Bankers Realty v. Shiotsugu

Filed 1/8/08 Bankers Realty v. Shiotsugu CA2/8

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 EIGHT

APPEAL from a judgment of the Superior Court for the County of Los Angeles. Jean E. Matusinka, Judge. Affirmed.

Friedman Stroffe & Gerard, Eoin L. Kreditor and Stephanie K. Leiter for Plaintiff, Cross-Defendant and Appellant Bankers Realty, Inc.

John J. Schimmenti for Plaintiff, Cross-Defendant and Appellant Dori Mosich.

Law Offices of Joel F. Tamraz and Joel F. Tamraz for Defendant, Cross-Complainant and Respondent.

____________________________

SUMMARY

A real estate broker and one of its agents challenge a jury verdict awarding damages to a homeowner in a dispute over a listing agreement for the homeowners residence. The broker and agent contend the trial courts instruction on damages was erroneous as a matter of law, and there was insufficient evidence to support the damages awarded. Finding no error, we affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Alice Shiotsugu owned (and still owns) a home in Palos Verdes. Dori Mosich is a real estate salesperson who worked for Bankers Realty, a licensed broker. Shiotsugu and Mosich were friends or acquaintances who socialized from time to time. On January 14, 2004, Shiotsugu and Mosich had drinks at Mosichs home, and then went with Mosichs boyfriend to the home of other friends. There, Mosich induced Shiotsugu to sign a listing agreement for the sale of her Palos Verdes home. The listing agreement did not identify Bankers Realty, instead listing Mosich as the real estate broker, though she had no brokers license. The agreement was to be effective from February 28, 2004 to June 1, 2004, and Mosich told Shiotsugu that if she changed her mind about selling her home, they could just tear up the contract. The agreement gave the broker a five percent commission, and stated that the seller would owe the broker the commission if the property was withdrawn from sale during the listing period without the brokers written consent.

The next day, Shiotsugu had misgivings about the listing agreement with Mosich. She called Mosich to tell her to cancel it, but Mosich did not respond to her calls or messages. On January 30, Mosich called Shiotsugu. Mosich was very angry because she had discovered that Shiotsugu had listed the property with another realtor for a short period, prior to the listing period specified in Mosichs listing agreement. Shiotsugu told Mosich that she did not want to sell the property, and Mosich told her that she was going to teach [Shiotsugu] a good lesson that [she] would never forget . . . . Then, on February 9, 2004, Shiotsugu mailed a notice to Mosich, canceling the listing agreement.

Undeterred, on February 28, 2004, Mosich placed Shiotsugus home on the Multiple Listings Service. Numerous real estate agents and other persons came to Shiotsugus residence, walked around the property, peered into her windows, knocked on her door, sometimes as late as 10 oclock at night, frightening Shiotsugu and making her feel like a hostage. In mid-March, Shiotsugu, having ascertained that Bankers Realty was the broker by which Mosich was employed, called Peter Mota, the CEO of Bankers Realty, telling him she did not want to sell her property and asking him to cancel the listing. He put her off, saying he could not meet with her as he was going away for three weeks, and need[ed] to hear [Mosichs] side and your [Shiotsugus] side to cancel this agreement. When she said she would go to the Board of Realtors if no action was taken to remove the property from the listing, Mota was sarcastic and merely said, What are they going to do to me . . . . Shiotsugu also contacted Susan Wylie, who was general manager for Bankers Realty, by telephone and e-mail, telling Wylie of her previous instruction to Mosich to cancel the listing agreement and that she did not want to sell her home. Shiotsugus e-mail to Wylie also indicated that she had explained to Mosich that she did not want to sell, and needed to refinance the property in order to make repairs and improvements. Wylie told her she would look into the matter if Shiotsugu would forward all the pertinent information by fax. Shiotsugu e-mailed Wylie, thanking her and indicating she was faxing a copy of the cancellation notice and repeating that she did not want to sell the property. Wylie said she never received Shiotsugus fax, but spoke with both Mosich and Mota about the matter.

Meanwhile, Shiotsugu had solicited and received an estimate for renovations to her property, which was in poor condition; she received an estimate of $100,000 for general repairs and another $150,000 for the addition of a second story. She employed a contractor and began some general repairs in January 2004; she had obtained a line of credit in December 2003, with a variable interest rate which was then at 4.2 percent. She tried to obtain refinancing of her mortgage loan at the 4.2 percent rate, but could not do so because Mosich had the property listed for sale. Then interest rates began to go up. Shiotsugu did not proceed with the addition of the second story, because the interest rates went very high, to six percent in June, when the listing finally expired. She calculated the difference between the 4.2 percent rate and the 6 percent rate and found the difference in her mortgage payment would be about $1,000 per month. So, she opted to use her line of credit instead of refinancing the mortgage, and to forego the second story addition.

After the listing expired, Bankers Realty and Mosich sued Shiotsugu for breach of contract. They alleged that in May 2004, Mosich presented Shiotsugu with a full price offer for her property, to which she did not respond, and that she was liable for payment of the five percent commission ($48,450) on the asking price of $969,000. Shiotsugu filed a cross-complaint, alleging causes of action for fraud in the inducement, constructive fraud (breach of fiduciary duty), trespass, and intentional infliction of emotional distress, among others. At the conclusion of a jury trial, the jury was instructed on Bankers Realtys breach of contract claim, and on Shiotsugus claims of fraud (inducing Shiotsugu to sign the listing agreement by telling her she could cancel it by February 28, 2004); constructive fraud arising from breach of fiduciary duty by Mosich; and false representations.

The jury returned a general verdict finding in favor of Shiotsugu, both on the Bankers Realty complaint and on Shiotsugus cross-complaint against Bankers Realty and Mosich. The jury awarded damages in the sum of $71,000 against Bankers Realty, and $48,450 against Dori Mosich. Judgment was entered on November 9, 2005, and motions by Bankers Realty and Mosich for judgment notwithstanding the verdict and for a new trial were denied.

Bankers Realty and Mosich filed appeals from the judgment.

DISCUSSION

On appeal, Bankers Realty contends the trial courts instruction on damages was erroneous as a matter of law, and the jurys award of damages was not supported by substantial evidence. Mosich presents similar contentions. We see no basis for disturbing the judgment.

1. The claim of instructional error is without merit.

The jury was instructed on Shiotsugus damages as follows:

If you decide that Alice Shiotsugu has proved her claim against Dori Mosich, you also must decide how much money will reasonably compensate Alice Shiotsugu for the harm. This compensation is called damages. The amount of damages must include an award for each item of harm that was caused by Dori Mosichs wrongful conduct, even if the particular harm could not have been anticipated. [] Alice Shiotsugu does not have to prove the exact amount of damages that will provide reasonable compensation for the harm. However, she must not however, you must not speculate or guess in awarding damages.

Bankers Realty and Mosich (collectively, Bankers) complain that the instruction was erroneous as a matter of law, because it failed to reflect either of two possible measures of damages for fraud by a fiduciary: (1) the out-of-pocket measure (CACI 1923), which awards the difference in actual value at the time of the transaction between what the plaintiff gave and what he received, and (2) the benefit-of-the-bargain measure (CACI 1924), which awards the difference in value between what the plaintiff actually received and what he was fraudulently led to believe he would receive. (See Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1240.) Bankerss theory is that Shiotsugu gave nothing under the out-of-pocket measure, and bargained for essentially, nothing under the benefit-of-the-bargain measure. The theory is specious. The CACI instructions to which Bankers refers, both of which require a determination of fair market value, assume the existence of a transaction in which property changes hands. This is not such a case, and the instruction the trial court gave was, of necessity, different from the CACI instructions, which were inapposite to the circumstances before the jury. The instruction given was appropriate to those circumstances, and perfectly consistent with Civil Code section 3333, which provides: For the breach of an obligation not arising from contract, the measure of damages, except where otherwise expressly provided by this code, is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not.[1]

Bankers also contends the instruction on damages was erroneous because it required the jury to hold Bankers Realty and Mosich liable for any harm caused, rather than only for harm the conduct was a substantial factor in causing. We see no prejudicial error. The instruction on damages tells the jury that each item of harm must have been caused by Dori Mosichs wrongful conduct . . . . Other instructions likewise indicated the jury must find the wrongful conduct caused harm. Thus the court told the jury that constructive fraud comprises any act, omission or concealment involving a breach of duty, trust or confidence which results in damage to another, and that to establish a false representation that harmed her, Shiotsugu had to prove that she reasonably relied on the representation, was harmed, and her reliance was a substantial factor in causing her harm. Moreover, a judgment may not be reversed for instructional error in a civil case unless the error has resulted in a miscarriage of justice. (Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 580.) The record in this case in no way supports a conclusion that any miscarriage of justice occurred.

2. Substantial evidence supported the damages awards.

Bankers asserts there was no evidence of any damages suffered by Shiotsugu. The only evidence of damage, according to Bankers, was Shiotsugus testimony that she was unable to obtain a loan at 4.2 percent because her home was listed for sale, and the cost of the loan increased to 6.0 percent by June. Shiotsugu was not harmed, Bankers claims, because she did not take out a six percent loan, and even if she had, there was no evidence to justify awarding almost six years worth of that theoretical difference in monthly payment. Bankers reasons that Shiotsugu already had a line of credit at 4.2 percent, so she in fact obtained financing at her desired rate . . . . This reasoning misreads the record and is otherwise without merit.

First, Shiotsugu was harmed, because (1) as a result of the increase in interest rates, which would have increased her mortgage payment by about $1,000 per month, she could not afford to refinance the mortgage, and hence could not construct the second story she wanted to add to her home (an addition which necessarily would have increased its value); (2) her line of credit had a variable interest rate, not a fixed rate, so, contrary to Bankerss claim, she did not obtain financing at her desired rate, since that rate necessarily rose when interest rates rose; and (3) she was subjected to three months of continual disturbance from real estate salespeople and their customers walking around her property, day and night. All of these items are detriment proximately caused by Mosichs wrongful conduct (Civ. Code, 3333), and Shiotsugu is entitled to compensation for these detriments.

Second, it is of course true that the jury may not speculate in awarding damages. However, the evidence clearly showed harm to Shiotsugu, and where the amount of damages is uncertain, the assessment of the amount is within the province of the jury. (See Dallman Co. v. Southern Heater Co. (1968) 262 Cal.App.2d 582, 594 [ it appears to be the general rule that while a plaintiff must show with reasonable certainty that he has suffered damages by reason of the wrongful act of defendant, once the cause and existence of damages have been so established, recovery will not be denied because the damages are difficult of ascertainment ; the defendant whose wrongful act gave rise to the injury will not be heard to complain that the amount thereof cannot be determined with mathematical precision ].) Under these principles and on this record, we see no basis for altering the jurys determination of the amount of the damages.

Bankers insists the damages award must have been based on Shiotsugus emotional distress, and that a plaintiff cannot recover emotional distress damages in a fraud action, citing Devin v. United Services Auto. Assn. (1992) 6 Cal.App.4th 1149, 1158-1159 [damages for fraud are ordinarily limited to recovery of economic injuries].) Devin, however, was a claim involving an insurers duty to defend the insured in an underlying fraud lawsuit by the purchasers of the insureds home, and included no direct discussion of the issue. Moreover, other cases suggest otherwise. (See Crisci v. The Security Ins. Co. (1967) 66 Cal.2d 425, 433 [it is settled in this state that mental suffering constitutes an aggravation of damages when it naturally ensues from the act complained of; the commonest example is where the plaintiff suffers personal injuries in addition to mental distress, but awards are not confined to such cases; damages for mental distress have also been awarded in cases where the tortious conduct was an interference with property rights without any personal injuries apart from the mental distress]; see also Jahn v. Brickey (1985) 168 Cal.App.3d 399, 406-407 [plaintiff who prevailed on tort theories of fraud and breach of fiduciary relationship, as well as on his claim for rescission, was entitled to damages for emotional distress; [t]he jury clearly found Brickey intentionally wronged Jahn]; cf. Quezada v. Hart (1977) 67 Cal.App.3d 754, 761 [observing that Civil Code section 3333 does not preclude damages for emotional suffering as a consequence of tortious conduct].)

In short, Mosichs wrongful conduct clearly caused both pecuniary and other harm to Shiotsugu, and the determination of the amount of that harm was within the province of the jury. We see no basis upon which we may interfere with the jurys award.

3. Points raised in Bankers reply brief have been waived.

In its reply brief, Bankers Realty contends, for the first time, that Bankers Realty, Inc. (the corporate entity) was not the broker of record or Mosichs employer, and that the evidence showed only that Mosich worked as an agent for Peter Mota, an individual doing business as Bankers Realty (which Bankers now claims was not merged into the corporate entity until several years later). Bankers Realty did not raise this issue in its opening brief, and the same is true of its contention that the verdict must be overturned because of the disparity in damage awards assessed against it ($71,000) and against Mosich ($48,450).[2]Because Bankers did not raise these issues in its opening brief, the points have been waived. (Tisher v. California Horse Racing Bd. (1991) 231 Cal.App.3d 349, 361.)

DISPOSITION

The judgment is affirmed. Alice Shiotsugu is to recover her costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

RUBIN, J.

We concur:

COOPER, P. J.

FLIER, J.

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[1] See also Civil Code section 1709: One who willfully deceives another with intent to induce him to alter his position to his injury or risk, is liable for any damage which he thereby suffers.

[2] The suggestion was also made at oral argument that it is uncertain whether the $71,000 verdict against Bankers Realty included the $48,450 verdict against Mosich. Any ambiguity in the judgment is not before us, and would be a matter for the trial court to resolve in the first instance, when Shiotsugu seeks to enforce the judgment. As to the disparity in the two awards, even if the issue had not been waived, the evidence at trial supported the disparity. The evidence showed other employees of Bankers Realty besides Mosich CEO Peter Mota and Susan Wylie ignored Shiotsugus pleas to cancel the listing of her property. Indeed Mota, who testified he was everything at Bankers Realty, was presumably responsible for the Bankers Realty complaint against Shiotsugu, seeking a commission for the listing she begged him to cancel. The jury could well have concluded from this evidence that Bankers Realty should bear a higher proportion of Shiotsugus damages.