Boyko v. Millican
Filed 5/6/13 Boyko v.
Millican CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits
courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH
APPELLATE DISTRICT
DIVISION
THREE
JOHN M. BOYKO et al.,
Plaintiffs,
Cross-defendants, and Respondents,
v.
PATRICK R. MILLICAN,
Defendant,
Cross-complainant, and Appellant;
SAILOR J. KENNEDY,
Defendant and
Appellant.
G046746
(Super. Ct. No. 30-2009-00119018)
O P I N I O N
Appeal
from a judgment and postjudgment orders of the Superior Court of
County, William M. Monroe, Judge. Affirmed.
Patrick
R. Millican, in pro. per., for Defendant, Cross-complainant, and Appellant
Patrick R. Millican.
Sailor
J. Kennedy, in pro. per., for Defendant and Appellant Sailor J. Kennedy.
Rodney
W. Wickers for Plaintiff, Cross-defendant, and Respondent Mireille Robinson by
her executor Robert Bird-Robinson.
No
appearance for Plaintiff, Cross-defendant, and Respondent John M. Boyko.
* * *
Plaintiff Mireille Robinson lost $450,000 in a 2006 transaction
facilitated by her then attorney, plaintiff John M. Boyko. Mireille passed away on July 31, 2010, but this case proceeded to trial to address the question of who,
if anyone, should be held to account to Mireille’s estate for her financial
loss.
Following a jury trial, the trial court entered judgment on the
and against defendant Patrick R. Millican in the amount of $765,543.99, which
represented the initial $450,000 plus interest as specified in a promissory note
signed by Millican in favor of Boyko (even though Mireille was the source of
the funds). The court stated in a
subsequent order that the “[d]amages awarded to Boyko shall be paid toâ€
Mireille. Although the jury found
defendant Sailor J. Kennedy took part in tortious wrongdoing that harmed
plaintiffs, the judgment does not include an award of damages against
Kennedy. With regard to Millican’s
cross-complaint against Boyko and Mireille, the court entered judgment in favor
of cross-defendants Boyko and Mireille.
Millican and Kennedy separately raise numerous contentions of error, but
we affirm the judgment as well as various postjudgment
orders.
FACTS
Pleadings
In the operative first amended complaint, plaintiffs Boyko and
Mireille sued defendants Millican and Kennedy for breach of promissory note,
judicial foreclosure, conspiracy to defraud, willful misconduct, conversion,
and money had and received. Attached to
the first amended complaint are copies of a promissory note in the amount of
$500,000 and a deed of trust referencing a residential property in Laguna Niguel, California (the
Property).
percent; the $500,000 figure represents $450,000 in principal and $50,000 in
interest due on June 1, 2007, one year after the
effective date of the note. Both
documents bear the purported signature of Millican (as the borrower and
trustor), but not Kennedy. The loan
documents indicate Boyko (and not Mireille) is the lender and the beneficiary
of the deed of trust.
Plaintiffs alleged that Millican and Kennedy are “friends and joint
business venturers.†After the note and
deed of trust were signed by Millican, Boyko wired the funds “to a bank account
selected by the defendants.†Neither
Millican nor Kennedy repaid the loan. To
support the tort allegations, plaintiffs further alleged that defendants had no
“intent of repaying the proceeds of the requested loan, and instead agreed
amongst themselves to have Kennedy negotiate the terms of the loan and to
direct the payment of the funds of that loan to a bank account on their behalf,
with Millican providing the . . . loan documents in order
to hide their true intent to later deny the validity of that loan by asserting
failure of consideration for the misdelivery of the loan proceeds to Kennedy
without the knowledge or consent of Millican, and on that basis attempt to
repudiate the validity of the Note and/or the Trust Deed which secured the
loan.†Plaintiffs alleged they had no
knowledge of this “elaborate scheme and conspiracy between Millican and
Kennedy.â€
Kennedy and Millican separately answered the
first amended complaint. Kennedy pointed
toward Boyko as the cause of any damages that may have been suffered by
Mireille.
Millican filed a cross-complaint against Boyko and Mireille,
asserting 16 causes of action (e.g., breach of contract, negligence, various
permutations of fraud, indemnification).
Millican alleged that he received unsolicited copies of a loan
agreement, promissory note, and deed of trust from Boyko in June 2006. Millican admitted he signed and returned
these documents to Boyko. Millican
alleged that Boyko and Mireille breached their contract by failing to provide
“the required consideration†(presumably the $450,000 loan) to Millican. Despite their failure to fund the loan, Boyko
and Mireille recorded their deed of trust and thereby damaged Millican by
creating a cloud on his title to the Property.
In short, Millican alleged he was deceived by Boyko and other agents of
Mireille. Millican did not file any
causes of action against Kennedy or the actual recipient of the $450,000. The cross-complaint appends a copy of a
mortgage loan agreement (which was not attached to the operative complaint),
the promissory note, and the deed of trust.
The documents contained within the mortgage loan agreement are generally
consistent with the terms of the promissory note and deed of trust referenced
in the complaint.
Kennedy dropped out of school in the ninth grade. Kennedy worked in the insurance business for
about six years and has been working in the “mortgage brokerage business†since
the 1970s. Kennedy was convicted of a
felony 30 years ago in connection with false statements on an application to a
bank. Millican is a lawyer licensed to
practice law in Michigan and Ohio. Kennedy and Millican have
known each other since approximately 1987.
They are “very good friends†who talk perhaps once per week. Kennedy and members of his extended family
resided at the Property (owned by Millican at the time) in 2006 and 2007.
In 2005 and 2006, Boyko represented entities affiliated with
Millican and Kennedy in various litigation matters. Boyko was in daily communication with Kennedy
and occasional communication with Millican.
Kennedy told Boyko he “was in the process of attempting to develop a
resort casino in Argentina.†Kennedy said he “had invested
several millions of his own dollars into the project.†At the outset of Boyko’s relationship with
Kennedy, Kennedy had suggested he would compensate Boyko for his services as a
lawyer with a “five-percent interest in any and all hotel projects that were
successfully completed.†Millican owned
a half-percent interest in the casino project.
Mireille was approximately 85 years old in 2006. As a result of her age and health issues,
Mireille signed a durable power of attorney in April 2006, designating Boyko
and Robert Bird-Robinson (Robert) as co-agents.
Mireille requested help investing her money.
In May 2006, Kennedy approached Boyko seeking an investor in the
casino project. Boyko advised Robert
about a proposed $450,000 loan and Robert agreed that the opportunity could be
presented to Mireille. Boyko did not
tell Robert the identity of the borrower or where he was sending the money,
other than the general idea that the money would be used to pursue a project in
South America. An essential component of
Robert’s consent to the loan was that it was secured. Kennedy responded to Boyko’s concerns by
offering the Property as security.
“Kennedy was residing at the property. . . . But the Property was actually purchased by .
. . Millican from . . . Kennedy’s son approximately three months before this
transaction occurred, so they had fresh appraisals in-hand . . . .†Millican agreed with this plan.
Boyko prepared the mortgage loan agreement, the promissory note, and
the deed of trust. It was an “oversightâ€
on Boyko’s part not to insert Mireille’s name as the lender/beneficiary rather
than Boyko. Kennedy and his son assisted
Millican with providing copies of appraisals to Boyko in April or May 2006. On June 5, 2006,
Millican signed and initialed all the documents and sent them by overnight mail
to Boyko. The promissory note stated
that payment of $500,000 was due June 1, 2007. Although Boyko was identified as the lender
in the loan documents, it was actually Mireille’s money being loaned.
On June
8, 2006, Boyko received an e-mail from
Kennedy providing wiring instructions for the money borrowed by Millican. The recipient of the wire transfer was
Calstar Properties, LLC (Calstar).
name="_ftnref3" title="">[3] Boyko knew “Kennedy was using this as a
vehicle for funding his operations in terms of his investments.†Boyko had previously performed legal work on
behalf of Calstar. Boyko did not discuss
this transfer of funds with Millican, but Millican had orally represented on an
earlier occasion that Kennedy would handle loan negotiations and loan
disbursement issues. Boyko did not have
written authorization from Millican for sending the money to the Calstar
account (or any other account). Nor did
Boyko have written documentation of the alleged agency relationship between Kennedy
and Millican. Boyko wired the money to
the Calstar account.
Millican came to Kennedy for assistance in procuring a loan in early
2007. Kennedy identified Bernard
Greenberg as a lender. Kennedy had a
written authorization signed by Millican authorizing Kennedy to obtain a loan
from Greenberg on Millican’s behalf. The
written authorization stated “Kennedy shall have no authority to sign documents
on behalf of Millican [or] receive any proceeds of the loan . . . .â€
In December 2006 or January 2007, Kennedy advised Boyko that “theyâ€
needed additional funds and asked Boyko if Mireille’s loan could be
subordinated. Robert did not know any of
the details of the subordination agreement (i.e., the borrower, the lender, the
amount). But, on the advice of Boyko,
Robert nonetheless agreed to the subordination agreement. Robert thought the loan was still
secure. Boyko talked to Kennedy about
the subordination agreement, not Millican.
But Millican signed the subordination agreement.
In March 2007, Greenberg loaned Millican $330,000. The loan was secured by a deed of trust on
the Property. This is the security
interest to which Mireille’s trust deed was subordinated. Greenberg had never met Millican; Kennedy
negotiated the terms and conditions of the loan. Greenberg wired $50,000 of the money to
Calstar at the direction of either Kennedy or Millican (but Greenberg does not
specifically recall ever speaking to Millican).
Greenberg received payments on the loan from a Calstar checking
account. Greenberg did not receive
additional payments after December 2007.
Debra Riehl was the escrow agent with regard to the Greenberg
loan. Her office prepared the agreement
subordinating the $500,000 Boyko loan to the Greenberg loan. The usual practice of her office was to send
such a document to the parties. Riehl
sent Millican the entire file, including the subordination agreement. Millican
signed and returned all of the documents to Riehl, including the subordination
agreement. Riehl’s files do not include
any notation of a communication from Millican indicating he did not receive the
entire subordination agreement.
In June 2007, the $500,000 was not paid to Boyko or Mireille. Kennedy offered various excuses based on
political or regulatory difficulties in Argentina. Boyko met with Mireille, Robert, and Randy
Robinson (another son of Mireille). They
agreed to “take a wait-and-see attitude for a couple of months.†Boyko continued to talk to Kennedy about the
nonpayment of funds. The casino project
never came to fruition.
On September
25, 2007, Boyko borrowed $300,000 from
Calstar, secured by a deed of trust encumbering property owned by Boyko. The property was purchased by Boyko with a
$1.1 million loan brokered by Kennedy earlier in September 2007.
On January 22 and February 15, 2009, Boyko wrote
letters to Millican demanding repayment of the loan and threatening legal
action. The first letter indicated he
was writing on behalf of Mireille, “the holder of the note.†Boyko sent the second letter because he
realized it was in fact his name on the note, “even though [he] was holding it
for her.†Millican did not respond to
the correspondence.
Judgment
The jury was presented with a 76-page special verdict form. With regard to the first amended complaint,
the jury found Mireille did not enter into a contract with either Kennedy or
Millican. The jury found Boyko did not
enter into a contract with Kennedy. But the
jury found Boyko did enter into a contract with Millican and that Boyko performed
his obligations under the contract. The
jury also found Boyko was harmed by Millican’s failure to perform the contract;
the jury set damages in the amount of $450,000 principal, plus $50,000 interest
and further interest accrued since June 1, 2007. Relatedly, the jury found Millican made a
false promise to Boyko that was a substantial factor in harming Boyko, but the
jury did not award any damages as part of its findings on this fraud cause of
action. The jury also found Millican had
converted Boyko’s property in the amount of $450,000, plus $50,000 in interest.
The jury found that Kennedy was an ostensible agent for Millican
(and Millican was an ostensible agent for Kennedy) in connection with the loan
transaction and that “plaintiff [Mireille]/Boyko was harmed because he/she
reasonably relied on his/her belief†that the agency relationships
existed. But no damages were
specifically awarded in connection with these agency findings. Similarly, the jury found that Millican and
Kennedy engaged in a conspiracy to commit promissory fraud, deceit, and/or
concealment that was a substantial factor in causing harm to Mireille and
Boyko, but awarded no damages to either Mireille or Boyko as a result of these
findings.
As to the cross-complaint, the jury found that Boyko was negligent,
but his negligence did not cause harm to Millican. The jury did not make any other findings that
would potentially support liability on the cross-complaint.
The court entered judgment on January 27, 2012. The judgment is relatively clear in its
first, second, and ninth paragraphs, but includes additional material less
clear in its effect: “1. Plaintiff Boyko
recover judgment on the merits against Defendant Millican in the amount of $450,000.00
plus $50,000 in interest from June 1, 2006 to June 1, 2007, plus interest of
10% from June 2, 2007, to November 15, 2011, totaling
$765,543.99. . . .
[¶] 2. Plaintiffs Boyko and [Mireille]
recover interest on their respective judgments at a rate of 10% from the date
of this Judgment against Defendant Millican, until paid. [¶] 3.
Defendant Millican received money intended for Plaintiff Boyko, did not use it
for the benefit of Plaintiff Boyko, and did not give it to Plaintiff
Boyko. [¶] 4. Defendant Millican made a false promise causing
harm to Plaintiff Boyko. [¶] 5. Defendant Millican converted Plaintiff
Boyko’s property harming him in the amount of $450,000, plus $50,000 interest
from June 1,
2006 through June 1, 2007. [¶] 6. Defendant Kennedy, as agent for Defendant
Millican, harmed Plaintiff Boyko and Plaintiff Robinson. [¶] 7.
Defendants Millican and Kennedy conspired and intended to commit and did commit
promissory fraud, deceit and/or concealment which was a substantial factor in
causing harm to both Plaintiff Boyko and Plaintiff [Mireille]. [¶] 8.
Cross Defendant Boyko was negligent, but his negligence was not a substantial
factor in causing harm to . . . Millican or [Mireille]. [¶] 9.
Cross Complainant Millican recover nothing from Cross Defendant Boyko and Cross
Defendant [Mireille].†It appears the
$500,000 awarded for conversion in paragraph 5 is duplicative of the damages
described in paragraph 1.
In a January 31, 2012 order, the court indicated “it would be unjust
enrichment to allow Boyko to retain the damages because of the
agency/employment relationship.
Therefore, the court imposes a constructive trust and order damages
awarded to Boyko be paid to [Mireille].â€
The court also found Boyko and Mireille were prevailing parties entitled
to attorney fees and costs against defendants.
In a separate section of its order, the court found Kennedy was not a
prevailing party entitled to his costs.
The court did not actually award costs or attorney fees as part of this
order.
In a March 27, 2012 order, the court denied defendants’ motions for
judgment notwithstanding the verdict and their motions for a new trial. The court called for additional briefing on
the question of attorney fees and costs; there is no order in the record
actually awarding attorney fees or costs to plaintiffs. The court was concerned with the question of
which costs and attorney fees could be awarded against Kennedy, in light of the
fact that Millican was the only defendant to file a cross-complaint against
plaintiffs.
DISCUSSION
Millican and Kennedy separately appeal the judgment and various
orders entered by the court. Before
addressing each of the issues properly before us, we mention several relevant
general rules of appellate practice. “‘A
judgment . . . is presumed correct. All intendments and presumptions are indulged
to support it on matters as to which the record is silent, and error must be
affirmatively shown. This is not only a
general principle of appellate practice but an ingredient of the constitutional
doctrine of reversible error.’†(
Cal.3d 557, 564.) To demonstrate
prejudicial error, an appellant must provide an adequate record of the trial
court proceedings and include specific page citations in its briefs illustrating
the error. (Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121,
132; Duarte v. Chino Community Hospital
(1999) 72 Cal.App.4th 849, 856.)
Issues not specifically raised at trial are forfeited on appeal. (Premier
Medical Management Systems, Inc. v. California Ins. Guarantee Assn. (2008)
163 Cal.App.4th 550, 564.)
Moreover, issues not specifically raised in the appellate briefs are
waived. (Roberts v. Assurance Co. of America (2008) 163
Cal.App.4th 1398, 1410.)
With regard to the parties’ multiple claims that the evidentiary
record is insufficient to support factual findings underlying the judgment or
posttrial orders, we apply the substantial evidence standard of review. “Under the substantial evidence standard of
review, ‘we must consider all of the evidence in the light most favorable to
the prevailing party, giving it the benefit of every reasonable inference, and
resolving conflicts in support of the [findings]. [Citations.]
[¶] It is not our task to weigh
conflicts and disputes in the evidence; that is the province of the trier of
fact. Our authority begins and ends with a determination as to whether, on the
entire record, there is any
substantial evidence, contradicted or uncontradicted, in support of the
judgment.’†(ASP Properties Group, L.P. v. Fard, Inc. (2005) 133
Cal.App.4th 1257, 1266.)
I.
ISSUES RAISED BY MILLICAN
Judgment Notwithstanding the Verdict Motions
Millican repeatedly contends throughout his brief that the court
erred by denying his oral motion for nonsuit at the close of plaintiffs’
case-in-chief. When Millican stated his
intention to make a motion, the court indicated that “[i]f you’re making a
motion for nonsuit, denied.†Relatedly,
Millican claims throughout his brief that the court erred by denying his motion
for judgment notwithstanding the verdict.
“Only after, and not before, the plaintiff has completed his or her
opening statement, or after the presentation of his or her evidence in a trial
by jury, the defendant, without waiving his or her right to offer evidence in
the event the motion is not granted, may move for a judgment of nonsuit.†(Code Civ. Proc., § 581c, subd.
(a).) “An order denying a motion for
nonsuit, while not directly appealable, may be reviewed on appeal from the
subsequent judgment for the plaintiff.â€
(Murray’s Iron Works, Inc. v.
Boyce (2008) 158 Cal.App.4th 1279, 1290.) “A defendant is entitled to nonsuit if the
trial court determines as a matter of law that plaintiff’s evidence, when
viewed most favorably to the plaintiff under the substantial evidence test, is
insufficient to permit a jury to find in his favor. [Citation.]
We review an order denying a motion for nonsuit by using the same test
as the trial court, and will affirm that order so long as there was substantial
evidence to support the jury’s verdict.â€
(Mendoza v. City of West Covina
(2012) 206 Cal.App.4th 702, 713.)
“The court, before the expiration of its power to rule on a motion
for a new trial . . . shall render judgment in favor of the aggrieved party
notwithstanding the verdict whenever a motion for a directed verdict for the
aggrieved party should have been granted had a previous motion been made.†(Code Civ. Proc., § 629.) Our review of the court’s denial of
Millican’s motion for judgment notwithstanding the verdict is the same as our
review of the denial of the nonsuit motion.
“Rulings on motions for nonsuit and for [judgment notwithstanding the
verdict] are reviewed for the existence of substantial evidence.†(OCM
Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157
Cal.App.4th 835, 845.)
Millican claims he was entitled to nonsuit or judgment
notwithstanding the verdict against Boyko because of admissions by Boyko that
he did not have any actual damages in the case.
But the jury was entitled to infer that what Boyko meant by these
admissions was that any money technically owed to him as the holder/payee of
the promissory note was actually owed to Mireille. (See Cal. U. Com. Code, § 3301 [“holder
of the instrument†entitled to enforce instrument].) In essence, Boyko was the assignee of
Mireille’s right to enforce the note and deed of trust. (Cf. Arabia
v. BAC Home Loans Servicing, L.P. (2012) 208 Cal.App.4th 462, 472-474
[loan servicer may commence judicial foreclosure with assignment of right to do
so by deed of trust beneficiary].) It is
unclear why Boyko did not simply assign the note and deed of trust to Mireille
before this litigation began. Given
Boyko’s questionable practices as attorney for Mireille (e.g., placing her
money in an overseas casino investment in which Boyko apparently held a stake,
advising Mireille to subordinate her security interest without new
consideration, failing to obtain clear written authorization from Millican for
the disbursement of Mireille’s funds to Calstar, borrowing money from Calstar
after he had transferred Mireille’s money to Calstar), joining Mireille and
Boyko as plaintiffs in the action was an awkward fit. But that is beside the point for purposes of
Millican’s motion for nonsuit.
Relatedly, Millican makes the claim that there is no evidence he
received any consideration from Boyko or Mireille, and that there was no
evidence he conspired or had an agency relationship with Kennedy. But this ignores the inferences the jury
fairly made from the direct and circumstantial evidence at trial. The jury was presented with two basic
theories of the case: (1) Millican was
Boyko’s patsy, set up by Boyko with the promissory note and deed of trust to
cover Boyko’s tracks in case the speculative bet on the casino venture did not
pay off; or (2) Boyko was Millican’s and Kennedy’s patsy, set up to believe the
casino venture would pay off and the Property would provide security to the
loan if it did not. The jury believed
the latter theory and there was substantial evidence to support that
theory. Millican had close connections
with Kennedy and was connected in other ways with Calstar. Millican told Boyko that Kennedy would handle
issues pertaining to the loan. Kennedy
delivered appraisal documents necessary for the secured loan to proceed. Millican signed the loan documents but did
not inquire with Boyko as to why he did not receive the loan funds. Millican signed a subordination agreement
referencing the Boyko deed of trust in 2007.
The jury was entitled to disbelieve the testimony of Millican and
Kennedy to the extent their testimony suggested that Millican had nothing to do
with the $450,000 being transferred to Calstar for use in the casino
investment. Based on the evidence
presented, the jury was entitled to agree with plaintiffs’ contention that
Millican received Mireille’s $450,000.
Millican also claims the court erred by supposedly refusing to allow
him to argue his motion for nonsuit.
Millican does not cite any authority for the proposition that a court
must allow a party to present argument on an oral nonsuit motion. And even if the court should have allowed
argument, Millican cannot demonstrate prejudice as his motion was not meritorious.
Responses to Requests for Admission
Millican also claims the court erred by refusing to grant a new
trial. “[W]e review an order denying a
new trial motion under the abuse of discretion standard. However, in doing so, we must review the
entire record to determine independently whether there were grounds for
granting the motion.†(
(2012) 202 Cal.App.4th 708, 733.) A
new trial may be granted based on, among other factors, “1. Irregularity in the
proceedings of the court, jury or adverse party, or any order of the court or
abuse of discretion by which either party was prevented from having a fair
trial. [¶] . . . [¶] 3. Accident or surprise, which ordinary
prudence could not have guarded against.
[¶] 4. Newly discovered evidence,
material for party making the application, which he could not, with reasonable
diligence, have discovered and produced at the trial. [¶] . . . [¶]
7. Error in law, occurring at the trial and excepted to by the party
making the application.†(Code Civ.
Proc., § 657.)
Millican’s first asserted ground for new trial is that the court
allowed Mireille at trial to withdraw two admissions she made during
discovery. On November 4, 2010, Millican
propounded a set of 151 requests for admission.
(Code Civ. Proc., § 2033.010 et seq.) Mireille responded on December 8, 2010
(although the record does not include a signature under oath by Mireille’s
representative).
Mireille admitted request numbers 65 and 72. Request No. 65 asked Mireille to “[a]dmit the
allegation(s) contained in paragraph 77 of Patrick R. Millican’s
Cross-Complaint.†Paragraph 77 of the
cross-complaint, in turn, stated “That [Mireille] was to provide a $450,000.00
investment in the venture in return for the interest in the venture.†Request No. 72 asked Mireille to “[a]dmit the
allegation(s) contained in paragraph 84 of Patrick R. Millican’s
Cross-Complaint.†Paragraph 84 of the
cross-complaint, in turn, stated “That at the time that [Boyko] sent the [loan
documents] to MILLICAN, [Mireille and Boyko] intended to deceive MILLICAN into
believing that after they received the signed [loan documents] back from
MILLICAN, that he would receive the $450,000 cash consideration that the NOTE
called for.â€
Millican read these admissions
into the record at trial. Mireille
subsequently moved to withdraw or amend her responses pursuant to Code of Civil
Procedure section 2033.300. Mireille and
her counsel attached their declarations to the motion, indicating they had
inadvertently responded “admit†to request numbers 65 and 72. The court granted Mireille’s motion. The court cited the confusing nature of the
requests for admission (in that they referenced the cross-complaint rather than
simply stating an alleged fact to admit or deny). The court found Millican was not prejudiced
because Mireille’s other discovery responses and her theory of the case at
trial was diametrically opposed to these admissions.
“A party may withdraw or amend an admission made in response to a
request for admission only on leave of court granted after notice to all
parties.†(Code Civ. Proc.,
§ 2033.300, subd. (a).) “The court
may permit withdrawal or amendment of an admission only if it determines that
the admission was the result of mistake, inadvertence, or excusable neglect,
and that the party who obtained the admission will not be substantially
prejudiced in maintaining that party’s action or defense on the merits.†(Id.,
subd. (b).)
We review the court’s ruling for an abuse of discretion. (New Albertsons,
Inc. v. Superior Court (2008) 168 Cal.App.4th 1403, 1420-1421.) “The trial court’s discretion in ruling on a
motion to withdraw or amend an admission is not unlimited, but must be
exercised in conformity with the spirit of the law and in a manner that serves
the interests of justice. Because the
law strongly favors trial and disposition on the merits, any doubts in applying
section 2033.300 must be resolved in favor of the party seeking relief. Accordingly, the court’s discretion to deny a
motion under the statute is limited to circumstances where it is clear that the
mistake, inadvertence, or neglect was inexcusable, or where it is clear that
the withdrawal or amendment would substantially prejudice the party who
obtained the admission in maintaining that party’s action or defense on the
merits.†(Id. at pp. 1420-1421.)
The court was within its discretion in granting Mireille’s
motion. Millican propounded an excessive
(Code Civ. Proc., § 2033.030, subd. (a) [party only entitled to serve 35 requests
for admission as a “matter of rightâ€])
number of requests for admission, which were improper in that they required the
responding party to refer to another document (Code Civ. Proc.,
§ 2033.060, subd. (d) [“Each request for admission shall be full and
complete in and of itselfâ€]). Although
great care should be taken in preparing responses to requests for admission, it
is plausible that Mireille inadvertently admitted these requests. And given that the parties were in the middle
of a trial in which the central issue was whether Millican was a victim or
villain with regard to the $450,000, it is equally plausible for the court to
have posited that Millican was not prejudiced by not being able to use these
inadvertent admissions. It is not as
though Millican was unaware of Mireille’s actual position as to what occurred
going into trial.
Millican claims in his appellate briefs that the motion was
untimely, in that it came after the close of discovery. (See Code Civ. Proc., § 2024.020, subd.
(a) [discovery cut off for “motions concerning discovery†is “on or before the
15th day, before the date initially set for the trial of the actionâ€].) But Millican forfeited this argument, as
Millican did not raise with the trial court an argument that a motion to
withdraw or amend admissions cannot occur after the discovery cut-off
date. In opposing the motion at trial,
Millican only argued he would be prejudiced if the motion were granted because
he rested his case in reliance on the admissions helping his case at
trial. In granting the motion, the court
explicitly authorized Millican to reopen his case with regard to the subject
area of the admissions.
We also note the admissions at issue did not represent the end of
the case even if the court had ruled that the admissions must stand. Mireille first admitted she “was to provide a
$450,000.00 investment in the venture in return for the interest in the
venture.†While Millican contends the
use of the words “venture†and “interest†(rather than “loan,†“note,†and
“deed of trustâ€) suggests Mireille was admitting to Millican’s characterization
of the transaction, the request is vague and ambiguous in that it is plausible
that Mireille and her attorney meant simply she admitted she provided $450,000
in exchange for her contractual rights under the note and deed of trust.
Mireille also admitted “[t]hat at the time that [Boyko] . . . sent
the [loan documents] to MILLICAN, [Mireille and Boyko] intended to deceive
MILLICAN into believing that after they received the signed [loan documents]
back from MILLICAN, that he would receive the $450,000 cash consideration that
the NOTE called for.†Obviously, an
admission that Mireille and Boyko “intended to deceive†Millican was harmful to
plaintiffs’ case. But given the reality
of the case, any such “deception†was beside the point if the jury believed
Millican actually did receive the funds (in the sense that he approved of the
destination of the $450,000 wire transfer).
Mireille did not admit that Millican did not receive the funds. It is likely that through inadvertence
Mireille and her attorney did not notice the word “deceive†in the request for
admission, as Mireille certainly did admit that she and Boyko intended to
convince Millican to believe that after they received the signed loan
documents, the $450,000 cash consideration would be transmitted to Millican’s
preferred destination (the casino project).
In the operative complaint, plaintiffs alleged that “[p]ursuant to
written instructions authorized by Millican and delivered by Kennedy to Boyko,
Boyko caused the proceeds of the [$450,000] loan to be wired to a bank account
selected by the defendants, and each of them.â€
As explained in the statement of facts, Boyko received an e-mail from
Kennedy providing wiring instructions for the money borrowed by Millican. The account was under the name Calstar. Boyko did not discuss this transfer of funds
with Millican, but understood based on prior conversations with Millican and
the nature of loan negotiations that Kennedy could designate where the funds
should be transferred. Obviously, the
gist of plaintiffs’ breach of contract action against Millican was that Kennedy
was Millican’s agent and that Kennedy was authorized to direct the disbursement
of funds.
But in his discovery response to a request for admission, Boyko
apparently admitted “that in the year 2006, Boyko had no oral authority from
Millican making Kennedy Millican’s agent for the loan.†This admission was read into the record by
Millican following his cross-examination of Boyko. Millican does not cite to a copy of the
actual discovery response in his brief.
Millican asserts the court erred by instructing the jury on agency
issues and including agency questions in the special verdict with regard to
plaintiffs’ causes of action. Millican
claims he was entitled to a new trial because of this purported error. But Millican ignores the fact that the jury
was instructed on the theory of ostensible agency, not actual agency.
ostensible.†(Civ. Code,
§ 2298.) “An agency is actual when
the agent is really employed by the principal.â€
(Civ. Code, § 2299.) “An
agency is ostensible when the principal intentionally, or by want of ordinary
care, causes a third person to believe another to be his agent who is not
really employed by him.†(Civ. Code,
§ 2300.)
Here, even holding Boyko to his ill-advised admission as the jury
was instructed to do, the jury was entitled to make special verdict findings
that Kennedy was Millican’s ostensible agent.
Boyko could reasonably have believed
the agency existed based on the close relationship between Kennedy and
Millican, past dealings between the three men (Boyko, Kennedy, and Millican),
Kennedy and his family residing at the Property owned by Millican that served
as the security for the transaction, Kennedy’s performance of various tasks for
Millican (e.g., providing the appraisals for the Property), Kennedy’s provision
of the wiring instructions for the loan proceeds, the lack of other
instructions from Millican for the loan proceeds, and the lack of inquiry by
Millican into the whereabouts of the loan proceeds. The evidence concerning the Greenberg loan
circumstantially supported the jury’s finding that an ostensible agency existed,
in that Kennedy acted as Millican’s actual agent for purposes of the Greenberg
loan, which was a nearly identical transaction to the Mireille loan.
Riehl as Surprise Witness
Millican next contends the court should have granted a new trial
because the escrow agent, Riehl, was not on the pretrial witness list and was
subpoenaed during trial. Riehl was not
called to testify during plaintiffs’ case-in-chief. Instead, she was called to testify by Boyko
during his rebuttal case. Riehl’s
testimony, if believed, tended to undermine prior testimony of Millican that
Millican had never seen the entire subordination agreement from the Greenberg
loan (even though Millican admitted signing the agreement). Thus, Riehl’s testimony and her Greenberg
loan file were relevant to an issue in dispute and admissible as impeachment
evidence (Evid. Code, § 780, subd. (i)).
Millican cites no authority for the proposition that a court abuses its
discretion by allowing a party to call a percipient witness at trial to impeach
and rebut a party opponent’s testimony, notwithstanding the absence of that
witness on the witness list. Nor does
Millican cite any authority for the proposition that it is unfair surprise
under Code of Civil Procedure section 657, subdivision (3), to allow the
testimony of Riehl under the circumstances presented. We reject Millican’s argument.
Millican also asserts the court erred by excluding evidence
pertaining to Mireille exploring the possibility of a separate malpractice
action by Mireille against Boyko, and by refusing to grant a new trial based on
this allegedly wrongful exclusion of evidence.
The court cited Evidence Code section 352 in granting Boyko’s objection
to such evidence. Trial courts have
broad discretion to exclude evidence under Evidence Code section 352 to avoid
confusing the issues and to prevent the undue consumption of time. (See Gibbs
v. American Airlines, Inc. (1999) 74 Cal.App.4th 1, 14.) Millican provides no citations to legal
authority or reasoned argument in support of his bare contention that he is
entitled to a new trial because of this evidentiary ruling. Millican therefore waives this issue on
appeal. (See Cahill v. San Diego Gas & Elec. Co. (2011) 194
Cal.App.4th 939, 956 [appellate briefs must be supported by reasoned
argument and citations to authority or else issue is waived].) Even if the issue were not waived, we would
conclude the court was within its discretion when it excluded evidence of an
action by Mireille against Boyko.
Relatedly, Millican claims he was entitled to a new trial because of
newly discovered evidence relating to Mireille’s action against Boyko. Apparently, the operative complaint in
Mireille’s action alleges that Boyko harmed Mireille by losing her $450,000,
the same money at issue in the instant case.
Furthermore, Millican discovered that Boyko settled with Mireille for
$350,000.
Millican claims this evidence “and inferences to be drawn from it
could have changed the whole outcome of this case.†But he provides no reasoned argument or
citation to authority for his argument that the court was required to admit
this evidence. Obviously, the court’s
previously-discussed ruling under Evidence Code section 352 would apply equally
to these materials. Thus, Millican
waives this issue on appeal as well.
We also note that Evidence Code section 1152, subdivision (a),
precludes the introduction of “[e]vidence that a person has, in compromise . .
. , furnished or offered or promised to furnish money or any other thing, act,
or service to another who has sustained or will sustain or claims that he or
she has sustained or will sustain loss or damage, as well as any conduct or
statements made in negotiation thereof.â€
There is a theoretical possibility
that Mireille could be overcompensated for her damages, were Millican to
satisfy the judgment in full to Boyko.
Boyko would be required to turn over the amount paid by Millican. If Boyko had already paid $350,000 in
settlement funds to Mireille, she potentially would have obtained a double
recovery. But this contingency is a
problem for Boyko to address, not Millican.
The jury found Millican responsible for the loss of Mireille’s $450,000
(plus interest) and he must satisfy this judgment. Mireille did not sue Boyko in this action and
any claim the two actions should have been consolidated is forfeited.
be Prevailing Parties
Millican next claims the court erred by deeming plaintiffs to be the
prevailing parties in this action under Code of Civil Procedure section 1032,
subdivision (a)(4). A review of this
portion of Millican’s brief reveals that his argument is entirely contingent on
this court agreeing with one or more of his previous grounds for reversing the
judgment. As we affirm the judgment
against Millican, we reject Millican’s argument that he is the true prevailing
party in this action.
Trust in Favor of Mireille
Finally, Millican alleges the court erred by ordering that any
proceeds of the judgment received by Boyko must be held in trust for
Mireille. But it was Boyko, not
Millican, who was aggrieved by this order.
Boyko did not appeal the court’s postjudgment order; indeed, Boyko did
not file any documents with this court.
Millican does not have standing to pursue this argument on appeal. (See Code Civ. Proc., § 902 [“Any party
aggrieved may appeal in the cases prescribed in this titleâ€];
Cal.App.4th 279, 285 [to be cognizable on appeal, “‘the aggrieved party’s
interest must be immediate, pecuniary and substantial, and not merely a nominal
or remote consequence of the judgment’†]; Serrano
v. Stefan Merli Plastering Co., Inc. (2008) 162 Cal.App.4th 1014, 1026
[“Only a party aggrieved by a judgment or order has standing to appeal the
judgment or orderâ€].)
II.
Kennedy appears to have dodged a bullet in this case. The jury found he was Millican’s agent and
that he and Millican were engaged in a conspiracy to defraud plaintiffs that
harmed plaintiffs. But the jury found
plaintiffs suffered no loss by reason of this conduct. Accordingly, the judgment does not hold
Kennedy liable for the plaintiffs’ damages.
Moreover, plaintiffs did not appeal the judgment. Nevertheless, Kennedy appeals the
judgment.
Nearly all of Kennedy’s contentions on appeal duplicate the
arguments made by Millican. Kennedy
claims he was entitled to nonsuit or judgment notwithstanding the verdict
against both plaintiffs. Kennedy claims
the court prejudicially erred by allowing Mireille to withdraw her responses to
Millican’s requests for admission.
Kennedy claims he was entitled to judgment as a matter of law with
regard to agency allegations. We refer
to our analysis above with regard to these contentions and reject Kennedy’s
assertions on appeal. We also note that,
with regard to some issues, Kennedy is not an aggrieved party and therefore may
not complain on appeal. However, Kennedy
does raise one issue requiring additional analysis.
The court found plaintiffs were the prevailing parties in this
action. Kennedy asserts that, contrary
to the court’s postjudgment ruling, he was the prevailing party vis-à -vis
plaintiffs for purposes of his costs.
an abuse of discretion. (
Inc. (2005) 127 Cal.App.4th 847, 852.)
“‘Prevailing party’ includes the party with a net monetary recovery,
a defendant in whose favor a dismissal is entered, a defendant where neither
plaintiff nor defendant obtains any relief, and a defendant as against those
plaintiffs who do not recover any relief against that defendant. When any party recovers other than monetary
relief and in situations other than as specified, the ‘prevailing party’ shall
be as determined by the court, and under those circumstances, the court, in its
discretion, may allow costs or not and, if allowed may apportion costs between
the parties on the same or adverse sides pursuant to rules adopted under Section
1034.†(Code Civ. Proc., § 1032,
subd. (a)(4).) “Except as otherwise
expressly provided by statute, a prevailing party is entitled as a matter of
right to recover costs in any action or proceeding.†(Code Civ. Proc., § 1032, subd. (b).)
Unlike Millican, the judgment does not order Kennedy to pay damages
to Boyko. Also unlike Millican, Kennedy
did not file an unsuccessful cross-complaint against Boyko or Mireille. Under ordinary circumstances, Kennedy would
be the prevailing party for purposes of Code of Civil Procedure sections
1032. (See Childers v. Edwards (1996) 48 Cal.App.4th 1544, 1549-1551
[plaintiffs failed to obtain any relief from defendants and defendants were
therefore prevailing parties].) Kennedy
would therefore be entitled to his costs from plaintiffs, not vice versa.
The question presented is whether the court abused its discretion by
deviating from this result under the unique circumstances of this case. Judgment was entered stating that “Defendant
Kennedy, as agent for Defendant Millican, harmed Plaintiff Boyko and Plaintiff
Robinson†and “Defendants Millican and Kennedy conspired and intended to commit
and did commit promissory fraud, deceit and/or concealment which was a
substantial factor in causing harm to both Plaintiff Boyko and Plaintiff
[Mireille].†Plaintiffs obtained relief
in the action, but the tangible portion of the judgment came only against
Millican. Based on the jury’s special
verdict findings, one would think Kennedy and Millican would be jointly and
severally liable for some or all of the damages awarded. For whatever reason, that did not
happen. Neither plaintiff moved for a
new trial (or appealed the judgment for that matter). The court was faced with a paradox. The jury apparently agreed that Kennedy
played a crucial role in a fraud perpetrated on plaintiffs. But the judgment did not award damages
against Kennedy.
Two distinct doctrines converge to support the court’s exercise of
discretion under the unique circumstances of this case. First, this case is comparable to situations
in which plaintiffs, not defendants, were found to be prevailing parties under
Code of Civil Procedure section 1032, subdivision (a)(4), despite the lack of a
damages award against the applicable defendants in the judgment. (See Zamora
v. Shell Oil Co. (1997) 55 Cal.App.4th 204, 213-215;
Cal.App.3d 1560, 1565-1568.) In
both of these cases, damages were awarded to plaintiffs at trial, but a
monetary judgment was not entered against particular defendants because other
defendants had already satisfied the judgment by settling with plaintiffs. (Zamora, at
pp. 213-214 [jury found damages of $222,282, but “after crediting the aggregate
amount of settlements with other defendants, the court entered judgments against
[the appealing defendant] for $0â€]; Pirkig, at
p. 1566 [“The only reason respondents failed to obtain a net monetary recovery
[against appealing defendants] at the second trial was because [plaintiffs]
settled before trial with [other defendants] for a greater amount than awarded
by the second courtâ€].)
name="_ftnref7" title="">[7]
Second, Millican and Kennedy shared a unity of interest in defending
the plaintiffs’ suit. Cases have
recognized that parties that are “united in interest and shared the same
counsel†at trial are not entitled to the strict application of the definition
of “prevailing party†in Code of Civil Procedure section 1032, subdivision
(a)(4). (Slavin v. Fink (1994) 25 Cal.App.4th 722, 726; see also
Fire Ins. Co. (2004) 118 Cal.App.4th 1061, 1075 [“where one of
multiple, jointly represented defendants presenting a unified defense prevails
in an action, the trial court has discretion to award or deny costs to that
partyâ€].) Millican and Kennedy, longtime
friends and business associates, were found by the jury to have conspired to
commit fraud against plaintiffs.
Millican and Kennedy, representing themselves in this litigation,
pursued similar theories of the case at trial and never sued each other for
indemnity. Millican is an attorney and
Kennedy is a layman. Our review of the
record and the appellate briefs suggests that Kennedy followed Millican’s lead
in filing legal documents. Although this
is not a clear cut case in which Millican and Kennedy hired the same attorney
and co-filed pleadings, it is analogous to such cases.
In sum, the unique circumstances of the case before us supported the
court’s refusal to classify Kennedy as a prevailing party despite his success
in avoiding a monetary judgment against him.
Plaintiffs achieved their litigation goal of obtaining a monetary
judgment to recover Mireille’s losses.
The jury classified Kennedy as a tortfeasor who harmed plaintiffs, but
somehow did not cause any monetary loss.
Kennedy presented a unified litigation front with Millican, who was held
liable for damages in the judgment.
DISPOSITION
The judgment and postjudgment orders are affirmed. Robert Bird-Robinson in his capacity as
executor of the estate of Mireille Robinson, shall recover costs incurred on appeal. A copy of this opinion shall be transmitted
to the State Bar of California pursuant to California Code of Judicial Ethics,
Canon 3(D)(2), as our review of attorney John Boyko’s testimony suggests
multiple violations of the Rules of Professional Conduct may have occurred with
regard to his representation of Mireille Robinson and the executor of her
estate.
IKOLA,
J.
WE CONCUR:
FYBEL, ACTING P. J.
THOMPSON, J.
refer to the late Ms. Robinson as Mireille in this opinion because it will be
necessary to differentiate her from other members of her family, whom we shall
also refer to by first name.
as of the time of trial, the Property had been foreclosed upon by a senior deed
of trust with no proceeds from the foreclosure sale accruing to
plaintiffs. Thus, the judicial
foreclosure cause of action was moot.
