterday afternoon," and opposed any modification of the verdict form. CSI then argued in favor of its modification, which broke the response to question 6 into several categories (roof, exterior cladding, windows, etc.), arguing that under the form as currently constructed there was no way for the jury to "implement the rationale that we complied with some plans but not others." The trial court declined to revise the verdict form or the instruction, indicating it did not "think that 4511 is designed to be broken down into specific parts of the plans and specifications."
We granted VillaSport's unopposed motion to augment the record with several exhibits, including the proposed special verdict form that CSI provided to the trial court on November 4.
The Verdict
Later that morning, the jury reached a verdict. They answered each of the contract interrogatories with "Yes," and each of the negligence interrogatories with "Yes." They found damages of $1,722,859.10. They answered questions 11 and 12 with "Yes." And in the section on comparative fault, they found that CSI was 20% responsible and VillaSport 80% responsible.
The trial court ultimately entered a final judgment reducing the jury's damage award by 80% according to VillaSport's comparative fault, and awarding damages to VillaSport on its negligence claim in the amount of $344,571.82 (20% of $1,722,859.10).
Judgment Notwithstanding the Verdict and New Trial Motions
VillaSport moved for judgment notwithstanding the verdict and in the alternative for a new trial, arguing that there was insufficient evidence to support the jury's finding that VillaSport's damages were the result of CSI's use of the plans and specifications (i.e., the jury's "Yes" answer to Interrogatory No. 6) and that the trial court erred in permitting CSI to amend its answer to assert the affirmative defense that it followed the plans and specifications. The trial court denied the motion.
CSI also moved for judgment notwithstanding the verdict, on the ground that VillaSport lacked standing to bring a negligence claim because it did not own the property, which was instead owned by Woodland-Lootens. The court denied the motion, finding that VillaSport "is the sole owner of VillaSport TW, LLC. The evidence was clear that [VillaSport] paid for the construction and all the repairs. The evidence supports the allegation that [VillaSport] was the only party that suffered harm from the alleged construction defects."
Before the jury returned its verdict, CSI had previously moved for a directed verdict on the same basis. The trial court denied the motion.
Both parties appealed.
DISCUSSION
VillaSport's Appeal
VillaSport argues that: 1. the jury instructions and special verdict form produced a jury verdict that is inconsistent and against law, 2. the trial court erred in permitting CSI to amend its answer to assert the affirmative defense of compliance with the plans and specifications, and 3. substantial evidence does not support the jury's finding that CSI had established that affirmative defense.
I. VillaSport Has Waived Its Challenges to the Special Verdict Form and the Verdict Is Not Internally Inconsistent
With respect to the special verdict form, VillaSport first argues that compliance with the plans and specifications was not a defense to all of its breach of contract claims, because, for example, CSI could have breached the contract by failing to perform the work according to industry standards—which the contract expressly required—even though it followed the plans and specifications. VillaSport asserts that question 6 combined with the damages preamble created a "super-immunity" to its contract claims because even though the affirmative defense should have been limited to implied warranty claims, a "Yes" answer to Interrogatory 6 ("Was [CSI's] alleged deficiency in performance because of [CSI's] use of the plans and specifications for the project?") prevented the jury from entering ANY contract damages under the damages preamble: "If you answered 'Yes' to question 2 AND if you answered 'No' to question 6 OR If you answered 'Yes' to question 9, then you must assess VillaSport, LLC's damages."
As will be discussed, VillaSport misreads the special verdict form, which nowhere prevented the jury from awarding contract damages, no matter how it answered the contract interrogatories.
VillaSport's Challenges To the Special Verdict Form Are Waived
"An objection to the form of questions in a special verdict must be raised in the trial court or the issue is waived on appeal." (Morales v. 22nd Dist. Agricultural Assn. (2016) 1 Cal.App.5th 504, 534; see Taylor v. Nabors Drilling USA, LP (2014) 222 Cal.App.4th 1228, 1242-1243.) Courts have, however, declined to apply the waiver rule "where the record indicates that the failure to object was not the result of a desire to reap a 'technical advantage' or engage in a 'litigious strategy.' " (Woodcock v. Fontana Scaffolding & Equip. Co. (1968) 69 Cal.2d 452, 456 fn. 2; see 7 Witkin, Cal. Procedure (5th ed. 2008) Trial, § 376, p. 439 ["failure to object [to special verdict form] does not always result in waiver; some element of negligence or culpability must appear"].)
VillaSport acknowledges that it was required to—and did not—raise its argument regarding the special verdict form below, but argues that its forfeiture should be excused because it unsuccessfully opposed CSI's motion to amend the answer to include the affirmative defense of compliance with the plans and specifications, and the fact that it thereafter "acquiesced in the ruling and 'tried to make the best of a bad situation'—including cooperating on some procedural aspects of instructing the jury, preparing a verdict form and responding to questions from the jury—does not result in a waiver of VillaSport's right to raise the issue on appeal."
We are not persuaded. Once the amendment was permitted, nothing prevented VillaSport's counsel from raising objections to the special verdict form in order to ensure that the form correctly reflected the operation of the defense. And VillaSport did not raise its argument regarding "super-immunity" when it moved for a new trial after the verdict either. VillaSport's position that it was merely "cooperating" with respect to the verdict form is particularly disingenuous because, as noted, CSI repeatedly objected to the form and the instructions on the affirmative defense, seeking to break out categories of alleged defects and damages, a modification which could have reduced or eliminated the "super-immunity" about which VillaSport now complains. VillaSport not only failed to raise its own objections to the verdict form, it objected to CSI's proposed modifications. This is precisely the "negligence or culpability" contemplated by the authorities cited above. VillaSport cannot now be heard to challenge the verdict form, having passed up ample opportunity to do so below. The argument is waived.
The Special Verdict Is Not Internally Inconsistent
VillaSport also argues that the jury's verdict was internally inconsistent, such that it is "against law" and a new trial is required. (See Code Civ. Proc., § 657, subd. (6).)
" 'A special verdict is inconsistent if there is no possibility of reconciling its findings with each other. [Citation.] If a verdict appears inconsistent, a party adversely affected should request clarification, and the court should send the jury out again to resolve the inconsistency. [Citations.] If no party requests clarification or an inconsistency remains after the jury returns, the trial court must interpret the verdict in light of the jury instructions and the evidence and attempt to resolve any inconsistency.' [Citation.] 'On appeal, we review a special verdict de novo to determine whether its findings are inconsistent. [Citation.] With a special verdict, . . . a reviewing court will not infer findings to support the verdict. [Citations.] " ' "Where the findings are contradictory on material issues, and the correct determination of such issues is necessary to sustain the judgment, the inconsistency is reversible error." ' " ' " (Markow v. Rosner (2016) 3 Cal.App.5th 1027, 1048.) "The inconsistent verdict rule is based upon the fundamental proposition that a factfinder may not make inconsistent determinations of fact based on the same evidence." (Cavallaro v. Michelin Fire Corp. (1979) 96 Cal.App.3d 95, 101.)
Although VillaSport's argument is not entirely clear, it appears to be that the jury's "Yes" answers to Interrogatories 1 and 2 are inconsistent with their "Yes" answers to Interrogatories 5 and 6—i.e., that the jury could not find both that: 1. VillaSport was "harmed" by CSI's "fail[ure] to do something that the contract with [VillaSport] required" and that 2. CSI "substantially compl[ied] with the plans and specifications for the project" and that VillaSport's "claims [were] the result of [CSI]'s use of the plans and specifications for the project."
We do not agree there is "no possibility of reconciling [these] findings with each other." (City of San Diego v. D.R. Horton San Diego Holding Co., Inc. (2005) 126 Cal.App.4th 668, 682.)
First, as VillaSport elsewhere acknowledges, the contract required CSI to do more than follow the plans and specifications—it expressly required CSI to perform the work without any defects and in accordance with industry standards. Thus, the jury could have found that CSI breached the contract by failing to perform the work at the applicable standard of care, while also finding that it substantially complied with the plans and specifications.
As VillaSport's brief puts it: "VillaSport had more than one basis for its breach of contract claim, certainly at least two (failure to properly follow the plans/specifications; and failure to perform such construction in a good and workmanlike manner)."
VillaSport's reliance on Shaw v. Hughes Aircraft Co. (2000) 83 Cal.App.4th 1336 is unavailing. There, the jury found against the plaintiff and former employee on his breach of contract claim, implying that he was an at-will employee, and also for the plaintiff on his claim for breach of the implied covenant of good faith and fair dealing—a finding that implied the existence of a contract and that the plaintiff could be terminated only for cause, findings that were irreconcilable. (Id. at pp. 1344-1346.)
Second, there is no inconsistency between the jury's finding that VillaSport was "harmed by [CSI's] failure" to do something that the contract required and its finding that VillaSport's claims were "the result of [CSI]'s use of the plans and specifications," as the jury could have concluded that VillaSport's harm had multiple causes. With respect to causation, the jury was instructed that "[a] substantial factor in causing harm is a factor that a reasonable person would consider to have contributed to the harm. It must be more than a remote or trivial factor. It does not have to be the only cause of the harm." It was also instructed that: "A person's negligence may combine with another factor to cause harm. If you find that [CSI]'s negligence was a substantial factor in causing [VillaSport]'s harm, then [CSI] is responsible for [VillaSport]'s harm. [CSI] cannot avoid responsibility just because some other person, condition, or event was also a substantial factor in causing [VillaSport]'s harm." Thus, the jury could have concluded that certain of VillaSport's harm was caused by CSI's negligent failure to follow industry standards, while other harm was caused by CSI's following the plans and specifications, or that all the harm was caused by some combination of both.
In any event, to the extent that VillaSport challenges the verdict as inconsistent because it concludes that both CSI's breach of the contract and its use of the plans and specifications caused VillaSport's harm, we conclude the argument is barred by the doctrine of invited error.
"The 'doctrine of invited error' is an 'application of the estoppel principle': 'Where a party by his conduct induces the commission of error, he is estopped from asserting it as a ground for reversal' on appeal." (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 403.) As previously discussed, the parties evidently recognized, given the large size of the project and the numerous categories of defects alleged, that the jury was unlikely to find that all of the damages had a single cause. Instead, it was more likely to find that certain of the damages resulted from negligence or breach of the contract, while others resulted from following the plans and specifications. Thus, CSI repeatedly sought to modify the special verdict form in order to break down the categories of alleged defects—and VillaSport repeatedly objected to those modifications, evidently making the tactical decision that by keeping the defense as an "all-or-nothing" proposition, the jury would be less likely to accept it. Having lost that gamble, VillaSport is estopped from arguing that the jury's failure to choose only one cause of all the alleged damage has resulted in an inconsistent verdict. (See Mesecher v. County of San Diego (1992) 9 Cal.App.4th 1677, 1685-1687 ["In light of its deliberate choice to avoid the gamble of an all-or-nothing verdict in favor of a compromise verdict, we hold [defendant] waived its right to assert error on the ground the ensuing verdicts were inconsistent"].)
Finally, it is not clear that the findings—even if irreconcilable as VillaSport asserts—were material to the judgment. (See Markow v. Rosner, supra, 3 Cal.App.5th at p. 1048 [in order to support reversal findings have to be both irreconcilable and material to the judgment].) Neither the special verdict form nor the instructions told the jury to reduce VillaSport's damages if they found the affirmative defense established. Indeed, no matter how the jury answered the contract interrogatories, because the jury answered "Yes" to Question 9 (i.e., found that VillaSport was harmed by CSI's negligence), the special verdict form instructed the jury to enter VillaSport's "total damages." The jury was also instructed that VillaSport sought damages under both negligence and breach of contract theories, and that it should award each item of damages only once under either theory. The instructions went on to identify three items of damages: cost of repair, investigative costs, and expert costs to develop and oversee the scope of repair. VillaSport has not explained how any alleged inconsistency in the jury's responses to the contract interrogatories could have reduced the total damages award. In fact, in closing argument VillaSport's counsel suggested to the jury that the damages sought under contract would also be available under a negligence theory: "In this case there's a lot of overlap between the contract claims and the negligence claims because, frankly, if you comply with the contract, if you comply with the plans and specifications, you're not being negligent. And if you don't comply with the plans and specifications, if you don't do what a reasonable contractor would do under the circumstances, which is to comply with those, then you are, in fact, negligent, as well." Thus, it is unclear how any inconsistency in the jury's findings on the contract interrogatories made any difference to the judgment ultimately entered on the jury's verdict.
Of course, if the jury found certain damages established under a contract theory that were not established under a negligence theory, those damages should not have been reduced by the jury's finding of comparative fault. But any such reduction would be a consequence of the structure of the special verdict form, which did not distinguish between contract and negligence damages, not any factual findings made by the jury. And CSI expressly sought to break out certain categories of damages on the verdict form in part to avoid reducing any contract damages according to the jury's comparative fault findings. VillaSport objected to this modification, and therefore cannot assert any such error on appeal.
In sum, for the reasons given, we reject VillaSport's challenges to the special verdict.
II. The Trial Court Did Not Abuse Its Discretion by Permitting CSI to Amend its Answer to Assert the Affirmative Defense of Compliance with the Plans and Specifications
VillaSport next argues that the trial court committed legal error and abused its discretion in permitting CSI to amend its answer to assert the affirmative defense of compliance with the plans and specifications after the close of evidence.
VillaSport Has Waived Its Argument That the Amendment Was Legal Error
VillaSport contends that permitting the amendment was legal error because the affirmative defense applies only to claims of breach of implied covenants, and the contract here expressly disclaimed all implied covenants. VillaSport cites no authority for this proposition except for the "Directions for Use" for CACI No. 4511, which begin with: "This instruction is a contractor's affirmative defense to the owner's claims that there is a defect in the work or deficiency in the contractor's performance." (See CACI No. 4510, Breach of Implied Covenant to Perform Work in a Good and Competent Manner—Essential Factual Elements) VillaSport appears to contend that this sentence, together with the title of CACI No. 4510, imply that the affirmative defense applies only to a claim that the contractor breached the implied covenant to perform the work in a good and competent manner.
This argument is waived because it was not made to the trial court. (See Giraldo v. Department of Corrections & Rehabilitation (2008) 168 Cal.App.4th 231, 251 [new issues may generally not be raised for the first time on appeal]; Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2019) ¶ 8:229, p. 8-174.) And we will decline to exercise our discretion to consider this argument for the first time on appeal. (See Resolution Trust Corp. v. Winslow (1992) 9 Cal.App.4th 1799, 1810 [whether to consider an issue raised for first time on appeal " 'is largely a question of the appellate court's discretion' "].)
Permitting the Amendment Was Not An Abuse of Discretion
VillaSport also argues that the trial court abused its discretion in permitting the amendment.
Code of Civil Procedure section 576 provides that "[a]ny judge, at any time before or after commencement of trial, in the furtherance of justice, and upon such terms as may be proper, may allow the amendment of any pleading or pretrial conference order." Ordinarily, leave to amend a complaint should be liberally granted unless the opposing party would be prejudiced by the amendment. (Trafton v. Youngblood (1968) 69 Cal.2d 17, 31; P&D Consultants, Inc. v. City of Carlsbad (2010) 190 Cal.App.4th 1332, 1345.) "Such amendments have been allowed with great liberality 'and no abuse of discretion is shown unless by permitting the amendment new and substantially different issues are introduced in the case or the rights of the adverse party prejudiced.' " (Trafton v. Youngblood, supra, 69 Cal. 2d at p. 31.) We review the denial of a motion for leave to amend a complaint for abuse of discretion. (IIG Wireless, Inc. v. Yi (2018) 22 Cal.App.5th 630, 653.) And we find no abuse of discretion here.
To begin with, it cannot be said that the amendment introduced "new or substantially different issues" or that VillaSport was unaware that the plans and specifications would figure prominently in CSI's defense. For example, CSI's issue conference statement, filed before trial on September 26, 2016, described the case as follows:
"From the beginning, the VillaSport project was plagued with design problems. VillaSport's architect, Russell Davis and Associates ('RDA'), RDA was unable to meet deadlines for delivery of its plans and the plans it produced were incomplete and seriously flawed. CSI was forced to work with plans that were only 70% complete and when it was told by VillaSport that the plans were 95% complete. To make matters worse, the plans were constantly changing because of design alterations requested by VillaSport and design corrections made by RDA. [¶] CSI's case will demonstrate that the bulk of the damages sought by VillaSport are related to VillaSport's [¶] poor design or design choices [¶] improper maintenance, [¶] operation of the facility, or [¶] betterment." The statement also contained a section entitled "Design Problems" further detailing CSI's allegations that it was VillaSport's changes to the plans, continuing through construction, which caused its damages.
The statement also specifically referenced the affirmative defense and jury instruction based on CSI's having followed the plans and specifications: "CSI is not liable for any defects that are present in the drawings. '[W]here the contractor faithfully performs the work as specified, there cannot be an implied warranty that the contractor will supplement the inadequacy of the plans.' CACI No. 4511 'Sources and Authority,' citing Sunbeam Construction Co. v. Fisci (1969) 2 Cal.App.3d 181, 184-185." A footnote provided that "[t]o the extent CSI needs leave to amend its Answer to reflect CACI No. 4511, it will do so."
As quoted above, counsel for both parties went on to discuss the designs and specifications during opening statements, with CSI's counsel telling the jury: "If there are problems associated with those issues, those problems are minor compared to all the changes that were made to the facility as a result of the repairs that were done by the plaintiff. Repairs that did not have the original design to them. They changed the design." And VillaSport's counsel told the jury: "Now, you're going to hear from Colorado Structures that they think the plans or the design by the architect was the problem and not their workmanship. You will hear from our experts that that is, in fact, not correct." This was hardly "trial by surprise—after the evidence had been presented," as VillaSport asserts.
VillaSport also struggles to articulate any prejudice. It first notes that CSI failed to produce the "as-built" drawings that the contract required it to keep. It then claims that had it known CSI would rely so heavily on the plans, it could have "pinned CSI down on the details, including impeaching CSI with its own other documents relating to requests for information and architect responses," could have "pointed out" CSI's alleged failure to keep the as-built drawings in its case-in-chief, could have cross-examined CSI's witnesses "on the RFI responses and other project documents," could have changed its voir dire questioning to "embrace[] the concept of the affirmative defense," and could have had Steve Foster "address[] these issues on direct . . . instead of on rebuttal, and thus avoided any appearance of being defensive." But VillaSport does not identify any discovery it did not pursue or evidence it was unable to present because of the timing of CSI's amendment. Certainly the trial court did not abuse its discretion in concluding that these changes of emphasis in VillaSport's trial presentation did not amount to sufficient prejudice to deny CSI's motion.
This distinguishes Duchrow v. Forrest (2013) 215 Cal.App.4th 1359, where the amendment relied on a new theory of liability to more than triple the damages sought, and the court identified discovery that could have been pursued and an expert who could have been retained had the amendment been made in a timely way. (Id. at p. 1381.)
III. Substantial Evidence Supports the Jury's Finding on the Affirmative Defense
VillaSport next argues that CSI failed to satisfy its burden of proof to establish the affirmative defense of compliance with the plans and specifications because it did not produce the "as-built" drawings—and thus did not prove that it performed the work according to the plans and specifications as reflected in those drawings.
VillaSport briefly argues, without citation to authority, that despite having been given leave to file an amended answer, CSI never did so, and therefore CSI had no right to try to prove the defense. This argument is meritless.
We review a claim of insufficient evidence to support a jury verdict under the substantial evidence standard of review. (Wilson v. County of Orange (2009) 169 Cal.App.4th 1185, 1188.) Under this standard, " 'we must consider all of the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference, and resolving conflicts in support of the [findings]. [Citations.] [¶] It is not our task to weigh conflicts and disputes in the evidence; that is the province of the trier of fact. Our authority begins and ends with a determination as to whether, on the entire record, there is any substantial evidence, contradicted or uncontradicted, in support of the judgment. . . .' To be substantial, the evidence must be of ponderable legal significance, reasonable in nature, credible, and of solid value." (ASP Properties Group, L.P. v. Fard, Inc. (2005) 133 Cal.App.4th 1257, 1266.)
VillaSport asserts that "without the design that [the original design] was actually changed to, there was a failure of proof that CSI's work complied with the changed design." VillaSport relies on the testimony of several of CSI's witnesses that they would not be able to address the details of VillaSport's claims without the as-built drawings, for example, the testimony of CSI's on-site project manager, David Mendiola:
"Q. Do you believe that you can address the claims in this case without the as-built plans?
"A. No. I would need the drawings."
However, when this testimony is read in context, it actually provides substantial evidence in support of the jury's conclusion that CSI performed the work according to the changed plans and specifications provided by VillaSport:
"Q. And when the project was completed, did you believe that CSI followed the specifications and designs as they've been modified and given to you?
"A. Yes.
"Q. Do you believe that CSI's subcontractors followed those plans and designs?
"A. Yes.
"Q. While you were on the project site, did CSI ever change a component of the design on its own?
"A. No.
[¶] . . . [¶]
"Q. Did CSI follow Mr. Foster's directive to change design components in the field?
"A. Yes.
"Q. And did you adhere to all of the changes that were made to the for-construction set that became the as-built set of drawings?
"A. Yes.
[¶] . . . [¶]
"Q. Do you believe that you can address the claims in this case without the as-built plans?
"A. No. I would need the drawings.
"Q. You don't remember all the changes that were made?
"A. No, I cannot remember all the drawings and the changes."
CSI's project manager Christopher Downs and assistant project manager Aaron Lavy testified similarly. Thus, CSI's witnesses testified that CSI followed the plans and specifications as modified by VillaSport, but could not remember the details of specific changes without referring to the as-built drawings. This testimony was substantial evidence in support of the jury's finding that CSI complied with the plans and specifications as modified by VillaSport, notwithstanding the absence of the as-built drawings themselves.
CSI's Cross-Appeal
In its cross-appeal, CSI argues that VillaSport lacks standing to pursue its negligence claim because it did not own the property at the time the damage was discovered in 2012.
"Both standing and the interpretation of statutes are questions of law to which we typically apply a de novo standard of review." (San Luis Rey Racing, Inc. v. California Horse Racing Board (2017) 15 Cal.App.5th 67, 73.)
CSI relies on Code of Civil Procedure section 367, which provides: "Every action must be prosecuted in the name of the real party in interest, except as otherwise provided by statute." CSI asserts that VillaSport is not the real party in interest because at the time the damage was discovered in 2012 (and at all other times), neither VillaSport nor VillaSport TW owned the property—Woodland-Lootens did. CSI relies on several cases addressing who may bring a negligence claim as between the owner at the time the negligent work was performed and a subsequent purchaser. (See Keru Investments, Inc. v. Cube Co. (1998) 63 Cal.App.4th 1412 (Keru); Krusi v. S.J. Amoroso Construction Co. (2000) 81 Cal.App.4th 995 (Krusi); Siegel v. Anderson Homes, Inc. (2004) 118 Cal.App.4th 994 (Siegel); Standard Fire Ins. Co. v. Spectrum Community Assn. (2006) 141 Cal.App.4th 1117 (Standard Fire).) These cases do not support CSI's position here.
In Keru, the owner of a building had an allegedly faulty seismic retrofit performed, following which the building was heavily damaged in the Northridge earthquake. (Keru, supra, 63 Cal.App.4th at p. 1415.) The building was subsequently sold "as is" to the plaintiff, Keru Investments, which then brought a negligence claim against the engineer and general contractor that had performed the seismic retrofit. (Id. at pp. 1414-1415.) The court held that the negligence cause of action accrued before Keru Investments became the owner of the building, and that it therefore lacked standing to pursue the claim. (Id. at pp. 1424-1425.)
Similarly, the plaintiffs in Krusi, the current owners of a building damaged by leaks allegedly due to faulty construction, sued the building's architect and general contractor. (Krusi, supra, 81 Cal.App.4th at p. 997.) A dispute had previously arisen during the construction of the building between the original owner and the architect, which dispute went to arbitration, where the arbitrator ruled in favor of the architect. (Ibid.) Prior to the sale to the plaintiffs, the seller became aware of several leaks, which were to the best of its knowledge repaired before the sale took place. (Ibid.) The court observed that "a duty may run from an architect, engineer or contractor to a subsequent owner of real property" but that did not mean that "in a case implicating damage to such property, once a cause of action in favor of a prior owner accrues, another cause of action against the same defendant or defendants can accrue to a subsequent property owner—unless, of course, the damage suffered by that subsequent owner is fundamentally different from the earlier type." (Id. at p. 1006.) Because the cause of action that accrued to the prior owner was the same as that alleged by plaintiffs, summary judgment was properly granted to the defendants. (Id. at p. 1007.)
In Siegel, subsequent owners brought a negligence claim against the builder of their homes, alleging that they containing numerous defects that were unknown to them at the time of purchase. (Siegel, supra, 118 Cal.App.4th at p. 996-97.) The builder brought a motion in limine to exclude evidence of the defects on the ground that the subsequent owners had no causes of action against it absent assignments from the original homeowners. (Id. at p. 996.) The trial court, relying on Krusi, granted the motion and thereafter dismissed the complaint. (Ibid.) The appellate court reversed, holding that "absent proof the original owners suffered actual economic injuries as a result of the construction defects . . . , they possessed no causes of action against [the builder] that precluded [the subsequent owners] from maintaining their present claims." (Ibid.) In this context, the court stated that "the cause of action belongs to the owner who first discovered, or ought to have discovered, the property damage. It is only then that some entity capable of maintaining a legal claim will have suffered a compensable injury, e.g., the cost of repair and/or the loss in the property's value (inasmuch as the owner then has a duty to disclose the damages to potential buyers)." (Id. at p. 1009.)
In Standard Fire, the homeowners' association of a condominium project sued the developers for design and construction defects. (Standard Fire, supra, 141 Cal.App.4th at p. 1121.) Standard Fire Insurance Company, which had issued a general liability insurance policy for the project, filed a declaratory relief action and sought summary judgment on the ground that it had no duty to defend the litigation because none of the plaintiffs had owned any interest in the project during the policy period and the association had not even been formed before the termination of the policy period. (Id. at p. 1122.) Relying on Siegel, the court found that the association could assert a cause of action against the developers: "As the court stated in Siegel: 'A cause of action cannot have accrued before there was someone in a position to actually assert it.' [Citation.] It would appear that the Association was the first entity capable of maintaining a legal claim against the developers for the construction defects at issue and must, necessarily, hold a cause of action for the same." (Standard Fire, supra, 141 Cal.App.4th at pp. 1145-1146.)
None of these cases persuades us that VillaSport lacks standing to pursue its negligence claim. To begin with, the cases are inapposite because there has been no transfer of the property. Specifically, CSI relies on language in Siegel, Krusi, and Keru that discusses whether the original owner or a subsequent purchaser can bring a negligence cause of action. (See Siegel, supra, 118 Cal.App.4th at p. 1009 ["the cause of action belongs to the owner who first discovered, or ought to have discovered, the property damage"]; Keru, supra, 63 Cal.App.4th at p. 1424 ["It is evident that the cause of action for negligent construction against [defendant] was held by the [previous owner] and not the party to whom it transferred the property after the cause of action accrued"]; Krusi, supra, 81 Cal.App.4th at 1005 ["Thus, if, as, and when an owner of a building suffers harm because of inadequate design of, or engineering or construction work performed on a building, a cause of action accrues to that owner. To be sure, it may choose to deliberately transfer that cause of action to another, but without some clear manifestation of such an intention, the cause of action is not transferred to a subsequent owner"].) This does not apply to the situation before us, where no purchase or transfer has taken place. CSI also misleadingly quotes language from Standard: "no one can sue for property damage other than the party that owns the property at the time the damage occurs." (Standard Fire, supra, 141 Cal.App.4th at p. 1139.) This language was the court's description of Standard Fire's argument on appeal—an argument the court went on to reject. (See ibid. ["Standard Fire contends that the Association does not even have a cause of action against the developers. More particularly, it contends that no one can sue for property damage other than the party that owns the property at the time the damage occurs. . . . We agree with the Association, for reasons we shall explain"].)
In this case, it is undisputed that VillaSport entered into an approximately $17.6 million contract for the construction of the facility. It is also undisputed that VillaSport paid approximately $3.8 million to investigate the problems that developed with the facility and to have those problems repaired—an amount that ultimately formed the basis for VillaSport's negligence damages. And as far as we are aware, Woodland-Lootens—the entity that CSI claims had the exclusive right to pursue a negligence claim here—has never done so. Reversing the verdict in VillaSport's favor for a lack of standing would therefore be inconsistent with the purpose behind section 367, which is " 'to save a defendant, against whom a judgment may be obtained, from further harassment or vexation at the hands of other claimants to the same demand. [Citations.]' " (Keru, supra, 63 Cal.App.4th at p. 1424.) Under these circumstances, we conclude that VillaSport has standing to pursue its negligence claim.
Because we conclude that VillaSport has standing in its own right, we need not address VillaSport's other arguments regarding standing, i.e., that it owned the building if not the underlying land, that VillaSport TW assigned the negligence claim to it, or that CSI invited the error by seeking to exclude certain evidence regarding the standing issues. --------
DISPOSITION
The judgment is affirmed. The parties shall bear their own costs on appeal. (Cal. Rules of Court, rule 8.278(a)(5).)
/s/_________
Richman, J. We concur: /s/_________
Kline, P.J. /s/_________
Stewart, J.