Jensen v. Charon Solutions CA2/2 ( 2023 )

Filed 1/26/23 Jensen v. Charon Solutions CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
PEACHES NONG JENSEN, B320268
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No.
v. BC469884)
CHARON SOLUTIONS, INC.
et al.,
Defendants and
Appellants.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Robert S. Draper, Judge. Affirmed.
Henry J. Josefsberg for Defendants and Appellants.
Law Offices of Yvonne M. Renfrew and Yvonne M. Renfrew
for Plaintiff and Respondent.
******
This is the fourth appeal between one or more parties to a
real estate deal that dates back to 2000, that spawned two
lawsuits in 2008 as well as a malicious prosecution lawsuit in
2011, and that has been ping-ponging between the trial court and
this court for over a decade. The last time around, we affirmed
the finding of liability in favor of the malicious prosecution
plaintiff, reversed the compensatory damages award due to a
prejudicial evidentiary error in the plaintiff’s proof of out-of-
pocket litigation costs, and conditionally affirmed the punitive
damages award. The retrial netted a smaller award of plaintiff’s
out-of-pocket litigation costs. This time around, the malicious
prosecution defendants raise a panoply of challenges to the new
damages award, none of which has merit. We accordingly affirm.
FACTS AND PROCEDURAL BACKGROUND
I. Facts
A. The parties and their business plan
Peaches Nong Jensen (Jensen) and Perry Segal (Segal)
used to be close friends.
In 2000, they agreed to develop a luxury home for sale,
drawing upon Jensen’s expertise as a real estate broker and
Segal’s expertise in construction. Jensen already owned a parcel
of land in Woodland Hills (the property), and resided in a house
on one portion of the property. Jensen and Segal agreed they
would sever the property into two smaller parcels, and develop a
new luxury home for sale on the as-yet-undeveloped parcel. To
effectuate their agreement, they formed P&P Holdings, LLC (the
2
LLC). The LLC had two members—namely, (1) Peachtree
Financial Corporation (Peachtree), which was owned by Jensen;
and (2) Charon Solutions, Inc. (Charon),1 which was owned by
Segal. Each member contributed $21,000 in starting capital to
the LLC.
Jensen moved out of the house in 2004 and allowed Segal to
rent her home at a discounted rate while he attended law school.
The project never got off the ground and, by 2005, Jensen
and Segal’s relationship soured.
B. Jensen’s lawsuit against the property’s prior
owner
In March 2004, Jensen suspected that the prior owner who
sold her the property, Scott Silver, had not disclosed defects in
the property. Jensen considered suing Silver; Segal advised
against it, fearing that any litigation would impede the lot-split
project they had envisioned for the property. Ignoring Segal’s
advice, Jensen forged ahead anyway and sued Silver; Silver then
cross-claimed against Jensen. Combined, we refer to these
actions as the Silver action.
In December 2005, Charon withdrew from the LLC, citing
Jensen’s failure to consult Segal regarding the Silver action and
her unilateral decision to borrow against the property to fund
that litigation. Segal then attempted to intervene in the Silver
action, but his motion was denied.
Jensen ultimately settled the Silver action.
1 This name ended up presaging the purgatory of eternal
litigation that would follow, as Charon is the Greek name for the
mythological ferryman who transports the dead across the River
Styx to the Underworld.
3
C. Segal and Jensen sue each other over the failed
project
1. Complaints
a. By Segal and Charon
In December 2008, Segal and Charon sued Jensen and
Peachtree for (1) fraud, based on (a) intentional
misrepresentation and (b) suppression of facts, (2) breach of
fiduciary duty, (3) conversion, (4) unjust enrichment, and (5)
declaratory relief (the underlying lawsuit).2 In support of the
unjust enrichment claim, Segal and Charon alleged that it was
“inequitable” for Jensen and Peachtree “to receive and retain the
funds they have received, accepted and retained,” and requested
that Segal and Charon’s “interest in the Property” be
“return[ed].” In support of their declaratory relief claim, Segal
and Charon alleged that the LLC obtained title to that portion of
the property containing Jensen’s home “by way of fraud,” and
requested that the court declare that Jensen and Peachtree own
only the vacant portion of the property.
b. By Jensen
Jensen and Peachtree filed a cross-complaint against Segal
and Charon for (1) breach of contract, (2) negligence, and (3)
fraud.
2. Resolution
a. Pretrial proceedings
In April 2009, the trial court dismissed on demurrer Segal
and Charon’s unjust enrichment and declaratory relief claims,
reasoning that “[t]here is no unjust enrichment and nothing to
declare.” The trial court also dismissed on demurrer Jensen and
2 They also named Jensen’s husband as a defendant, but he
later settled.
4
Peachtree’s negligence and fraud claims. In their amended
complaint, Segal and Charon dropped Peachtree as a defendant.
And they later voluntarily abandoned the conversion claim.
b. Trial
The former friends’ dueling complaints proceeded to a jury
trial on three claims—namely, (1) Segal and Charon’s fraud
claim, (2) their breach of fiduciary duty claim, and (3) Jensen and
Peachtree’s remaining claim for breach of contract.
Both sets of litigants lost, as the jury rejected all claims
and awarded nothing.
II. Procedural Background
A. Jensen’s malicious prosecution lawsuit
In September 2011, Jensen sued Segal and Charon
(collectively, defendants) for malicious prosecution of the
underlying lawsuit.3 She sought (1) compensatory damages
reflecting her out-of-pocket litigation expenses in defending
against the underlying lawsuit, (2) emotional distress damages,
(3) damages for injury to her professional reputation, and (4)
punitive damages.
3 Jensen also sued the lawyers who represented Charon and
Segal in the underlying lawsuit, but the trial court granted the
lawyers’ anti-SLAPP motions and dismissed her claims against
them.
Peachtree was also a named plaintiff, but the trial court
granted defendants’ anti-SLAPP motion as to Peachtree, while
denying it as to Jensen. The court then denied defendants’
motion for summary judgment against Jensen for the same
reasons it denied their earlier anti-SLAPP motion. We affirmed
these rulings on appeal. (Jensen v. Charon Solutions, Inc. (Oct.
10, 2013, B240651) [nonpub. opn.].)
5
B. First trial
The malicious prosecution case proceeded to a jury trial in
2016. The jury returned a verdict finding defendants liable and
awarding Jensen (1) a general verdict of $1 million in
compensatory damages; and (2) $500,000 in punitive damages,
comprised of $250,000 against Charon and $250,000 against
Segal.
C. Appeal
Defendants appealed.4 We affirmed the jury’s finding of
liability, but “reversed and remanded for a new trial on
compensatory damages” because only two of defendants’ claims in
the underlying lawsuit were brought without probable cause
(namely, the unjust enrichment and declaratory relief claims),
yet the trial court permitted Jensen to introduce heavily redacted
attorney fee bills that made it nigh impossible to break down
Jensen’s $400,163.51 attorney fees bills into fees for the claims
brought with probable cause (for which malicious prosecution
damages were unrecoverable) and fees for the claims brought
without probable cause (for which malicious prosecution damages
were recoverable); we concluded that the heavy redactions
effectively precluded defendants from “conducting any
meaningful cross-examination,” and thereby denied them due
process. (Jensen v. Charon Solutions, Inc. (Dec. 20, 2017,
B276050) [nonpub. opn.].) We conditionally left the $500,000
4 Simultaneously, Jensen filed a fourth lawsuit against
defendants and their new attorney regarding enforcement of the
money judgment she had obtained on her malicious prosecution
claim. We addressed the anti-SLAPP motion at issue in that
proceeding in an unpublished opinion. (Jensen v. Josefsberg (Oct.
16, 2018, B286094).)
6
punitive damages award intact, in the event the remanded
proceedings resulted in a compensatory damages award in excess
of $25,000.
D. Retrial on damages
In September 2021, the parties proceeded to a six-day jury
trial on the issue of compensatory damages.
The trial court carefully defined the “[s]ole” issues before
the jury in the retrial—namely, (1) whether Jensen had been
damaged by defendants’ “act in maliciously prosecuting the
causes of action for declaratory relief and unjust enrichment”
and, if so, (2) “the amount of [Jensen’s] damages and whether
those damages can be apportioned among the acts of [d]efendants
in filing the declaratory relief and unjust enrichment causes of
action and other causes.”
Jensen took the stand. She testified that (1) the possibility,
arising out of the relief Charon and Segal sought in the
underlying lawsuit, that she might lose her house (or some
portion of the property she owned) had caused her “tremendous”
distress because of her experience as a child refugee forced from
her home in Vietnam; (2) defendants’ filing of the unjust
enrichment claim against her in the underlying lawsuit
“trigger[ed] . . . distress” she had previously experienced from
defendants’ conduct in the Silver action; and (3) the allegations
against her in the underlying lawsuit could ruin her career.5
Throughout the trial, the court consistently enforced the
limits it had imposed upon the scope of the retrial—through
vigilant regulation of what was admitted into evidence and
5 Defendants do not contest the first and third categories of
Jensen’s testimony; their challenges in this appeal largely center
on the second category.
7
through pinpointed jury instructions. Whenever questions put to
Jensen by her attorney arguably transgressed the court’s limits,
the court cut off examination of Jensen and provided
supplemental instructions to the jury reinforcing the narrower
scope of the retrial. The court also prohibited Jensen from
testifying that she could recover emotional distress damages for
the claims in the underlying lawsuit that were brought with
probable cause, rejecting her contention that those nonactionable
claims had somehow been “incorporated by reference” into the
actionable unjust enrichment and declaratory relief claims; the
court concomitantly instructed the jury to disregard this
“incorporation by reference” argument. Throughout the trial, the
trial court also emphasized to the jury that (1) the only claims in
the underlying lawsuit that could support Jensen’s malicious
prosecution damages were defendants’ unjust enrichment and
declaratory relief claims; and (2) Jensen could not recover
damages for any emotional distress she suffered during the Silver
action, and that her testimony regarding the Silver action was
admissible “solely for the limited purpose” of showing how the
emotional distress she experienced when defendants filed the
unjust enrichment and declaratory relief claims had been
“increased” by defendants’ “acts or statements” in the Silver
action.
The jury awarded Jensen compensatory damages of
$447,300, comprised of (1) $7,300 in out-of-pocket litigation
expenses incurred defending against the unjust enrichment and
declaratory relief claims when they were “live” in the underlying
lawsuit from December 2008 to April 2009, (2) $400,000 in
emotional distress damages, and (3) $40,000 for reputational
damages. Because the compensatory damages awarded met the
8
conditions articulated in the prior appeal, the trial court also
reinstated the prior $250,000 punitive damages award against
each defendant.
E. Motion for new trial
Defendants filed a motion for new trial that raised several
arguments, including the argument that Jensen’s attorney had
committed misconduct during the retrial. After further briefing
and a hearing, the trial court denied the motion. Although the
court found that Jensen’s attorney had engaged in misconduct
during the retrial that warranted reporting the attorney to the
State Bar of California, the court found the misconduct not to be
prejudicial because, in the court’s view, it was not “reasonably
probable that, absent this misconduct, [d]efendants would have
achieved a different or more favorable result.”
C. Appeal
Defendants timely filed this appeal.6
DISCUSSION
To prevail on a malicious prosecution claim, the plaintiff
must prove that the underlying lawsuit “(1) was commenced by or
at the direction of the defendant and was pursued to a legal
termination in [the] plaintiff’s favor [citations]; (2) was brought
6 Jensen filed a cross-appeal which we dismissed after she
failed to timely file a combined respondent’s brief and cross-
opening brief by the deadline. (Cal. Rules of Court, rule
8.220(a).) Indeed, Jensen’s briefing deadline was set by an order
of this court that largely adopted the schedule proposed by
Jensen after she had already been placed in default for not filing
her brief by the original deadline. This court had an additional
reason to dismiss Jensen’s cross-appeal—namely, she failed to
cure defects identified in the trial court’s notice of noncompliance
of default on appeal. (Cal. Rules of Court, rule 8.140(b).)
9
without probable cause [citations]; and (3) was initiated with
malice.” (Bertero v. National General Corp. (1974) 13 Cal.3d 43,
50 (Bertero).) During the retrial that is on appeal before us now,
the trial court instructed the jury that these three elements had
already been established (during the first trial and on appeal) as
to defendants’ unjust enrichment and declaratory relief claims in
the underlying lawsuit. The retrial was therefore limited solely
to the question of compensatory damages on Jensen’s malicious
prosecution claim.
Malicious prosecution gives rise to three categories of
compensatory damages—namely, (1) the ‘“out of pocket loss”’ the
plaintiff ‘“suffered”’ ‘“in the form of attorney fees and costs”’
incurred to defend against the maliciously prosecuted claim(s),
(2) emotional distress damages, and (3) damages for injury to the
plaintiff’s reputation arising from the ‘“groundless allegations
made in pleadings[,] which are public records.’” (Jackson v.
Yarbray (2009) 179 Cal.App.4th 75, 90 (Jackson); Bertero, supra,
13 Cal.3d at pp. 51, 59; Carruth v. Superior Court (1978) 80
Cal.App.3d 215, 219.)
In this appeal, defendants seek to attack the jury’s award
of attorney fees and emotional distress damages. They do so by
raising challenges that we have grouped into four buckets—that
is, challenges to (1) the court’s evidentiary rulings, (2) the special
verdict form, (3) the sufficiency of the evidence, and (4) the denial
of the posttrial motion for new trial on the basis of attorney
misconduct. In reviewing these challenges, we make all
presumptions in favor of the judgment and endeavor to uphold
the judgment “whenever possible.” (Bertero, supra, 13 Cal.3d at
p. 61.)
10
I. Evidentiary Rulings
In their briefing, defendants allude to a plethora of alleged
evidentiary errors but do not support them with any reasoned
argument. Such issues are waived, and we decline to consider
them. (Cal. Rules of Court, rule 8.204(a)(1)(B); Benach v. County
of Los Angeles (2007) 149 Cal.App.4th 836, 852; Badie v. Bank of
America (1998) 67 Cal.App.4th 779, 784-785.) Defendants
sufficiently challenge only three of the trial court’s evidentiary
rulings—namely, (1) the court’s admission of an exhibit reflecting
Jensen’s attorney fee bills for the entire duration of the
underlying lawsuit (rather than those bills incurred prior to April
16, 2009, the date the actionable unjust enrichment and
declaratory relief claims were dismissed on demurrer); (2) the
court’s exclusion of the special verdict findings made by the jury
that heard the underlying lawsuit in 2008; and (3) the trial
court’s admission of Jensen’s testimony regarding the Silver
action and regarding other prior conduct by defendants. We
review these rulings for an abuse of discretion. (People v. Powell
(2018) 5 Cal.5th 921, 961; People v. Flores (2020) 9 Cal.5th 371,
409.) Even if we conclude there was an abuse of discretion, we
may not reverse unless it is reasonably probable that a result
more favorable to defendants would have occurred absent the
error. (People v. Thompson (2022) 83 Cal.App.5th 69, 106; People
v. Young (2019) 7 Cal.5th 905, 931; Cal. Const., art. VI; § 13;
Evid. Code, § 353, subd. (b).)
A. Admission of the entirety of Jensen’s attorney fee
bills (exhibit 60)
At trial and over defendants’ objection, the trial court
admitted an exhibit that contained all of Jensen’s attorney fee
11
bills, which came to more than $400,000. Jensen argued that she
was entitled to recover all of her attorney fees. On appeal,
defendants argue that the trial court erred in (1) admitting this
exhibit at all because Jensen failed to lay the foundation for those
bills, and (2) admitting any portion of the exhibit reflecting fees
incurred after April 2009, which is when defendants’ actionable
unjust enrichment and declaratory relief claims—the only claims
that could give rise to malicious prosecution damages—were
dismissed.
Neither argument has merit.
Plaintiff laid a sufficient foundation for the attorney fees
bills because the attorney who issued those bills laid the
foundation when he testified; contrary to what defendants
suggest, plaintiff did not also have to testify regarding the
authenticity of the bills. (See Mardirossian & Associates, Inc. v.
Ersoff (2007) 153 Cal.App.4th 257, 269 (Mardirossian); Evid.
Code, § 702.)
The trial court also did not prejudicially err in not limiting
the exhibit to those attorney fees incurred before April 2009. To
begin, it was not necessarily error because, as the trial court
correctly noted, a malicious prosecution plaintiff is entitled to
recover the full amount of attorney fees incurred unless and until
the malicious prosecution defendant carries its burden of
convincing the jury that the fees can be apportioned between the
actionable fees (in this case, fees incurred in litigating
defendants’ unjust enrichment and declaratory relief claims) and
the nonactionable fees (in this case, fees incurred in litigating the
remaining claims in the underlying lawsuit). (Jackson, supra,
179 Cal.App.4th at pp. 95-96; Bertero, supra, 13 Cal.3d at p. 60;
Crowley v. Katleman (1994) 8 Cal.4th 666, 690 (Crowley).) Thus,
12
the court did not err in admitting the full amount of fees incurred
subject to defendants demonstrating it was possible to apportion
them. Further, defendants succeeded in apportioning the fees
because the jury—from bills totaling more than $400,000—
awarded Jensen only $7,300 in damages for her out-of-pocket,
attorney fees expenses. Defendants assert that what the jury
really did in awarding Jensen $400,000 in emotional distress
damages was use the full amount of the attorney fees as the
gauge for emotional distress damages, because Jensen’s counsel
urged the jury to do so. This assertion is not only based on pure
speculation, but it also ignores that the trial court properly
instructed the jury on what may be considered as out-of-pocket
expenses and emotional distress damages, and also instructed
the jury that the attorneys’ arguments at trial are not evidence
and are to be disregarded when they conflict with the witnesses’
testimony. We presume that the jury dutifully followed those
instructions. (People v. Winbush (2017) 2 Cal.5th 402, 457
(Winbush); People v. Washington (2017) 15 Cal.App.5th 19, 26
(Washington).)
B. Exclusion of jury’s special verdict from trial of
underlying lawsuit (exhibit 213)
After changing its preliminary ruling a few times, the trial
court ultimately excluded three questions from the special verdict
form from the trial in the underlying lawsuit in which the jury
made findings rejecting Jensen’s breach-of-contract claim. The
court based its ruling on Evidence Code section 352, finding the
admission of the special verdict questions to be “more confusing
than helpful to the jury.” Defendants argue that this was error
because, without the special verdict form, Jensen was able to
testify to facts contrary to that jury’s special verdict findings.
13
This argument also lacks merit.
To begin, the court’s ruling under Evidence Code section
352 was not an abuse of discretion. That section grants trial
courts broad “discretion” to “exclude evidence if its probative
value is substantially outweighed by the probability that its
admission will,” among other things, “create substantial danger .
. . of confusing the issues.” (Evid. Code, § 352.) The special
verdict form itself had little probative value because the trial
court elsewhere allowed defendants to elicit from Jensen on
cross-examination the prior jury’s answers to those verdict form
questions. The trial court did not abuse its discretion in finding
that the minimal probative value of the special verdict form itself
was substantially outweighed by the danger that its admission
would confuse the jury by opening the door to the scope of claims
at issue in the underlying lawsuit as well as which claims had
been sustained and which rejected—issues that the limited
nature of the retrial had removed from the jury’s purview. To the
extent defendants allude to the trial court’s errors in overruling
some of the specific objections they made to Jensen’s testimony
where she testified to facts contradicting the special verdict
findings, defendants have, as noted above, waived those
arguments by failing to support them with reasoned analysis.
14
C. Admission of Jensen’s testimony regarding the
Silver action7
The trial court allowed Jensen to offer testimony about the
emotional distress she experienced by virtue of defendants’
conduct during the Silver action (including Segal’s motion to
intervene), but instructed the jury it could not award Jensen
damages for that distress and could only consider that testimony
to show how the distress she experienced as a result of
defendants’ conduct in bringing the unjust enrichment and
declaratory relief claims in this case had been “increased” by
virtue of her vulnerability to such distress caused by defendants’
earlier conduct. Defendants argue that this testimony should
have been excluded because it was (1) legally barred by (a) the
statute of limitations, (b) judicial estoppel, because Jensen
disavowed any intent to collect damages on the nonactionable
claims when she successfully opposed defendants’ motion for
summary judgment, (c) the unavailability of a malicious
prosecution claim based on a subpart of a lawsuit, such as a
motion to intervene, and (d) the litigation privilege (Civ. Code, §
47); and (2) irrelevant, because Jensen was only entitled to
recover damages for the two actionable claims that were part of
the underlying lawsuit.
This argument lacks merit.
7 Defendants also argue that the trial court erred in allowing
Jensen to testify about the emotional distress she suffered as a
result of the nonactionable claims in the underlying lawsuit
(namely, the fraud and breach of fiduciary duty claims). This
argument is relegated to a footnote because it is foreclosed by the
record, which shows that the trial court steadfastly shut down
Jensen’s (and her attorney’s) attempts to discuss any distress she
suffered from the nonactionable claims.
15
To begin, defendant’s argument completely ignores that the
trial court specifically and repeatedly instructed the jury that any
emotional distress defendants caused Jensen during the Silver
action was not recoverable; instead, that conduct was admitted
only if Jensen connected any prior distress she suffered to proof
that it made her extra fragile and susceptible to greater distress
when defendants brought the two actionable claims in the
underlying lawsuit without probable cause. Based on our review
of the record, the trial court struck large swaths of Jensen’s
testimony that failed to draw that connection, frequently
reminded Jensen’s attorney to “tie in” how the parties’ litigation
history is relevant to the damages Jensen suffered from
defendants’ bringing the unjust enrichment and declaratory relief
claims, and issued a limiting instruction to the jury directing it to
use Jensen’s testimony only for the discrete purpose of evaluating
her predisposition to experiencing emotional distress from
defendants’ bringing those two claims without probable cause.
Because the court did not permit the jury to consider this
evidence as recompense for the emotional distress Jensen
suffered in the Silver action, none of the legal bars defendants
raise are implicated.
Defendants’ relevance-based attack also fails because the
law allows a jury to consider “the effect” of nonactionable conduct
insofar as it may have an effect on the emotional distress that the
malicious prosecution plaintiff suffered as a result of the
actionable claims. (Garcia v. Myllyla (2019) 40 Cal.App.5th 990,
1000 (Garcia).) As with any other type of tort damages, a
defendant takes the plaintiff as she is when it comes to emotional
distress damages. (See Golden v. Dugan (1971) 20 Cal.App.3d
295, 311 [tortfeasor “must take his victim as he finds [her]”];
16
People v. Taylor (2011) 197 Cal.App.4th 757, 764 [“‘[A] wrongdoer
in criminal cases as in civil tort takes his victim as he finds
[her].’”]; Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217,
1226 [defendant’s knowledge that plaintiff had special
susceptibility to emotional distress is factor in determining
whether conduct was outrageous for purposes of claim for
intentional infliction of emotional distress].) Consequently, if a
defendant’s wrongdoing aggravates the plaintiff’s existing
emotional condition, the plaintiff can recover the full amount of
her emotional distress damages. (Hastie v. Handeland (1969)
274 Cal.App.2d 599, 604; Ng v. Hudson (1977) 75 Cal.App.3d 250,
255, overruled on other grounds in Soule v. General Motors Corp.
(1994) 8 Cal.4th 548, 574; Sanchez v. Kern Emergency Medical
Transportation Corp. (2017) 8 Cal.App.5th 146, 168; CACI Nos.
3927 & 3928.) A jury can make this assessment only if it is
permitted to know what past event makes the plaintiff “more
prone to emotional distress” (and hence, what caused the
aggravation of her current emotional distress), and that past
event can sometimes be—as it was here—an event involving the
defendant. (Garcia, at p. 1000.) Because the trial court in this
case limited the admission of evidence regarding the Silver action
to show why Jensen was more prone to aggravation by
defendants of her emotional distress, this evidence was both
relevant and properly admitted.
II. The Special Verdict Form
The jury during the retrial was presented with a special
verdict form that, among others, posed the following two
questions (and which the jury answered as follows):
“[Question] 3[:] Were there substantial factors other
than defendants’ malicious prosecution of the
17
[d]eclaratory [r]elief or [u]njust [e]nrichment causes
of action which were a substantial factor in causing
the damages you have found in response to question
number 2?
“[Answer:] Yes.
“[Question] 4[:] Are you able to apportion the
damages to Mrs. Jensen you have found between
those caused by defendants’ malicious prosecution of
the declaratory relief or unjust enrichment causes of
action and those caused by other factors?
“[Answer:] No.”
Defendants argue that these two questions are defective, and
that the verdict in Jensen’s favor must be tossed. We disagree.
For starters, defendants waived their right to challenge the
special verdict questions on appeal because they never objected to
them before the trial court. (Jensen v. BMW of North America,
Inc. (1995) 35 Cal.App.4th 112, 131; Mardirossian, supra, 153
Cal.App.4th at p. 277 [“Because [defendant] did not challenge the
special verdict form on this ground below, we do not consider it
for the first time on appeal.”].) Defendants’ submission of a
competing special verdict form does not by itself constitute an
objection when defendants did not express any disagreement
with the form ultimately used. And although this waiver rule
has exceptions (e.g., Behr v. Redmond (2011) 193 Cal.App.4th
517, 530 [no objection required when “‘the record indicates that
the failure to object was not the result of a desire to reap a
“technical advantage” or engage in a “litigious strategy”’”]; id. at
pp. 530-531 [no objection required when verdict was “fatally
inconsistent”]), defendants have not argued that any exception
applies here.
18
More to the point, the two special verdict form questions
are consistent with the relevant law. To be sure, a malicious
prosecution plaintiff bears the initial burden of proving that she
was damaged, and those damages should be allocated to
individual causes of action where it is possible to allocate.
(Singleton v. Perry (1955) 45 Cal.2d 489, 498-499.) But the law
places the burden on a malicious prosecution defendant—as “the
party whose malicious conduct created the problem”—to
demonstrate that allocation is possible. (Bertero, supra, 13
Cal.3d at p. 60; Crowley, supra, 8 Cal.4th at p. 690; Jackson,
supra, 179 Cal.App.4th at p. 96.) These principles apply with
equal force to emotional distress damages and out-of-pocket
damages. (See Crowley, at pp. 688-690.) The special verdict
questions here embody this law: Question 3 inquires whether
Jensen met her initial burden, and question 4 asks whether
defendants have carried their burden of proving that allocation is
possible. Although the jury, in its answer to question 4, said
allocation was not possible, its $7,300 award for out-of-pocket
expenses indicates that allocation was possible for that category
of damages; its inability to allocate emotional distress damages,
however, reflects no more than defendants’ failure to carry their
burden. The verdict form is fine.
III. Sufficiency of the Evidence
Defendants argue that the jury’s $400,000 emotional
distress award is not supported by sufficient evidence. We review
a jury’s damages award for substantial evidence. (Myllyla, supra,
40 Cal.App.5th at pp. 999-1000; Major v. Western Home Ins. Co.
(2009) 169 Cal.App.4th 1197, 1208.) This is a notoriously
deferential standard of review because, in asking whether the
record contains evidence to support the award, we must view the
19
evidence in the light most favorable to the prevailing party as
well as draw all reasonable inferences and resolve all conflicts in
the evidence in support of the award. (Myllyla, at p. 1000.) Our
review of emotional distress damages is even more deferential
because, by definition, “there is no fixed or absolute standard by
which to compute the monetary value” of this “extremely
subjective and individualistic” form of damages. (Merlo v.
Standard Life & Acc. Ins. Co. (1976) 59 Cal.App.3d 5, 17; Regan
Roofing Co. v. Superior Court (1994) 21 Cal.App.4th 1685, 1707-
1708.)
Substantial evidence supports the jury’s emotional distress
award in this case. Jensen testified that defendants’ prosecution
of their unjust enrichment and declaratory relief claims in the
underlying lawsuit “drove [her] crazy,” distressed her
“tremendously,” and made her “very upset.” Jensen explained
that she was concerned that, if defendants prevailed on those
claims, she would lose the property, which “brought back
memories” of her emergency evacuation from Vietnam as a child
and thus exacerbated her “anxiety and stress” at the possibility of
being once again forced to uproot her life. Jensen further
testified that, in her job as a mortgage loan originator, she is
regularly required to disclose the underlying lawsuit to lenders;
to Jensen, doing so is like “a bad wound that keeps opening up.”
Her distress, Jensen explained, has had physical
manifestations—namely, she has been unable to sleep, hast lost
weight, has lost her hair, and developed a “stress rash.” All of
this evidence at trial amply supports the jury’s emotional distress
damages award.
Defendants marshal three arguments in response.
20
First, they argue that the jury’s emotional distress award is
inflated because it includes emotional distress Jensen suffered
during the Silver action as well as the parties’ history of other
disputes. As explained above, the factual premise of this
argument is refuted by the record. (Winbush, supra, 2 Cal.5th at
p. 457; Washington, supra, 15 Cal.App.5th at p. 26.)
Second, defendants argue that the jury’s $400,000
emotional distress award is so similar to the total amount of
attorney fees Jensen incurred in litigating the whole underlying
lawsuit (that is, just over $400,000) that the jury must have just
taken a shortcut and used the total attorney fees award as a
proxy for Jensen’s emotional distress damages. Defendants offer
nothing in support of their theory beyond their speculation. That
is obviously not enough to invalidate the award where, as here,
substantial evidence otherwise supports it. (See Diego v. City of
Los Angeles (2017) 15 Cal.App.5th 338, 349 [“An inference may
not be based on speculation or surmise.”]; see also Seffert v. Los
Angeles Transit Lines (1961) 56 Cal.2d 498, 508 [“There are no
fixed or absolute standards by which an appellate court can
measure in monetary terms the extent of [pain and suffering]
damages suffered by a plaintiff as a result of the wrongful act of
the defendant” and the “amount to be awarded is ‘a matter on
which there legitimately may be a wide difference of opinion.’”].)
Third, defendants argue that the jury’s emotional distress
award is based on Jensen’s fear of losing her home, and that this
fear is unsupported by the record because defendants—in the
underlying lawsuit—sought only to take title to the portion of the
property on which the luxury home was to be built and not the
portion containing Jensen’s home. We reject this argument
because the operative complaint alleged an entitlement to the
21
portion containing Jensen’s home. Defendants claimed at trial
that this was a “typo,” but informing Jensen of a typo years after
she read the complaint that caused her distress does not
somehow erase that distress. A reasonable person in Jensen’s
position—particularly given the litigious history between her and
Segal—would have a reasonable basis to interpret the allegations
as a threat to her ownership of the property. Credited by a jury,
Jensen’s “anxiety” over possibly losing her home is sufficient to
support an award of damages for emotional distress. (Knutson v.
Foster (2018) 25 Cal.App.5th 1075, 1096.)
IV. Attorney Misconduct
Defendants argue that the trial court erred in denying their
motion for a new trial. After finding that Jensen’s attorney’s
misconduct was serious enough to report to the State Bar of
California, defendants urge, the court could not possibly conclude
that the misconduct was not prejudicial. We independently
review a trial court’s denial of a motion for new trial. (Garcia v.
ConMed Corp. (2012) 204 Cal.App.4th 144, 149 (ConMed);
Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 802 (Cassim)
[must examine “the entire case”].)
A. Pertinent background
Jensen’s attorney engaged in misconduct during the retrial.
Despite the trial court’s unambiguous rulings that the damages
at issue were limited to those arising from defendants’
prosecution of their unjust enrichment and declaratory relief
claims, Jensen’s attorney repeatedly asked questions that invited
Jensen to “launch[]” into unresponsive “narrative[s]” that ranged
far beyond the scope of damages at issue during the retrial.
Despite the trial court’s admonition not to ask such free-ranging
questions and expressions of “concern” “that the jury [was] being
22
misled” into believing that the case was about awarding
emotional distress damages for all of defendants’ conduct,
Jensen’s attorney did not change her questioning style or attempt
to keep Jensen’s answers more focused. During closing
argument, Jensen’s attorney seemingly tried to capitalize on
Jensen’s open-ended testimony and utterly ignored the scope of
the retrial by explicitly urging the jury to “compensate [Jensen]
for all of the damage” caused by the underlying lawsuit, not just
the damages caused by the two claims defendants brought
without probable cause, because defendants had incorporated by
reference all of the allegations in the underlying lawsuit into
their two maliciously prosecuted claims. The trial court found
Jensen’s attorney’s flagrant and brazen violation of its prior
rulings “shock[ing],” aimed at “intentionally misleading . . . the
jury,” and wrong under the law. In addition to the standard
instruction informing the jury that the statements of attorneys
are not evidence, the trial court also gave a supplemental
instruction informing the jury that the substance of Jensen’s
attorney’s specific arguments was improper.
In ruling on defendants’ motion for new trial based on
Jensen’s attorney’s trial conduct, the court found that the conduct
constituted misconduct but found that it was not prejudicial.
More specifically, the court observed that Jensen’s attorney
treated this court’s prior opinion and the trial court’s evidentiary
rulings as advisory, violating their mandates whenever she
disagreed with them. The court found the repeated and
intentional nature of the misconduct sufficiently problematic to
report to the State Bar of California. However, the court found
that, in light of the court’s many instructions and admonitions, it
was not “reasonably probable that, absent th[e] misconduct,
23
[d]efendants would have achieved a different or more favorable
verdict.”
B. Governing law
A new trial may be granted on the basis of attorney
misconduct. (City of Los Angeles v. Decker (1977) 18 Cal.3d 860,
870 [attorney misconduct is an “irregularity” in the proceedings];
Code Civ. Proc., § 657, subd. (1) [“[i]rregularity in the
proceedings” is a basis for a new trial].) To obtain a new trial on
this ground, however, the movant must show both (1) attorney
misconduct, and (2) resulting prejudice. (ConMed, supra, 204
Cal.App.4th at p. 149; Martinez v. Dept. of Transportation (2015)
238 Cal.App.4th 559, 568 (Martinez).) Attorney misconduct is
prejudicial if “it is reasonably probable” that the party “would
have achieved a more favorable result in the absence” of the
challenged misconduct. (Cassim, supra, 33 Cal.4th at p. 802;
accord, Pilliod v. Monsanto Co. (2021) 67 Cal.App.5th 591, 635
(Pilliod).) Factors relevant to assessing prejudice include (1) the
“nature and seriousness” of the misconduct; (2) the “general
atmosphere,” including the “judge’s control” of the trial; (3) the
likelihood that the misconduct actually prejudiced the jury; and
(4) the “efficacy of objection or admonition under all the
circumstances.” (Sabella v. Southern Pac. Co. (1969) 70 Cal.2d at
311, 320-321; Pilliod, at p. 636.)
C. Analysis
Applying the pertinent factors, we independently conclude
that defendants were not prejudiced by the misconduct of
Jensen’s attorney during the retrial.
The “nature and seriousness” of the misconduct (the first
factor) weighs in favor of a finding of prejudice. Jensen’s attorney
repeatedly let Jensen wander during her testimony, refused to
24
tailor questions to better constrain Jensen’s testimony, and
“shocked” the trial court by making arguments that ignored prior
court rulings. Indeed, the misconduct was serious enough that
the trial court reported it to the State Bar of California.
The “general atmosphere,” including the “judge’s control”
over the trial (the second factor), weighs heavily against finding
prejudice. Contrary to what defendants argue, the trial court
actively managed Jensen’s attorney’s behavior and mitigated the
effects of her misconduct by repeatedly sustaining defendants’
objections, repeatedly striking irrelevant portions of Jensen’s
testimony, and repeatedly issuing curative instructions. (Cf.
Martinez, supra, 238 Cal.App.4th at p. 569 [concluding that
defense counsel “simply ignor[ed] the trial judge’s rulings,” “made
it inevitable that the jury would conclude it didn’t have to pay
attention to the trial judge,” and “seriously diminished” the
“authoritative force of [the judge’s] instructions”].)
The likelihood that the misconduct actually biased the jury
(the third factor) also weighs heavily against finding prejudice.
Despite Jensen’s attorney’s attempts to get the jury to award
Jensen damages for the full spectrum of defendants’ litigation
against her, the jury in this case seemed to faithfully follow the
court’s instructions by awarding only $7,300 in attorney fees
rather than the more-than-$400,000 urged by Jensen’s attorney.
What is more, the total jury award in this case is less than the
amount the prior jury awarded, further confirming that Jensen’s
attorney did not whip up the jury into a frenzy of sympathy and
passion. (Cf. Martinez, supra, 238 Cal.App.4th at p. 569
[likelihood of actual prejudice greater where the outcome was
uncertain and the misconduct pushed the jury in one direction];
see also Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 296-
25
297 [factor weighed against prejudice when strong evidence
supported plaintiff’s claims and therefore the misconduct was
“neither so pervasive nor so egregious that it prevented the jury
from rationally considering the evidence admitted at trial”].)
The efficacy of the court’s admonitions (the fourth factor) is
a closer call, but on balance weighs against prejudice. The trial
court was “shocked” by counsel’s rebuttal argument on a legal
position the court had discussed with counsel “numerous times”
throughout the trial, and the court characterized counsel’s
argument as “intentionally misleading,” suggesting she
disregarded the court’s instructions. But the jury necessarily
rejected the improper argument made by Jensen’s attorney
because it ultimately apportioned Jensen’s out-of-pocket
litigation costs and awarded emotional distress damages that are
supported by the record. This outcome shows that the trial
court’s curative instructions and admonitions were effective in
countering counsel’s misconduct.
Defendants resist this conclusion with two further
arguments.
First, they argue that this court has an independent
obligation to recognize all misconduct, even when it was not
objected to during trial. To the extent defendants are suggesting
we have a duty to comb through the record looking for instances
of misconduct not brought to our attention, they are wrong. And
to the extent defendants are suggesting we must recognize the
misconduct to which objections were properly raised, that
argument is beside the point because we have accepted the trial
court’s finding of attorney misconduct.
Second, defendants argue that two cases compel reversal on
the basis of attorney misconduct. They are wrong. In Simmons
26
v. Southern Pacific Transportation Company, the court ruled that
a new trial was warranted because counsel had engaged in a
“campaign of hate, vilification and subterfuge for the sole purpose
of prejudicing the jury against defendant,” and because there was
instructional error. (Simmons v. Southern Pac. Transportation
Co. (1976) 62 Cal.App.3d 341, 351-361.) The misconduct in this
case was not nearly as egregious and would be the sole viable
basis for a new trial. And Hassett v. Olson (2022) 78 Cal.App.5th
866 does not deal with a new trial motion at all. Instead, Hassett
upheld an order disqualifying counsel who, in his previous
employment as a judge, had ruled on disputes regarding the
same property at issue in the case. (Id. at p. 868.) The language
from Hassett excerpted by defendants is accordingly inapt.
DISPOSITION
The judgment is affirmed. The parties are to bear their
own costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
______________________, J.
HOFFSTADT
We concur:
_________________________, P. J.
LUI
_________________________, J.
CHAVEZ
27