Bujulian v. Utilitech Finance

Filed 7/23/09 Bujulian v. Utilitech Finance CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FIFTH APPELLATE DISTRICT

APPEAL from a judgment of the Superior Court of Fresno County. Mark Wood Snauffer, Judge.

Tritt & Tritt and James F. Tritt for Plaintiff and Appellant.

Doyle, Fike & Watson and David Douglas Doyle for Defendants and Respondents.

-ooOoo-

A jury found against appellant on her claim that respondents intentionally interfered with a contract providing for the payment of a finders fee. On appeal, appellant contends this court should overturn the jurys special verdicts, by finding as a matter of law that the respondents (1) knew of the finders fee agreement and (2) intended to disrupt its performance.

We will assume for purposes of this appeal that appellant correctly states the law in arguing that the requisite intent for her cause of action would be established if she proved that respondents knew their conduct was substantially certain to make performance of the contract more difficult or expensive. When we view the evidence in the light most favorable to the prevailing party, however, we cannot find as a matter of law that respondents knew their conduct was substantially certain to cause these consequences. Rather, the evidence supports findings that respondents conduct (1) was not causally connected to the breaching partys decision to withhold the instructions that would have led to the payment of the finders fee and (2) did not hinder either appellants performance of the contract or any attempt by the breaching party to give the necessary instructions. In short, respondents conduct was not the reason the finders fee was not paid. Thus, we cannot find as a matter of law that respondents knew their conduct was substantially certain to cause a disruption of the performance of the finders fee agreement.

Accordingly, the judgment will be affirmed.

FACTS

The Parties

The four plaintiffs in this matter (hereafter Finders) were Barbara Bujulian, Darryl Conney, Ticeco, LLC; and Real Estate Funding Associates, doing business as Projects Funding Associates. William Tice is a principal in Ticeco, LLC. Robert Cohrs is a principal in Real Estate Funding Associates, which is a corporation based in San Diego, California. Bujulian is the sole appellant.

The defendants in this lawsuit can be divided into two groups. The first group is the three respondents in this appeal: (1) Utilitech Finance Company, LLC (Utilitech Finance); (2) Utilitech PartnersFresno LLC (Utilitech Fresno); and (3) Crews and Associates, Inc. (Crews).^[1] These defendants were sued for intentionally interfering with the finders fee agreement.

The second group of defendants was sued for breaching the finders fee agreement; they are not parties to this appeal. That group consisted of Ron Allison, Charles Briggs, Zahra Properties, Inc., AB Parking Facilities, LLC, and A Partners, LLC. Allison was (1) the managing member of AB Parking Facilities, LLC, (2) the sole member of A Partners, LLC, and (3) a shareholder of Zahra Properties, Inc. Finders alleged Allison and Briggs^[2]were the alter egos of Zahra Properties, Inc., AB Parking Facilities, LLC, and A Partners, LLC.^[3]

Utilitech Finance is based in Little Rock, Arkansas and provides financial advice and assistance in structuring financings for its customers. Richard Ted Sniegocki owns 99 percent of Utilitech Finance, and Heartsill Ragon III owns the other one percent. Sniegocki is the managing member of Utilitech Finance. Ragon acts as attorney for Utilitech Finance and is a partner in a law firm located in Little Rock.

Utilitech Fresno is an Arkansas limited liability company formed and owned by Utilitech Finance for a specific role in the transaction involved here, which provided financing for fuel cells acquired by Allison and the Allison Entities.

Crews is a regional investment banking firm organized as an Arkansas corporation and based in Little Rock, Arkansas. Crews is owned by First Security Bancorp, a bank holding company based in Arkansas. Rush Harding was the chief executive officer of Crews and Jim Jones was its president. Jim Brown and Edmond Hurst were vice-presidents of Crews. Jim Brown also was the president of First Security Leasing, Inc., a wholly owned subsidiary of Crews.

Allisons Project

Allison was involved in a project to refurbish the Guarantee Savings Building in downtown Fresno. The building had been empty for a number of years. Allisons plan was to sign up tenants to lease the building and then refurbish it. Allison and the Allison Entities obtained a lease from the United States government through the General Services Administration. Under that lease, an agency of the Department of Homeland Security and two departments of the Internal Revenue Service were to occupy the building. Allison and the Allison Entities also obtained land nearby to build a parking structure required for the federal employees.

As the project progressed, Allison wanted to obtain about $30 million in financing, using the real estate parcels as collateral, to keep the project going. Allison was introduced to one Cy Cerro, who believed he could help arrange financing quickly. Allison explained the project to Cerro and stated how much money was needed. Allison estimated that about $23 million would be used to build the parking structure and complete the tenant improvements, and about $5 million would be necessary for fuel cells for the building. Cerro told Allison that (1) Finders had a lender that could finance the project and (2) Cerro would disclose the lender to Allison when Allison and Finders signed an agreement.

Allison and Finders executed a finders fee agreement in May 2003. Allison agreed to pay 6 percent of the amount loaned by prospective lenders referred to him by Finders. Item No. 5 of the finders fee agreement stated the fee will be added to all loan proceeds and paid to Finder at the time of each funding of the loan or any part thereof. Item No. 6 provided that Allison will expressly instruct Prospective Lenders to pay the Finders Fee to Finder out of loan proceeds.

Allison testified that he expressly told Bujulian that he would not fund a finders fee outside the financing transaction, and his understanding of the language in the finders fee agreement was that he would not pay a fee unless the lender was willing to advance it. Allison stated he told Finders before he signed the agreement that he believed the agreement meant that no funds would come from me to pay their fee, that they would all come from whatever prospective lender they found, and be paid through escrow to them directly, that I would not be paying their fee, and it wouldnt be an amount that would be abnormal for the transaction being made.

Item No. 10 of the finders fee agreement stated the term of the agreement was 18 months. Item No. 11 provided: This agreement doesnt apply and is null and void if the borrower has or applies to a lender other than the ones which the Finder gives notice of and are accepted by the client. Allison testified that this provision was in there explicitly at my insistence. Allison also testified that a transaction sometimes can end up with a string of finders and that is what he tried to prevent.

Allison also talked to Finders about the size of their fee, and they understood they might have to negotiate that fee with the ultimate lender because its size was unusual. Allison stated he was willing to pay a 6 percent finders fee because he needed the financing quickly, and Finders said they could do the financing for both the real estate and the fuel cells very quickly. Specifically, Allison testified that Cerro represented to him that the loans could be closed in two weeks.

Finders interested Burnham Capital Markets (Burnham) in the transaction. In August 2003, Burnham informed Allison and Finders that it was interested only in the real estate loan and wanted to carve the fuel cells out of its transaction.

The real estate loan arranged by Burnham amounted to $23 million. In October 2003, Finders and Allison agreed to a reduction in the finders fee owed on the loan. Specifically, an October 17, 2003, addendum to the finders fee agreement stated that the finders fee would be reduced to 2 percent and divided equally between Finders and Burnham. In addition, the addendum provided: [Allison] reaffirms his responsibility to pay 6% of the fuel cell equipment amount financed to the Finder upon closing of the fuel cell lease or loan, subject to the terms of the finder fee agreement.

After Finders learned that Burnham wanted to carve the fuel cells out of its loan transaction, Finders began to search for other lenders. Darryl Conney took the lead on locating financing for the fuel cells and called people at United Technologies Corporation (UTC), the parent company of the fuel cell manufacturer.

UTC is a large company and, in various rankings, places in the top 50 companies in the United States. Its subsidiaries include UTC Power, which manufactures fuel cells, and Carrier Corporation, which manufactures heating and air conditioning equipment.

Pete Morris at UTC Power referred Conney to John Sumpter, the finance program manager for Carrier Corporation. Sumpter obtained information from Conney about the fuel cells and Allisons renovation of the building. Sumpter reviewed the information and contacted about a dozen lenders that he thought might be interested in financing the transaction. One of the lenders expressed some interest, but discussions did not go very far because of Allisons credit.

Sumpter then contacted Sniegocki at Utilitech. Utilitech had represented to Sumpter that it could structure financings where the equipment would be held by a single-purpose company rather than the actual user. This structure was used for various financial and economic reasons, sometimes when the user was a nonprofit organization such as a hospital or school.

Sumpter, with the permission of Finders, sent Sniegocki two large binders containing information about the project, including financial information, government contracts, and the finders fee agreement.

Sniegocki became interested in the transaction. As a result, Finders introduced Utilitech Finance to Allison, and Allison signed an acknowledgement that Finders had made that introduction. On December 1, 2003, Allison signed a document on Utilitech Finance letterhead titled FINANCIAL ADVISOR AND PLACEMENT SERVICES AGREEMENT that described the services that Utilitech would provide Allison.^[4] Once Allison signed the Utilitech Finance document, Finders gave Allison a preliminary term sheet that described the fuel cell combined heat and power generation project and the financing proposed.

Utilitech did not loan its own money; instead, it acted as a matchmaker on projects. In this case, Utilitech contacted Crews to determine if it had any interest in the potential financing opportunity. Crews was interested.

Crews eventually organized a private placement in which the investors purchased $5,855,000 worth of securities called custodial receipts. The structure of the financing was complex and its details are not material to the issues decided in this appeal. Under the structure, Utilitech Fresno acted as a conduit for the transaction. The custodial receipts represented a fractional interest in the right to receive future payments made by the federal government under an irrevocable equipment lease that covered the fuel cells. The proceeds generated by the investors purchase of the custodial receipts were used to purchase the fuel cells and pay various costs and fees associated with the transaction.

The private placement for the custodial receipts closed on March 30, 2004. Prior to the closing, Allison never instructed Crews to pay Finders. It is undisputed that the payment made at the closing did not include the finders fee.

The facts material to this appeal include (1) what Utilitech knew about Finders and the finders fee, (2) what Utilitech did and did not do with respect to Finders and the finders fee, and (3) what caused Allison to breach the finders fee agreement.

Utilitechs Acts and Omissions

It is undisputed that Sniegocki knew of the finders fee agreement and the addendum and did not tell Crews about Finders or their claim to a finders fee.

Sniegocki testified that he had received copies of the finders fee agreement and the addendum. When Sniegocki saw that the addendum mentioned the fuel cells,^[5]he telephoned Allison and suggested that Allison needed to get in touch with Finders. Sniegocki testified that he did not tell Crews about the addendum and the 6 percent finders fee because both Allison and Allisons attorney told him that it was not an issue. Also, Sniegocki did not send the finders fee agreement or the addendum to Crews. Sniegocki testified he did not think he had a duty to make such a disclosure and he made his decision after consulting with his client, Allison.

Both Finders and Sumpter (of Carrier Corporation) communicated with Sniegocki about the finders fee. For example, in December 2003, when Sumpter noticed that a term sheet prepared by Utilitech did not include the finders fee, he talked to Sniegocki about it. Sniegocki told Sumpter that he felt the fee was an issue for the owner, Allison. At trial, Sumpter confirmed his deposition testimony that (1) in December 2003, Allison told him that he, Allison, was not going to authorize payment to Finders and (2) Allison never wavered from that position except to say that Finders could come back and negotiate a new agreement with him.

Also, in mid-January 2004, Sniegocki received documents relating to the fee, including an invoice from Finders.^[6] Finally, on February 4, 2004, Sumpter sent an e‑mail to Sniegocki and Ragon that stated the finders fee remained an unresolved issue.

Sniegocki testified that in one of his earliest conversations with Finders he mentioned, as a trial balloon, the figure of $25,000 as compensation for Finders. The figure was rejected and Sniegocki then told Finders that they needed to contact Allison and work it out. Thereafter, Sniegockis position with both Finders and Allison was that he was not going to be involved in their negotiations over the finders fee.

The following illustrates one of Sniegockis attempts to distance himself from the finders fee issue. Bujulian testified that Finders got nervous in January because Sniegocki stopped returning their telephone calls. Sniegocki testified that he did return their calls, but probably not as quickly as Finders would have liked, and not with the answer Finders wanted. Sniegocki testified, [E]ach time I talked to these folks I said, Im not going to be in a position of negotiating your fees. If you have got something you need to visit with regarding your fee, talk to Mr. Allison. Sniegocki also testified that he received no further communication from Finders after the Sumpter e‑mail of February 4, 2004.

Sniegocki testified he never told or asked Allison not to pay Finders. Similarly, Allison testified that Utilitech and Sniegocki did nothing to prevent him from informing Crews about the finders fee or to prevent him from performing his obligations under the finders fee agreement. At trial, Sniegocki was asked: Now, you knew that when, by not telling Crews about the finders, that they might not get paid, right? After an objection was overruled, Sniegocki replied: The answer would be the same for Crews as it would have been for me, I dont know what the outcome would have been.

Allisons View Regarding Payment of the Finders Fee

Allison testified that he formed the understanding in January 2004 that Utilitech was a finder and not a lender. One reason Allison formed this understanding was that Finders never registered or gave written notice to Allison that Crews was a potential lender.

When the March 30, 2004, closing of the private placement occurred, Allison did not know if Finders were receiving payment through another entity that was being paid at the closing. Allison testified that, although he was focused on things other than Finders, he thought the finders fee issue had been taken care of.^[7]

Allison recalled receiving an invoice from Finders at or after the closing of the transaction. Allison felt he did not owe a fee at that point and went to his attorney. As earlier, Allison based his view on the fact that Crews had not been registered as the lender and therefore did not fall under the finders fee agreement. Allison testified that he told Crews that he disputed Finders March 30, 2004, invoice.

Crews apparently relied on Allisons view of the matter because, when an additional $500,000 was financed by Crews in July 2005, Finders were not paid a fee on that transaction either.

PROCEEDINGS

Approximately two months after the March 2004 closing, Finders filed a lawsuit against Allison, the Allison Entities, and Utilitech Finance. The operative pleading in this case is Finders second amended complaint filed in August 2005.

Finders third cause of action alleged that Utilitech Finance and certain Doe defendants knew of the existence of the finders fee agreement and intended to disrupt the performance of that agreement by not providing that a direct payment from the lender of 6% of the amounts lent be paid directly to the [Finders]. The third cause of action also alleged that Utilitech Finances conduct prevented performance of the agreement and was a substantial factor in causing harm to Finders. Finders alleged they were damaged in the amount of $336,000, which equaled the 6 percent finders fee on a loan of $5.1 million and a $500,000 second loan that Allison or the Allison Entities received in July 2005.

The first two Doe defendants named by Finders were Utilitech Fresno and First Security Leasing, Inc. In October 2005, Finders substituted Crews for First Security Leasing, Inc.

The lawsuit was slowed when the Allison Entities filed for bankruptcy in November 2005. Finders obtained relief from the bankruptcy stay in May 2006. Also, in May, the attorney who represented the Allison Entities was allowed to withdraw as counsel. The Allison Entities were unable to obtain replacement counsel and, as a result, the trial court struck their answers and entered their defaults.

At trial, Finders pursued a breach of contract claim against Allison, who represented himself, and against the defaulted Allison Entities. Finders also pursued an intentional interference with contract claim against Utilitech Finance, Utilitech Fresno, and Crews.

The 13-day jury trial ended in mid-June 2007. The jurys findings were set forth on special verdict forms. The jury found that Allison breached the finders fee agreement and Finders suffered damages in the amount of $348,354.15. The jury also found that Utilitech Finance and Utilitech Fresno knew of the finders fee agreement between Allison and Finders, but that Crews did not know of the contract. In addition, the jury found that neither Utilitech Finance nor Utilitech Fresno intended to cause Allison or the Allison Entities to breach the finders fee agreement.

Based on the special verdicts, the trial court entered judgment (1) in favor of Finders against Allison and the defaulted Allison Entities and (2) against Finders in favor of Utilitech Finance, Utilitech Fresno, and Crews.

Bujulian appeals from the judgment in favor of Utilitech Finance, Utilitech Fresno, and Crews. Her notice of appeal was filed timely in August 2007. The other Finders have not appealed.

DISCUSSION

I. Standards of Review

When an appellate court reviews a judgment entered after a jury trial, the jurys explicit and implicit findings on questions of fact are reviewed under the substantial evidence standard. (Crawford v. Southern Pacific Co. (1935) 3 Cal.2d 427, 429 [substantial evidence rule].) The California Supreme Court has described that standard of review as follows:

Where findings of fact are challenged on a civil appeal, we are bound by the elementary, but often overlooked principle of law, that the power of an appellate court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted, to support the findings below. (Crawford v. Southern Pacific Co.[, supra,] 3 Cal.2d 427, 429.) We must therefore view the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference and resolving all conflicts in its favor in accordance with the standard of review so long adhered to by this court. (Jessup Farms v. Baldwin (1983) 33 Cal.3d 639, 660.)

Evidence is substantial for purposes of this standard of review if it is of ponderable legal significance, reasonable in nature, credible, and of solid value. (Brewer v. Murphy (2008) 161 Cal.App.4th 928, 935-936.) The testimony of a single witness, even if a party to the case, may constitute substantial evidence. (See In re Marriage of Mix (1975) 14 Cal.3d 604, 614.)

In contrast to the deferential review given to findings of fact, appellate courts subject a trial courts determinations of questions of law to independent review. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 801.)

II. Appellants Contentions

On appeal, appellant challenges the jurys findings that (1) Utilitech Finance and Utilitech Fresno did not intend to disrupt the performance of the finders fee agreement and (2) Crews did not know of the finders fee agreement.

Appellant contends that the relationship among Utilitech Finance, Utilitech Fresno, and Crews established that Utilitech had to know, as a matter of law, that the failure to circulate information concerning the finders fee agreement to Crews and the failure to include the finders fee as part of the subject transaction would be substantially certain to interfere with the finders fee contract. Appellant argues that Utilitech had to know an interference was substantially certain because it had to know (1) the failures would make it more expensive and more difficult or burdensome to secure performance of the finders fee contract and (2) the failures would result in nonpayment and outright breach. To support this view of what Utilitech had to know, appellant contends it is sufficient to show substantial certainty of making performance more expensive, difficult or burdensome. It therefore follows that the Utilitech Entities necessarily intended to disrupt [appellant]s contract with Allison within the meaning of intend established by the case law.^[8]

III. Analysis

A. Legal Background

The elements of a claim for intentional interference with contractual relations are (1) the existence of a valid contract between the plaintiff and a third party; (2) the defendants knowledge of this contract; (3) the defendants intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage. (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126.)

1. Types of interference

The third and fourth elements indicate two types of interference are actionableinducing a breach of the contract and disrupting the contractual relationship. (See 40 Cal.Jur.3d (2006) Interference with Economic Advantage,  3, p. 11 [inducement of a breach of contract and disruption of a contractual relationship are different theories with the latter being broader].) Under the theory that a defendant induced a breach of contract, the plaintiff must establish by evidence that the contract which otherwise would have been performed was breached and abandoned by reason of the wrongful act by the defendant. (Id.,  18, p. 38.) In contrast, an actionable disruption of a contractual relationship can be shown by proof that the defendants conduct made the plaintiffs performance of the contract more costly or burdensome. (Pacific Gas and Electric Co. v. Bear Stearns Co., supra, 50 Cal.3d at p. 1129; 40 Cal.Jur.3d, supra,  18, p. 39.)

2. The defendants state of mind

The relationship between these two types of interference and a defendants state of mind is addressed in the third element by the phrase intentional acts designed to induce a breach or disruption. This phrase and its use of the word designed does not imply that the defendant must have acted with the specific intent to interfere. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1155.) The tort of intentional interference with contract applies (1) when a defendant acts with the purpose or desire to interfere and (2) when the defendant does not act for the purpose of interfering with the contract or desire it but knows that the interference is certain or substantially certain to occur as a result of his action. The rule applies, in other words, to an interference that is incidental to the [defendants] independent purpose and desire but known to him to be a necessary consequence of his action. (Rest.2d Torts,  766, com. j, p. 12.) (Id. at pp. 1155-1156; see Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 56.)

Justice Baxter, writing for a unanimous California Supreme Court, confirmed the principles stated in Korea Supply Co. and Quelimane Co. regarding the requisite intent: To establish the claim [of intentional interference with contractual relations], the plaintiff need not prove that a defendant acted with the primary purpose of disrupting the contract, but must show the defendants knowledge that the interference was certain or substantially certain to occur as a result of his or her action. [Citation.] (Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148; see Rest.2d Torts,  8A, p. 15 [intent defined].)

B. Applicable Rule of Law

For purposes of this appeal, we will assume that appellant correctly states the law in her contention regarding the level of knowledge that establishes the requisite state of mind. Specifically, appellant asserts it is sufficient to show substantial certainty of making performance more expensive, difficult or burdensome. Consequently, we will assume appellant could establish her claim simply by proving that Utilitech knew its actions were substantially certain to make performance of the finders fee agreement more difficult or expensive. (But see 40 Cal.Jur.3d, supra, Interference with Economic Advantage,  15, p. 34; BAJI No. 7.83 [inference of intent to induce a breach].)

Based on this assumption, we will proceed to the question whether the evidence presented would allow us to find, as a matter of law, that Utilitech knew its actions were substantially certain to induce a breach or disruption of the finders fee agreement.

C. Explanation of When Consequences Are Substantially Certain

An explanation of when consequences are substantially certain to result from a defendants action is contained in the comments and illustrations to section 8A of the Restatement Second of Torts.

If the actor knows that the consequences are certain, or substantially certain, to result from his act, and still goes ahead, he is treated by the law as if he had in fact desired to produce the result. As the probability that the consequences will follow decreases, and becomes less than substantial certainty, the actors conduct loses the character of intent, and becomes mere recklessness, as defined in  500. As the probability decreases further, and amounts only to a risk that the result will follow, it becomes ordinary negligence, as defined in  282. (Rest.2d Torts,  8A, com. b, p. 15; see Korea Supply Co. v. Lockheed Martin Corp., supra, 29 Cal.4th at p. 1156 [Restatements definition of intent discussed].)

Illustration 1 to section 8A of the Restatement Second of Torts provides in full:

A throws a bomb into Bs office for the purpose of killing B. A knows that C, Bs stenographer, is in the office. A has no desire to injure C, but knows that his act is substantially certain to do so. C is injured by the explosion. A is subject to liability to C for an intentional tort. (Id. at pp. 15-16.)

The foregoing demonstrates that our review must (1) identify Utilitechs conduct, (2) identify the disruptions of the finders fee agreement, (3) examine the causal connection between the two, and (4) determine whether that causal connection was strong enough to meet the substantial certainty standard.

D. Evidence Regarding Certainty of Consequences

1. Utilitechs conduct

The first step in our analysisidentifying Utilitechs conductis not difficult because the parties do not dispute what Richard Ted Sniegocki and Heartsill Ragon III failed to do.

Sniegocki admitted in his testimony that he did not inform Crews about the finders fee agreement or the dispute between Finders and Allison over whether a fee was due. It is undisputed that Utilitech did not make the amount financed large enough to include the finders fee. Appellant contends these two failures to actthe failure to inform Crews of the finders fee agreement and the failure to include the fee in the amount financeddisrupted Finders contractual relationship with Allison.

To place these failures to act in context, we note the actions Sniegocki did take. Sniegocki testified that, when he spoke with Finders or Allison about the finders fee, he would tell Finders to contact Allison, he would tell Allison to contact Finders, and he would tell both sides he was not going to negotiate the fee issue on their behalf.

2. Interference inducing a breach or a nonbreach disruption

The second step of our analysis is to identify the types of interferences asserted by appellant. Generally, contracts are interfered with because the defendants conduct (1) induces a breach or (2) disrupts the performance of the contract in a way that is distinct from causing a breach. (See part III.A.1, ante.) We note that the concept of a disruption is broad enough to include breaches, but for purposes of our analysis here we will treat the categories as mutually exclusive. In other words, subsequent references to a disruption will mean a disruption of the contract, other than a breach, which made performance of the contract more difficult, burdensome, or costly.

Appellant asserts both types of interference occurred in this case. First, appellant argues that Utilitech had to know its inactions would result in nonpayment and outright breach. Second, appellant argues that it is beyond reasonable doubt that Utilitechs failures would make it more expensive and more difficult or burdensome to secure performance of the finders fee agreement.

The second argument is undeveloped in that appellant does not identify a specific nonbreach disruption. During closing argument at trial, Finders counsel argued that Sniegockis failure to inform Crews of the finders fee agreement made performance of the contract more difficult and expensivepart of the increased expense being the costs of the lawsuit to enforce the finders fee agreement. This argument, however, does not identify a nonbreach disruption. Rather, it simply identifies a consequence that resulted from the breachnamely, that Finders had to sue to enforce the contract.

To determine whether Utilitech disrupted the performance of the finders fee agreement, we will look at the acts that each party needed to perform.

Finders performed their obligations under the contract by introducing Allison to Utilitech and registering Utilitech in accordance with the terms of the finders fee agreement. Once those actions were completed, Finders had performed their end of the bargain and would be entitled to payment if the financing was completed.

Allisons obligation under item. No. 6 of the finders fee agreement was to expressly instruct Prospective Lenders to pay the Finders Fee to Finder out of loan proceeds. In the October 17, 2003, addendum, Allison reaffirmed his obligation to a 6 percent fee upon closing of the fuel cell lease or loan, subject to the terms of the finder fee agreement.

Appellant has presented no argument regarding how Utilitechs inaction interfered with Finders performance under the finders fee agreement. Moreover, we cannot identify any such interference because Finders performance was completed when it registered Utilitech with Allison. Accordingly, viewing the evidence in the light most favorable to the verdict, we must conclude that Utilitechs inaction did not make it more costly or burdensome for Finders to perform their part of the finders fee agreement.

Appellant also has presented no argument for how Utilitechs inaction made it more costly or burdensome for Allison to expressly instruct the prospective lender to pay the finders fee to Finders out of the amount financed. Moreover, the evidence shows Utilitech did not hinder Allisons ability to provide this express instruction to Crews.

Accordingly, we conclude that appellant has failed to identify a nonbreach disruption. At most, appellant has asserted that Utilitechs inaction caused the breach of the finders fee agreement (nonpayment) and the breach, in turn, caused Finders to incur expenses in attempting to collect the fee after the breach.

3. Causal connection between Utilitechs inaction and breach

Next, we must determine whether Utilitechs failure to act was causally linked to the breach of the finders fee agreement. In other words, was the breach a consequence of Utilitechs failure to act? In deciding this question, we must view the evidence in the light most favorable to the prevailing party. (Jessup Farms v. Baldwin, supra, 33 Cal.3d at p. 660.)

First, Utilitechs failure to inform Crews of the finders fee agreement did not necessarily cause Allison to breach his contractual duty to expressly instruct Crews to pay the finders fee. The evidence is sufficient to support a finding that Allison was not influenced by Utilitechs nondisclosure and independently decided he was not obligated to instruct Crews to pay the fee because he believed the finders fee was not owed. Allison testified (1) he told Crews that he disputed Finders March 30, 2004, invoice and (2) Utilitech and Sniegocki did nothing to prevent him from informing Crews about the finders fee or to prevent him from performing his obligations under the finders fee agreement. In short, the evidence supports a finding that Allison believed no fee was payable and, therefore, Utilitech did not induce Allison to breach the contract.

Second, the evidence is sufficient to support a finding that Utilitechs failure to structure the transaction to include a 6 percent finders fee did not cause the fee to be excluded from the amount financed because inclusion of the fee would have killed the deal. Sumpter testified the transaction already was fee heavy, and Sniegocki had implied the transaction would not be funded with such a fee. Also, Crewss vice-president Hurst testified he would not have let this loan go through if he had known before funding that somebody was claiming money. The testimony that Sniegocki floated a trial balloon that suggested Finders accept $25,000 for their effort and Finders rejected the suggestion supports the inference that the private placement financing could not have been justified economically had a finders fee over $300,000 been added to the amount financed. A reasonable inference from the evidencean inference we are compelled by law to draw because it supports the jurys verdictis that adding another $300,000 to the amount financed would have made the financing too expensive to be workable and, thus, the transaction would not have been completed. Therefore, we also must infer that if Utilitech had insisted that the finders fee be included in the amount financed, the finders fee would not have been paid because the private placement arranged by Crews would not have been completed.

Based on the foregoing conclusions regarding the causal link between Utilitechs failures to act and the nonpayment of the finders fee, we cannot find as a matter of law that Utilitech knew with substantial certainty that its conduct would result in the breach of the finders fee agreement.

IV. Fiduciary Duties

Appellant contends that the activities of Utilitech Finance Company took it out of the role of finder and into the role of principal, joint venturer and agent, resulting in fiduciary duties, including duties of utmost honesty and full disclosure.

Anticipating a problem, appellant urges this court to exercise its discretion to consider this contention even though it was not raised in the trial court. As appellant notes, appellate courts do have discretionary authority to consider new theories on appeal, particularly where the other party has not been deprived of the opportunity to litigate the relevant facts. (See Ward v. Taggart (1959) 51 Cal.2d 736, 742.)

We decline to exercise our discretion and fully analyze appellants new theory. First, this new theory regarding a fiduciary duty should have been brought forward when the trial court was considering a motion for summary adjudication of the breach of fiduciary duty cause of action. Second, appellants new theory about fiduciary duties does not include an explanation of why Utilitech owed the duty to Finders or why Finders should be allowed to sue for a breach of a duty owed to someone else.^[9] Thus, we will not examine the new theory further.

DISPOSITION

The judgment is affirmed. Respondents shall recover their costs on appeal.

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DAWSON, J.

WE CONCUR:

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ARDAIZ, P.J.

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HILL, J.

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^[1]We will refer to Utilitech Finance and Utilitech Fresno collectively as Utilitech.

^[2]Briggs filed for bankruptcy and, consequently, the trial court ordered the issue of Briggss alter ego liability be tried separately from all other issues.

^[3]We will refer to these companies collectively as the Allison Entities.

^[4]This document, with the preliminary term sheet attached, was admitted into evidence as plaintiffs exhibit 113 and is part of the appellate record. (Cal. Rules of Court, rule 8.124(b)(3).)

^[5]The finders fee agreement does not mention fuel cells. A third party reading that document without the aid of the addendum would not realize the parties to the finders fee agreement intended the 6 percent fee to apply to any financing obtained for the fuel cells.

^[6]January 2004 was when Finders learned about the involvement of Crews in the transaction.

^[7]Allison also testified that he expected the finders, advisors, or whatever they call themselvesthat is, the nonprincipalswould have an agreement amongst themselves how the compensation that was paid by the principals would be divided up.

^[8]Similarly, appellant asserts in her reply brief: Utilitechs intent is established as a matter of law by its undertaking actions which it had to know would make it more difficult for appellant to secure performance of her contract.

^[9]If appellant is arguing that Utilitech, as a coprincipal with Allison, is bound by the same contractual duties as Allison, then appellant, in effect, is arguing that Utilitech also is a party to the finders fee agreement. If Utilitech is regarded as a party to the finders fee agreement, it cannot be liable for the tort of intentionally interfering with the contractual relationship because the tort of intentional interference with contract does not lie against a party to the contract. (40 Cal.Jur.3d, supra, Interference with Economic Advantage,  6, p. 16.)