Stanton v. Marques CA2/7 ( 2024 )

Filed 4/2/24 Stanton v. Marques CA2/7
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
RYAN STANTON, B305149
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC572198)
v.
FRANCES FONTANE
MARQUES et al.,
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of
Los Angeles County, Randolph M. Hammock, Judge. Reversed
with directions.
Law Offices of Alain V. Bonavida and Alain V. Bonavida for
Plaintiff and Appellant.
Klapach & Klapach and Joseph S. Klapach for Defendants
and Appellants.
________________________
INTRODUCTION
Ryan Stanton, a plastic surgeon, sued his business partner
and former romantic partner, Frances Fontane Marques, and her
daughter, Pablynie Jamison, for misappropriating money
through improper distributions from the company managing
Stanton’s medical practice. The matter proceeded to a nine-day
jury trial on Stanton’s causes of action for fraud, conversion,
breach of the operating agreement, breach of fiduciary duty,
constructive fraud, negligent misrepresentation, negligence,
obtaining property by false pretenses and larceny under Penal
Code section 496, and fraudulent conveyance.
After Stanton presented his case-in-chief, the trial court
granted Marques’s and Jamison’s motions for nonsuit on the
causes of action for fraud, Penal Code section 496, breach of
fiduciary duty as to Jamison, constructive fraud, negligent
misrepresentation, and negligence. The jury ultimately entered a
special verdict in Stanton’s favor against Marques on the
remaining causes of action for conversion, breach of contract,
breach of fiduciary duty, and fraudulent transfer, and against
Jamison for conversion. It awarded Stanton compensatory
damages of $1,652,128 against Marques and $50,000 against
Jamison, and punitive damages of $1,000,000 against Marques
and $40,000 against Jamison.
Stanton appeals the trial court’s grant of nonsuit on his
Penal Code section 496 cause of action, and purports to appeal
the trial court’s postjudgment order denying his Code of Civil
2
Procedure section 2033.420 motion for costs and attorney fees
relating to a request for admission.1
Marques and Jamison cross-appeal the judgment against
Jamison for conversion and the compensatory and punitive
damages awards against both of them. They also contend the
trial court committed prejudicial evidentiary error by allowing
Stanton’s counsel to question Jamison about her alleged past
work as an escort.
We reverse and remand with directions. First, we reverse
the order of nonsuit on Stanton’s Penal Code section 496 cause of
action. While this appeal was pending, the California Supreme
Court decided Siry Investment, L.P. v. Farkhondehpour (2022)
13 Cal.5th 333, 361 (Siry), which holds that a plaintiff may
recover damages under Penal Code section 496, “when property
has been obtained in any manner constituting theft.” On
remand, the trial court shall require Stanton to elect his
remedies to the extent he prevails on the Penal Code section 496
cause of action at trial. Next, we conclude we lack jurisdiction to
review the trial court’s postjudgment order denying Stanton’s
section 2033.420 motion because he did not appeal from that
order. Third, we reverse the judgment and damages award
against Marques and Jamison, and remand for a new trial on
liability and damages due to inconsistencies in the jury’s verdict
as to Marques, and prejudicial evidentiary error and insufficient
evidence supporting conversion and damages awarded as to
Jamison.
1 Undesignated statutory references are to the Code of Civil
Procedure.
3
FACTUAL AND PROCEDURAL BACKGROUND
A. The Parties’ Relationship, Business, and Lawsuit
Stanton and Marques began a romantic relationship and
moved in together in 2002, as Stanton was launching his plastic
surgery practice in Beverly Hills. In 2005 Stanton and Marques
formed a limited liability company called Modern Medical
Management LLC (“MMM”) to manage Stanton’s medical
practice, with Stanton and Marques each holding a 50 percent
membership interest. Under the MMM operating agreement,
Marques was entitled to 50 percent of net profits and received a
$4,500 per month salary. She testified, however, that she took
few salary distributions between 2003 and 2006. Stanton and
Marques ended their romantic relationship and cohabitation in
2009, but remained close friends and business partners, with
Stanton “completely trust[ing]” Marques and her management of
the business.
Marques served as the managing member of MMM from
2005 through 2014, handling business operations, bookkeeping,
banking, and other administrative and financial management
tasks for the medical practice while Stanton focused on patient
care. Marques was not an owner of Stanton’s medical practice,
which was separately incorporated as Modern Institute of Plastic
Surgery and Anti-Aging, Inc. (“MIPSA”), but had signatory
authority on MIPSA’s accounts and the ability to move funds out
of MIPSA into MMM. In 2011 Marques and Stanton hired
Marques’s daughter Jamison to work for MMM as a bookkeeper
and office manager. Stanton terminated Jamison in August 2014
due to her job performance and after hearing from staff that she
claimed to own the business.
4
In August 2014, Stanton transferred his 50 percent interest
in MMM to Marques.
After terminating Jamison, Stanton became suspicious
when his practice suddenly became more profitable. He
discovered irregularities in MMM’s books, including a
spreadsheet showing different member distributions from MMM.
He confronted Marques about the discrepancies and locked her
out of his medical practice in October 2014. On November 8,
2014 bookkeeper Michele Askori discovered the Quickbooks data
for Stanton’s practice had been deleted from the office computer
Jamison was using before she was fired.
In 2015 Stanton filed the underlying action against
Marques, Jamison, MMM, and Marques Management LLC (an
entity solely owned by Marques), alleging Marques and Jamison
misappropriated millions of dollars from Stanton’s medical
practice. Stanton’s operative second amended complaint stated
causes of action for fraud, conversion, breach of MMM’s operating
agreement, breach of fiduciary duty, constructive fraud, negligent
misrepresentation, negligence, obtaining property by false
pretense and larceny under Penal Code section 496, and
fraudulent conveyance. Stanton sought compensatory damages,
punitive damages, and rescission of contract.
In December 2019 and January 2020 the trial court
conducted a nine-day jury trial. Marques’s defense theory was
that Marques was entitled to “pay herself” after investing her
own money and sweat equity without compensation in the early
years of the business. According to Marques and Jamison,
Stanton knew Marques was paying personal expenses from
company funds, and he also used MMM funds for his personal
expenses. They also maintained the amounts paid to Jamison
5
were solely salary related. Finally, according to Marques and
Jamison, Stanton sued them because he wanted to “get back” at
Marques and regretted going into business with her.
B. The Evidence at Trial
At trial, the jury heard testimony in Stanton’s case-in-chief
from forensic accounting and damages expert Leonard Lyons,
Stanton’s current bookkeeper Michele Askori, and Stanton.
Stanton called Marques and Jamison as hostile witnesses.
Stanton also introduced into evidence voluminous financial
exhibits, including bank records, detailed accounting records, and
forensic analysis.
Lyons testified Marques received $2,442,628 in total
payments from MMM, while Stanton received $372,699. Lyons
offered two alternative damages calculations at trial. The first
calculated Stanton’s damages as $1,034,965, and assumed the
operating agreement was valid, entitling Marques and Stanton to
a 50 percent interest in net profits. The second calculated
Stanton’s damages as either $1,952,128 or $2,442,628 (depending
on whether Marques was entitled to a salary); for this
calculation, Lyons assumed the operating agreement was not
valid and that Marques had “no right to any of the profits.”
Lyons also testified that what appeared to be Marques’s
personal expenses and personal travel were on MMM’s books,
including a $60,000 watch that was recorded as a medical
supplies expense. He further testified Marques withdrew
$112,024.24 from Stanton’s surgical practice (MIPSA) even
though she was not an owner of that entity and that she used
$564,396.74 obtained from MMM to purchase a home in Santa
Monica, which she transferred into a trust on the eve of litigation.
6
Marques and Jamison testified on their own behalf and
called Stanton as a witness. They did not present any expert on
damages. Marques testified she contributed $300,000 of her own
funds to remodel the surgical center shortly after starting to work
with Stanton. Jamison was paid a salary of $4,000 per month as
an independent contractor, which was later raised to $4,500 per
month, plus health insurance benefits, a cell phone, and car
payments. Marques testified she authorized the payment of
Jamison’s health insurance, cell phone, and car payments.
Jamison testified that Lyons had mistakenly identified a number
of business expenses as personal expenses in his analysis, such as
$1,000 charges for cleaning and $86 for pest control.
C. The Motions for Nonsuit by Marques and Jamison
At the close of Stanton’s case-in-chief, the trial court
granted the oral nonsuit motion of Marques and Jamison as to
Stanton’s causes of action for fraud, Penal Code section 496,
breach of fiduciary duty as to Jamison, constructive fraud,
negligent misrepresentation, and negligence.2 The remaining
claims for the jury were breach of contract, conversion, breach of
fiduciary duty, and fraudulent transfer against Marques, and
conversion only against Jamison.
As to Stanton’s Penal Code section 496 cause of action, the
trial court stated: “I looked at the statute very carefully. This
[statute] is [for] one who receives stolen property. Receives or
hides it, okay? . . . That section covers people that are like the
fence, . . . and that’s why you get the treble damages . . . . I don’t
think I can properly allow it because I don’t think the evidence
2 Stanton only appeals from the nonsuit as to the Penal Code
section 496 cause of action.
7
fits that theory. . . . Their evidence is overwhelming that a theft
on a conversion took place.”
D. Jury Finds for Stanton and Awards him Damages and
Punitive Damages
On January 3, 2020 the jury entered a special verdict in
Stanton’s favor on the conversion, breach of contract, breach of
fiduciary duty, and fraudulent transfer causes of action.
The jury awarded Stanton $1,652,128 in noncumulative
compensatory damages on each cause of action against Marques
for conversion, breach of MMM’s operating agreement, and
breach of fiduciary duty.3 The jury also found Marques
fraudulently transferred her real property to her family trust and
LLC. The jury awarded Stanton $50,000 in compensatory
damages against Jamison for conversion.
The jury also found by clear and convincing evidence that
Marques acted with malice, fraud or oppression with respect to
the conversion and breach of fiduciary duty claims, and that
Jamison acted with malice, fraud or oppression with respect to
the conversion claim.
On January 6 the court conducted a jury trial on punitive
damages and the jury awarded Stanton $1,000,000 in punitive
damages against Marques and $40,000 in punitive damages
against Jamison. The evidence of net worth presented to the jury
included that Marques owned two unencumbered real properties
3 The jury was instructed under CACI No. 3943 (Damages on
Multiple Legal Theories) that “each item of [compensatory]
damages may be awarded only once, regardless of the number of
legal theories alleged” or under which the defendants are
ultimately found liable.
8
with fair market value of $3,650,000 and $1,800,000 at the time
of trial, and Marques’s testimony that she had other assets worth
at most $178,000 and current liabilities of $97,500. The parties
stipulated Jamison had a net worth of $500,000.
On January 7 the court held a hearing on equitable issues
at which it denied Stanton’s equitable claim of rescission, denied
Stanton’s oral motion to amend the complaint to allege
constructive trust, and voided the transfers of Marques’s real
property to other entities.
E. Judgment and Post-trial Motions
On January 15 the trial court entered judgment in favor of
Stanton and against Marques and Jamison, and awarded the
damages amounts found by the jury. Specifically, the court
awarded $1,652,128 in compensatory damages against Marques
for conversion, breach of MMM’s operating agreement, and
breach of fiduciary duty; $50,000 in compensatory damages
against Jamison for conversion; $1,000,000 in punitive damages
against Marques, and $40,000 in punitive damages against
Jamison.
Marques and Jamison filed a motion for a new trial and a
motion to set aside and vacate the judgment. Among other
things, they argued the jury’s special verdict was inconsistent as
to the damages awarded against Marques, and that the
compensatory and punitive damages awards were excessive and
unsupported by the evidence. On March 10, 2020 the trial court
denied these motions.
9
F. The Parties’ Notices of Appeal
On March 20 Stanton filed a notice of appeal from the
January 15 judgment and the January 2 order granting nonsuit.
The notice further stated Stanton appealed from “All
Orders/Rulings that are separately appealable which will be
detailed within Plaintiff’s Appellant’s Opening Brief.” On
April 6, 2020 Marques and Jamison filed a notice of appeal from
the January 15 judgment, the January 2 order denying Jamison’s
motion for nonsuit as to conversion, and from “All Orders/Rulings
that are separately appealable which will be detailed within
Defendants’/Cross-Appellants’ Opening Brief.”
G. Stanton’s Section 2033.420 Motion Was Decided After He
Filed His Notice of Appeal
On March 16 Stanton moved for an award of over $350,000
in attorney fees and costs pursuant to section 2033.420.
According to Stanton, he was entitled to recover that amount due
to Marques and Jamison’s refusal to admit to the following
request for admission he propounded during discovery: “Admit
that you stole monies from Plaintiff.”
On July 2, after Stanton’s notice of appeal was filed, the
trial court denied the section 2033.420 motion. At the hearing,
the court stated that it was “one of the most frivolous motions I’ve
ever seen,” and that section 2033.420 was “not designed for”
broad requests for admission that ask, “‘Admit that I’m going to
win this case.’” Instead, the statute applied “when somebody
unreasonably denies something that they should not deny.” The
10
trial court alternatively determined an award of attorney fees
and costs was not warranted under the statute.4
Stanton did not separately appeal from the trial court’s
July 2 postjudgment order denying his section 2033.420 motion.
DISCUSSION
A. Stanton’s Appeal
Stanton appeals the trial court’s grant of nonsuit on his
Penal Code section 496 cause of action and the trial court’s order
denying his section 2033.420 motion. We reverse the grant of
nonsuit and remand for new trial on the Penal Code section 496
cause of action. We lack jurisdiction to review the trial court’s
order denying Stanton’s section 2033.420 motion because he did
not separately appeal the postjudgment order denying it.5
4 First, the court determined Stanton’s request, “‘Admit that
you stole money from me,’” was of “‘no substantial importance’”
under section 2033.420, subdivision (b)(2). Second, it ruled
Marques and Jamison “‘had reasonable ground to believe that
[they] would prevail on the matter’” under section 2033.420,
subdivision (b)(3), due to Marques’s rights as a partner in MMM
and Jamison’s employment agreements with MMM. Third, the
court determined Marques and Jamison had “good reasons to
deny [Stanton’s] completely overbroad and improper request for
admission,” which appeared to be “just a setup” for Stanton to
argue liability was “deemed admitted” and “not really calculated
to lead to the discovery of admissible evidence.” (See § 2033.420,
subd. (b)(4) [court may deny order for costs of proof if “[t]here was
other good reason for the failure to admit”].)
5 It is unclear whether Stanton has standing to bring all of
his claims because some might belong to MMM and he did not
bring a derivative action. (See Sirott v. Superior Court (2022)
11
1. The Trial Court Erred by Granting Nonsuit on
Stanton’s Penal Code Section 496 Cause of Action
a. Governing law and standard of review
After the plaintiff’s opening statement or case-in-chief, the
defendant may move for a judgment of nonsuit. (§ 581c,
subd. (a).) “If it appears that the evidence presented, or to be
presented, supports the granting of the motion as to some but not
all of the issues involved in the action, the court shall grant the
motion as to those issues and the action shall proceed as to the
issues remaining.” (§ 581c, subd. (b).)
“A motion for nonsuit allows a defendant to test the
sufficiency of the plaintiff’s evidence before presenting his or her
case. Because a successful nonsuit motion precludes submission
of plaintiff’s case to the jury, courts grant motions for nonsuit
only under very limited circumstances. [Citation.] A trial court
must not grant a motion for nonsuit if the evidence presented by
the plaintiff would support a jury verdict in the plaintiff’s favor.
[Citations.] [¶] ‘In determining whether plaintiff’s evidence is
sufficient, the court may not weigh the evidence or consider the
credibility of witnesses. Instead, the evidence most favorable to
the plaintiff must be accepted as true and conflicting evidence
must be disregarded. The court must give “to the [plaintiff’s]
78 Cal.App.5th 371, 383; Holistic Supplements, LLC. v. Stark
(2021) 61 Cal.App.5th 530, 541-543; Denevi v. LGCC, LLC (2004)
121 Cal.App.4th 1211, 1221-1222; Corp. Code, § 17709.02.)
Further, at oral argument the parties represented that Stanton’s
interest in MMM was transferred to Marques and that the trial
court subsequently found MMM was her alter ego. In light of our
reversal, we need not resolve the issue of standing but, on
remand, the defendants should have an opportunity to file an
appropriate motion to challenge Stanton’s standing to bring suit.
12
evidence all the value to which it is legally entitled, . . . indulging
every legitimate inference [that] may be drawn from the evidence
in plaintiff[‘s] favor.”’” (Carson v. Facilities Development Co.
(1984) 36 Cal.3d 830, 838-839; accord, O’Neil v. Crane Co. (2012)
53 Cal.4th 335, 347; Lacagnina v. Comprehend Systems, Inc.
(2018) 25 Cal.App.5th 955, 967.)
On appeal from a judgment following a grant of nonsuit,
the reviewing court similarly interprets the evidence “in the light
most favorable to the plaintiff” and “‘most strongly against the
defendant,” resolving all presumptions, inferences, and doubts in
the plaintiff’s favor. (Carson v. Facilities Development Co., supra,36 Cal.3d at p. 839.) A grant of nonsuit may only be upheld on
appeal when, drawing all reasonable inferences in favor of the
nonmoving party, the court determines the moving party was
entitled to resolution of the issue, claim or action in his or her
favor as a matter of law. (See ibid.; Lombardo v. Huysentruyt
(2001) 91 Cal.App.4th 656, 664.)
b. Penal Code section 496 and Siry Investment,
L.P. v. Farkhondehpour
Penal Code section 496, subdivision (a), describes the crime
of receiving stolen property and also provides a civil cause of
action with treble damages. (Siry, supra, 13 Cal.5th at p. 346.)
“As amended in 1972 . . . it provides in relevant part: ‘Every
person who buys or receives any property that has been stolen or
that has been obtained in any manner constituting theft or
extortion, knowing the property to be so stolen or obtained, or
who conceals, sells, withholds, or aids in concealing, selling, or
withholding any property from the owner, knowing the property
to be so stolen or obtained,’ is subject to incarceration.” (Ibid.)
13
Subdivision (c) provides for civil recovery of treble damages
for anyone “who has been injured by a violation of
subdivision (a).” “Section 496(c) . . . articulates a right to special
civil remedies when a violation of section 496(a) has occurred.
Subdivision (c) . . . states that any person who has been injured
by a violation of section 496(a) ‘may bring an action for three
times the amount of actual damages, if any, sustained by the
plaintiff, costs of suit, and reasonable attorney’s fees.’” (Siry,
supra, 13 Cal.5th at pp. 346-347, fn. omitted.) “[A] criminal
conviction under section 496(a) is not a prerequisite to recovery of
treble damages under section 496(c).” (Bell v. Feibush (2013)
212 Cal.App.4th 1041, 1043 (Bell); accord, id. at p. 1046 [holding
“violation” unambiguously connotes conduct not conviction; “‘the
purpose of the statute would be defeated if the statute operated
to condition civil liability upon criminal liability’”].)
As the high court recently clarified, Penal Code section 496
is not limited to receiving or trafficking in stolen goods. In Siry,
which was decided after the trial court proceedings in this case,
the California Supreme Court held a trial court may award treble
damages and attorney fees under Penal Code section 496,
subdivision (c), “in a case involving, not trafficking of stolen
goods, but instead, fraudulent diversion of a partnership’s cash
distributions.” (Siry, supra, 13 Cal.5th at p. 339; fn. omitted.)
The Court concluded that Penal Code section 496, subdivision (c),
“is unambiguous” and that when read together with
subdivision (a) and Penal Code section 484 (defining theft), “[a]
plaintiff may recover treble damages and attorney’s fees under
section 496(c) when property has been obtained in any manner
14
constituting theft.”6 (Siry, at p. 361.) The Court reiterated that
“the term ‘theft’ in section 496 includes forms of theft listed ‘in
the general theft statute (Pen. Code, § 484), i.e., theft committed
by means of larceny, embezzlement, or false pretenses.’” and that
the “broad phras[ing]” of Penal Code section 496, subdivision (a)
expressly targets property ‘obtained in any manner constituting
theft.’” (Siry, at p. 350, fn. 11.)
c. Siry requires reversal of the nonsuit as to Stanton’s
Penal Code section 496 cause of action and remand
for a new trial
The trial court granted nonsuit on Stanton’s Penal Code
section 496 cause of action, without the benefit of Siry, reasoning
that the statute applied only to a defendant “who receives stolen
property” like a “fence,” and not a defendant accused of stealing
property directly. In supplemental briefing, Marques and
Jamison concede Siry rejected the trial court’s rationale for the
nonsuit. They assert, however, that the grant of nonsuit was still
proper because Stanton failed to prove Marques and Jamison
6 In relevant part, Penal Code section 484, subdivision (a),
defines the crime of theft: “Every person who shall feloniously
steal, take, carry, lead, or drive away the personal property of
another, or who shall fraudulently appropriate property which
has been entrusted to him or her, or who shall knowingly and
designedly, by any false or fraudulent representation or pretense,
defraud any other person of money, labor or real or personal
property, or who causes or procures others to report falsely of his
or her wealth or mercantile character and by thus imposing upon
any person, obtains credit and thereby fraudulently gets or
obtains possession of money, or property or obtains the labor or
service of another, is guilty of theft.”
15
obtained any of his property by false pretenses. In their view,
Stanton’s Penal Code section 496 claim cannot be predicated on
theft by false pretenses because the trial court also granted
nonsuit on Stanton’s fraud and negligent misrepresentation
causes of action, neither of which Stanton challenges on appeal.
This is a distinction without a difference in light of Siry’s broad,
unambiguous holding that a plaintiff may recover under Penal
Code section 496, subdivision (c), when property has been
“obtained in any manner constituting theft.” (Siry, supra,
13 Cal.5th at p. 361.)
Stanton’s cause of action for violation of Penal Code
section 496 was not solely based on theft by false pretenses.
Rather, the cause of action in his complaint was premised on
Marques and Jamison “obtaining property by false pretense and
larceny.” (Emphasis added.) The cause of action incorporated all
other factual allegations in the complaint, except those limited to
fraudulent conveyance, and stated that Marques and Jamison
“wrongfully and by fraud, artifice and trickery obtained
possession of monies belonging to Stanton,” by which acts they
“committed a theft as defined by California Penal Code
section 484(a)” and “[b]y virtue of receiving these monies . . .
violated CA Penal Code § 496(c).”
Further, Stanton’s evidence at trial was sufficient to
survive a nonsuit for violation of Penal Code section 496 as
interpreted by Siry. The evidence of Marques’s disproportionate
payouts from MMM, combined with her unilateral authorization
of benefits and car payments for Jamison without Stanton’s
approval, was more than sufficient to support a jury finding that
Marques and Jamison obtained and received money by theft from
16
Stanton’s medical practice in violation of Penal Code section 496,
subdivision (a).7
In sum, the trial court erred in granting nonsuit on
Stanton’s Penal Code section 496 cause of action. We decline,
however, Stanton’s request to amend the judgment to include a
finding that Marques and Jamison also violated Penal Code
section 496. Where the trial court erred in granting a nonsuit,
“[t]he remedy requires that we reverse and remand for a new
trial on the cause of action for which the trial court granted
nonsuit.” (Samantha B. v. Aurora Vista Del Mar, LLC (2022)
77 Cal.App.5th 85, 108 [rejecting similar request to include a
finding of respondeat superior where trial court erroneously
granted nonsuit on that basis because defendant was entitled to
jury determination].) Accordingly, we reverse and remand for a
new trial on Stanton’s Penal Code section 496 cause of action.
d. Stanton will need to elect his damages if he
prevails on his Penal Code section 496 cause of
action
If Stanton prevails on his Penal Code section 496 cause of
action on remand, he may be entitled to treble damages,
requiring him to elect his damages (subject to any new
compensatory and punitive damages awarded after a new trial).
Marques and Jamison argue Stanton is precluded entirely from
pursuing a claim for treble damages under Penal Code
section 496, subdivision (c), because the jury already awarded
7 Marques and Jamison also contend Stanton cannot
establish a Penal Code section 496 claim against Jamison
because the conversion claim against Jamison is legally deficient.
We address this argument below.
17
him damages for conversion, breach of fiduciary duty, and breach
of contract on a theory of civil theft. Thus, they contend, any
finding on remand that they violated Penal Code section 496
based on the same conduct underlying their liability for the other
causes of action would constitute impermissible “dual liability.”
But Marques and Jamison conflate two distinct issues:
(1) whether double or duplicative damages are prohibited in a
Penal Code section 496 civil action, and (2) whether obtaining
damages on Stanton’s other causes of action for the same conduct
precludes him from pursuing his Penal Code section 496 claim on
remand.
Marques and Jamison base their argument on Penal Code
section 496, subdivision (a)’s bar on dual convictions: “A principal
in the actual theft of the property may be convicted pursuant to
this section. However, no person may be convicted both pursuant
to this section and of the theft of the same property.” “Thus, a
person who obtains property by theft may be convicted for theft
or for receiving stolen property, but not both.” (Bell, supra,212 Cal.App.4th at p. 1049; accord, People v. Allen (1999)
21 Cal.4th 846, 857-861.)
As Bell noted in a case involving a loan fraudulently
obtained for a scam business and never repaid: “Were that
principle [against dual convictions] applied to [defendant’s] civil
liability under section 496(c), he would not be liable for damages
under the breach of contract and fraud causes of action and treble
damages under the statute.” (Bell, supra, 212 Cal.App.4th at
p. 1049; see Siry, supra, 13 Cal.5th at p. 370 (conc. opn. of
Groban, J.) [noting Bell “rais[ed] the issue” whether Penal Code
section 496, subdivision (a), “which bars dual convictions of the
18
theft itself and the receipt of stolen property, operates to bar
“‘double recovery’” in the civil context”].)
We need not determine whether or how Penal Code
section 496’s bar on dual convictions translates to the civil
context, however, given the existing general principles against
double or duplicative recovery in a civil action. As the California
Supreme Court has explained, “[r]egardless of the nature or
number of legal theories advanced by the plaintiff, he 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.
[Citation.] [¶] . . . [¶] In contrast, where separate items of
compensable damage are shown by distinct and independent
evidence, the plaintiff is entitled to recover the entire amount of
his damages, whether that amount is expressed by the jury in a
single verdict or multiple verdicts referring to different claims or
legal theories.” (Tavaglione v. Billings (1993) 4 Cal.4th 1150,
1158-1159; accord, Roby v. McKesson Corp. (2009) 47 Cal.4th 686,
703 [overlapping non-economic damages awards on different
causes of action “had the effect of compensating [the plaintiff]
multiple times for the same injury.”]; Plotnik v. Meihaus (2012)
208 Cal.App.4th 1590, 1612; Zuniga v. Cherry Avenue Auction,
Inc. (2021) 61 Cal.App.5th 980, 997.) Accordingly, the jury here
was expressly instructed that “each item of damages may be
awarded only once, regardless of the number of legal theories
alleged” or under which the defendants are ultimately found
liable.
19
Duplicative penalties, punitive damages, or multiple
damages awards are also prohibited unless a statute
unequivocally authorizes double recovery. “California courts
have held that if a defendant is liable for a statutory penalty or
multiple damages under a statute, the award is punitive in
nature, and the award penalizes essentially the same conduct as
an award of punitive damages. The plaintiff cannot recover
punitive damages in addition to that recovery but must elect its
remedy. [Citations.] To impose both a statutory penalty or
multiple damages award and punitive damages in those
circumstances would be duplicative. [Citations.] We presume
that the Legislature did not intend to allow such a double
recovery absent a specific indication to the contrary.” (Fassberg
Construction Co. v. Housing Authority of City of Los Angeles
(2007) 152 Cal.App.4th 720, 759-760 (Fassberg); see Los Angeles
Unified School District v. Superior Court (2023) 14 Cal.5th 758,
778 [“This court and others have frequently characterized treble
damages as exemplary or punitive.”]; see also Troensegaard v.
Silvercrest Industries, Inc. (1985) 175 Cal.App.3d 218, 228 [had
the Legislature intended a double recovery of punitive and penal
damages for the same acts, “it would in some appropriate manner
have said so”].)
But the rule against double recovery of damages for the
same conduct does not preclude Stanton from pursuing multiple
or alternate theories of liability in the same action. “‘“That a
given set of facts fortuitously supports liability on two legal
theories is not a principled reason to deny a party the right to
pursue each theory.”’” (Bowser v. Ford Motor Co. (2022)
78 Cal.App.5th 587, 624 (Bowser); accord, County of Santa Clara
v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 310.) In
20
other words, while dual recovery is prohibited, “dual liability” is
not. It merely requires an election of damages to the extent there
is any overlap or duplication of damages once liability on all
causes of action is determined. (Bowser, at p. 624 [“[T]he
prospect of a double recovery requires the plaintiff to elect only
between amounts that are duplicative, not those that are not.”].)
In Bowser, for example, the plaintiffs in a lemon law case “could
properly be required to elect between their Song-Beverly
compensatory damages and their fraud compensatory damages,”
each of which awarded the purchase price of the nonconforming
vehicle (less different specified values), “because their damages
for fraud overlapped their damages under the Song-Beverly Act.”
(Ibid.)
“Normally, in a double recovery situation, the plaintiff will
choose the larger amount. In that event, the larger award
embraces the smaller award.” (Bowser, supra, 78 Cal.App.5th at
p. 624.) In Siry, for instance, the high court was not presented
with a question of duplicative damages because the trial court
there required the plaintiff to choose between either treble
damages based on Penal Code section 496 or punitive damages
based on fraudulent diversion of partnership funds. After the
jury found in his favor on both theories, the plaintiff elected to
collect treble damages. (Siry, supra, 13 Cal.5th at p. 342, see id.
at p. 361.) Similarly, in Bell, the judgment awarded plaintiff
“$202,500 in damages on the breach of contract cause of action,
the same amount on the fraud cause of action, and treble
damages of $607,500 under the section 496(a) cause of action,”
and directed that “‘[n]o double recovery’” was to occur. (Bell,
supra, 212 Cal.App.4th at p. 1049.) The appellate court
explained that “[a]s a consequence, the principal amount of
21
damages recoverable under the judgment cannot exceed
$607,500—which is [defendant]’s treble damage liability under
section 496(c).” (Ibid.)
Accordingly, on remand, any damages awarded on the
other causes of action after a new trial would not preclude
Stanton from pursuing his Penal Code section 496 cause of action
for the same conduct. But Stanton is required to elect his
remedies as between treble damages, on the one hand, and
punitive damages, on the other hand, should he prevail.
2. We Lack Jurisdiction To Review Stanton’s
Section 2033.240 Motion
a. Governing law and standard of review
During pretrial discovery a party may serve a written
request that another party “admit the genuineness of specified
documents, or the truth of specified matters of fact, opinion
relating to fact, or application of law to fact.” (§ 2033.010;
Vargas v. Gallizzi (2023) 96 Cal.App.5th 362, 370 (Vargas).)
Such requests for admission “‘are primarily aimed at setting at
rest a triable issue so that it will not have to be tried.’”
(Bloxham v. Saldinger (2014) 228 Cal.App.4th 729, 752; accord,
Orange County Water Dist. v. The Arnold Engineering Co. (2018)
31 Cal.App.5th 96, 115 [“‘requests for admission serve to narrow
discovery, eliminate undisputed issues, and shift the cost of
proving certain matters’”].) If a party denies a request for
admission that is later proved, section 2033.420, subdivision (a),
provides for an award of costs of proof.
22
Our review of a trial court’s ruling on a section 2033.420
motion is for abuse of discretion. (See Vargas, supra,
96 Cal.App.5th at pp. 270-271; accord, Bloxham v. Saldinger,
supra, 228 Cal.App.4th at p. 753.)
b. We lack jurisdiction to review the trial court’s order
denying Stanton’s section 2033.420 motion
Marques and Jamison contend we lack jurisdiction to
review the denial of Stanton’s section 2033.420 motion because
Stanton did not separately appeal the postjudgment order
denying his motion. We agree.
“A postjudgment order which awards or denies costs or
attorney’s fees is separately appealable, and if no appeal is taken
from such an order, the appellate court has no jurisdiction to
review it.” (Silver v. Pacific American Fish Co., Inc. (2010)
190 Cal.App.4th 688, 693; accord, Colony Hill v. Ghamaty (2006)
143 Cal.App.4th 1156, 1171 (Colony Hill) [“‘An appellate court
has no jurisdiction to review an award of attorney fees made after
entry of the judgment, unless the order is separately appealed’”];
see § 904.1, subd. (a)(2).)
Although notices of appeal must be liberally construed (Cal.
Rules of Court, rule 8.100(a)(2)), we cannot construe Stanton’s
March 20, 2020 notice of appeal to include the subsequent July 2
postjudgment order denying his section 2033.420 motion.
“‘“[W]here several judgments and/or orders occurring close in
time are separately appealable (e.g., judgment and order
awarding attorney fees), each appealable judgment and order
must be expressly specified—in either a single notice of appeal or
multiple notices of appeal—in order to be reviewable on appeal.”’”
(Colony Hill, supra, 143 Cal.App.4th at p. 1171; accord,
DeZerega v. Meggs (2000) 83 Cal.App.4th 28.)
23
Here, Stanton’s notice of appeal was filed three months
before the postjudgment order denying his section 2033.420
motion. The general statement in Stanton’s notice of appeal that
he purported to appeal from “All Orders/Rulings that are
separately appealable” is insufficiently specific to encompass his
then-pending and not-yet-ruled-upon section 2033.420 motion.
“‘Despite the rule favoring liberal interpretation of notices of
appeal, a notice of appeal will not be considered adequate if it
completely omits any reference to the judgment [or order] being
appealed.’” (Norman I. Krug Real Estate Investments, Inc. v.
Praszker (1990) 220 Cal.App.3d 35, 47.)
“[A] postjudgment award of attorney fees may be subsumed
in a previously filed notice of appeal” (Bankes v. Lucas (1992)
9 Cal.App.4th 365, 368-369) in limited circumstances.
Specifically, “when a judgment awards costs and fees to a
prevailing party and provides for the later determination of the
amounts, the notice of appeal subsumes any later order setting
the amounts of the award.” (Grant v. List & Lathrop (1992)
2 Cal.App.4th 993, 998 [court’s order setting attorney fee award
entered after notice of appeal filed].) Grant emphasized that the
entitlement to fees in that case had been expressly determined in
the first judgment and was therefore not a purely collateral issue,
separately tried. (Ibid.)
Such circumstances are not present here. The judgment in
this case provided that Marques and Jamison were liable to
Stanton for attorney’s fees and costs “as may be allowed by law,
TBD.” But resolution of Stanton’s section 2033.420 motion
required the trial court to make a separate determination of his
entitlement to costs and attorney fees expended towards proving
true a specific request for admission that was originally denied.
24
It was thus a collateral issue, separately tried outside of the
judgment. “The entire litigation of that issue occurred after the
entry of the judgment from which the appeal was taken.
Accordingly the judgment cannot be said to ‘subsume’ the later
fee award. It follows that the exception adopted in Grant cannot
be held to apply, and jurisdiction over the fee award cannot be
found.” (DeZerega v. Meggs, supra, 83 Cal.App.4th at pp. 43-44
[no jurisdiction to review postjudgment order adjudicating motion
for attorney fees under Civil Code section 1717 filed after
judgment was entered, where judgment appealed from allowed
“costs of suit” but did not award attorney fees].)
B. Marques and Jamison’s Cross-Appeal
Marques and Jamison cross-appeal arguing that: the trial
court committed prejudicial error by allowing Stanton’s counsel
to introduce evidence about her alleged past work as an escort;
the judgment against Jamison for conversion was unsupported by
the evidence; and the compensatory and punitive damages
awards against both defendants were excessive and unsupported
by the evidence. We agree and reverse for a new trial on liability
and damages.
1. The Trial Court Erred by Allowing Extended and
Unduly Prejudicial Questions About Jamison’s Alleged
Past Work as an Escort
a. Governing law and standard of review
Under Evidence Code section 785, “[t]he credibility of a
witness may be attacked or supported by any party,” and under
section 1101, subdivision (c), character evidence is admissible
when “offered to support or attack the credibility of a witness.”
Section 1101, subdivision (b), permits “the admission of evidence
25
that a person committed a crime, civil wrong, or other act when
relevant to prove some fact (such as motive, opportunity, intent,
preparation, plan, knowledge, identity, absence of mistake or
accident, . . .) other than his or her disposition to commit such an
act.” However, evidence of a person’s character, including
“evidence of specific instances of his or her conduct,” “is
inadmissible when offered to prove his or her conduct on a
specified occasion” (id., subd. (a)) and courts must also “protect
the witness from undue harassment or embarrassment” (id.,
subd. (a)).
Under Evidence Code section 352, “[t]he court in its
discretion may exclude evidence if its probative value is
substantially outweighed by the probability that its admission
will . . . (b) create substantial danger of undue prejudice, of
confusing the issues, or of misleading the jury.” We review for
abuse of discretion. (People v. Barnett (1998) 17 Cal.4th 1044,
1118 [“When a trial court overrules a defendant’s objections that
evidence is . . . unduly prejudicial . . . , we review the rulings for
abuse of discretion.”]; see Zuniga v. Alexandria Care Center, LLC
(2021) 67 Cal.App.5th 871, 883-884.)
A judgment may be reversed for the erroneous admission of
evidence only if the error “resulted in a miscarriage of justice.”
(Evid. Code, § 353, subd. (b).) “Claims of evidentiary error under
California law are reviewed for prejudice applying the
‘miscarriage of justice’ or ‘reasonably probable’ harmless error
standard of People v. Watson (1956) 46 Cal.2d 818, 836, that is
embodied in article VI, section 13 of the California Constitution.
Under the Watson harmless error standard, it is the burden of
appellants to show that it is reasonably probable that they would
have received a more favorable result at trial had the error not
26
occurred.” (Christ v. Schwartz (2016) 2 Cal.App.5th 440, 447; see
Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 800 [error
justifies reversal in a civil action only if it is reasonably probable
a different result would have been reached absent the error].)
b. The trial court should not have admitted evidence
of Jamison’s alleged escort work, and the error was
not harmless
Marques and Jamison contend the trial court committed
reversible error by permitting Stanton’s counsel to question
Jamison at length and by admitting text messages about her
alleged past work as a prostitute or escort in Las Vegas, over
defense counsel’s objection. They argue this line of questioning
had no probative value and no purpose other than as improper
character evidence offered to harass and embarrass them.
Stanton contends the inquiry into Jamison’s alleged escort
work was relevant to impeach Jamison’s credibility under
Evidence Code sections 785 and 1101, subdivision (c), and to
establish motive under Evidence Code section 1101,
subdivision (b). Stanton argues the prejudicial impact of this
questioning was substantially outweighed by its probative value
as to Jamison’s credibility and motive.
Questions from Stanton’s counsel to Jamison during
Stanton’s case-in-chief spanned 13 pages of the reporter’s
transcript and included the following exchange:
[Counsel] The reason why your mother, Ms. Marques,
wanted you to leave Vegas and come to Los
Angeles and work for Dr. Stanton is because she
27
wanted you to stop engaging as an escort in Vegas,
correct?
[Jamison] No, that is not –
[Counsel] And in fact, you were on websites in Vegas as an
escort for, quote-unquote, high rollers in Vegas,
correct?
[Jamison] No, that’s a complete lie.
...
[Counsel] In fact, Ms. Jamison, you got into fights with your
mother about the very same issue. . . . Is that
correct?
[Jamison] I don’t believe so. . . . I never engaged in
prostitution.
[Counsel] Let’s look at the screen. . . . Did you ever sign up
or be part of a website called Seeking
Arrangements?
[Jamison] I don’t remember.
[Counsel] I’ll try to refresh your recollection. Seeking
Arrangements is a website where, quite explicitly,
it advertises to usually older men looking for
younger women. The men refer to themselves as
sugar daddies. The women, normally like yourself
at the time, refer to themselves as sugar babies.
Does that refresh your recollection?
[Jamison] I’ve heard of sites like that. I’m not sure if I’ve
heard of this specific one.
[Counsel] Were you ever a member of a site like that?
[Jamison] No.
...
28
[Counsel] [T]his is a two-page document that are text
messages between yourself and your mother. . . .
Read the next paragraph, please. . . .
[Jamison] “You should go back to your prostitution job
position in Vegas and try to make something out
of your sorry self. . . .”
Stanton’s counsel also questioned Jamison regarding text
messages with a friend who was also allegedly working on such
websites, and included the following exchange:
[Counsel] You respond, ‘If you are too nice, they try to get
away with f’ing you without paying.” That’s your
text, correct?
[Jamison] Yeah.”
Counsel concluded as follows:
[Counsel] Ms. Jamison, you view men – your motivation for
meeting men or your viewpoint of men, at least
back then, was that they are to be exploited, be
taken advantage of, and they’re a source of money
to fund your lifestyle, correct? . . . Was that your
attitude towards men back in 2013?
[Jamison] No.
...
[Counsel] In fact, you saw Dr. Stanton as an opportunity to
make money as an employee, but also to steal from
him like your mom, correct?
[Jamison] No, that’s incorrect. I never stole from him.
29
The trial court overruled defense counsel’s objections on
Evidence Code section 352 grounds, and admitted the text
messages “over the defendant’s objection.” The trial court stated
it was allowing this line of questioning because it was “relevant
as to [her] qualifications or the motivations of being hired . . . by
[MMM], and she’s also a named defendant in this case.”8
We conclude the trial court abused its discretion by
permitting extended examination of Jamison on a highly
prejudicial line of inquiry having no bearing on any material
issue. Whether Jamison ever worked as an escort is a
substantively immaterial consideration for the conversion cause
of action against her, and there was no contention that her
alleged escorting involved any illegal activity. Although Stanton
argues (and the trial court ruled) such questioning was relevant
to motive, motive is immaterial to civil conversion liability. (See
Voris v. Lampert (2019) 7 Cal.5th 1141, 1150 [“[n]otably absent”
from conversion analysis “is any element of wrongful intent or
motive; in California, conversion is a ‘strict liability tort’”];
accord, Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th
202, 208 [“‘“questions of the defendant’s good faith, lack of
8 During the defense case, Stanton’s counsel also asked
Jamison whether her mother was “an honest person.” Jamison
responded, “for the most part,” and Stanton’s counsel asked: “So
she was correct when she accused you or said you were a
prostitute in these messages; is that correct?” Defense counsel
objected to the question as argumentative, which the trial court
overruled. Stanton’s counsel then left the “prostitution job” text
message from Marques displayed on the courtroom screen during
an extended pause before his next question, until the trial court
directed him to take it down after Jamison asked twice that he do
so.
30
knowledge, and motive are ordinarily immaterial”’” to a
conversion cause of action]; Enterprise Leasing Corp. v. Shugart
Corp. (1991) 231 Cal.App.3d 737, 747-748 [“Because the tort of
conversion is a species of strict liability, defendant’s . . . motive is
irrelevant.”].)
More fundamentally, “‘[p]ermitting the defense to elicit
testimony from [a witness] that she engaged in acts of
prostitution had an obvious potential for embarrassing or
unfairly discrediting her. [Citation.] The degrading impact of
such questions has long been recognized.’” (People v. Phillips
(2000) 22 Cal.4th 226, 234 (Phillips); accord, People v. Phillips
(1985) 41 Cal.3d 29, 49-50.) Indeed, the trial court has an
obligation “to make interrogation as rapid, as distinct, and as
effective for the ascertainment of the truth, as may be, and to
protect the witness from undue harassment or embarrassment.”
(Evid. Code, § 765.) Here, questions regarding Jamison’s
“motivation for meeting men” to exploit them, and the time spent
by Stanton’s counsel on this line of questioning, consumed an
undue amount of time on a collateral issue with “‘obvious
potential for embarrassing or unfairly discrediting [Jamison].’”
(Phillips, supra, 22 Cal.4th at p. 234.)
Here, “[b]ecause this evidence has no tendency to prove or
disprove any disputed fact . . . , its use is necessarily limited to
impeachment.” (Winfred D. v. Michelin North America, Inc.
(2008) 165 Cal.App.4th 1011, 1034 (Winfred D.) Impeachment
with such evidence is “highly prejudicial,” and is properly
excluded unless “‘the patent prejudicial impact of permitting such
questioning was substantially outweighed by its probative
value.’” (Phillips, supra, 22 Cal.4th at p. 234.) In Phillips, for
example, the high court affirmed exclusion of cross-examination
31
testimony from a witness regarding her past prostitution
activities where it was “at most marginally relevant” to the issue
of the defendant’s alibi and “might have some slight relevance” to
the witness’s credibility. (Ibid.)
Additionally, “[a] party may not cross-examine a witness
upon collateral matters for the purpose of eliciting something to
be contradicted.” (People v. Lavergne (1971) 4 Cal.3d 735, 744;
accord, Winfred D., supra, 165 Cal.App.4th at p. 1036.) “These
principles are of particular importance if the proffered evidence
involves an issue of sexual conduct, and its admission is highly
prejudicial and inflammatory.” (Winfred D., at p. 1034 [trial
court abused its discretion in concluding evidence of extramarital
affairs denied by plaintiff was more probative than prejudicial in
personal injury case].) At most, Jamison’s testimony and the text
messages impeached her initial testimony denying that she ever
engaged in transactional intimate relationships. However,
“witnesses have a ‘strong reason’ to lie about an irrelevant or
collateral matter, which suggests that the matter should not be
used for impeachment. [Citation.] And where the irrelevant
matter involves the witness’s illicit, intimate conduct, there is a
greater probability that the witness will lie.” (Winfred D., at
pp. 1035-1036.) Accordingly, “the denial itself is irrelevant and
prejudicial and thus inadmissible.” (Id. at p. 1034.)
For the reasons explained below, we conclude it was
reasonably probable this evidentiary error affected the outcome of
the case, because no substantial evidence supported the liability
finding against Jamison for conversion or the $50,000 damages
award. (See People v. Watson, supra, 46 Cal.2d at p. 836.)
32
2. Substantial Evidence Did Not Support Conversion
Liability or the Damages Awarded Against Jamison
The jury found Jamison liable for conversion although the
evidence to support Jamison’s liability was insufficient:
acceptance of allegedly excess compensation authorized by
Marques, including health insurance benefits, cell phone, and car
payments, and her access to MMM’s financial records from 2011
to 2014. Further, the $50,000 conversion damages award against
Jamison is so disproportionate to Stanton’s evidence at trial of
actual monies wrongfully acquired by Jamison that it compels the
conclusion it was the result of passion or prejudice by the jury.
(See LA Investments, LLC v. Spix (2022) 75 Cal.App.5th 1044,
1063 [“The appellate court will interfere with the jury’s
determination only when the award is so disproportionate to the
injuries suffered that it shocks the conscience and virtually
compels the conclusion the award is attributable to passion or
prejudice.”].) Indeed, no substantial evidence supports the
$50,000 compensatory damages award against Jamison.
The jury was instructed that any conversion damages were
to be awarded for “[t]he specific amount of monies that were
wrongfully taken” and any emotional distress. The jury awarded
Stanton $0 emotional distress damages. To justify the award,
Stanton argues “the jury heard substantial testimony from
multiple witnesses and were presented with thousands of pages
of exhibits including voluminous bank records, detailed
accounting records and forensic analysis by Mr. Lyons based on
the accounting data/records created by Defendants Frances and
Pablynie. The jury used this substantial evidence to support its
finding of fact that Pablynie converted $50,000 of Plaintiff’s
monies.”
33
But the $50,000 damages award against Jamison is not
supported by this evidence. As to Jamison, Lyons presented a
single spreadsheet reflecting payments made to her for
“professional services” (i.e., her monthly salary) and payments to
an insurance company for Jamison’s health benefits. Stanton
makes no argument the salary amounts were wrongfully paid to
Jamison or should be the basis for conversion damages. The
other damages listed on the spreadsheet reflect that MMM paid a
total of $3,443.55 in health care insurance payments for Jamison.
Stanton presented no other evidence regarding money Jamison
received from MMM for car or cell phone payments. The evidence
that was presented to the jury was insufficient to support an
award of $50,000. (See Lueter v. State of California (2002)
94 Cal.App.4th 1285, 1302 [“‘[D]amages which are speculative,
remote, imaginary, contingent, or merely possible cannot serve as
a legal basis for recovery.’”]; see also People ex rel. Department of
Public Works v. McCullough (1950) 100 Cal.App.2d 101, 105
[affirming grant of new trial where damages “appeared to be
without sufficient evidentiary support”; “a jury cannot disregard
the evidence as to value and render a verdict in excess of that
shown by the testimony of the witnesses”].)
Under the circumstances, it is reasonably probable the
evidentiary error discussed above affected the jury’s liability and
damages findings as to Jamison, mandating a new trial.9
9 During the punitive damages phase, Stanton’s counsel also
asked Marques if she ever received payment “for any kind of
service” from a friend. The trial court then asked Marques to
clarify whether she was “in the same type of business that your
daughter allegedly was . . . [a]n escort or companion service,”
and whether she ever received any “money or gifts” for her
companionship, which Marques denied. Such questioning is
34
3. Inconsistent Findings in the Jury’s Special Verdict as to
Marques and Lack of Substantial Evidence Supporting
the Compensatory Damages Award Against Jamison
Require a New Trial
Marques contends the jury’s $1,652,128 compensatory
damages award is excessive and inconsistent with the jury’s
special verdict findings because it fails to reflect her 50 percent
right to MMM’s profits under the operating agreement. Marques
argues the jury’s special verdict finding that she breached the
contract includes an implicit finding the contract was valid and
an express finding that Stanton and Marques had co-equal
entitlement to share in MMM’s proceeds. Yet the jury awarded
Stanton damages using his expert’s calculations which assumed
Marques was not entitled to any of MMM’s proceeds. We
conclude the jury made contradictory findings in its special
verdict, rendering the verdict irreconcilably inconsistent. As
outlined above, we have already concluded that no substantial
evidence supports the $50,000 compensatory damages award
against Jamison. Accordingly, we reverse and remand for a new
trial on both liability and damages as to both Marques and
Jamison.
a. Governing law and standard of review
“The amount of damages is a fact question, committed first
to the discretion of the jury and next to the discretion of the trial
improper for the reasons outlined above, and it was error for the
trial court to permit such questions and to affirmatively question
Marques about whether she had worked as an escort. Because
we reverse and remand the judgment against Marques for a new
trial on other grounds, we need not decide whether this error was
prejudicial.
35
judge on a motion for new trial.” (Westphal v. Wal-Mart Stores,
Inc. (1998) 68 Cal.App.4th 1071, 1078; see § 662.5, subd. (a).)
We ordinarily review a jury’s award of damages based on
the verdict for substantial evidence, viewing the evidence in the
light most favorable to the verdict. (Fassberg, supra,152 Cal.App.4th at p. 746.) But where a party argues the jury’s
special verdict is inconsistent or irreconcilable, “we review a
special verdict de novo to determine whether its findings are
inconsistent.” (Singh v. Southland Stone, U.S.A., Inc. (2010)
186 Cal.App.4th 338, 358 (Singh); accord, Zagami, Inc. v.
James A. Crone, Inc. (2008) 160 Cal.App.4th 1083, 1092
(Zagami); City of San Diego v. D.R. Horton San Diego Holding
Co., Inc. (2005) 126 Cal.App.4th 668, 678 (Horton).) “With a
special verdict, unlike a general verdict or a general verdict with
special findings, a reviewing court will not infer findings to
support the verdict.” (Singh, at p. 358; accord, Horton, at p. 679
[“‘“there is no such presumption in favor of upholding a special
verdict”’”].) “Where there is an inconsistency between or among
answers within a special verdict, both or all the questions are
equally against the law” and “[t]he appellate court is not
permitted to choose between inconsistent answers.” (Horton, at
p. 682)
In the case of inconsistent damages findings in a special
verdict, “‘[w]here the trial judge does not interpret the verdict or
interprets it erroneously, an appellate court will interpret the
verdict if it is possible to give a correct interpretation.
[Citations.] If the verdict is hopelessly ambiguous, a reversal is
required, although retrial may be limited to the issue of
damages.’” (Zagami, supra, 160 Cal.App.4th at p. 1091 [new trial
on damages required where breach of contract damages figure
36
conflicted with valuation finding on separate cause of action, in
light of uncontroverted expert testimony regarding value of
missing equipment], quoting Woodcock v. Fontana Scaffolding &
Equipment Co. (1968) 69 Cal.2d 452, 456-457; see Horton, supra,126 Cal.App.4th at p. 683 [new trial appropriate where
inconsistent special verdict findings were “implicitly based on
different fair market values for the same parcel of property at the
same point in time”].) “‘The inconsistent verdict rule is based
upon the fundamental proposition that a factfinder may not make
inconsistent determinations of fact based on the same evidence.’”
(Horton, at p. 682.) “An inconsistent verdict may arise from an
inconsistency between or among answers within a special verdict
[citation] or irreconcilable findings.” (Ibid.)
b. Relevant jury instructions
The jury was instructed that to recover for breach of
contract, here the MMM operating agreement, Stanton had to
prove (1) he and Marques entered into a contract, (2) Stanton
performed his requirements under the contract, and (3) that
under the terms of the operating agreement Stanton and
Marques were “co-equal Members with equal economic interests
in MMM.” (See CACI No. 303.) As to contract damages, the
court instructed the jury that Stanton claimed “damages for
monies improperly obtained” by Marques and that the purpose of
contract damages was to put Stanton “in as good a position as he
would have been if . . . Marques had performed as promised.”
(CACI No. 350.)
On conversion, the jury was instructed that Stanton needed
to prove, among other elements, Marques’s substantial
interference with his property by “knowingly or intentionally
37
taking possession of his monies.” (CACI No. 2100.) On breach of
fiduciary duty, the jury was instructed on the duty of good faith
and fair dealing, the duty of undivided loyalty, and failure to use
reasonable care. On damages for these two causes of action, the
jury was instructed that Stanton claimed (1) economic damages
solely in the form of “monetary damages” (further defined for
conversion as “[t]he specific amount of monies that were
wrongfully taken”), and (2) noneconomic damages for emotional
distress. (CACI No. 2102.) The court further instructed that
compensatory damages were recoverable only once under all of
the causes of action, and that the damages award “must be based
on your reasoned judgment applied to the testimony of the
witnesses and the other evidence that has been admitted during
trial.”
c. Marques is entitled to a new trial because the jury’s
finding the operating agreement was valid is
irreconcilable with its award of compensatory
damages premised on no valid contract existing
The parties agree the jury reached the $1,652,128 damages
award by taking Lyons’s second alternate damages calculation
($1,952,128) and subtracting $300,000 (Marques’s capital
contribution).10 Indeed, during its deliberations, the jury asked
for and received Lyons’s damages exhibit. The parties further
agree the damages calculation used by the jury was based on
Lyons’s assumption there was no valid contract and that
10 Marques and Jamison’s opening brief posits the jury may
have taken a “weighted average” of Lyon’s different damages
analyses but their reply agrees with Stanton the jury credited
Marques’s testimony in applying a $300,000 reduction to the
damages figure.
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Marques had no right to any of MMM’s profits (but included an
amount for a salary). As noted above, Marques and Jamison
presented no expert testimony on damages.
We agree the jury’s special verdict is inconsistent. As
relevant here, the jury was instructed that to rule for Stanton on
the contract cause of action it needed to find that (a) “he and
Marques entered into a contract” (which contains an implicit
finding the contract was valid) and (b) Stanton and Marques had
“equal economic interests in MMM.” The jury was further
instructed that Stanton claimed contract “damages for monies
improperly obtained” by Marques, and that the purpose of such
damages was to put Stanton “in as good a position as he would
have been if . . . Marques had performed as promised.” Yet, in
deciding how much to award Stanton in damages, the jury used
Lyons’s damages calculation premised on no valid contract
existing and that Marques was not entitled to any of MMM’s
proceeds. “‘[A] factfinder may not make inconsistent
determinations of fact based on the same evidence.’” (Horton,
supra, 126 Cal.App.4th at p. 682.) Further, Stanton was only
entitled to recover for any “monies improperly obtained” by
Marques, and if a valid contract existed the damages awarded
could not include amounts to which she was legally entitled given
her equal economic interest in MMM.
In short, the jury’s finding of a valid contract with equal
economic interests is inconsistent with its finding that Stanton
suffered $1,652,128 in compensatory damages. (See Singh,
supra, 186 Cal.App.4th at p. 357 [“A special verdict is
inconsistent if there is no possibility of reconciling its findings
with each other.”].) If allowed to stand, the jury’s special verdict
would award Stanton greater compensatory damages than he
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was entitled to under the MMM operating agreement (over
$600,000 more than Lyons’s first alternate damages calculation
of $1,034,965, which assumed a valid contract and 50/50 rights to
MMM’s profits under the operating agreement).
That the jury awarded the same compensatory damages
amount on Stanton’s tort causes of action does not resolve the
inconsistency in the verdict. The jury was instructed that, for the
conversion and breach of fiduciary duty causes of action, the
damages Stanton claimed were limited to “[t]he specific amount
of monies that were wrongfully taken” (for conversion),
“monetary damages,” and emotional distress. As noted above, the
jury expressly awarded “$0” emotional distress damages, making
monetary damages the only basis for the compensatory award.
As to conversion, since the jury was instructed Stanton was
only entitled to receive damages for amounts that were “his
monies” or “wrongfully taken,” he was not entitled to recover
from Marques any monies that she was legally entitled to under
the operating agreement given their equal economic interests.
The breach of fiduciary duty cause of action does not
provide a basis for a more expansive award of monetary damages.
The damages Stanton claimed at trial were limited to his
economic losses, and the only evidence he presented on that front
was Lyons’s testimony. Stanton did not present any evidence
that he incurred, for example, any out-of-pocket economic losses
due to Marques’s malfeasance or any other form of economic
damages (e.g., lost income, extra tax or accounting expenses,
etc.). As such, the jury’s only basis to award damages was
Lyons’s testimony and its damages award was based on the
irreconcilable findings that the contract was valid and Marques
had an equal economic interest in MMM, on the one hand, and a
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damages amount premised on the theory the contract was invalid
and Marques had no such interest, on the other hand. In other
words, given the evidence at trial and the jury’s finding the
operating agreement was valid, Stanton’s economic loss under
any theory presented to the jury would be the amount due to
Stanton under the terms of the operating agreement.
Stanton argues the jury was “free to disregard MMM’s
Operating Agreement” if it believed Marques used MMM to steal
Stanton’s monies. Stanton also suggests the “multiple scenarios”
to which Lyons testified were substantial evidence supporting the
jury’s damages award. But the jury’s special verdict
demonstrates it did not “disregard” the agreement, and it instead
found the operating agreement was a valid contract. And
although it is plausible Lyons’s damages calculations might have
constituted substantial evidence for the damages award (in the
absence of a finding the contract was valid and if Stanton had
only prevailed on the tort theories of liability), that is not what
the jury did here. More fundamentally, we are prohibited from
choosing between inconsistent answers in a special verdict.
(Zagami, supra, 160 Cal.App.4th at p. 1091; cf. Shaw v. Hughes
Aircraft Co. (2000) 83 Cal.App.4th 1336, 1344-1346 [new trial
required on finding of inconsistent general verdicts as to breach
of contract and breach of implied covenant of good faith and fair
dealing].) The general rule that a jury may “‘“accept the evidence
of any one expert or choose a figure between them based on all of
the evidence”’” does “not override the independent rule that a
jury’s special verdict findings must be internally consistent and
logical.” (Horton, supra, 126 Cal.App.4th at pp. 681, 683.)
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We are unable to find a rational explanation for the
damages award. The record supports no alternate basis for the
compensatory damages figure under any cause of action, and a
new trial is required. “If the record contained such evidence, the
door might be open to a conclusion that the trial court’s error [in
denying a motion for new trial based on inconsistent special
verdict] was harmless because it probably would have reached
the same result under proper legal principles.” (Ryan v. Crown
Castle NG Networks, Inc. (2016) 6 Cal.App.5th 775, 787.) But the
record before us provides no factual basis to conclude the
damages could be calculated in the amount the jury awarded.
Marques and Jamison assert the judgment should simply
be reduced to reflect Lyons’s first alternate damages calculation
of $1,034,965 (which assumes 50/50 rights to MMM’s profits
under the operating agreement), less Marques’s capital
contribution.11 Again an “appellate court is not permitted to
choose between inconsistent answers” in an inconsistent special
verdict; rather, the appropriate course is to reverse and remand
for a retrial. (Horton, supra, 126 Cal.App.4th at p. 682; accord,
Zagami, supra, 160 Cal.App.4th at p. 1092.) Although in some
11 Marques and Jamison’s opening brief and reply brief
present alternate proposals for how to calculate Marques’s capital
contribution, resulting in either a $150,000 or $300,000 reduction
to the damages award. Because we reverse and remand with
directions to conduct a new trial, we need not address the
appropriate method of calculation of Marques’s capital
contribution. For the same reason, we need not address Marques
and Jamison’s related argument the trial court erroneously failed
to reduce Stanton’s damages to account for the purchase with
MMM funds of a $60,000 watch intended as a gift from Stanton
to Marques.
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cases retrial may be appropriate on damages only, we conclude
retrial on both liability and damages is required here because the
inconsistency arises from a contradiction between a liability
finding (of breach of a valid contract with equal economic
interests) and damages finding (that Stanton suffered $1,652,128
in compensatory damages).
DISPOSITION
The judgment is reversed, and the matter is remanded with
directions to the trial court to: (1) enter a new order denying
nonsuit on Stanton’s Penal Code section 496 cause of action and
conduct a new trial on this cause of action; Stanton shall be
required to elect his remedies as between treble damages, on the
one hand, and punitive damages, on the other hand, should he
prevail; (2) conduct a new trial on liability and damages as to the
causes of action for conversion, breach of contract, breach of
fiduciary duty, and fraudulent transfer as to Marques; and
(3) conduct a new trial on liability and damages as to the cause of
action for conversion as to Jamison. The parties are to bear their
own costs on appeal.
MARTINEZ, J.
We concur:
SEGAL, Acting P. J. FEUER, J.
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