De Jong v. Beach CA3 ( 2021 )

Filed 9/13/21 De Jong v. Beach CA3
NOT TO BE PUBLISHED
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 This opinion has not been certified for publication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.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(San Joaquin)
----
CRAIG DE JONG, C085462 & C086926
Plaintiff and Respondent, (Super. Ct. Nos. STK-CV-
URP-2014-0008188 & 39-
v. 2014-00314863-CU-OR-STK)
GEORGE BEACH et al.,
Defendants and Appellants.
In these consolidated appeals, George Beach, Susan Beach, Nicola Bellino, and
Judith Bellino challenge the trial court’s award of compensatory and punitive damages,
as well as costs-of-proof, to Craig De Jong.1 The compensatory damages were awarded
1 We refer to the Beaches and Bellinos collectively as appellants. Kim Solario is
not a party to these appeals.
In this opinion, undesignated statutory citations are to the Code of Civil Procedure.
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after the trial court found that appellants conspired with the Bellinos’ daughter, Kim
Solario, to deprive De Jong of his 80 percent interest in a house located in Escalon
California (the Escalon property). The trial court imposed punitive damages based on its
findings that appellants and Solario engaged in conduct that was despicable and carried
on in willful and conscious disregard for De Jong’s right to the property. The trial court
additionally found that appellants and Solario each subjected De Jong to cruel and unjust
hardship in conscious disregard of his rights so that their conduct was oppressive under
Civil Code section 3294, subdivision (c)(2). The trial court ordered appellants and
Solario to jointly pay costs-of-proof to De Jong in amounts specified for each of them but
not to exceed a collective total of $189,532.50.
In case No. C086926, (1) the Beaches argue they owed no fiduciary duty to
De Jong because this case involves a resulting trust for which California law does not
create a fiduciary relationship, (2) appellants contend De Jong is barred from recovery for
failure to mitigate his damages, (3) the Beaches argue that De Jong ratified their conduct
through his acquiescence, (4) the Beaches argue that De Jong’s negligence cause of
action against them is barred by the statute of limitations, (5) the Bellinos assert that they
are not liable for fraudulent transfer, money had and received, or unjust enrichment
because the evidence in the record did not support these claims, (6) appellants contend
the trial court erred in holding them liable for causes of action not actually asserted
against them by De Jong, (7) the Bellinos argue they were erroneously held liable for
breach of fiduciary duty because they did not owe De Jong a fiduciary duty,
(8) appellants contend insufficient evidence supported the trial court’s finding that they
conspired against and aided and abetted each other in depriving De Jong of his interest in
the house, (9) appellants argue that the evidence was insufficient to show they acted with
oppression or malice toward De Jong, (10) appellants argue that if compensatory
damages are reduced based on their arguments, so too must the punitive damages be
reduced to comport with constitutional due process guarantees, and (11) the trial court
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erred in giving De Jong a double recovery in the form of prejudgment interest and capital
appreciation on a subsequent purchase by Solario of a residential property located in
Ripon, California (the Ripon property).
In case No. C085462, appellants contend (12) De Jong forfeited the right to
recover costs-of-proof because he did not bring a motion to compel further responses,
(13) they had good faith bases for denying De Jong’s requests for admission,
(14) appellants had “other good reasons for denying the requests” for admission, (15) the
trial court erred in awarding costs-of-proof where no proof was made that De Jong
forgave or excused payment owed to him or that the Bellinos requested that the Beaches
transfer title to Solario, (16) the award of costs-of-proof must be reversed to the extent
that it includes fees incurred after the close of the evidentiary phase of trial, (17) the trial
court abused its discretion in awarding costs-of-proof for matters outside the scope of
De Jong’s requests for admission, (18) the trial court improperly awarded costs-of-proof
for costs not actually incurred, and (19) the trial court erred in making appellants jointly
and severally liable for the entire award of costs-of-proof.
We reach the following conclusions: (1) The Beaches had a fiduciary duty to
De Jong under the resulting trust that they intentionally breached. (2) Appellants have
forfeited the issue of mitigation of damages through deficient appellate briefing.
(3) Appellants’ assertion of posttransfer ratification is not supported by the record.
(4) The Beaches do not address the trial court’s alternate finding that accrual of the
statute of limitations for the negligence claim was equitably tolled. We affirm on this
unchallenged, alternate basis. (5) The Bellinos’ challenge to their liability for fraudulent
transfer, money had and received, and unjust enrichment rests on an assertion of
insufficient evidence that is refuted by the appellate record. (6) Even if the trial court
erred in holding appellants liable for some causes of action not asserted against them in
the operative complaint, any such error is harmless because the trial court found that each
of the appellants was liable for additional causes of action that were properly alleged.
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(7) Likewise, the possibility that the trial court erroneously held the Bellinos liable for
breach of fiduciary duty is harmless because the evidence supports the conclusion that the
Bellinos were liable for fraudulent transfer, money had and received, and unjust
enrichment. (8) Ample evidence supported the trial court’s factual finding that appellants
and Solario conspired and aided and abetted each other in depriving De Jong of his
interest in the house for which he contributed 80 percent of the purchase price. (9) The
evidence was also sufficient to show that appellants acted with oppression and malice
toward De Jong. (10) Because we determine that appellants have not demonstrated error
requiring reduction of compensatory damages, we reject their contention that a reduction
in compensatory damages concomitantly requires a reduction in punitive damages.
(11) The trial erred in awarding De Jong prejudgment interest in addition to appreciation
on the Ripon property. (12) De Jong was not required to bring a motion to compel
further responses to those responses given by the Beaches and Bellinos that amounted to
failure to admit requested facts. (13) Appellants have not demonstrated that the trial
court abused its discretion in implicitly rejecting their argument that they had good faith
bases for denying De Jong’s request for admission. (14) The Bellinos have demonstrated
an abuse of discretion in the trial court’s award of costs-of-proof for three of their
responses to De Jong’s requests for admission. (15) Appellants have not established that
the trial court’s award of costs-of-proof included matters for which no proof was made.
(16) We reject appellants’ assertion that costs-of-proof are constrained to fees incurred
during the evidentiary phase of trial. (17) The trial court erred in awarding, as costs-of-
proof, fees incurred for opposing appellants’ request for a jury trial and for preparing a
motion in limine to exclude appellants’ evidence. (18) Appellants have not demonstrated
error in the trial court’s allocation of costs-of-proof among appellants. (19) The trial
court erred in making appellants jointly and severally liable for each other’s costs-of-
proof.
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Accordingly, we affirm the trial court’s judgment insofar as it awards
compensatory and punitive damages to De Jong, but reverse to the extent that the
judgment awards both prejudgment interest and appreciation on the Ripon property to
De Jong. On remand, the trial court shall award either prejudgment interest or
appreciation on the Ripon property to De Jong. We reverse the award of costs-of-proof
with instruction that the trial court strike costs-of-proof relating to De Jong’s requests for
admission numbers 2, 4, 5, and 15 to the Bellinos; exclude time claimed by De Jong’s
trial counsel for opposing the request for jury trial and in moving in limine to exclude
appellants’ evidence; and strike the imposition of joint and several liability on appellants
for the costs-of-proof.
FACTUAL AND PROCEDURAL HISTORY
Purchase of the Escalon Property
During the summer of 2008, De Jong began a dating relationship with Solario
while his divorce was being finalized. In December 2008, De Jong began living with
Solario in a house on East River Road in Escalon California. The Escalon property
consisted of a one-acre ranchette that was owned by Judith Bellino and situated next to
the Bellinos’ own property.
At some point, Solario informed De Jong that her parents intended to sell the
Escalon property and asked if he would be interested in buying it. Not long thereafter,
the Bellinos and De Jong agreed on a “short sale” purchase price of $345,000. However,
the two lenders who held liens on the Escalon property would not accept a purchase price
below $425,000. De Jong borrowed $340,000 from his friends for the purchase of the
Escalon property. However, his available funds were $85,000 short of the purchase
price. To help him bridge the shortfall, the Bellinos reached out to their longtime friends,
the Beaches. The Beaches agreed to loan $85,000 to De Jong. In August 2009, the
Beaches signed a residential purchase agreement as copurchasers for the Escalon
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property. The residential purchase agreement shows that the offer to purchase initially
came from De Jong alone in February 2009. The Beaches later cosigned part of the
residential purchase agreement.
The residential purchase agreement does not mention Solario, nor does it contain
her signature. She was not involved in negotiating the purchase. And Solario did not pay
any amount toward the purchase of the Escalon property.
Shortly after the residential purchase agreement was signed, De Jong determined
that he did not want to purchase the Escalon property in his name because it might
“muddy” his ongoing divorce proceeding. Solario informed her parents, who in turn told
the Beaches. The Bellinos coordinated the collection of money to purchase the property
and there was “a very quick change of names” so that the Beaches alone held record title.
De Jong discussed the matter with the Bellinos and understood that the Beaches would
hold title for his benefit. On August 12, 2009, the Beaches and De Jong signed an
addendum that removed De Jong’s name from all purchase documents related to the
property. The Beaches understood that the balance of the purchase price was coming
from De Jong and that no one was gifting the Escalon property to them.
The Beaches understood that their $85,000 loan did not represent the full purchase
price for the Escalon property. The Beaches became record owners of the property,
having taken title from Judith Bellino. George Beach testified that he understood that he
was holding title to the Escalon property for the benefit of himself, his wife, De Jong, and
Solario. At trial, Solario testified that the Beaches were holding title to the Escalon
property for her and De Jong.
The Beaches completed the purchase of the Escalon property for $425,000 using
the proceeds contributed by De Jong. After the close of escrow, George Beach sent a
check in the amount of $1,258.85 to De Jong due to an overpayment to escrow.
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The Conspiracy to Transfer the Property to Solario
After the close of escrow, Solario drafted a “real estate note agreement” that
purported to issue 430 shares in the Escalon property, each valued at $1,000. The
proposed agreement declared that Solario owned 345 shares and the Beaches owned the
other 85 shares. The agreement provided that “[t]he shares owned by George & Susan
Beach may be sold only to Kim Solario at the rate of $1000.00 per share.” The proposed
agreement did not mention De Jong having any beneficial interest in the property. In an
e-mail sent in October 2009 to George Beach, Solario reported that the Bellinos intended
to work on “buying . . . out” the Beaches when the Bellinos returned from Belize.
A revised version of the agreement was signed by the Beaches and Solario on
August 14, 2009. The revised agreement stated that the Beaches would receive interest in
the amount of 6.5 percent and set the maturity date as June 1, 2010. As with the
proposed agreement, the revised agreement declared that Solario “owns 345” of the 430
shares representing ownership of the Escalon property. De Jong was not part of the
negotiations, did not sign the agreement, and was unaware appellants planned for Solario
to receive title to the Escalon property.
In November 2010, George Beach personally delivered a property tax bill for the
Escalon property to De Jong for De Jong to pay. George Beach did not discuss the plan
to transfer the property to Solario with De Jong. De Jong did not pay rent to the Beaches.
De Jong intended to sell the Escalon property after January 1, 2012, and repay the
Beaches from the proceeds.
In January 2011, the Beaches, the Bellinos, and Solario met in the kitchen to
discuss the Escalon property. During the kitchen meeting, the Bellinos agreed to provide
Solario with the money to pay off the loan made by the Beaches. In return, the Beaches
would transfer title to Solario. At trial, Solario confirmed that the participants in the
kitchen meeting “agreed that I would be placed on the title” to the Escalon property.
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De Jong was not present during the meeting nor did he know about the plan to transfer
the property to Solario.
De Jong and Solario ended their dating relationship in February or March 2011.
De Jong moved out of the Escalon property and told Solario that she and her children
could stay in the property until the end of 2011. Thereafter, De Jong intended to sell the
property and repay the Beaches.
In March 2011, George Beach sent a letter addressed to Solario and De Jong in
which he noted that repayment of the note was overdue. The letter notes: “Susan
[Beach] and I value our relationship with the Bellino family, and our friendship with you
and Craig [De Jong]. We have been patient and understanding of your personal financial
circumstances. However, we are now well into the second year and our forbearance is at
its end.” De Jong did not see this letter nor did the Beaches discuss the loan with him.
In response to the Beaches’ letter, the Bellinos raised the money to pay off the
loan as agreed upon during the kitchen meeting. The Bellinos gave the money to Solario,
who in turn purchased a cashier’s check made payable to the Beaches in the amount of
$94,438.38. This amount represented principal and accrued interest on the Beaches’ loan
to De Jong. Solario gave the cashier’s check to the Beaches. On April 12, 2011, the
Beaches transferred title solely to Solario. The Beaches did not inform De Jong about
transferring the property to Solario. At trial, George Beach testified that he “transferred
that property to Kim [Solario] without any regard for any interest Mr. De Jong might
have in that property.”
De Jong was unaware of any agreement to transfer ownership of the Escalon
property to Solario. Likewise, De Jong was not aware of the transfer of ownership to
Solario in April 2011. Instead, De Jong continued to pay the property taxes for the
property. He also paid for maintenance costs of the property, including $8,000 to replace
the air conditioning system in June 2011. Even after ownership of the Escalon property
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transferred to Solario, De Jong was not informed of the transfer by the Beaches, Bellinos,
or Solario.
De Jong first noticed that something was amiss in December 2011 when he saw a
tax bill for the Escalon property with Solario’s name on it. He confronted Solario – who
was working for him at the time. She admitted to him that the property had been
transferred to her in April 2011. Solario added, “No problem. We can put your name on
title anytime you want. Don’t worry. I’m not going to screw you out of your money.”
At the time, De Jong and Solario had an amicable relationship and he had entrusted her
with the bookkeeping for his farming company. Solario testified that, at the time, she still
loved him and believed he loved her too.
Shortly after January 1, 2012, De Jong and Solario discussed selling the Escalon
property. They believed that “the market wasn’t great right then” and decided to wait
before listing the property for sale. De Jong continued to pay the property taxes on the
Escalon property.
In the summer of 2012, De Jong spoke with Solario about listing the Escalon
property for sale and they agreed that the time was right. Solario said that she would
order a sign to be made that would advertise the house for sale. The sign never
materialized, and De Jong became busy with the fall harvest. In December 2012, Judith
Bellino wrote De Jong a check for $1,097.41 with the notation that was for “25%
property tax” on the Escalon property. De Jong did not deposit the check because it
overstated Solario’s interest in the property by 5 percent.
After the harvest was completed, De Jong spoke with Solario and Lisa Steves, a
real estate agent, about selling the property. Steves agreed to list the property for Solario.
And Solario agreed that Steves could share information about efforts to sell the property
with De Jong. Steves understood from De Jong and Solario that he was owed some
amount of money that would be realized from the sale of the property.
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The Lot Line Adjustment
During the time that the Bellinos owned both the Escalon property and the
adjacent property, they built a large storage shed over the boundary between the two
properties. De Jong’s expert witness testified that the shed was not code-compliant and
probably not permitted. The shed was worth approximately $16,000 based its age and
construction. Lisa Spencer, who worked with the real estate agent who would ultimately
sell the Escalon property, testified that the shed likely did not affect the sales price at all.
In May 2013, Judith Bellino paid for adjustment of the lot line to the Escalon
property. The lot line adjustment was necessary in order to sell the Escalon property.
The Escalon property had originally been one acre. To preserve the one-acre size, the
property underneath the shed was annexed to the Escalon property while another side of
the property was ceded back to the Bellinos.
The Escalon property did not sell in 2013. Around January 2014, Solario decided
to take the property off the market without consulting De Jong. At that time, Solario
stopped communicating with De Jong. De Jong became concerned about his interest in
the Escalon property and handed Solario a draft deed to transfer title to him. In February
2014, Solario told De Jong that she would talk to her attorney about the draft deed and
said she was not going to sign the document. However, Solario did represent that she
was “trying to get [him his] money back.” However “she didn’t want to talk about
numbers with [De Jong]” and that “she was the one that had to figure out what was fair.”
The exchange became heated.
In deposition testimony introduced at trial, Solario stated that she “did not think or
presume him to be an owner of the property.” When asked the reason for this opinion,
Solario answered: “I don’t know how to answer that. I did not think of him as the owner
of the property.” Regarding the February discussion about Solario signing the draft deed,
she acknowledged: “I did not respond well.” She confirmed refusing to convey title to
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De Jong. When asked the reason for her refusal, Solario stated: “No reason. Why
would I?”
On March 13, 2014, De Jong placed a telephone call to Nicola Bellino in an effort
to get the Escalon property sold by lowering the asking price. Nicola Bellino asked
De Jong to “go ahead and put your numbers together” for further discussion. De Jong
and Nicola Bellino spoke again on March 17, 2014. Nicola Bellino said that he did not
want to hear about the numbers and would work to return De Jong’s original investment.
De Jong pointed out that there was additional equity. Nicola Bellino then “got mad, and
there was no more talking about it.”
A month later, De Jong’s father was diagnosed with cancer. De Jong began taking
care of his father. In June 2014, De Jong got married because he wanted his father to see
him get married. De Jong’s father died on July 14, 2014.
In June 2014, Solario listed the property for sale with a new real estate agent,
Timothy Spencer. Solario did not tell De Jong that she was relisting the property for sale.
At some point prior to the close of escrow, the Bellinos determined that they wanted to
receive $150,000 from the sale of the Escalon property. The Bellinos presented this
number to Solario, who agreed to pay them the amount out of escrow. The $150,000 was
for money repaid to the Beaches, the lot line adjustment, and “all the work that came into
play to move the lot line into the 1-acre parcel and include the [shed].” Solario testified
at trial that there was no discussion with De Jong about this agreement. In listing the
property for sale with Spencer, Solario signed a seller property questionnaire stating that
there was another person on title to the property or who had a claim to ownership other
than her. The Escalon property sold on July 28, 2014, for $610,000. The Bellinos were
paid $150,000 out of escrow. Solario received $425,684.87 from the sale. Solario used
$361,163.40 to purchase a residential property located in Ripon, California.
Solario did not tell De Jong about the sale of the Escalon property, and he received
nothing out of escrow. De Jong first learned that the Escalon property had been sold
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when someone told him that he or she saw a “sold sign” in the front yard. The next day,
De Jong attempted to talk to Solario about the sale. Despite repeated efforts, De Jong
was unable to secure any kind of response from Solario.
Bench Trial Phase One: Defendants Liable for Compensatory and Punitive Damages
Approximately two weeks after De Jong learned that the Escalon property had
been sold, he sued appellants and Solario. De Jong filed a first amended complaint (the
operative complaint) in November 2014. The operative complaint asserted causes of
action against the Beaches for breach of fiduciary duties, negligence, breach of contract,
money lent, money had and received, and unjust enrichment. The complaint asserted
claims against the Bellinos for money had and received, unjust enrichment, and
avoidance of fraudulent transfers. The operative complaint also alleged that “each of the
defendants . . . was the agent or co-conspirator of each of the remaining defendants, and
in doing the things herein alleged, each of the defendants was acting within the course
and scope of that agency or conspiracy with the knowledge, consent, or ratification of the
remaining defendants.” The operative complaint requested compensatory and punitive
damages against all defendants.
The case proceeded to a bench trial that was bifurcated into two phases: The first
phase concerned the defendants’ liability for compensatory and punitive damages as well
as the amount of compensatory damages. The second phase of the bench trial addressed
the amount of punitive damages owed by the defendants.
The first phase of trial culminated with the issuance of a 24-page statement of
decision in which the trial court found the Beaches, Bellinos, and Solario liable for
compensatory and punitive damages. The trial court made findings, including the
following pertinent facts: The Beaches breached their fiduciary duties to De Jong by
secretly transferring the Escalon property to Solario. Solario, in turn, breached her duties
to De Jong by secretly selling the Escalon property to a third party and retaining the
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proceeds for herself and parties other than De Jong. Each of the defendants conspired
with one another and aided and abetted each other in their conduct toward De Jong.
Specifically, the defendants “collectively agreed amongst themselves on a purchase price
for the Escalon Property, which was less than twenty-two percent (22%) of then-fair
market value.” To this end, the Bellinos provided funds to Solario “for the purpose of
inducing Mr. and Mrs. Beach to transfer the Escalon Property to Ms. Solario, in breach of
their duties to Mr. De Jong; that Ms. Solario paid those funds to Mr. and Mrs. Beach for
that purpose; that Mr. and Mrs. Beach accepted the funds for that purpose; and that the
Defendants carried out the transfer of the Escalon Property in secret, without informing
or obtaining the consent of Mr. De Jong, whom the Defendants all knew held an interest
in the Escalon Property, with the intent to hide that transaction from Mr. De Jong.”
Based on these facts, the trial court additionally found the defendants liable for
negligence and conversion. The Bellinos and Solario were found liable for money had
and received, and for unjust enrichment. In light of these findings, the trial court
dismissed additional causes of action asserted against the defendants as moot.
The trial court determined that De Jong was entitled to punitive damages based on
clear and convincing evidence that each of the defendants engaged in conduct that “was
despicable and was carried on with willful and conscious disregard of Mr. De Jong’s
rights in the Escalon Property, with which they were each well aware, and was thus
malicious within the meaning of Civil Code section 3294[, subdivision ](c)(1).”
The trial court expressly rejected the defendants’ affirmative defenses of judicial
estoppel, unclean hands, statute of limitations, and the assertion that De Jong gifted the
property to Solario. Thus, the trial court held defendants jointly and severally liable to
De Jong in the amount of $460,663.03 plus postjudgment interest of 7 percent.
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Order Awarding Costs-of-proof to De Jong
After the trial court entered an interlocutory judgment holding defendants liable
for compensatory and punitive damages, De Jong moved for costs-of-proof under section
2033.420.2 In his motion, De Jong sought attorney fees against Solario for her refusal to
admit 11 key facts, against George Beach for his refusal to admit 8 key facts, against
Susan Beach for her refusal to admit 4 key facts, and against the Bellinos for refusing to
admit 7 key facts. The defendants opposed the motion. The trial court ordered that
defendants jointly pay $189,532.50 in costs-of-proof to De Jong. Appellants timely filed
notices of appeal from the order granting costs-of-proof.
Bench Trial Phase Two: Amount of Punitive Damages
The second phase of trial commenced on October 10, 2017. This phase of trial
culminated with the trial court awarding De Jong punitive damages against Solario in the
amount of $20,000, against the Beaches individually and collectively in the amount of
$100,000, and against the Bellinos individually and collectively in the amount of
$750,000. The trial court also awarded De Jong sole ownership of the Ripon property.
In imposing punitive damages on the Beaches, the trial court made the following
findings: “Particularly aggravating the reprehensibility of his conduct, Mr. Beach
communicated with the other defendants in secret many times over a long period to agree
to and deliberately carry out the transfer of valuable real property that Mr. Beach held in
trust for the benefit of Mr. De Jong to Kim Solario, without Mr. De Jong’s knowledge or
consent, and with utter disregard for his rights in that property or for the impact that the
transfer may have on Mr. De Jong’s physical or emotional health or well-being.” “Mrs.
Beach owed the same duties to Mr. De Jong that her husband did, and Mrs. Beach
2 We grant De Jong’s request for judicial notice, filed in appeal No. C085462, of the
record in appeal No. C086926. (Evid. Code, §§ 452, subd. (d), 459, subd. (a); People v.
Jenan (2007) 148 Cal.App.4th 1144, 1145, fn. 1.)
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participated in the same course of conduct with regard to the disposition of Mr. De Jong’s
property, likewise demonstrating complete disregard for Mr. De Jong’s rights and for the
impact that the transfer of Mr. De Jong’s property to Ms. Solario may have on Mr.
De Jong.”
As to Solario, the trial court found that punitive damages were warranted because
“Solario repeatedly lied to Mr. De Jong about her plans for the Escalon Property,
concealed both the acquisition of the Escalon Property and its sale from him, and
deliberately sold that property and kept the proceeds despite knowing of his interest
therein.” As to the Bellinos, the trial court found that both Nicola and Judith Bellino
were “personally aware of Mr. De Jong’s interest in the Escalon Property and his claim
thereto,” that they “met in secret with the other defendants to plan and carry out the
transfer of that property to [their] daughter, Kim Solario, which [they] facilitated by
providing the money she used to purchase that property. [They] subsequently assisted
her in selling the property, agreeing in advance to receive money that belonged to Mr.
De Jong from the sale of that property, and did so with knowledge or, certainly, with
reason to know that Ms. Solario intended to keep the balance of the proceeds of the
Escalon Property and not pay Mr. De Jong.” The trial court further found both of the
Bellinos were “aware of Mr. De Jong’s vulnerability and conspired with and aided and
abetted Ms. Solario in exploiting it,” and that their “participation in the aforementioned
course of conduct spanned a long period of time.”
The Beaches and Bellinos timely filed a notice of appeal. The Beaches and
Bellinos filed a separate notice of appeal from a postjudgment order awarding costs to
De Jong in the amount of $25,910.75.
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APPEAL IN C086926
I
The Beaches’ Fiduciary Duty to De Jong
The Beaches contend the trial court erred as a matter of law in determining that
trustees owe a fiduciary duty under a resulting trust. Thus, they argue that they owed no
fiduciary duty to De Jong under the resulting trust for the Escalon property. We disagree.
A.
Trial Court Statement of Decision
In its statement of decision, the trial court determined that a resulting trust arose in
the Beaches’ acquisition of title to the Escalon property. The trial court reasoned, “Once
the sale closed, Mr. and Mrs. Beach held title to the Escalon Property in a resulting trust
for the benefit of Mr. De Jong to the extent of his interest therein . . . . As resulting
trustees, Mr. and Mrs. Beach owed duties to Mr. De Jong to hold the Escalon Property for
his benefit and ultimately to convey it to him. Mr. and Mrs. Beach breached that duty by
instead selling the Escalon Property in April 2011 to Ms. Solario—with whom he was no
longer living or sharing a romantic relationship by that time—for a sum sufficient to
repay Mr. and Mrs. Beach’s ‘loan’ with interest, without Mr. De Jong’s knowledge or
consent and without taking any action to memorialize or protect Mr. De Jong’s interest.
The sale was made for a price that was a mere fraction of fair market value. Mr. De Jong
was not paid his equitable share of the fair market value of the property, or even of the
actual sale price—indeed, he was not paid anything.”
Regarding fiduciary duties owed to De Jong, the trial court found “that each of the
Defendants conspired to breach the fiduciary duties owed by Mr. and Mrs. Beach and by
Ms. Solario to Mr. De Jong. The Court finds, inter alia, that each of the Defendants
intended, planned, and agreed that Mr. and Mrs. Beach would sell the Escalon Property to
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Ms. Solario in secret, in breach of their duties to Mr. De Jong, in consideration for a price
sufficient only to repay Mr. and Mrs. Beach’s ‘loan’ . . . .” (Italics omitted.) As to the
Beaches, the trial court found that their breach of their fiduciary duties to De Jong served
as a basis for compensatory and punitive damages. The trial court’s statement of decision
reiterated that the Beaches’ “breaches include, without limitation, their transfer of the
Escalon Property to Ms. Solario without Mr. De Jong’s knowledge or consent and
without memorializing or protecting his interest therein.”
B.
Resulting Trust
California has long recognized that trusts impose fiduciary duties on trustees. “A
trust is a fiduciary relationship with respect to property in which the person holding legal
title to the property—the trustee—has an equitable obligation to manage the property for
the benefit of another—the beneficiary. (In re Estate of Shaw (1926) 198 Cal. 352, 360;
Askew v. Resources Funding, Ltd. (1979) 94 Cal.App.3d 402, 407; Rest.2d Trusts, § 2.)
A trustee must always act solely in the beneficiaries’ interest. ([Prob. Code,] § 16002,
subd. (a); Estate of Feraud (1979) 92 Cal.App.3d 717, 723.) If the trustee violates any
duty owed to the beneficiaries, the trustee is liable for breach of trust. ([Prob. Code,]
§ 16400.)” (Moeller v. Superior Court (1997) 16 Cal.4th 1124, 1133-1134.)
A trust may be express or resulting – depending on whether the trust’s creation is
express or inferred. (Askew v. Resources Funding, Ltd. (1979) 94 Cal.App.3d 402, 407.)
A resulting trust arises by operation of law, without the express intent of the settlor, when
transfer of real property is made to one person but paid for by another. (In re Marriage
of Ruelas (2007) 154 Cal.App.4th 339, 342, overruled on another ground in
Conservatorship of O.B. (2020) 9 Cal.5th 989, 1010, fn. 7.) “ ‘The trust that is
“presumed to result” from this situation is termed a “resulting trust”; its purpose is to
enforce the intentions of the parties. It is distinguished from a constructive trust, which is
17
typically imposed to rectify fraudulent behavior.’ (Johnson v. Johnson (1987) 192
Cal.App.3d 551, 556.)” (Ruelas, at p. 342.)
Notably, “[t]he terms ‘constructive trust’ and ‘resulting trust’ have often been
confused by attorneys, as well as some courts. (Kraus v. Willow Park [Public Golf
Course (1977)] 73 Cal.App.3d [354,] 373; see 3 Witkin, Cal. Procedure (2d ed. 1971)
Pleading, § 704, p. 2326; 5 Scott on Trusts [(3d ed. 1967)] § 462.1, p. 3416.) Both are
involuntary trusts implied by law and exempt from the statute of frauds. (See Civ. Code,
§ 852.) However, ‘ “[a] resulting trust arises from a transfer of property under
circumstances showing that the transferee was not intended to take the beneficial interest
. . . . [¶] It has been termed an ‘intention-enforcing’ trust, to distinguish it from the other
type of implied trust, the constructive or ‘fraud-rectifying’ trust. The resulting trust
carries out the inferred intent of the parties; the constructive trust defeats or prevents the
wrongful act of one of them.” ’ (American Motorists Ins. Co. v. Cowan (1982) 127
Cal.App.3d 875, 884-885.)” (Martin v. Kehl (1983) 145 Cal.App.3d 228, 238.)
C.
The Beaches’ Fiduciary Relationship
The Beaches do not contest the trial court’s determination that their purchase of
the Escalon property with funds received from De Jong gave rise to a resulting trust.
Instead, the Beaches contend that a resulting trust “is not a true trust for purposes of
creating a fiduciary relationship.” Thus, the Beaches argue that they did not owe any
fiduciary duties to De Jong despite their receipt of funds for the purchase of the Escalon
property from him. We reject the argument.
The trial court did not err finding that the Beaches breached their fiduciary duty to
De Jong by transferring title in the Escalon property solely to Solario without any regard
for De Jong’s ownership interest in the property. Under the resulting trust for the Escalon
property, the Beaches had a fiduciary duty to De Jong even if that fiduciary duty had a
18
limited scope. “[T]he relationship between resulting trustee and beneficiary arises where
one, in good faith, acquires title to property belonging to another. . . . The trustee has no
duties to perform, no trust to administer, and no purpose to pursue except the single
purpose of holding or conveying the property according to the beneficiary’s demands.”
(Estate of Yool (2007) 151 Cal.App.4th 867, 874, italics omitted & added.) While the
Beaches did not have an obligation to manage the Escalon property for De Jong, they did
have the obligation to hold title to the property for De Jong’s benefit or transfer title
according to his demand. (Ibid.) By transferring title to the Escalon property without
regard for De Jong’s interest, the Beaches breached their fiduciary duty to him.
We reject the Beaches’ argument that they had no fiduciary relationship with
De Jong based on their assertion that it “is undisputed that DeJong [sic] had no
discussions whatsoever with the Beaches before they received title or about eventually
transferring title to DeJong [sic].” The absence of direct communications between the
Beaches and De Jong did not excuse the Beaches from their fiduciary obligation to
De Jong. Under the resulting trust, the “law implies an obligation on the part of the one
in whom title has vested to hold the property for the owner’s benefit and eventually
convey it to the owner.” (Estate of Yool, supra, 151 Cal.App.4th at p. 874, italics added.)
Thus, the Beaches breached their fiduciary duties when they conveyed the Escalon
property to Solario without any consideration for De Jong’s interest.3
We also reject the Beaches’ reliance on Probate Code section 82, subdivision
(b)(1). Probate Code section 82 supplies a definition of term “trust” that excludes
resulting trusts as well as some types of constructive trusts. The applicability of Probate
Code section 82’s definition of “trust,” however, is expressly limited by Probate Code
3 Accordingly, we also reject the defendants’ arguments elsewhere in their opening
brief that the trial court erred in holding them liable despite their asserted lack of
fiduciary duty to De Jong.
19
section 20. Section 20 provides that “the definitions in this part govern the construction
of this code.” (Italics added.) This case does not involve a claim that arises under the
Probate Code. Consequently, the definitional limitations of Probate Code section 82 do
not apply here.
We are not persuaded by the Beaches’ reliance on Richman v. Green (1956) 143
Cal.App.2d 470. The Richman court held that, under a resulting trust, “[t]he trustee has
no duties to perform, no trust to administer, and no purpose to carry out except the single
one of holding or conveying according to the beneficiary’s demand.” (Id. at p. 473,
italics added.) In this case, the Beaches breached this duty. Indeed, the trial court found
that the Beaches intentionally and maliciously breached their duty to De Jong when they
conveyed title in the Escalon property to Solario. Thus, Richman confirms that the
Beaches’ conduct violated their fiduciary duty under the resulting trust for which De Jong
was the beneficiary. The trial court did not err in determining that the Beaches breached
their fiduciary duty to De Jong to hold and convey title to the Escalon property for his
benefit.
II
Mitigation of Damages
The Beaches next argue that De Jong failed to mitigate his damages. This
argument is not properly presented under a heading that discloses the nature of the
contention. Moreover, the argument is unaccompanied by record citations relating to any
facts that appellants might believe support their mitigation of damages contention.
As this court has previously admonished, “An appellant must ‘[s]tate each point
under a separate heading or subheading summarizing the point, and support each point by
argument and, if possible, by citation of authority.’ (Cal. Rules of Court, rule
8.204(a)(1)(B); see Opdyk v. California Horse Racing Bd. (1995) 34 Cal.App.4th 1826,
1830-1831, fn. 4.) Failure to provide proper headings forfeits issues that may be
20
discussed in the brief but are not clearly identified by a heading.” (Pizarro v. Reynoso
(2017) 10 Cal.App.5th 172, 179.)
The Beaches’ vague statement that “DeJong [sic] is barred by numerous equitable
and legal doctrines from obtaining any relief from the Beaches,” does not inform this
court that they intend to advance an argument about mitigation of damages. Instead, the
argument is buried in a section that also includes an unheralded argument about
De Jong’s purported ratification of the Beaches’ conduct. Here, the lack of proper
heading means that multiple arguments are lumped together and require guesswork as to
the exact grounds on which the Beaches believe they are entitled to a reversal. “The
strength and wisdom of this rule [requiring proper headings] is that it nudges and cajoles
the brief writer into focusing and specifying the precise reason we must reverse the trial
court’s action.” (Pizarro v. Reynoso, supra, 10 Cal.App.5th at p. 180.)
The guesswork necessary is compounded by the Beaches’ lack of citation to the
appellate record in support of their mitigation of damages argument. Specifically, the
Beaches do not provide record support for any facts they believe to support their assertion
that De Jong did not properly mitigate his damages. “When an appellant’s brief makes
no reference to the pages of the record where a point can be found, an appellate court
need not search through the record in an effort to discover the point purportedly made.
(Berger v. Godden (1985) 163 Cal.App.3d 1113, 1117, fn. 2; [citations].) We can simply
deem the contention to lack foundation and, thus, to be forfeited.” (In re S.C. (2006) 138
Cal.App.4th 396, 406-407.)
III
Ratification Through Acquiescence
The Beaches argue that De Jong ratified their conduct through his acquiescence.
Specifically, the Beaches assert that, “[d]espite knowing that title had been transferred,
DeJong [sic] admittedly did nothing for more than two years before first demanding that
21
Solario put him on title.” This issue has not been preserved for appeal because appellants
did not argue the defense of posttransfer ratification during trial.
A.
Testimony Regarding De Jong’s Consent or Acquiescence to Transfer of Title
During trial, appellants did not attempt to prove the defense of posttransfer
ratification. Instead, appellants testified that De Jong was personally present during the
kitchen meeting at the Escalon property and that he consented to the transfer of title to
Solario. Thus, appellants’ posttrial brief focused their proof of De Jong’s presence at the
kitchen meeting. Neither at trial nor in their posttrial brief did appellants advance a
defense premised on De Jong’s alleged posttransfer ratification.
The trial court determined that appellants’ testimony was not credible regarding
De Jong’s presence during the kitchen meeting or his acquiescence to transfer of title.
The trial court found appellants “collectively met in person outside of Mr. De Jong’s
presence and without his knowledge to plan the transfer of the Escalon property to Ms.
Solario in exchange for payment of Mr. and Mrs. Beach’s loan.” The trial court further
found that “Mr. De Jong did not consent to the transfer. Mr. De Jong did not know, and
did not have reason to suspect, that the transfer had taken place until December 2011,
when he discovered that the name on the invoice for the property taxes assessed against
the Escalon Property had been changed from Mr. and Mrs. Beach to Ms. Solario. The
[appellants’] contrary testimony that Mr. De Jong knew of the transfer beforehand and
consented to it was not credible.”
B.
Ratification
As the California Supreme Court has explained, “Ratification is the voluntary
election by a person to adopt in some manner as his own an act which was purportedly
done on his behalf by another person, the effect of which, as to some or all persons, is to
22
treat the act as if originally authorized by him.” (Rakestraw v. Rodrigues (1972) 8 Cal.3d
67, 73.) Ratification may be express or implied. (Ibid.) The defense that a plaintiff has
ratified a voidable contract presents a question of fact for which the defendant bears the
burden of convincing the trier of fact. (Bank of America Nat’l Trust & Sav. Asso. v.
Lamb Finance Co. (1956) 145 Cal.App.2d 702, 719-720.) “ ‘ “Ratification of a
fraudulent transaction can only be made where there is a full knowledge of the facts
constituting the fraud [citation] and depends primarily on the intention of the party as
shown by his declarations, acts and conduct [citation].” ’ ” (Id. at p. 720.) Thus, the
question of whether a party has ratified a fraudulent contract presents a question for the
trier of fact. (Common Wealth Ins. Systems, Inc. v. Kersten (1974) 40 Cal.App.3d 1014,
1024, 1026.)
In reviewing the factual findings of the trial court, we apply the substantial
evidence standard of review. (Jameson v. Five Feet Restaurant, Inc. (2003) 107
Cal.App.4th 138, 142-143.) “ ‘When a trial court’s factual determination is attacked on
the ground that there is no substantial evidence to sustain it, the power of an appellate
court begins and ends with the determination as to whether, on the entire record, there is
substantial evidence, contradicted or uncontradicted, which will support the
determination, and when two or more inferences can reasonably be deduced from the
facts, a reviewing court is without power to substitute its deductions for those of the trial
court. If such substantial evidence be found, it is of no consequence that the trial court
believing other evidence, or drawing other reasonable inferences, might have reached a
contrary conclusion.’ (Bowers v. Bernards (1984) 150 Cal.App.3d 870, 873-874.) The
substantial evidence standard of review is applicable to appeals from both jury and
nonjury trials.” (Id. at p. 143, italics omitted.)
23
C.
Evidence Regarding Ratification
Appellants’ argument that De Jong ratified the fraudulent transfer sometime after
he learned about it in 2011 represents a notable retreat from their position at trial. During
trial, appellants and Solario testified that De Jong was personally present during the
kitchen meeting and acquiesced to the transfer at that point in January 2011. Appellants
also attempted to prove that he gifted the Escalon property to Solario. The trial court,
however, rejected the credibility of the testimony that De Jong was present during the
kitchen meeting. And the trial court rejected the assertion that De Jong gifted his interest
in the Escalon property to Solario. In its statement of decision, the trial court found that
De Jong did not consent to the transfer to Solario either during the time that the
appellants secretly formulated their plan to confer title to her or after De Jong found out
about the transfer.
Substantial evidence supports the trial court’s factual findings. De Jong testified
that he was not present during the kitchen meeting and did not know about the plan to
transfer title to Solario. De Jong further testified that he did not actually learn about the
transfer until December 2011, when he saw that the addressee for the property tax invoice
had been changed to Solario. De Jong could not have ratified a transfer of title of which
he was unaware.
After De Jong learned of the transfer through the property tax bill, he promptly
confronted Solario and secured a promise to “put him on title whenever he wished.”
Solario also assured him that he would be paid his interest when the property was sold. It
was not until 2014 that Solario stopped cooperating and communicating with De Jong.
When De Jong found out that the Escalon property had been sold, he went to confront her
the very next day. He filed this action against appellants and Solario approximately two
weeks later. Rather than showing ratification of the transfer of title to Solario, De Jong
24
consistently acted to protect his interest in the Escalon property in all of his
communications with Solario. We reject appellants’ contention that De Jong ratified the
transfer to Solario.
IV
Statute of Limitations for Negligence
Appellants next argue that the trial court erred in determining that De Jong’s cause
of action for negligence was timely because appellants were estopped to assert the statute
of limitations. In its statement of decision, the trial court found that appellants were
estopped from asserting the statute of limitations as to the claim of negligence. As a
separate basis for rejecting the appellants’ statute of limitations defense, the trial court
found that the accrual of the statute of limitations for the negligence claim was equitably
tolled. However, appellants’ opening brief does not address this separate equitable
tolling finding by the trial court. Accordingly, we affirm on this unchallenged, alternate
ground.
The negligence cause of action related to the April 2011 transfer of the Escalon
property by the Beaches. Regarding the appellants’ statute of limitations defense, the
trial court found as follows: “Mr. De Jong did not know of or have reason to suspect the
existence of any cause of action until December 2011 at the earliest. His action was filed
less than three years later, and consequently his causes of action for breach of fiduciary
duty and conversion are timely. Each of his causes of action arising out of the July 2014
sale of the Escalon Property are also well within the statute of limitations and are timely.
With respect to his other causes of action against Mr. and Mrs. Beach arising from the
April 2011 transfer of the Escalon Property, the running of the statute of limitations was
tolled, and the Defendants were estopped to assert it, until February 2014, as Ms. Solario
continued to affirmatively recognize Mr. De Jong’s interest in the Escalon Property until
that time and continued until that time to represent that he would be paid when the
25
Escalon Property was sold, and Mr. De Jong reasonably relied upon those
representations.” (Italics added.)
As the italicized portion of the statement of decision shows, the trial court found
that the causes of action relating to the April 2011 transfer (including the negligence
claim) were timely because of equitable tolling and equitable estoppel. Thus, the trial
court found two separate bases for rejecting the statute of limitations defense because
equitable tolling and equitable estoppel are distinct from each other. (Lantzy v. Centex
Homes (2003) 31 Cal.4th 363, 383-384.) In Lantzy, the Supreme Court explained:
“ ‘ “Tolling, strictly speaking, is concerned with the point at which the limitations period
begins to run and with the circumstances in which the running of the limitations period
may be suspended. . . . Equitable estoppel, however, . . . comes into play only after the
limitations period has run and addresses . . . the circumstances in which a party will be
estopped from asserting the statute of limitations as a defense to an admittedly untimely
action because his conduct has induced another into forbearing suit within the applicable
limitations period.” ’ ” (Id. at p. 383, ellipses added by Lantzy.)
On review, we may affirm the trial court’s judgment on any correct legal ground
supported by the record. (Taylor v. Elliott Turbomachinery Co. Inc. (2009) 171
Cal.App.4th 564, 573, fn. 5.) Here, appellants’ opening brief does not address the
equitable tolling rationale employed by the trial court. (Reyes v. Kosha (1998) 65
Cal.App.4th 451, 466, fn. 6 [holding that issues not raised in an appellant’s opening brief
are deemed abandoned].) Accordingly, we reject appellants’ contention for lack of
prejudice because a single valid basis is sufficient to affirm the trial court’s decision.
(Salazar v. Southern Cal. Gas Co. (1997) 54 Cal.App.4th 1370, 1376; Waller v. TJD, Inc.
(1993) 12 Cal.App.4th 830, 833.)
26
V
Fraudulent Transfer
The Bellinos argue that the trial court erred as a matter of law in holding them
liable for fraudulent transfer, money had and received, and unjust enrichment. In
particular, they challenge the trial court’s finding that “Solario transferred $150,000 in
sale proceeds from the [Escalon] property through escrow to the Bellinos ‘with intent to
hinder, defraud, and delay payment to Mr. DeJong [sic].’ ” To support their argument,
the Bellinos engage in a detailed analysis of the evidence introduced at trial that shows
the gravamen of their appellate argument to be a substantial evidence challenge. Their
argument depends on inflating the value of the encroaching shed above the $11,000
valuation settled upon by the trial court. Viewing the evidence in the light most favorable
to the judgment, we conclude that the evidence supported the trial court’s determination.
A.
Transfer of $150,000 to the Bellinos
The trial court found that Solario received title to the entirety of the Escalon
property even though her equitable interest was only 19.98 percent. The remaining 80.02
percent belonged to De Jong. The trial court further found that “Ms. Solario’s equitable
share of the sale proceeds was $115,021.84 after costs of sale. However, pursuant to a
prior agreement with Mr. and Mrs. Bellino, made without Mr. De Jong’s knowledge, Ms.
Solario paid Mr. and Mrs. Bellino $150,000.00 from the proceeds of the sale of the
Escalon Property directly out of escrow. That payment exceeded Ms. Solario’s entire
equitable share of the sale proceeds by at least $34,978.16.” On this basis, the trial court
determined that the $34,978.16 difference represented a fraudulent transfer to the
Bellinos.
27
B.
Reasonably Equivalent Value for Transfer
The Bellinos argue that Solario received approximately $115,000 in value for the
Escalon property before she transferred $150,000 of the sale proceeds to the Bellinos.
The Bellinos formulate their $115,000 estimate by adding the $11,000 value of the shed,
the $9,000 they paid for a lot line adjustment, and $94,438.38 for repayment of the
Beaches’ loan. On these figures, the Bellinos argue that “Solario thus received
reasonably equivalent value for her transfer” so that the transfer was not fraudulent. We
are not persuaded.
We determine that the Bellinos are unable to muster legal authority establishing
that proof of reasonably equivalent value would provide them with a defense for their
fraud against De Jong. In making this determination, we reject as inapposite the
Bellinos’ reliance on four federal bankruptcy opinions: In re Pringle (Bankr. 9th Cir.
2013) 495 B.R. 447 (Pringle), In re AFI Holding, Inc. (Bankr. 9th Cir. 2008) 525 F.3d
700 (AFI), In re Alpha Medical Center Partners, LLC (Bankr. S.D. Cal., Nov. 3, 2011,
06-00062-B11) 2011 WL 5417088 (Alpha Medical), and In re Carbaat (Bankr. N.D. Cal.
2006) 357 B.R. 553 (Carbaat). Each of these four cases focused on the application of
section 548 of title 11 of the United States Bankruptcy Code. (Pringle, at p. 455; AFI, at
p. 704; Alpha Medical, at p. *1; Carbaat, at p. 558.) This section of the United States
Bankruptcy Code allows bankruptcy trustees to void transfers by debtors who intend to
avoid their obligations to their creditors by receiving less than a reasonably equivalent
value in exchange for such transfer. (11 U.S.C. § 548(a)(1)(B)(i).) This federal statute
does not apply to this case, which is not a bankruptcy proceeding and does not involve
the participation of a bankruptcy trustee.
The cases of AFI, Alpha Medical, and Carbaat also involve the application of a
corollary statute, California Civil Code section 3439.04. (AFI, supra, 525 F.3d at p. 706;
28
Alpha Medical, supra, 2011 WL 5417088 at p. *2; Carbaat, supra, 357 B.R. at p. 558.)
Similar to the function of section 548 of title 11 of the United States Bankruptcy Code,
Civil Code section 3439.04, subdivision (a), provides that “[a] transfer made or
obligation incurred by a debtor is voidable as to a creditor, whether the creditor’s claim
arose before or after the transfer was made or the obligation was incurred, if the debtor
made the transfer or incurred the obligation” as specified. (Italics added.) Section
3439.04 is part of the Uniform Voidable Transactions Act (UVTA). (Civ. Code, § 3439.)
As this court has previously explained, “[a] fraudulent conveyance under the [(UVTA)]
involves ‘ “a transfer by the debtor of property to a third person undertaken with the
intent to prevent a creditor from reaching that interest to satisfy its claim.” ’ ” (Filip v.
Bucurenciu (2005) 129 Cal.App.4th 825, 829, quoting Kirkeby v. Superior Court (2004)
33 Cal.4th 642, 648.)
In this case, Solario and De Jong did not stand in a debtor-creditor relationship for
which the provisions of the UVTA or section 548 of title 11 of United States Bankruptcy
Code apply. Solario did not transfer $150,000 to the Bellinos to avoid payment on a debt
she incurred with De Jong. Instead, Solario received and transferred value from the
Escalon property as the product of a secret conspiracy against De Jong’s interest in the
property.
VI
Deficiency in Pleading
Appellants argue that deficiencies in De Jong’s pleadings require reversal of the
trial court’s determinations that they are liable for conspiracy, aiding and abetting each
other, and for “unasserted causes of action.” Appellants identify these “unasserted causes
of action” as the claims asserted in the operative complaint “for breach of fiduciary duty,
negligence, and conversion against the Bellinos, and conversion against the Beaches.”
We conclude the alleged errors are harmless.
29
A.
“Unasserted Causes of Action”
We first address appellants’ contention that they were erroneously held liable on
unasserted causes of action for which they were not individually named in the operative
complaint.
1. Multiple Bases of Liability for the Beaches and Bellinos
In its statement of decision, the trial court held the Beaches liable for (1) breach of
fiduciary duty to De Jong based on resulting trust, (2) conspiring with the other
appellants for breach of their duties to De Jong based on aiding and abetting,
(3) negligence in failing to protect De Jong’s interest in the Escalon property,
(4) conversion, and (5) punitive damages for despicable conduct.
The Bellinos were held liable for (1) conspiring with the other appellants for
breach of their duties to De Jong based on aiding and abetting, (2) negligence in failing to
protect De Jong’s interest in the Escalon property, (3) fraudulent transfer, (4) money had
and received, (5) unjust enrichment, and (6) punitive damages for despicable conduct.
2. Alternate Bases for Liability
We begin our review with the presumption that the trial court’s decision is correct.
(In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.) As a corollary, a single
valid basis for the trial court’s decision is sufficient for an affirmance even if an alternate
basis for the decision fails. “Where an appeal is taken from such a judgment the
reviewing court has the power to disregard particular theories and findings and to affirm
the judgment on a theory which is supported by the finding and evidence in order that
causes may be disposed of by a single appeal and without further proceedings in the trial
court.” (Crogan v. Metz (1956) 47 Cal.2d 398, 403.) Where a trial court states “a
primary basis and an alternative and independent basis for its award, the alleged
invalidity of its alternative basis does not invalidate the award unless the primary basis
30
was invalid.” (Meister v. Regents of University of California (1998) 67 Cal.App.4th 437,
449, fn. 11.) Where one basis is valid, we do not need to address the validity of the
alternative basis. (Ibid.) This is because “[w]hen the trial court commits error in ruling
on matters relating to pleadings, procedures, or other preliminary matters, reversal can
generally be predicated thereon only if the appellant can show resulting prejudice, and the
probability of a more favorable outcome, at trial.” (Waller v. TJD, Inc., supra, 12Cal.App.4th at p. 833, italics omitted.)
3. Recovery Under a Single Valid Basis for Liability
A plaintiff is allowed to plead multiple alternative causes of action arising out of a
single injury. (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1388.) Even
so, a plaintiff may recover only once for a particular injury. “ ‘Regardless of the nature
or number of legal theories advanced by the plaintiff, he [or she] is not entitled to more
than a single recovery for each distinct item of compensable damage supported by the
evidence. [Citation.] Double or duplicative recovery for the same items of damage
amounts to overcompensation and is therefore prohibited.’ ” (Roby v. McKesson Corp.
(2009) 47 Cal.4th 686, 702, quoting Tavaglione v. Billings (1993) 4 Cal.4th 1150, 1158-
1159.) A plaintiff’s recovery for a particular injury must be the same regardless of
whether the plaintiff has proven one or more causes of action arising out of that injury.
Here, appellants challenge the sufficiency of the pleading for conversion against
the Beaches. However, they do not challenge the sufficiency of the pleadings in alleging
causes of action against the Beaches for breach of fiduciary duties, negligence, money
lent, or money had and received. The trial court found the Beaches liable for the claims
of breach of fiduciary duty and negligence. Based on the multiple and redundant bases
for liability, the trial court dismissed as moot the additional causes of action, including
those for breach of contract, money had and received, and money lent. In the same way,
the possibility that the pleadings were not sufficient to allege a cause of action for
conversion against the Beaches does not undermine the unchallenged sufficiency of the
31
pleadings against them for four additional causes of action. Because any one of these
other four causes of action against the Beaches was sufficient to establish De Jong’s
claim that they acted wrongfully toward him in transferring title to Solario without regard
for his interests, there is no prejudice arising out of possible deficiency in pleading a
claim of conversion against the Beaches. (Roby v. McKesson Corp., supra, 47 Cal.4th at
p. 702; Waller v. TJD, Inc., supra, 12 Cal.App.4th at p. 833)
For the same reason, we reject appellants’ claims that the operative complaint did
not sufficiently allege causes of action against them for breach of fiduciary duty,
negligence, and conversion against the Bellinos. The operative complaint also alleged
causes of action against them for fraudulent transfers, money had and received, and
unjust enrichment. The trial court found the Bellinos liable for fraudulent transfers,
money had and received, and unjust enrichment. The Bellinos do not challenge the
sufficiency of the pleadings in the operative complaint insofar as it stated claims against
them for fraudulent transfers, money had and received, and unjust enrichment. As with
the Beaches, the unchallenged causes of action each support the award of damages for the
Bellinos’ wrongful conduct toward De Jong. Accordingly, there can be no prejudice
arising out of deficient pleading of claims against the Bellinos for breach of fiduciary
duty, negligence, or conversion.
B.
Conspiracy and Aiding and Abetting
As part of their argument regarding deficiencies in the operative complaint,
appellants contend the complaint insufficiently alleged they engaged in a conspiracy or in
aiding and abetting each other.
1. Operative Complaint and Trial Court Argument
The original complaint in this case pleaded that De Jong “is informed and believes
and thereupon alleges that all times relevant to this Complaint, each of the defendants,
32
including those fictitiously named, was the agent or co-conspirator of each of the
remaining defendants, and in doing the things herein alleged, each of the defendants was
acting within the course and scope of that agency or conspiracy with the knowledge,
consent, or ratification of each of the remaining defendants.” The operative complaint in
this case reiterated the identical allegation of conspiracy.
In his pretrial brief filed in the trial court, De Jong argued that “[t]he Bellinos were
involved in this action from the beginning and aided, abetted, and conspired with Ms.
Solario to cheat Mr. De Jong. They share jointly and severally in her liability.” De Jong
claimed damages against the Beaches on grounds that “[t]he Beaches also aided, abetted,
and conspired with Ms. Solario and consequently share joint and several liability for her
injury to Mr. De Jong.” In his posttrial brief De Jong reiterated his claim of conspiracy
by devoting a section to his conspiracy claim with the heading: “The defendants
collectively conspired in, and aided and abetted one another in, the breach of their duties
to Mr. De Jong.”
2. Sufficiency of the Pleading Regarding Conspiracy
Conspiracy, by itself, does not constitute a cause of action. “To be actionable
(conspiracy) the alleged combination must result in the commission of a civil wrong,
either by the perpetration of an unlawful act or some injurious act by unlawful means,
resulting in damage. (Agnew v. Parks (1959) 172 Cal.App.2d 756.) As stated in Wise v.
Southern Pacific Co. (1963) 223 Cal.App.2d 50, 64, ‘. . . a conspiracy, in and of itself,
however[] atrocious, does not give rise to a cause of action unless a civil wrong has been
committed resulting in damage.’ The major significance of the conspiracy lies in the fact
that it renders each participant in the wrongful act responsible as a joint tortfeasor for all
damages ensuing from the wrong, irrespective of whether or not he was a direct actor and
regardless of the degree of his activity.” (Younan v. Equifax Inc. (1980) 111 Cal.App.3d
498, 508, citing Mox Inc. v. Woods (1927) 202 Cal. 675, fn. omitted.) As the California
Supreme Court has held, “By participation in a civil conspiracy, a coconspirator
33
effectively adopts as his or her own the torts of other coconspirators within the ambit of
the conspiracy. ([Wyatt v. Union Mortg. Co. (1979) 24 Cal.3d 773, 784].) In this way, a
coconspirator incurs tort liability co-equal with the immediate tortfeasors.” (Applied
Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 511.)
The allegation of a conspiracy to commit a specified wrongful act gives notice that
coconspirators are each responsible as joint tortfeasors. “ ‘ “The advantage to the pleader
in charging a conspiracy is to implicate all participating in the common design and thus
fasten liability on him who agreed to the plan to commit the wrong as well as on him who
actually carried it out.” ’ ” (117 Sales Corp. v. Olsen (1978) 80 Cal.App.3d 645, 649,
quoting Allen v. Powell (1967) 248 Cal.App.2d 502, 508.)
Because a conspiracy “is simply a corrupt agreement,” the requirements for
pleading are simple. (117 Sales Corp. v. Olsen, supra, 80 Cal.App.3d at p. 649) “To
state a cause of action for civil conspiracy, facts must be alleged which show the
formation and operation of a conspiracy, the wrongful act of any of the conspirators
thereto and damage resulting therefrom.” (Ibid.) “To be entitled to a joint recovery of
damages against the defendants for inflicting a wrong through a conspiracy, the plaintiff
must allege and prove: a concert of action between the defendants to accomplish the
purpose of the conspiracy; that their actions were illegal and in furtherance of a common
scheme or design to achieve the unlawful purpose of the conspiracy; and their knowledge
of the conspiracy and its unlawful purpose.” (James v. Herbert (1957) 149 Cal.App.2d
741, 747.)
The operative complaint sufficiently pleaded a conspiracy by appellants and
Solario to deprive De Jong of his interest in the Escalon property. Both the original and
amended complaints prominently allege the conspiracy in a stand-alone paragraph. The
operative complaint describes the agreement of defendants to act together and against
De Jong’s property interest. The operative complaint details the following: The Beaches
transferred title to the Escalon property solely to Solario for a sum that was far below the
34
property’s market value. Solario, in turn, gave some of the proceeds from the sale of the
property to the Bellinos in an amount that exceeded that to which they were entitled. The
Bellinos accepted the proceeds in bad faith with an intent to defraud De Jong. None of
the defendants informed De Jong about the transfer to Solario before, during, or after the
transfer of title. Instead, the defendants acted in a manner that was “fraudulent,
malicious, and oppressive in nature . . . .” In short, the operative complaint painted a
picture of a conspiracy by the Beaches, Bellinos, and Solario to realize the value of the
Escalon property and divide it among themselves without regard to De Jong’s interests.
In addition to the operative complaint, De Jong outlined his conspiracy allegations
in pretrial briefing. In that briefing, De Jong stated that he intended to show that “[t]he
Bellinos were involved in this action from the beginning and aided, abetted, and
conspired with Ms. Solario to cheat Mr. De Jong. They share jointly and severally in her
liability. [¶] . . . [¶] The Beaches also aided, abetted, and conspired with Ms. Solario and
consequently share joint and several liability for her injury to Mr. De Jong.” De Jong’s
posttrial briefing reiterates the allegations of conspiracy and emphasizes the defendants’
agreement on a plan to appropriate De Jong’s interest in the Escalon property. De Jong
pointed out where in the reporter’s transcript that the evidence showed “[t]he Beaches
met with Ms. Solario outside of Mr. De Jong’s presence to agree on a price for the
Escalon Property and to transfer that property to Ms. Solario. Ms. Solario subsequently
agreed in advance with her parents on an amount that they would receive from the sale of
the Escalon Property.”
In sum, De Jong’s operative complaint and trial briefs clearly alleged a conspiracy
by defendants to appropriate for themselves the interest he had in the Escalon property.
On this record, the trial court did not err in determining that De Jong sufficiently pleaded
that defendants were liable for their conspiracy against him.
35
3. Sufficiency of the Pleading Regarding Aiding and Abetting
Although closely related to conspiracy, aiding and abetting is a distinct theory for
tort liability. (Navarrete v. Meyer (2015) 237 Cal.App.4th 1276, 1287, fn. 3.)
“ ‘ “Liability may . . . be imposed on one who aids and abets the commission of an
intentional tort if the person (a) knows the other’s conduct constitutes a breach of duty
and gives substantial assistance or encouragement to the other to so act or (b) gives
substantial assistance to the other in accomplishing a tortious result and the person’s own
conduct, separately considered, constitutes a breach of duty to the third person.” ’ ”
(Richard B. LeVine, Inc. v. Higashi (2005) 131 Cal.App.4th 566, 574, quoting Fiol v.
Doellstedt (1996) 50 Cal.App.4th 1318, 1325-1326.) As the court noted in Richard B.
LeVine, “[t]he unifying principle under either theory of recovery, civil conspiracy or
aiding and abetting, is that [the defendant’s] liability depends upon the actual commission
of a tort.” (Richard B. LeVine, at p. 574.)
Here, De Jong’s operative complaint expressly alleged that defendants were liable
for aiding and abetting each other with the knowledge, consent, or ratification of each of
the remaining defendants. As with the conspiracy allegations, the operative complaint
detailed defendants’ action in concert to transfer title from the Beaches to Solario with a
portion of the value of the Escalon property to go to the Bellinos in excess of the sum to
which the Bellinos were entitled. This action in concert was taken without informing
De Jong. These allegations were amplified by De Jong’s pretrial and posttrial briefing.
In his trial briefs, De Jong confirmed his allegations that defendants acted in concert to
deprive him of his lawful interest in the Escalon property. The pleadings were sufficient
to apprise defendants of De Jong’s aiding and abetting theory of liability.
36
VII
Substantial Evidence Challenge to the Findings of Conspiracy and of Aiding and
Abetting
Appellants next argue that insufficient evidence supported the trial court’s findings
that they engaged in conspiracy and in aiding and abetting each other to deprive De Jong
of his interest in the Escalon property. We conclude that the evidence amply supports the
trial court’s findings regarding conspiracy and aiding and abetting.
A.
Substantial Evidence Standard of Review
We review appellants’ challenge to the sufficiency of evidence in support of the
trial court’s factual findings that they engaged in conspiracy and aided and abetted each
other under the substantial evidence standard of review. “Substantial evidence is
evidence that a rational trier of fact could find to be reasonable, credible, and of solid
value. Under the substantial evidence standard of review, we view the evidence in the
light most favorable to the judgment and accept as true all evidence tending to support
the judgment, including all facts that reasonably can be deduced from the evidence, and
must affirm the judgment if an examination of the entire record viewed in this light
discloses substantial evidence to support the judgment.” (Mealy v. B-Mobile, Inc. (2011)
195 Cal.App.4th 1218, 1223.) In assessing whether the record reveals substantial
evidence in support of the judgment, “the appellate court will look only at the evidence
supporting the prevailing party and will disregard the contrary showing; the evidence is
not to be weighed by the appellate court: ‘All of the evidence most favorable to the
respondent must be accepted as true, and that unfavorable discarded as not having
sufficient verity, to be accepted by the trier of fact. If the evidence so viewed is sufficient
as a matter of law, the judgment must be affirmed.’ ” (GHK Associates v. Mayer Group,
Inc. (1990) 224 Cal.App.3d 856, 872, quoting Estate of Teel (1944) 25 Cal.2d 520, 527.)
37
B.
The Conspiracy Regarding De Jong’s Interest in the Escalon Property
Civil conspiracy requires a plaintiff to prove an agreement and action by two or
more persons to commit a tortious act against the plaintiff. (Kidron v. Movie Acquisition
Corp. (1995) 40 Cal.App.4th 1571, 1582.) “ ‘The elements of an action for civil
conspiracy are the formation and operation of the conspiracy and damage resulting to
plaintiff from an act or acts done in furtherance of the common design.’ ” (Doctors’ Co.
v. Superior Court (1989) 49 Cal.3d 39, 44, quoting Mox Inc. v. Woods, supra, 202 Cal. at
pp. 677-678.) Thus, proof of a civil conspiracy requires a plaintiff to prove “that each
member of the conspiracy acted in concert and came to a mutual understanding to
accomplish a common and unlawful plan, and that one or more of them committed an
overt act to further it. ([Hinkle v. City of Clarksburg (4th Cir. 1996) 81 F.3d 416,] 421.)
It is not enough that the conspiring officers knew of an intended wrongful act, they had to
agree—expressly or tacitly—to achieve it. Unless there is such a meeting of the minds,
‘ “the independent acts of two or more wrongdoers do not amount to a conspiracy.” ’
(National Congress P.R. Rights v. City of New York (S.D.N.Y. 1999) 75 F.Supp.2d 154,
168.)” (Choate v. County of Orange (2000) 86 Cal.App.4th 312, 333.)
Civil conspiracies frequently involve secret agreements. (See, e.g., Anderson v.
Thacher (1946) 76 Cal.App.2d 50, 72; Rosenthal v. Gould (1969) 273 Cal.App.2d 239,
244.) Consequently, “[c]onspiracies are typically proved by circumstantial evidence.
(See People v. Bawden (1962) 208 Cal.App.2d 589, 596-597.) ‘[S]ince such
participation, cooperation or unity of action is difficult to prove by direct evidence, it can
be inferred from the nature of the act done, the relation of the parties, the interests of the
alleged conspirators, and other circumstances.’ ” (Rickley v. Goodfriend (2013) 212
Cal.App.4th 1136, 1166, quoting Black v. Sullivan (1975) 48 Cal.App.3d 557, 566.)
38
Substantial evidence supports the trial court’s findings that the Beaches and
Bellinos conspired with Solario to deprive De Jong of his interest in the Escalon property.
The evidence at trial showed the following:
The Beaches “reached out” to Solario to talk about getting “some resolution” on
the debt owed by De Jong. The Beaches also contacted Nicola Bellino to “pull together a
meeting.” The Beaches, Bellinos, and Solario met in January 2011 in the kitchen of the
Escalon property. According to Solario, “the basic discussion was how the Beaches were
going to get paid back for their note.” Nicola Bellino told the Beaches that “we will work
on this. Kim will make good on this. I will help. I will back them if that’s what it is.”
The Beaches responded, “All right. We understand. If you can keep communicating
with us, if you can come up with the money and pay us off the note, then we will be able
to transfer title back to you.”
Most importantly, appellants agreed that Solario “would be placed on the title to
the [Escalon] property.” At trial, George Beach conceded that the Beaches “transferred
that property to [Solario] without any regard for any interest Mr. De Jong might have in
that property.” Thus, the kitchen meeting involved no discussion of protecting De Jong’s
interest in the property. Equally telling, none of the participants in the kitchen meeting
ever informed De Jong of their agreement to transfer title solely to Solario. The
agreement to transfer title to Solario without regard to De Jong constituted a conspiracy
to wrongfully deprive him of his ownership interest in the Escalon property.
Appellants’ actions after the kitchen meeting were consistent with their secret
agreement to transfer title to Solario in derogation of De Jong’s interest in the property.
To this end, the Beaches and Solario met at the title company and sold the Escalon
property to Solario for $94,438.38. The Bellinos, for their part, accepted $150,000 out of
the sale of the Escalon property even though it included a substantial sum to which they
were not entitled. In their agreement and their actions, appellants conspired to deprive
De Jong of his lawful interest in the Escalon property.
39
C.
Aiding and Abetting
For similar reasons, we reject appellants’ substantial evidence challenge to the trial
court’s factual findings that they aided and abetted each other in committing wrongful
acts against De Jong. As we noted above, conspiracy and aiding and abetting are closely
related. (Navarrete v. Meyer, supra, 237 Cal.App.4th at p. 1287, fn. 3.) “California
courts have long held that liability for aiding and abetting depends on proof the defendant
had actual knowledge of the specific primary wrong the defendant substantially assisted.”
(Casey v. U.S. Bank Nat. Assn. (2005) 127 Cal.App.4th 1138, 1145.) Thus, a theory of
liability involving “ ‘ “[a]iding-abetting focuses on whether a defendant knowingly gave
‘substantial assistance’ to someone who performed wrongful conduct . . . .” [Citation.]
[¶] . . . [A]iding and abetting . . . necessarily requires a defendant to reach a conscious
decision to participate in tortious activity for the purpose of assisting another in
performing a wrongful act.’ ” (Id. at p. 1146, quoting Howard v. Superior Court (1992) 2
Cal.App.4th 745, 748-749.) Based on the similarities between conspiracy and aiding and
abetting, much of the same evidence supports both theories of liability.
Substantial evidence supports the trial court’s findings that appellants aided and
abetted each other in depriving De Jong of his interest in the Escalon property.
Appellants met in the kitchen of the Escalon property to discuss how the Beaches would
receive repayment of their loan to De Jong. Rather than including De Jong in the
discussion about the property for which he owned the majority interest, appellants kept
him in the dark. Appellants never told De Jong about the meeting or their agreement to
transfer title solely to Solario. The participants reached their agreement without any
regard for De Jong’s property interest. Contrary to appellants’ assertions on appeal, the
evidence showed that the Beaches and Bellinos agreed that title to the property should
pass solely to Solario even though she had no financial interest in or ownership claim to
40
the Escalon property. In short, the testimony at trial established actual agreement by the
Beaches and Bellinos to a plan to transfer title solely to Solario without any regard for
De Jong’s property interest.
VIII
Punitive Damages
Appellants argue that the trial court’s imposition of punitive damages must be
reversed because the findings that they acted with oppression, fraud, and malice are not
supported by substantial evidence. Appellants further argue that the reduction of
compensatory damages based on their other arguments also requires reduction of punitive
damages to comport with constitutional due process guarantees. We disagree.
A.
Trial Court Findings Regarding Punitive Damages
In its statement of decision, the trial court noted a dozen times that its findings in
support of the award of punitive damages were supported by clear and convincing
evidence. In imposing punitive damages on the Beaches and Bellinos, the trial court
summarized the evidence supporting the imposition of punitive damages as to George
Beach as follows: He breached his fiduciary duty to De Jong, converted De Jong’s
property and conspired with Solario to deprive De Jong of his property. “Particularly
aggravating the reprehensibility of his conduct, Mr. Beach communicated with the other
defendants in secret many times over a long period to agree to and deliberately carry out
the transfer of valuable real property that Mr. Beach held in trust for the benefit of Mr.
De Jong to Kim Solario, without Mr. De Jong’s knowledge or consent, and with utter
disregard for his rights in that property or for the impact that the transfer may have on
Mr. De Jong’s physical or emotional health or well-being.”
The trial court made parallel findings that Susan Beach breached her fiduciary
duty to De Jong, converted his property, and conspired with Solario to deprive him of his
41
property. “Mrs. Beach owed the same duties to Mr. De Jong that her husband did, and
Mrs. Beach participated in the same course of conduct with regard to the disposition of
Mr. De Jong’s property, likewise demonstrating complete disregard for Mr. De Jong’s
rights and for the impact that the transfer of Mr. De Jong’s property to Ms. Solario may
have on Mr. De Jong.”
As to the Bellinos, the trial court found that they “converted Mr. De Jong’s
property, received fraudulent transfers thereof, and conspired with and aided and abetted
George and Susan Beach and Kim Solario in the breach of their fiduciary duties to Mr.
De Jong and in Ms. Solario’s conversion of his property. . . . Particularly aggravating
the reprehensibility of [their] conduct, [the Bellinos were] personally aware of Mr.
De Jong’s interest in the Escalon Property and his claim thereto, but [they] met in secret
with the other defendants to plan and carry out the transfer of that property to [their]
daughter, Kim Solario, which [they] facilitated by providing the money she used to
purchase that property. [The Bellinos] subsequently assisted her in selling the property,
agreeing in advance to receive money that belonged to Mr. De Jong from the sale of that
property, and did so with knowledge or, certainly, with reason to know that Ms. Solario
intended to keep the balance of the proceeds of the Escalon Property and not pay Mr.
De Jong. . . . [The Bellinos’] participation in the aforementioned course of conduct
spanned a long period of time.”
De Jong, the trial court found, was in a vulnerable position “as he did not have
legal control of the property and was unaware of the Defendants’ plan until after it had
been carried out.” The Beaches and the Bellinos “knew or had reason to know of
[De Jong’s] vulnerability and of the risk that Ms. Solario would fail to protect or deliver
Mr. De Jong’s interest in the property to him.” “Considered as a whole,” the trial court
found that the Beaches and Bellinos’ “conduct was highly reprehensible and warrants a
high amount of punitive damages, subject to [their] ability to pay.” (Italics added.)
42
Based on these findings, the trial court imposed punitive damages in the amount of
$100,000 against George and Susan Beach individually and limited to a total of $100,000
collectively. The trial court imposed punitive damages in the amount of $750,000 against
Nicola and Judith Bellino individually and limited to a total of $750,000 collectively.
B.
Substantial Evidence
The requirement of clear and convincing evidence in the trial court to support an
award of punitive damages does not change the standard of review for appellants’
substantial evidence challenge. “As in other cases involving the issue of substantial
evidence, we are bound to ‘consider the evidence in the light most favorable to the
prevailing party, giving him the benefit of every reasonable inference, and resolving
conflicts in support of the judgment.’ (9 Witkin, Cal. Procedure [(4th ed. 1997)] Appeal,
§ 359, p. 408.) But since the [trier of fact’s] findings were subject to a heightened burden
of proof, we must review the record in support of these findings in light of that burden.
In other words, we must inquire whether the record contains ‘substantial evidence to
support a determination by clear and convincing evidence. . . .’ ” (Shade Foods, Inc. v.
Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 891, quoting
Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 1287.)
We begin by noting that appellants’ substantial evidence challenge is focused on
the trial court’s findings that they acted with oppression, fraud, and malice. Appellants
argue that the evidence does not support findings that they acted in a manner that was
despicable and carried on with willful and conscious disregard for De Jong’s property
rights. In support of their argument, they cite evidence showing that – at the time of the
transfer of title to Solario – the Beaches “believed DeJong [sic] and Solario were still a
couple and were still living together.” Thus, they assert that there was no evidence
indicating that Solario would defraud De Jong. Appellants further argue that, based
43
largely on their prior substantial evidence argument, the evidence did not support
findings that they engaged in a conspiracy against De Jong.
We reject appellants’ substantial evidence challenge. The possibility that De Jong
and Solario were still in a dating relationship did not excuse the fiduciary duty that the
Beaches owed as trustees to De Jong. As we discussed above, in part I. C., the Beaches
owed a fiduciary duty to De Jong that arose out of the resulting trust for which De Jong
was the beneficiary. Moreover, the evidence at trial showed that the Beaches did not rely
on De Jong’s relationship with Solario as a way of safeguarding De Jong’s interests.
George Beach’s testimony established that the Beaches acted without any regard for their
duty to De Jong. The correspondence introduced at trial showed that the Beaches had
grown impatient with De Jong over the lack of payment on their loan. In arranging the
kitchen meeting, the Beaches reached out to Nicola Bellino even though the Bellinos
were not parties to the loan to De Jong. During the kitchen meeting, the Beaches agreed
to convey title to Solario alone.
It is telling that none of the participants in the kitchen meeting ever informed
De Jong about their meeting or plan to transfer title to Solario. Instead, appellants and
Solario secretly carried out their plan against De Jong’s interest. The Beaches transferred
title to Solario for only a fraction of the Escalon property’s market value. For their part,
the Bellinos facilitated the wrongful transfer by agreeing to the plan to transfer title to
Solario and loaning Solario money so that she could receive title from the Beaches for far
less than the fair market value of the property. The Bellinos engaged in this conduct even
though they were aware of De Jong’s interest in the Escalon property from the beginning
of his efforts to purchase the residence. The Bellinos then received payment out of the
sale of the Escalon property even though they did not own any percentage of the
property. In short, substantial evidence at trial showed that the wrongful transfer of title
to Solario was the result of cooperation between the Beaches and Bellinos that they
undertook despite being well aware of De Jong’s property rights.
44
C.
Reduction in Punitive Damages Based on Reduction of Compensatory Damages
Appellants contend we must reduce the award of punitive damages as a matter of
due process because of the reduction of compensatory damages for which they argue in
other parts of their briefs. We have rejected appellants’ other assertions of error
regarding compensatory damages. Consequently, we also reject their contention that we
must reduce the punitive damages award by an amount commensurate to the reduction in
compensatory damages.
We are also not persuaded by the appellants’ argument that the imposed punitive
damages exceed constitutional limits. Regarding the constitutional limits of punitive
damages, the California Supreme Court has explained that “the due process clause of the
Fourteenth Amendment to the United States Constitution places limits on state courts’
awards of punitive damages, limits appellate courts are required to enforce in their review
of jury awards.” (Simon v. San Paolo U.S. Holding Co., Inc. (2005) 35 Cal.4th 1159,
1171 (Simon).) Thus, “[t]he imposition of ‘grossly excessive or arbitrary’ awards is
constitutionally prohibited, for due process entitles a tortfeasor to ‘ “fair notice not only
of the conduct that will subject him to punishment, but also of the severity of the penalty
that a State may impose.” ’ ” (Ibid.; quoting State Farm Mut. Auto. Ins. Co. v. Campbell
(2003) 538 U.S. 408, 416-417 [155 L.Ed.2d 585] (State Farm).)
The constitutional limit on punitive damages is not delineated by exact multiples
or percentages of compensatory damages. Instead, there are no “rigid numerical limits”
imposed on punitive damages by federal constitutional due process guarantees. (Simon,
supra, 35 Cal.4th at p. 1171.) Courts employ “a three-factor weighing analysis looking to
the nature and effects of the defendant’s tortious conduct and the state’s treatment of
comparable conduct in other contexts. As articulated in State Farm, the constitutional
‘guideposts’ for reviewing courts are: ‘(1) the degree of reprehensibility of the
45
defendant’s misconduct; (2) the disparity between the actual or potential harm suffered
by the plaintiff and the punitive damages award; and (3) the difference between the
punitive damages awarded by the jury and the civil penalties authorized or imposed in
comparable cases.’ ” (Simon, supra, 35 Cal.4th at pp. 1171-1172, quoting State Farm,
supra, 538 U.S. at p. 418.)
In view of the lack of rigid mathematical formulas for the constitutional limits of
punitive damage awards, “there is a wide range of reasonableness for punitive damages
reflective of the fact finder’s human response to the evidence presented. (Devlin v.
Kearny Mesa AMC/Jeep/Renault, Inc. [(1984)] 155 Cal.App.3d [381, 390,] 391.) On
appeal, high ratios of punitive damages to compensatory damages, as much as 2,000 to 1,
have been affirmed.” (McGee v. Tucoemas Federal Credit Union (2007) 153
Cal.App.4th 1351, 1362; accord Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc., supra,
155 Cal.App.3d at pp. 391-392 [affirming a punitive damages award that was 27 times
the award of compensatory damages].)
Here, the trial court determined that the Beaches and Bellinos were jointly liable
for $460,663.03 in compensatory damages. In addition, the Beaches were liable for
$100,000 in punitive damages and the Bellinos were liable for $750,000 in punitive
damages. The Beaches’ punitive damage liability represents less than a quarter of the
compensatory damage award. Punitive damages as a percentage of the Beaches’ liability
for compensatory damages do not violate their constitutional due process rights. As the
trial court found, the Beaches acted “in secret many times over a long period” in order to
“deliberately carry out” a plan to deprive De Jong of his property rights. Despite their
fiduciary duty to De Jong, they acted “with utter disregard” for his property rights and his
physical and emotional well-being. For their conduct, which the trial court found to be
despicable, the amount of punitive damages was not excessive.
We also conclude that the punitive damages imposed on the Bellinos was not
excessive. As with the Beaches, the trial court expressly found that the Bellinos’ conduct
46
was despicable. With the additional finding that the Bellinos engaged in highly
reprehensive conduct, the trial court imposed punitive damages of slightly more than one
and a half times the amount of compensatory damages. The finding of reprehensibility is
based on findings that the Bellinos were actually aware of De Jong’s property interest in
the Escalon property when they secretly conspired with the Beaches and Solario to
transfer ownership solely to the Bellinos’ daughter. The Bellinos’ participating in the
conspiracy against De Jong’s interest “spanned a long period of time.” Their conduct
also occurred despite the fact that they “aware of Mr. De Jong’s vulnerability and
conspired with and aided and abetted Ms. Solario in exploiting it.” Defendants conspired
against De Jong during the time that his father was dying of cancer. In light of the
circumstances and express findings of despicable conduct, the trial court’s imposition of
punitive damages did not exceed constitutional limits.
IX
Double Recovery
Appellants contend the trial court erred in awarding De Jong “double recovery” by
ordering appellants to pay both prejudgment interest and capital appreciation on the
subsequent purchase of the Ripon property by Solario. Solario used the proceeds from
the sale of the Escalon property to buy the Ripon property for the sales price of $359,000
plus $2,163.40 in closing costs. Appellants argue that De Jong was erroneously awarded
prejudgment interest in addition to being allowed to keep the appreciation in the value of
the Ripon property. The argument is meritorious.
A.
Trial Court Award of Interest and Capital Appreciation
The trial court found “that Mr. De Jong is the sole equitable and beneficial owner”
of the Ripon property. Thus, the trial court determined that Solario held nominal title to
the Ripon property under a resulting trust in favor of De Jong. The trial court ordered
47
Solario to convey possession of the property within 30 days of the judgment. The trial
court gave appellants and Solario “a credit of $359,000” for the value of the Ripon
property, “credited as of May 30, 2017.” The trial court also ordered appellants and
Solario jointly to pay prejudgment interest from July 28, 2014, to the date of entry of
judgment at the rate of 7 percent. Appellants timely objected to the inclusion of both
prejudgment interest and the appreciation of the Ripon property in responding to the
proposed statement of decision and proposed judgment. Judgment including both was
entered on February 14, 2018.
B.
Compensation for Loss of Use
A trial court may award prejudgment interest in order to make an injured party
whole. “Prejudgment interest is awarded to compensate a party for the loss of the use of
his or her property.” (Bullis v. Security Pac. Nat’l Bank (1978) 21 Cal.3d 801, 815
(Bullis).) In Bullis, for example, the trial court properly awarded prejudgment interest
where plaintiff “was deprived of the use of a quarter of a million dollars for several years
due to [defendant’s] negligence.” (Ibid.) Thus, prejudgment interest may be awarded to
ensure that the injured party receives full compensation. (Nordahl v. Department of Real
Estate (1975) 48 Cal.App.3d 657, 665)
A trial court may award compensation in an alternate form. For example, the trial
court may award the injured party all of the increase of the value of the wrongfully
deprived property during the time that defendant exercised dominion over it. (Heckmann
v. Ahmanson (1985) 168 Cal.App.3d 119.) In Heckmann, shareholders in Walt Disney
Productions paid $325 million to the Steinberg Group – which threatened a hostile
takeover. (Id. at p. 123.) The Disney shareholders established that the Steinberg group
wrongfully profited on the shareholders’ payment. (Ibid.) The Heckmann court held that
the trial court had discretion to award the ill-gotten profit to the shareholders and
48
explained that “under a constructive trust upon money, the plaintiff is entitled to trace the
fund to its ultimate product or profit. [Citation.] By the time plaintiff obtains a final
judgment, the original fund may have grown far greater than the legal rate of interest
would recognize.” (Id. at p. 135.)
Whatever form of compensation that the trial court awards, however, a party may
not receive double compensation for the same injury. Indeed, “double recovery is
antithetical to compensatory damages.” (Fuller v. Capitol Sky Park (1975) 46
Cal.App.3d 727, 732.) We review claims that a trial court has erred in awarding double
compensation for abuse of discretion. (Cf. Bullis, supra, 21 Cal.3d at pp. 814-815;
Nelson v. United Technologies (1999) 74 Cal.App.4th 597, 617.)
C.
Redundant Compensation for Loss of Use of Property
The trial court erred in awarding De Jong prejudgment interest in addition to
capping the value of the Ripon property in a manner that also awarded the property’s
appreciation to De Jong. Prejudgment interest compensated De Jong for the loss of use
of his economic interest in the Escalon property caused by appellants’ conspiracy.
Because De Jong received compensation for his loss of use, he was not also entitled to
capital appreciation of the Ripon property. Receipt of both types of compensation would
have awarded redundant damages for the same injury. Because De Jong was not entitled
to redundant compensation for his loss of use, either the prejudgment interest or the
appreciation on the Ripon property must be subtracted from his award.
The question of adequate compensation under the circumstances of the case
ordinarily presents a question that the trier of fact is uniquely suited to address. Although
the trial court determined that De Jong was entitled to prejudgment interest, it did not
calculate the amount of that interest. Appellants’ objection on grounds of double
recovery was timely, but made at a time when they did not have the opportunity to
49
introduce evidence relating to the value of the Ripon property. Accordingly, we remand
the matter to the trial court for the limited purpose of determining the correct amount of
compensation to which De Jong is entitled for his loss of use of his property. (Sanchez v.
Brooke (2012) 204 Cal.App.4th 126, 142 [remand appropriate to provide trial court with
opportunity to determine correct compensation amount].)
D.
Costs of Suit
Appellants assert that if we reverse the judgment in any respect that we must also
reverse the trial court’s award of costs to De Jong. We disagree.
In asserting that the award of costs must be reversed, appellants rely on Poseidon
Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106. In
Poseidon, a reversal of a judgment of dismissal meant that the procedural posture of the
case was too early to determine who might eventually turn out to be the prevailing party
on the revived claims. (Id. at p. 1120.) The same is not true in this case. Our limited
remand for purposes of determining the correct amount of compensation for loss of use of
De Jong’s property leaves intact all of the substantial parts of the judgment regarding
De Jong’s causes of action against appellants. De Jong remains the prevailing party on
the scope of damages arising out of appellants’ conspiracy to deprive him of his interest
in the Escalon property as well as the punitive damages that he secured from the trial
court. De Jong’s continuing status as prevailing party does not warrant vacating the
award of costs for a reversal and remand of a minor issue in the judgment.4
4 Our conclusion that appellants’ meritorious argument regarding double recovery
of compensation involving prejudgment interest and capital appreciation does not
foreclose appellants’ separate challenge to costs-of-proof. Thus, we proceed to consider
appellants’ argument regarding the award of costs-of-proof to De Jong.
50
APPEAL IN C085462
Costs-of-proof and Principles of Review
In case No. C085462, appellants challenge the trial court’s award of costs-of-proof
to De Jong. The trial court awarded costs-of-proof under section 2033.420. In pertinent
part, section 2033.420 provides: “(a) If a party fails to admit the genuineness of any
document or the truth of any matter when requested to do so under this chapter, and if the
party requesting that admission thereafter proves the genuineness of that document or the
truth of that matter, the party requesting the admission may move the court for an order
requiring the party to whom the request was directed to pay the reasonable expenses
incurred in making that proof, including reasonable attorney’s fees. [¶] (b) The court
shall make this order unless it finds any of the following: [¶] (1) An objection to the
request was sustained or a response to it was waived under Section 2033.290. [¶] (2)
The admission sought was of no substantial importance. [¶] (3) The party failing to
make the admission had reasonable ground to believe that that party would prevail on the
matter. [¶] (4) There was other good reason for the failure to admit.” (Italics added.)
Requests for admission are intended to expedite or shorten trials. (City of
Glendale v. Marcus Cable Associates, LLC (2015) 235 Cal.App.4th 344, 353.) “Requests
for admission are not restricted to facts or documents, but apply to conclusions, opinions,
and even legal questions. (See 2 Witkin, [Cal. Evidence (5th ed. 2012) Discovery,] § 174
at p. 1164; Burke v. Superior Court of Sacramento County (1969) 71 Cal.2d 276, 282.)
Thus, requests for admission serve to narrow discovery, eliminate undisputed issues, and
shift the cost of proving certain matters. As such, the requests for admission mechanism
is not a means by which a party obtains additional information, but rather a dispute
resolution device that eliminates the time and expense of formal proof at trial.” (Id. at
pp. 353-354.)
51
Background
Prior to trial, De Jong served requests for admissions on appellants. The pertinent
requests, along with appellants’ responses, are as follows:
George Beach – Request Number 3
De Jong’s request for admission number 3 to George Beach was: “Admit that at
the time that Plaintiff Craig De Jong paid $340,500.00 to George Beach, George Beach
understood that that money was to be used for the purchase of the real property located at
21335 E. River Road, Escalon, California.” To this request, George Beach responded:
“Objected to as overbroad, vague, ambiguous, argumentative, compound, calling for
speculation, and containing conjunctive and/or disjunctive requests. Without waiving
said objections and subject to them, this Defendant responds as follows: Defendant
denies that Craig DeJong [sic] paid him any monies. Defendant admits that the $85,000
contributed as a loan was to be used to purchase the real property.”
The trial court found that the Beaches purchased the Escalon property “largely
with money paid by Mr. De Jong” and that “Mr. De Jong contributed his $340,500 to the
purchase price of the Escalon Property by cashier’s check payable to George Beach.”
Based on his contribution, De Jong provided 80.02 percent of the purchase money. The
trial court further found that the Beaches “understood that Mr. De Jong had not gifted
them the $340,500, but that they held title to that property for the benefit of Mr.
De Jong.”
George Beach – Request Number 4
De Jong’s request for admission number 4 to George Beach was: “Admit that at
the time that Plaintiff Craig De Jong paid $340,500.00 to George Beach, George Beach
had no knowledge of an intent on the part of Craig De Jong to make a gift of that money
to anyone.” To this request, George Beach responded: “Objected to as overbroad, vague,
ambiguous, argumentative, compound, calling for speculation and containing conjunctive
52
and/or disjunctive requests. Without waiving said objections and subject to them, this
Defendant responds as follows: Defendant denies that Craig DeJong [sic] paid him any
monies. Regarding the remainder of the request, Defendant lacks sufficient information
or knowledge to admit or deny this request and on that basis, deny.”
The trial court found that De Jong paid $340,500 to George Beach with which the
Beaches purchased the Escalon property. The Beaches understood they held title for
De Jong. The trial court expressly found that De Jong did not intend to gift his interest in
the Escalon property to anyone.
George Beach – Request Number 5
De Jong’s request for admission number 5 to the Beaches was: “Admit that at the
time that Plaintiff Craig De Jong paid $340,500.00 to George Beach, George Beach had
no knowledge of an intent on the part of Craig De Jong to make a loan of that money to
anyone.” To this request, George Beach responded: “Objected to as overbroad, vague,
ambiguous, argumentative, compound, calling for speculation and containing conjunctive
and/or disjunctive requests. Without waiving said objections and subject to them, this
Defendant responds as follows: Defendant denies that Craig DeJong [sic] paid him any
monies. Regarding the remainder of the request, Defendant lacks sufficient information
or knowledge to admit or deny this request and on that basis, deny.”
The trial court found that De Jong contributed $345,500 of the purchase money for
the purchase of the Escalon property. As a consequence, De Jong had an 80.02 percent
interest in the Escalon property as a percentage of his contribution toward the purchase
price.
Beaches – Request Number 8
De Jong’s request for admission number 8 to the Beaches was: “Admit that at the
time that George Beach and Susan Beach acquired the real property located at 21335 E.
River Road, Escalon, California, they understood Craig De Jong to be a co-owner of that
53
property with them.” George Beach responded: “Objected to as overbroad, vague,
ambiguous, argumentative, compound, calling for speculation, and containing
conjunctive and/or disjunctive requests. In addition, this request is violative of the
marital privilege contained in Evidence Code Section 970 et seq. Without waiving said
objections, this Defendant responds as follows: Deny as to Defendant George Beach.”
Susan Beach responded in the same manner, except that her concluding sentence read:
“Deny as to Defendant Susan Beach.”
The trial court found that the Beaches understood they held title for De Jong’s
benefit and that he had an ownership interest commensurate with his contribution to the
purchase price.
Beaches – Request Numbers 14 and 15
De Jong’s request for admission numbers 14 and 15 to the Beaches was: “Admit
that George Beach and Susan Beach transferred the real property located at 21335 E.
River Road, Escalon, California, to Kimberly Solario for less than fair market value” and
“Admit that the fair market value of the real property located at 21335 E. River Road,
Escalon, California in April 2011 was not less than $445,000.00.” To this request, the
Beaches responded: “Objected to as overbroad, vague, ambiguous, argumentative,
compound, calling for speculation, and containing conjunctive and/or disjunctive
requests. In addition, this request is violative of the marital privilege contained in
Evidence Code Section 970 et seq. Finally, this request is objected to as seeking expert
opinion. Without waiving said objections and subject to them, this Defendant responds
as follows: This Defendant lacks sufficient information or knowledge to admit or deny
this request and on that basis, deny.”
The trial court found that the fair market value of the property was $445,000 at the
time of transfer in April 2011.
54
Beaches – Request Number 16
De Jong’s request for admission number 16 to the Beaches was: “Admit that
Craig De Jong did not consent to the transfer of the real property located at 21335 E.
River Road, Escalon, California from George Beach and Susan Beach to Kimberly
Solario.” To this request, the Beaches responded: “Objected to as overbroad, vague,
ambiguous, argumentative, compound, calling for speculation, and containing
conjunctive and/or disjunctive requests. In addition, this request is violative of the
marital privilege contained in Evidence Code Section 970 et seq. Without waiving said
objections and subject to them, this Defendant responds as follows: Deny.”
The trial court found that De Jong did not know of or consent to the transfer of
title to Solario.
Beaches – Request Number 17
De Jong’s request for admission number 17 to the Beaches was: “Admit that
Craig De Jong . . . has not forgiven or excused Mr. or Mrs. Beach from making any
payment to him in connection with the sale or transfer of the Escalon Property to
Kimberly Solario.” To this request, the Beaches responded: “Objected to as overbroad,
vague, ambiguous, argumentative, compound, calling for speculation, and containing
conjunctive and/or disjunctive requests. In addition, this request is violative of the
marital privilege contained in Evidence Code Section 970 et seq. Finally, this request is
objected to as calling for a legal conclusion or analysis. Without waiving said objections,
this Defendant responds as follows: Deny.”
The trial court found that De Jong did not forgive or excuse repayment to him of
his interest in the Escalon property.
Bellinos – Request Number 2
De Jong’s request for admission number 2 asked both Nicola and Judith Bellino:
“Admit that you knew of Craig De Jong’s contribution to the purchase price of the real
55
property located at 21335 E. River Road, Escalon, California, at or about the time of
closing of the sale of that property to George Beach and Susan Beach in August 2009.”
To this request, Nicola and Judith Bellino responded: “Objected to as overbroad, vague,
ambiguous, argumentative, compound, calling for speculation, and containing
conjunctive and/or disjunctive requests. Without waiving said objections and subject to
them, this Defendant responds as follows: See response to request no. 1.” In response to
request for admission number 1, both Nicola and Judith responded: “Admit that Plaintiff
contributed approximately $340,500 towards the purchase of the described property.”
In its statement of decision, the trial court found that Nicola and Judith Bellino
actually knew about De Jong’s interest in the Escalon property, and that they had been
involved from the start in the process by which De Jong purchased the property.
Bellinos – Request Number 4
De Jong’s request for admission number 4 asked both Nicola and Judith Bellino:
“Admit that you requested that George Beach and Susan Beach contribute the balance of
the approximately $425,000.00 purchase price of the real property located at 21335 E.
River Road, Escalon, California, above Craig De Jong’s approximately $340,500.00
contribution toward that purchase price.” To this request, Nicola and Judith Bellino
responded: “Objected to as overbroad, vague, ambiguous, argumentative, compound,
calling for speculation, and containing conjunctive and/or disjunctive requests. Without
waiving said objections and subject to them, this Defendant responds as follows: Admit
that George Beach and/or Susan Beach contributed approximately $85,000.”
The trial court found that Nicola Bellino helped De Jong by reaching out to the
Beaches, who agreed to contribute $85,000.00 to complete the purchase.
Bellinos – Request Number 5
De Jong’s request for admission number 5 asked both Nicola and Judith Bellino:
“Admit that George Beach and Susan Beach purchased the real property located at 21335
56
E. River Road, Escalon, California, in August 2009 at your request.” To this request,
Nicola and Judith Bellino responded: “Objected to as overbroad, vague, ambiguous,
argumentative, compound, calling for speculation, and containing conjunctive and/or
disjunctive requests. Without waiving said objections and subject to them, this
Defendant responds as follows: See response to request no. 4.”
The trial court found that Nicola Bellino “reached out” to the Beaches, who then
contributed $85,000 to complete the purchase of the Escalon Property. The Beaches
executed an addendum to add themselves as cobuyers with De Jong. Nicola Bellino also
communicated De Jong’s desire not to have his name appear on title to the Beaches. The
Beaches, in turn, agreed to hold title for him and executed an addendum to that effect.
Bellinos – Request Number 6
De Jong’s request for admission number 6 asked the Bellinos: “Admit that to the
best of your knowledge, Craig De Jong’s contribution to the purchase price of the real
property located at 21335 E. River Road, Escalon, California in 2009 was not a gift.” To
this, Nicola and Judith Bellino responded: “Objected to as overbroad, vague, ambiguous,
argumentative, compound, calling for speculation, and containing conjunctive and/or
disjunctive requests. Without waiving said objections and subject to them, this
Defendant responds as follows: Deny.”
As we have recounted, the trial court found that De Jong had not gifted his interest
in the Escalon property to anyone.
Bellinos – Request Number 8
De Jong’s request for admission number 8 asked Nicola and Judith Bellino:
“Admit that Craig De Jong acquired an equitable interest in the real property located at
21335 E. River Road, Escalon, California, by virtue of his contribution to George Beach
of approximately eighty percent of the purchase price of that property in August 2009.”
To this request, Nicola and Judith Bellino responded: “Objected to as overbroad, vague,
57
ambiguous, argumentative, compound, calling for speculation, and containing
conjunctive and/or disjunctive requests. Without waiving said objections and subject to
them, this Defendant responds as follows: Deny.”
The trial court found that De Jong had an ownership interest of 80.02 percent in
the Escalon property.
Bellinos – Request Number 9
De Jong’s request for admission number 9 asked Nicola and Judith Bellino:
“Admit that George Beach and Susan Beach transferred the real property located at
21335 E. River Road, Escalon, California to Kimberly Solario at your request.” To this
request, Nicola and Judith Bellino responded: “Objected to as overbroad, vague,
ambiguous, argumentative, compound, calling for speculation, and containing
conjunctive and/or disjunctive requests. Without waiving said objections and subject to
them, this Defendant responds as follows: It was agreed by all parties, including
Plaintiff, that title to the real property would be transferred to Kimberly Solario upon
repayment of the $85,000 contributed by George and/or Susan Beach.”
The trial court found that the Bellinos, the Beaches, and Solario collectively
conspired to sell the Escalon Property without De Jong’s knowledge, and the Bellinos
provided Solario with the money to enable the transfer.
Bellinos – Request Number 15
De Jong’s request for admission number 15 asked Nicola and Judith Bellino:
“Admit that you had no unrecorded or equitable lien on the real property located at 21335
E. River Road, Escalon, California at the time of its sale in July 2014.” To this request,
Nicola and Judith Bellino responded: “Objected to as overbroad, vague, ambiguous,
argumentative, compound, calling for speculation, and containing conjunctive and/or
disjunctive requests. In addition, this request calls for a legal conclusion. Without
waiving said objections and subject to them, this Defendant responds as follows: See
response to request no. 10.” The Bellinos’ response to request for admission number 10
58
was: “Admit that George Beach and Susan Beach were repaid the $85,000, plus interest,
that they had loaned/contributed to the purchase of the specified property.”
The trial court found that the Bellinos had no lien or other right to payment from
the proceeds of the sale of the Escalon Property. The trial court further found that to the
extent Solario owed them any debt, it was unsecured.
Bellinos – Request Number 19
De Jong’s request for admission number 19 asked Nicola and Judith Bellino:
“Admit that the transfer to you of proceeds of the July 2014 sale of the real property
located at 21335 E. River Road, Escalon, California, was intended to shield that money
from Craig De Jong.” To this request, Nicola and Judith Bellino responded: “Objected
to as overbroad, vague, ambiguous, argumentative, compound, calling for speculation,
and containing conjunctive and/or disjunctive requests. Without waiving said objections
and subject to them, this Defendant responds as follows: Deny.”
The trial court found that the $150,000 transfer out of escrow for the Escalon
property was made to the Bellinos in derogation of De Jong’s property rights.
Order Granting the Motion for Costs-of-proof
After entry of judgment, De Jong moved for costs-of-proof. Appellants opposed
the motion. The trial court found good cause to award costs-of-proof on the following
grounds:
“1. Mr. De Jong propounded requests for admission on the Defendants: Kim
Solario, George Beach, Susan Beach, Nicola Bellino, and Judith Bellino.
“2. Kim Solario failed to admit Mr. De Jong’s Requests for Admission nos. 2-5,
9-25, 28-30, 35-36, and 41 propounded by Mr. De Jong.
“3. George Beach failed to admit Mr. De Jong’s Requests for Admission nos. 3-6,
8, and 14-17 propounded by Mr. De Jong.
59
“4. Susan Beach failed to admit Mr. De Jong’s Requests for Admission nos. 8 and
14-17 propounded by Mr. De Jong.
“5. Nicola Bellino failed to admit Mr. De Jong's Requests for Admission nos. 2,
4-6, 8-9, 15, and 19 propounded by Mr. De Jong.
“6. Judith Bellino failed to admit Mr. De Jong’s Requests for Admission nos. 2,
4-6, 8-9, 15, and 19 propounded by Mr. De Jong.
“7. At trial, Mr. De Jong proved the truth of the matters that Mr. De Jong
requested that the Defendants admit in the above-referenced requests for admission.
“8. The grounds for relief from an award of expenses under Code of Civil
Procedure section 2033.420[, subdivision ](b) do not exist as to the Defendants’ failure to
admit the above-referenced requests for admission.
“9. Mr. De Jong reasonably incurred the attorney’s fees sought in his motion as
expenses of making proof of the matters that the Defendants failed to admit.” (Italics
omitted.)
While the trial court determined that defendants were jointly liable for De Jong’s
attorney fees, it capped their respective individual liabilities. The order limited attorney
fees as to Solario to $183,182, as to George Beach to $156,966, as to Susan Beach to
$155,337.50, as to Nicola Bellino to $157,966.50, and as to Judith Bellino to
$157,966.50. The trial court ordered that De Jong’s recovery of costs-of-proof under
section 2033.420 not exceed a total of $189,532.50 from all defendants.
X
Costs-of-proof Award in the Absence of Motion to Compel
Appellants argue that De Jong is not entitled to receive costs-of-proof because he
did not move to compel further responses to his requests for admission. We agree in part.
60
A.
Scope of Review
In the trial court, appellants opposed De Jong’s motion for costs-of-proof. One of
their grounds of opposition related to De Jong’s failure to move to compel further
responses. On this point, appellants argued: “Here, Mr. and Mrs. Bellino’s responses to
[requests for admission] Nos. 2, 4, 5, 9 and 15 contain no denials, whatsoever. To the
contrary, their responses to these [requests for admission] consist of admissions that
[De Jong] now contends evaded important aspects of the Requests and, effectively, left
the Requests unanswered. However since [De Jong] never moved to compel further
responses to these [requests for admission] before his Motion, he waived the right to seek
costs in proving the truth of these matters. [¶] Similarly, Mr. Beach’s response to
Request No. 3 contains denials in part. Mr. Beach’s partial-denial does not address any
central aspect of the request and is, therefore, a denial in mere form rather than substance.
Instead, this denial merely relates the request’s assumption: that [De Jong] paid money to
Mr. Beach in the first place. In a similar vein, Mr. Beach’s partial-admission is no denial
at all.”
B.
Necessity of a Motion to Compel Further Responses
We begin our analysis by noting that, in the trial court, appellants asserted the
waiver of costs-of-proof for lack of a motion to compel only as to the Bellinos’ responses
to requests for admission numbers 2, 4, 5, 9, and 15, and George Beach’s responses to
request for admission number 3. Having limited their argument in the trial court
regarding the lack of motion to compel to these six requests for admission, we deem the
issue preserved only as to these six requests. “ ‘ “Appellate courts are loath to reverse a
judgment on grounds that the opposing party did not have an opportunity to argue and the
trial court did not have an opportunity to consider. [Citation.] In our adversarial system,
61
each party has the obligation to raise any issue or infirmity that might subject the ensuing
judgment to attack. . . .” ’ ” (Premier Medical Management Systems, Inc. v. California
Ins. Guarantee Assn. (2008) 163 Cal.App.4th 550, 564, quoting Kashmiri v. Regents of
University of California (2007) 156 Cal.App.4th 809, 830.) And, as to these six requests,
we conclude that the trial court erred in awarding costs-of-proof as to four requests posed
to the Bellinos.
In considering whether section 2033.430 requires a motion to compel in order to
allow an award of costs-of-proof, we apply the independent standard of review because
questions of statutory interpretation are reviewed without deference to the trial court.
(Webster v. Appellate Division of Superior Court (2020) 51 Cal.App.5th 676, 679.) As
the California Supreme Court has explained, “As in any case involving statutory
interpretation, our fundamental task here is to determine the Legislature’s intent so as to
effectuate the law’s purpose. (White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 572.) We
begin by examining the statute’s words, giving them a plain and commonsense meaning.
(Garcia v. McCutchen (1997) 16 Cal.4th 469, 476.) We do not, however, consider the
statutory language ‘in isolation.’ (Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735.)
Rather, we look to ‘the entire substance of the statute . . . in order to determine the scope
and purpose of the provision . . . . [Citation.]’ (West Pico Furniture Co. v. Pacific
Finance Loans (1970) 2 Cal.3d 594, 608.) That is, we construe the words in question
‘ “in context, keeping in mind the nature and obvious purpose of the statute . . . .”
[Citation.]’ (Ibid.)” (People v. Murphy (2001) 25 Cal.4th 136, 142.)
Section 2033.420 provides for costs-of-proof when “a party fails to admit . . . the
truth of any matter when requested to do so . . . .” Subdivision (b)(1) of section 2033.420
provides that “[t]he court shall make this order [awarding costs-of-proof] unless it finds
. . . [¶] . . . [a]n objection to the request was sustained or a response to it was waived
under Section 2033.290.” In turn, section 2033.290, subdivision (a), provides: “On
receipt of a response to requests for admissions, the party requesting admissions may
62
move for an order compelling a further response if that party deems that either or both of
the following apply: [¶] (1) An answer to a particular request is evasive or incomplete.
[¶] (2) An objection to a particular request is without merit or too general.” (Italics
added.) Subdivision (c) of section 2033.290 imposes a deadline on motions to compel as
follows: “Unless notice of this motion is given within 45 days of the service of the
verified response, or any supplemental verified response, or any specific later date to
which the requesting party and the responding party have agreed in writing, the
requesting party waives any right to compel further response to the requests for
admission.” (Italics added.)
Under this statutory scheme, the costs-of-proof statute (§ 2033.420, subd. (b)(1))
refers to the 45-day deadline in subdivision (c) of section 2033.290. By incorporating the
45-day deadline of subdivision (c), section 2033.420 signals that an objection based on an
“evasive or incomplete” (§ 2033.290, subd. (a)(1)) answer requires a motion to compel
further responses. The deadline to bring the motion to compel further responses imposes
both the obligation and timeline that the requesting party must follow. Therefore,
De Jong was required to bring a motion to compel within the 45-day statutory deadline to
preserve the issue of whether the answers given were evasive or incomplete.
De Jong asserts that he had the prerogative to elect either to move to compel or to
litigate through trial and then seek costs-of-proof. In support of this assertion, De Jong
relies on Zorro Inv. Co. v. Great Pacific Securities Corp. (1977) 69 Cal.App.3d 907.
Zorro, however, is inapposite because it did not involve a challenge to an award of costs-
of-proof. Instead, Zorro involved the question of whether a propounding party was
required to file a motion to compel before requests were deemed admitted in the absence
of a response. (Id. at p. 913.) Moreover, the Zorro court relied on a now superseded set
of statutes governing requests for admissions and sanctions. (Id. at pp. 918-919 [former
§§ 2033 & 2034].) Thus, we are not persuaded that Zorro provides authority for
excusing a motion to compel before securing costs-of-proof under the current statute.
63
For similar reasons, there is only limited utility in appellants’ cited cases of
Wimberly v. Derby Cycle Corp. (1997) 56 Cal.App.4th 618 (Wimberly), and American
Federation of State, County & Municipal Employees v. Metropolitan Water Dist. (2005)
126 Cal.App.4th 247 (American Federation). Wimberly and American Federation also
relied on a superseded costs-of-proof statute.
In Wimberly, the trial court denied plaintiff’s motion for costs-of-proof against
Derby Cycle Corporation (Derby), the manufacturer of a mountain bike fork assembly.
(Wimberly, supra, 56 Cal.App.4th at p. 623.) Before trial, Derby initially denied all
requests for admission. (Id. at p. 635.) However, Derby later amended its responses to
admit that a microscopic crack was introduced during the welding process but denied that
the improper welding caused plaintiff’s injuries. (Id. at p. 636.) As to the request for
admission that the defect caused plaintiff to require future medical care, Derby
responded: “ ‘Objection. Defendant cannot respond to this question as phrased. The
request is vague and ambiguous as to what is “claimed” by the plaintiff as well as to the
extent of medical care the plaintiff seeks. To the extent defendant can respond, defendant
denies that the extent of future medical care, including replacement of prosthetic implants
is reasonable and necessary.’ ” (Ibid., italics added.) A week before trial, Derby again
amended its response to deny that there was a manufacturing defect in the product.
(Ibid.)
During the trial in Wimberly, Derby did not introduce any evidence regarding the
manufacturing defect, causation, or future medical care. (Wimberly, supra, 56
Cal.App.4th at p. 636.) Even so, the trial court denied plaintiff’s motion for costs-of-
proof on grounds that Derby had a reasonable basis for denying the defect and causation
and that plaintiff had not made a motion to compel regarding the request for admission
relating to future medical costs. (Ibid.) The Wimberly court reversed the denial of costs
regarding defect and causation on grounds that the trial court had erred in finding a
reasonable basis for the denials. (Ibid.) However, the Wimberly court concluded that
64
plaintiff was “not entitled to costs associated with the medical care issue, because he
made no motion to compel a further response after Derby objected to the request for
admission.” (Ibid.) Wimberly cited former section 2033, subdivision (l). At the time,
subdivision (l) of former section 2033 provided in pertinent part:
“(l) [Orders compelling further response; failure to obey] If the party requesting
admissions, on receipt of a response to the requests, deems that (1) an answer to a
particular request is evasive or incomplete, or (2) an objection to a particular request is
without merit or too general, that party may move for an order compelling a further
response. The motion shall be accompanied by a declaration stating facts showing a
reasonable and good faith attempt at an informal resolution of each issue presented by the
motion.” (Stats. 1991, ch. 1090, § 13, p. 5088, italics added.)
Without analysis, the Wimberly court affirmed the trial court’s determination that
the propounding party was not entitled to costs-of-proof in the absence of a motion to
compel. (Wimberly, supra, 56 Cal.App.4th at pp. 636-637.) In the absence of any
analysis and because it relied on a superseded statute, we discern no guidance from
Wimberly for our present analysis.
As in Wimberly, it was the former costs-of-proof statute that was at issue in
American Federation, supra, 126 Cal.App.4th 247. The American Federation court
distinguished Wimberly to affirm an award of costs-of-proof that had been made without
a prior motion to compel. (American Federation, at p. 269.) American Federation held
that a defendant’s “admissions and/or denials provided complete responses to the
requests, . . . leaving nothing to address in a motion to compel” under subdivisions (l) and
(o) of former section 2033. (American Federation, at p. 269.) Even though American
Federation construed an earlier statute, that statute did require a motion to compel for
evasive and incomplete answers. We agree with the American Federation court’s
rationale that if there is nothing to address in a motion to compel, then a motion to
compel is not required to preserve a claim for costs-of-proof. It is well settled that “[t]he
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law does not require the performance of an idle act.” (Robinson v. Puls (1946) 28 Cal.2d
664, 667.) If responses to requests for admission render a motion to compel an idle act, a
motion to compel is not required for costs-of-proof.
C.
Analysis of the Responses
De Jong did not bring a motion to compel further answers to the requests for
admission for which he was awarded costs-of-proof by the trial court. As a consequence,
De Jong’s waiver of the time within which to bring a motion to compel also forfeited his
right under section 2033.420 to recover costs-of-proof for evasive or incomplete answers.
Thus, the question becomes whether the responses provided by the Beaches and Bellinos
to the requests at issue were evasive or incomplete, or instead stood on their own such
that there was nothing to address in a motion to compel.
In request for admission number 3, George Beach was asked to admit “that at the
time that Plaintiff Craig De Jong paid $340,500.00 to George Beach, George Beach
understood that that money was to be used for the purchase of the [Escalon property].”
In response, George Beach stated that he “denies that Craig DeJong [sic] paid him any
monies.” The trial court, however, found that “Mr. De Jong contributed his $340,500 to
the purchase price of the Escalon Property by cashier’s check payable to George Beach.”
George Beach flatly denied a fact that De Jong proved, namely that De Jong paid him for
his share of the Escalon property purchase price. On this basis, we affirm the trial court’s
award of costs-of-proof for this request.
In request number 2 of the Bellinos, De Jong asked them to admit that they knew
of his contribution to the purchase price of the Escalon property. Nicola and Judith
Bellino reiterated their “response to request no. 1,” which was that they admitted that
De Jong “contributed approximately $340,500 towards the purchase of the described
property.” This admission was responsive to De Jong’s request. As a responsive
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admission, it was not subject to costs-of-proof to De Jong. If De Jong had found the
admission to be an incomplete admission, he could have moved to clarify how it might
have been incomplete.
In request for admission number 4, De Jong asked the Bellinos to admit that they
asked the Beaches to contribute the remainder of the purchase price for the Escalon
property to the extent that De Jong was short. To this request, the Bellinos responded
that they “[a]dmit[ted] that George Beach and/or Susan Beach contributed approximately
$85,000.” This was an admission responsive to the request. The trial court’s finding was
the same as the admission, namely that the Bellinos reached out to the Beaches who then
contributed $85,000 to complete the sale of the Escalon property. The trial court should
not have awarded costs-of-proof for this request.
De Jong’s request number 5 to the Bellinos asked them to admit that the Beaches
purchased the property that their request. In response, the Bellinos pointed to their
admission to request number 4. As with their admission to request number 4, the gist of
their answer to request number 5 was therefore also an admission. For the same reason
as with request number 4, we conclude that the admission to request number 5 was not
subject to costs-of-proof. If De Jong had believed the admission did not admit enough,
he could have moved to compel a further answer by indicating how he had thought the
admission was insufficient.
In request for admission number 9, De Jong asked the Bellinos to admit that they
requested of the Beaches that the Beaches transfer tittle to Solario. To this, the Bellinos
responded that “[i]t was agreed by all parties, including [De Jong], that title to the real
property would be transferred to Kimberly Solario upon repayment of the $85,000
contributed by George and/or Susan Beach.” This response was patently false. The trial
court found that the Bellinos, Beaches, and Solario secretly conspired against De Jong in
planning to transfer title to Solario. The trial court properly awarded costs-of-proof for
this request.
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In request for admission number 15, De Jong asked the Bellinos to admit that they
held no secret or unrecorded lien on the Escalon property in July 2014. To this request,
the Bellinos pointed to their response to request number 10 where they stated: “Admit
that George Beach and Susan Beach were repaid the $85,000, plus interest, that they had
loaned/contributed to the purchase of the specified property.” This response was evasive
in that it did not address the call of the question at all. Indeed, the response did not touch
on liens at all. As an evasive response, De Jong was obligated to move to compel a
further response under sections 2033.420, subdivision (b)(1) and 2033.290, subdivision
(a)(1) before claiming costs-of-proof.
In sum, the trial court erred in awarding costs-of-proof for request numbers 2, 4, 5,
and 15 of the Bellinos.
XI
Good Faith Denial
Appellants next argue that the trial court abused its discretion in awarding costs-
of-proof because they had good faith bases for denying the requests for admission.
Specifically, appellants challenge the award of costs-of-proof on this ground as to
requests for admission numbers 8, 16, and 17 addressed to the Beaches and numbers 6, 8,
and 19 as to the Bellinos. The argument does not persuade us.
A.
Review
As a general rule, the award of costs-of-proof is a matter addressed to the sound
discretion of the trial court. Thus, “ ‘ “[t]he determination of whether ‘there were no
good reasons for the denial,’ whether the requested admission was ‘of substantial
importance,’ and the amount of expenses to be awarded, if any, are all within the sound
discretion of the trial court. [Citation.]” ’ ” (Doe v. L.A. County Dep’t of Children &
Family Services (2019) 37 Cal.App.5th 675, 690, quoting Bloxham v. Saldinger (2014)
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228 Cal.App.4th 729, 753.) “In evaluating whether a ‘good reason’ exists for denying a
request to admit, ‘a court may properly consider whether at the time the denial was made
the party making the denial held a reasonably entertained good faith belief that the party
would prevail on the issue at trial.’ ” (Laabs v. City of Victorville (2008) 163
Cal.App.4th 1242, 1276, quoting Brooks v. American Broadcasting Co. (1986) 179
Cal.App.3d 500, 511, italics added.)
B.
Beaches – Request Numbers 8, 16, and 17
The Beaches argue that they had good faith bases to deny that they understood at
the time they acquired the Escalon property that De Jong was a co-owner of the property
(request number 8), that De Jong never consented to their transfer of title to Solario
(request number 16), and that De Jong never gifted them any money (request number 17).
We conclude that the trial court did not abuse its discretion in implicitly finding that the
Beaches did not have good faith bases for these denials.
The trial court expressly found that the parties understood that their contribution
toward the purchase price of the Escalon property was a loan and that their holding title
to the property was an accommodation to De Jong “and a means of securing repayment
of their loan.” The Beaches never laid claim to owning the property and therefore did not
collect rent or pay for any expenses incurred by the Escalon property. After the close of
escrow on the Escalon property, George Beach wrote a check to De Jong due to an
overpayment to escrow. Despite their understanding that they merely held a claim to a
loan on the Escalon property, the Beaches engaged in a long and secret conspiracy
against De Jong. Indeed, it was the Beaches who initiated the kitchen meeting among
appellants and Solario. And the Beaches transferred title to the Escalon property without
any regard for De Jong’s interest.
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Perhaps most importantly for purposes of this issue, the trial court reiterated a
dozen times that the evidence supporting its findings that warranted punitive damages
was supported by clear and convincing evidence. That De Jong prevailed on his claims
on this elevated standard of proof supports the conclusion that the Beaches lacked good
faith bases for their denials. In making its findings, the trial court also noted that
appellants’ testimony at trial regarding the kitchen meeting and assertions of De Jong’s
consent to the transfer was not credible. In short, the record does not establish an abuse
of discretion by the trial court in implicitly rejecting the Beaches’ argument that they had
good faith bases for denying these requests for admissions.
C.
Bellinos – Request Numbers 6, 8, and 19
For similar reasons, we reject the Bellinos’ argument on this issue. Specifically,
the Bellinos argue they had good faith bases to deny that they knew De Jong’s
contribution of the purchase price of the property was not a gift (request number 6), that
De Jong owned 80 percent of the Escalon property (request number 8), and that they
money they received from Solario from the sale of Escalon property was to be shielded
from De Jong (request number 19).
The Bellinos were involved from the beginning of De Jong’s attempts to purchase
the Escalon property. As did the Beaches, they understood that De Jong was the
purchaser. De Jong’s first offer to purchase the Escalon property was made in his name.
Despite knowing this, the Bellinos participated in the conspiracy to deprive De Jong of
his interest in the property. At trial, appellants testified falsely that De Jong had
personally attended the kitchen meeting and had consented to transfer of title to Solario.
In other words, the appellants’ theory of the case was founded on noncredible evidence.
The trial court did not abuse its discretion in awarding costs-of-proof against the Bellinos
where De Jong proved his case against them by clear and convincing evidence. In
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proving his case on this elevated standard of proof, De Jong necessarily disproved that
the Bellinos understood his property interest to be gifted to Solario or that they did not
knowingly participate in the conspiracy against him. There was no error.
XII
“Other Good Reasons for Denying the Requests”
Appellants next argue that the trial court erred in awarding costs-of-proof because
they had “other good reasons” for denying the requests for admission numbers 4 and 5,
addressed to George Beach, and numbers 14 and 15 addressed to George and Susan
Beach. They argue that George Beach’s lack of any conversation with De Jong prior to
the Escalon purchase and lack of appraisal of the property rendered it excusable that
George Beach did not admit that De Jong did not gift the property or admit that the
property was worth $445,000 in April 2011.
We have already rejected appellants’ assertion that they, or George Beach in
particular, had a reasonable basis for denying their understanding that De Jong was not
gifting the property to Solario. As to the value of the Escalon property, the request for
admission sought information that gave rise to an obligation to investigate. “ ‘[W]here it
becomes clear from evidence introduced by either party at trial that the party who denied
for lack of information or belief had access to the information at the time requests for
admissions were propounded, sanctions are justified because that party has a duty to
investigate.’ ” (Bloxham v. Saldinger, supra, 228 Cal.App.4th at p. 752, quoting Smith v.
Circle P Ranch Co. (1978) 87 Cal.App.3d 267, 275.) During trial, De Jong introduced
evidence from a licensed realtor stating that the value of the Escalon property had been
$445,000 in April 2011 based “on comparable sales around that time.” Thus, De Jong
was required to prove a fact that the record indicates was practicably ascertainable based
on historical comparable sales. For this reason, the trial court did not abuse its discretion
in awarding costs-of-proof.
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XIII
Costs-of-proof Where No Proof Was Made
Appellants argue the trial court erred in awarding costs-of-proof where no proof
was made that De Jong “has not forgiven or excused” payment owed to him for the
transfer of the property to Solario (Beaches request for admission number 17), that the
Bellinos requested that the Beaches transfer of title to Solario (Bellinos request for
admission number 9), and that the Bellinos received $150,000 out of escrow from Solario
to “shield” the money from De Jong (Bellinos request for admission number 19). The
argument lacks merit.
Conspiracy often presents a challenge for a plaintiff to prove because defendants
often attempt to conceal their wrongful conduct. (Anderson v. Thacher, supra, 76
Cal.App.2d at p. 72.) Here, appellants failed to make admissions to requests directly
related to points that De Jong had to establish in order to prevail. A statement of decision
is not required to address every factual issue raised at trial. (Yield Dynamics, Inc. v. TEA
Systems Corp. (2007) 154 Cal.App.4th 547, 559.) Instead, a statement of decision must
address only “ ‘ultimate findings rather than evidentiary ones.’ ” (Ibid.) Thus, the trial
court’s failure to make particular findings in its statement of decision on every one of the
requests for admission that appellants now contest is not fatal to the award of costs by the
same judge who heard the evidence at trial.
We discern no abuse of discretion in the award of costs as to the challenged
requests for admission. De Jong proved that he was entitled to recover the value of the
Escalon property, which he was wrongful deprived of by appellants’ conspiracy. Any
forgiveness or excuse of appellants’ wrongful action would necessarily have been fatal to
De Jong’s claim. Instead, the trial court found that De Jong was entitled to
approximately 80 percent of the value of the Escalon property at the time of its sale by
Solario. The trial court also rejected appellants’ assertions of affirmative defenses –
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expressly finding noncredible the assertion that De Jong gifted his interest in the Escalon
property. The Bellinos were found to have intentionally hidden their conspiracy from
De Jong. Indeed, the Bellinos played a pivotal role in the agreement reached during the
kitchen meeting in paying off the Beaches and then receiving proceeds from the later
sale. Appellants have not established an abuse of discretion in the award of costs-of-
proof.
XIV
Posttrial Attorney Fees as Costs-of-proof
Appellants assert that the trial court erred in awarding fees incurred by De Jong
after trial as costs-of-proof. Specifically, appellants challenge the award to the extent that
it includes fees incurred after the close of the evidentiary phase of trial. The challenged
fees include posttrial briefing and De Jong’s preparation of the statement of decision. We
are not persuaded by appellants’ argument that the trial court abused its discretion by
including in costs-of-proof fees incurred after the close of evidence.
Section 2033.420 provides for costs-of-proof rather than the costs of introducing
evidence. (§ 2033.420, subd. (a) [“If a party fails to admit the genuineness of any
document or the truth of any matter when requested to do so under this chapter, and if the
party requesting that admission thereafter proves the genuineness of that document or the
truth of that matter, the party requesting the admission may move the court for an order
requiring the party to whom the request was directed to pay the reasonable expenses
incurred in making that proof, including reasonable attorney’s fees.” (Italics added.)].) It
has long been established that “[p]roof is something more than just evidence. It is the
establishment of a fact in the mind of a judge or jury by way of evidence. (People v.
Mahoney (1939) 13 Cal.2d 729, 732.) Until a trier of fact is exposed to evidence and
concludes that the evidence supports a position, it cannot be said that anything has been
proved.” (Stull v. Sparrow (2001) 92 Cal.App.4th 860, 865-866, italics added.) As the
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California Supreme Court long ago observed, “There is an obvious difference between
the words evidence and proof. The former, in legal acceptation, includes the means by
which any alleged matter of fact, the truth of which is submitted to investigation, is
established or disproved. The latter is the effect or result of evidence.” (Schloss v. His
Creditors (1866) 31 Cal. 201, 203.) Thus, proof encompasses more than the introduction
of documentary or testimonial evidence. Proof includes argument and comments on
evidence that help illuminate the veracity and significance of testimony and documents.
(Beaird v. Bryan (1966) 244 Cal.App.2d 836, 842-843.)
The trial court did not abuse its discretion in including fees necessary to proving
De Jong’s case against appellants. Because the burden of proof extended beyond mere
introduction of evidence, we reject appellants’ challenge to fees incurred after the close
of evidence. Arguments regarding the evidence in posttrial briefing and advocacy in
helping craft the statement of decision – which provides the definitive findings of fact for
purposes of our review – fall within the concept of proof. (Stull v. Sparrow, supra, 92
Cal.App.4th at pp. 865-866.) Until the trial court issues a final statement of decision, the
factual findings remain at issue. (Whittington v. McKinney (1991) 234 Cal.App.3d 123,
127-128.) We conclude advocacy in connection with this phase of proof was
encompassed within the trial court’s discretion to award costs-of-proof.
Appellants offer no authority that supports their contention that costs-of-proof
must be limited to the evidentiary phase of trial. Instead, they argue that costs-of-proof
may not be imposed as a penalty by relying on Brooks v. American Broadcasting Co.,
supra, 179 Cal.App.3d at p. 509. We agree that costs-of-proof are not intended to serve
as a penalty. (Ibid.) Equally important, however, is the Brooks court’s observation that
the costs-of-proof statute “is designed to reimburse reasonable expenses incurred by a
party in proving the truth of a requested admission . . . .” (Ibid., italics added.) Under the
Evidence Code, “ ‘Proof’ is the establishment by evidence of a requisite degree of belief
concerning a fact in the mind of the trier of fact or the court.” (Evid. Code, § 190, italics
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added.) Including among costs-of-proof those efforts directly required to secure
favorable factual findings comports with the letter and spirit of section 2033.420,
subdivision (a). Accordingly, the trial court did not exceed the bounds of its discretion in
awarding costs-of-proof for posttrial attorney fees.
XV
Costs-of-proof for Proof for Matters Outside the Scope of the Requests
Appellants next argue the trial court erred in awarding costs-of-proof relating to
“matters outside the scope of the requests for admission.” In this argument, appellants
develop the following challenges to costs: De Jong’s reliance on two attorneys during
trial, excessive eliciting of testimony regarding whether De Jong paid $340,500 to
George Beach, introduction of expert witness testimony regarding the fair market value
of the Escalon property in April 2011, excessive preparation for examination of Solario
during trial, researching and drafting motions in limine motions opposing jury trial and to
exclude appellant’s evidence, and “a $59 phone call with Lisa Steves” regarding
continuance of trial. We agree that the fees incurred to oppose a jury trial and to exclude
appellants’ evidence did not constitute permissible costs-of-proof.
Appellants present fact-specific challenges to costs that lie with the unique
province of the trial court to evaluate. As the California Supreme Court has noted, “ ‘The
“experienced trial judge is the best judge of the value of professional services rendered in
his court, and while his judgment is of course subject to review, it will not be disturbed
unless the appellate court is convinced that it is clearly wrong” ’— meaning that it abused
its discretion.” (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095, quoting
Serrano v. Priest (1977) 20 Cal.3d 25, 49.) Thus, a trial judge is also in the best position
to evaluate whether having counsel as second chair at trial constituted a reasonable fee.
(Balsam v. Trancos, Inc. (2012) 203 Cal.App.4th 1083, 1104.)
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Appellants, however, did not raise the same challenges presented in this argument
on appeal to the trial court.5 With the exception of the contention that the pretrial
motions may not be awarded under the costs-of-proof statute, appellants’ new arguments
on appeal raise fact-specific challenges that should have been addressed to the trial court
in the first instance. As a general rule, new factually based theories of defense may not
be raised for the first time on appeal. (Fort Bragg Unified School Dist. v. Colonial
American Casualty & Surety Co. (2011) 194 Cal.App.4th 891, 907.) We are, for
example, poorly situated to evaluate the practical necessity of De Jong’s second chair
during trial. Likewise, the question of whether a day’s preparation constituted excessive
preparation in light of the highly contested allegation of conspiracy against multiple
parties is a matter addressed to the sound discretion of the trial judge who observed the
witnesses and the nature of the contest. We decline to second-guess the award of fees
based on appellants’ new theories regarding excessive costs.
An exception to the rule against raising new theories on appeal exists for pure
questions of law based on undisputed facts. (Ward v. Taggart (1959) 51 Cal.2d 736,
742.) Here, appellants contend that the trial court lacked discretion to award as costs-of-
proof those fees incurred by De Jong in opposing appellants’ request for jury trial and in
preparing motions in limine to exclude evidence. This contention has merit.
The trial court granted costs-of-proof in the amount of $189,532.50 – exactly the
amount for which De Jong moved. Thus, the trial court included all of the time expended
by De Jong’s attorney on an itemized summary of hours submitted in support of the
5 Although appellants’ opposition to the motion for costs-of-proof mentioned
request for admission number 3 of George Beach, it did not advance the argument on
appeal that proof on this issue was excessive because it awarded a full day’s worth of fees
for a brief examination on the issue of the $340,500 payment. Likewise, appellants’
opposition in the trial court mentioned De Jong’s expert witness on the value of the
Escalon property, but without asserting that it was excessive for De Jong’s attorney to
have spent a day preparing for the introduction of this evidence.
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motion for costs-of-proof. De Jong’s counsel included among these hours time for:
preparing an ex parte application to strike appellants’ demand for a jury trial, research for
an in limine motion to exclude evidence, and preparation of motions to compel the
production of documents at trial. Work on compelling the production of documents may
relate to matters of proof for which the trial court awarded costs-of-proof. The trial court
had discretion to determine that the hours relating to the production of documents fell
into the category of efforts relating to proof and were therefore subject to section
2033.420. However, time devoted to opposing trial by jury and to the exclusion of
evidence does not fall within section 2033.420’s provision for costs incurred by De Jong
proving facts not admitted by appellants.
De Jong contends that the trial court had discretion to determine that these fees for
opposing trial by jury and to exclude evidence were so intertwined with costs that are
permissible under section 2033.420, subdivision (a). Trial courts have discretion to
apportion fees when some fees are recoverable and some are not. (Zintel Holdings, LLC
v. McLean (2012) 209 Cal.App.4th 431, 443.) Moreover, a “trial court need not
apportion fees between contract and noncontract claims when claims are ‘ “ ‘inextricably
intertwined’ ” ’ so it is ‘ “impracticable, if not impossible, to separate the multitude of
conjoined activities into compensable or noncompensable time units” ’ ” (Ibid., quoting
Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1111.) However, a trial
court abuses its discretion when it includes nonrecoverable fees in an award and declines
to make any apportionment between clearly recoverable and unrecoverable fees. (Zintel
Holdings, at pp. 443-444.) Here, the itemization of fees by De Jong’s counsel includes
fees for work solely billed to the nonrecoverable tasks of opposing a jury trial and
preparing an in limine motion to exclude evidence. Accordingly, we remand for the trial
court to apportion fees so that fees claimed for opposing a jury trial and for an in limine
motion to exclude evidence are not included in the award of costs-of-proof under section
2033.420.
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XVI
Costs-of-proof for Costs Not Actually Incurred
Appellants argue that the trial court awarded costs-of-proof in excess of the costs
actually incurred by De Jong. In this argument, appellants scour a spreadsheet of costs
claimed by De Jong’s trial attorney. The spreadsheet at issue contains an itemization of
hours along with columns listing the requests for admission to which the hours relate. In
appellants’ view, the claimed total hours exceed the hours claimed on the spreadsheet that
relate to the various requests for admissions. In response, De Jong details a calculation of
fees based on the evidence in the record and consistent with the trial court’s award. The
itemization in the record of hours expended with respect to each request for admission
totals the costs with the same result as that awarded by the trial court. Appellants have
not carried their burden to demonstrate that the trial court abused its discretion in relying
on the spreadsheet’s total hours summary.
XVII
Lack of Apportionment
Finally, appellants argue that the trial court erred in making them jointly and
severally liable for costs-of-proof awarded against each other. Here, the trial court made
the Beaches and Bellinos jointly and severally liable for costs-of-proof even though not
all costs related to each of the appellants. De Jong concedes that “the fees awarded to
Mr. De Jong as a result of each defendant’s failure to admit requests propounded on that
defendant are personal to that defendant and the others are not jointly liable for them.”
We accept the concession and order the imposition of joint and several liability stricken
from the postjudgment order awarding costs-of-proof.
DISPOSITION
The judgment is reversed to the extent that it awards both prejudgment interest and
appreciation in the Ripon property to De Jong. The postjudgment order awarding costs-
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of-proof is reversed to the extent that it includes fees relating to requests for admission
numbers 2, 4, 5, and 15 of the Bellinos, and for De Jong’s opposition to a jury trial and
his pretrial motion to exclude appellants’ evidence.
On remand, the trial court is instructed to find and award compensation for
De Jong’s loss of use of his property interest in the form of either prejudgment interest or
appreciation of the value of the Ripon property after Solario received title to that
property. Also on remand, the trial court shall strike the imposition of joint and several
liability for costs-of-proof when it recalculates costs-of-proof to exclude time claimed by
De Jong’s trial counsel relating to requests for admission numbers 2, 4, 5, and 15 of the
Bellinos and for opposing the request for jury trial and in moving in limine to exclude
appellants’ evidence.
In the interest of justice, De Jong shall recover his costs on appeal. (Cal. Rules of
Court, rule 8.278(a)(1) & (5).)
/s/
HOCH, J.
We concur:
/s/
HULL, Acting P. J.
/s/
KRAUSE, J.
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