David Newman CPA v. Jerome Leventhal Accountancy
Filed 9/11/13 David Newman CPA v. Jerome Leventhal
Accountancy CA2/4
NOT TO BE PUBLISHED IN THE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opinion has not been certified for publication or ordered published for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 FOUR
DAVID B. NEWMAN,
CPA, INC.,
Plaintiff and Respondent,
v.
JEROME LEVENTHAL
ACCOUNTANCY CORPORATION,
Defendant and Appellant.
B237166
(Los
Angeles County
Super. Ct.
No. LC089787)
APPEAL from a
judgment of the Superior Court
of
County, Michael Latin and Huey P. Cotton, Judges. Affirmed in part, reversed in part.
Law Offices of
Steven Sandler, Steven Sandler, for Defendant and Appellant.
Scott A. Newman
for Plaintiff and Respondent.
______________________________
Appellant Jerome Leventhal Accountancy Corporation and
respondent David B. Newman, CPA, Inc., are owned and operated by Jerome
Leventhal and David B. Newman, respectively.
a settlement agreement the parties signed as a result of mediation, (2) denying
Leventhal’s cross-complaint, and (3) computing Newman’s damages. We affirm the judgment, but reverse the
damage award in part.
Leventhal and Newman are
certified public accountants whose accounting practices shared office space and
a receptionist for many years. They
shared equally in rent payments, expenses for office supplies, and the receptionist’s
salary. The payment of most joint bills
was handled by Newman.
In 2004, LeRoy D.
Ross moved his accountancy practice into the office suite. The three accountants entered into a written
agreement, according to which Ross would transfer accounting and bookkeeping
work to Newman and Leventhal. In
exchange for offering Ross office space, bookkeeping and secretarial staff, and
payment of certain expenses, Newman and Leventhal were to receive a percentage
of all fees collected for work performed for Ross’s clients by any of the three
accountants. Newman and Leventhal orally
agreed to equally divide the percentage they received for servicing Ross’s
clients and did so over the next five years.
The 2004 agreement with Ross also gave Newman and Leventhal the right of
first refusal for the purchase of Ross’s practice when Ross retired, and set
forth the terms of the purchase.
Ross unexpectedly
died in March 2009, in the midst of tax season.
To protect his clients and estate, Newman and Leventhal immediately
entered into an addendum to the 2004 agreement with his estate. The addendum provided for the immediate
purchase of Ross’s practice with a down payment of 25 percent of the prior
year’s collections, plus monthly 25 percent payments to Ross’s estate of the
prior month’s collections. Newman and
Leventhal each contributed half of the down payment, but Leventhal believed
they each bought 50 percent of the practice and would eventually split its
clients. Newman, on the other hand,
believed they bought Ross’s practice jointly and would continue to split
collections equally until one of them died or retired.
The parties’
receptionist assigned Ross’s clients to one or the other accountant based on
their availability to meet with the clients who called to schedule
appointments. Extensions for filing tax
returns were obtained for many clients.
Some left, and a few assigned to Newman went to Leventhal. At the end of 2009, Leventhal offered Newman
a proposed separation agreement, with schedules dividing Ross’s clients and a
letter allowing the clients to elect between the two accountants. Newman rejected the proposed agreement.
On Leventhal’s
initiative, the parties submitted to mediation.
On January 22, 2010,
they signed a document titled “Term Sheet re:
Settlement of Newman/Levanthal Dispute re: The Former Don Ross Clients.†It memorialized the parties’ agreement on
several “deal points.†As relevant here,
point 1 was that the income from Ross’s clients would be equally divided until
the obligation to Ross’s estate was paid in full. Point 2 was that Ross’s clients were to
immediately become Leventhal’s and Newman’s individual clients as of December 31, 2009, “based on the
list as provided by [Leventhal’s attorney].
True and corrected [sic]
copies of said list will be attached hereto as Exhibit ‘A’ upon verification
and subject to agreement.†Under point
5, each party agreed not to solicit any of Ross’s clients allocated to the
other party on “the lists†referenced in point 2. Point 8 provided that, as of February 1,
2010, Leventhal was to assume the task of disbursing funds received from Ross’s
clients, as well as paying rent and parking, tasks until then performed by
Newman at no charge.
The term sheet had
an integration clause, stating that the agreement superseded “all prior
agreements written or oral,†relating to its subject matter. The parties agreed to “execute and exchange a
further complete settlement agreement†by February 5, 2010, “to effectuate the above-specified terms
of settlement.†Finally, the term sheet
provided that “the parties hereto agree that Agreement is prepared in the
course o[f], or pursuant to, a mediation and is binding and enforceable.â€
On February 4, 2010, Leventhal’s attorney
advised Newman’s attorney that Leventhal “realized he has made an error
regarding funds payable to your client†and could not accept “[t]he tentative
aspect of a future agreement,†but was willing to return to mediation. Thereafter, Newman sued Leventhal for breach
of contract, breach of the implied covenant of good faith and fair dealing, and
accounting, all based on Leventhal’s alleged breach of the term sheet. Leventhal cross-complained for breach of contract,
unjust enrichment, and promissory estoppel.
These claims were based on allegations that Newman had been assigned
more of Ross’s clients than Leventhal, that Newman had asked Leventhal to
service some clients assigned to Newman, and that Newman had promised Leventhal
that, after the 2009 tax season, they would equalize the distribution of
clients and Leventhal would be paid for servicing clients assigned to
Newman.
After a bench
trial, the court issued an oral tentative decision, finding the parties and all
witnesses “100 percent credible†and the mediation agreement enforceable. The court ruled the agreement superseded all
other agreements, foreclosing the cross-complaint. The court awarded Newman damages in the
amount of $43,704.75. Leventhal
requested a written statement of decision on a number of issues. Newman drafted it to address each of those
issues.
The proposed
statement of decision found that the mediation
agreement was binding and enforceable by its own terms, and that Leventhal
had breached it by failing to share income he received from Ross’s clients and
failing to assume the task of paying office rent and parking. The proposed damages award to Newman was
$27,235.75, plus interest. The award
included $18,173.25, representing one half of $36,346.50, the difference in
fees collected from Ross’s clients by Leventhal ($115,730) and Newman
($79,383.50) between January 1, 2010 and May 23, 2011. It included $3,600 for 16 hours of tasks
assigned to Leventhal under the mediation agreement that Newman continued to
perform, at an hourly rate of $225.
Included in the award also were damages in the amount of $5,462.50,
representing one half of the outstanding accounts receivable as of November 30,
2009, that Leventhal collected after that date.
The proposed
decision concluded there was no dispute as to clients at the time of trial and
declared each party’s clients to be those listed on Exhibits 111, A27, and A28,
which showed the division of clients as of 2010. It reiterated the earlier ruling that the
mediation agreement superseded all agreements on which the cross-complaint was
based. It additionally found no evidence
supporting Leventhal’s claim that Newman had agreed to alter the parties’ five-year
course of performance of equally dividing income from Ross’s clients or his
claim that between 2004 and 2008 Newman performed no work for Ross’s
clients.
Leventhal objected
that the proposed statement of decision was unsupported by evidence and flawed
in many respects. Specifically, he
argued a contract claim based on the term sheet could not subsume his
promissory estoppel claim, nor did the term sheet supersede the 2004 agreement
for services to Ross’s clients before Ross’s death. Or if it did, it lacked the essential element
of accounting for those services and lacked consideration with regard to
them. Leventhal argued the term sheet
was unenforceable because it was uncertain as to time and client allocation,
and because his consent was based on a mistake of fact. He objected to the computation of damages on
the ground that it ignored payments to Ross’s estate, improperly divided
accounts receivable, improperly awarded damages for Newman’s continued
performance of tasks for free, and failed to credit to Leventhal the
differential in value of the allocation of clients as of March 2009.
The court signed
the proposed statement of decision without any change. Newman submitted a proposed judgment that
purported to award $40,088.87 in damages, which consisted of the $27,235.75
awarded in the statement of decision, plus pre-judgment interest from January
1, 2010 to May 23, 2011, the period for which damages were awarded. It once again added to the award $3,600 and
$5,462.50, even though these amounts already were included in the $27,235.75
total. Leventhal objected to the
proposed judgment, including the damages award.
The judgment was signed and filed without any change.
Leventhal filed a
motion for a new trial, on much the same grounds as were included in his
objections to the proposed statement of decision and judgment. He specifically addressed the excessiveness
of damages, including the repeated award of some damage amounts in the
judgment. The motion was denied. This timely appeal followed.
I
Leventhal argues that the
term sheet is not enforceable because it is uncertain, and because his consent
was based on a mistake of fact. Issues
of contract law are reviewed de novo on appeal while factual findings are
reviewed for substantial evidence. (
Cal.App.4th 1530, 1533.)
A.
Uncertainty
Whether a contract is
certain enough to be enforced is a question of law. (Patel
v. Liebermensch (2008) 45 Cal.4th 344, 348, fn. 1.) Courts favor enforcing contracts if the
parties’ intention can be ascertained. (
96 Cal. App. 4th 1251, 1255–1256). Where
an essential term is subject to a future agreement, it cannot be ascertained
without the future agreement. (
relative importance to
the parties and whether its absence would make enforcing the remainder of the
contract unfair to either party.†(
The term sheet provides for
a future more formal agreement, but that provision, by itself, does not
invalidate it. “Where the parties . . .
have agreed in writing upon the essential terms of their contract, even though
several more formal instruments are to be prepared and signed later, the written
agreement which they have already signed is a binding contract.†(Mann
v. Mueller (1956) 140 Cal.App.2d 481, 487.)
Leventhal argues that the
term sheet is uncertain regarding the end date for paying off Ross’s
estate. He claims that, if he pays off
his share of the purchase price faster, it would be unfair to require him to
split his monthly collections with Newman until the latter finishes paying off
his own share. The term sheet assumes
that the parties’ obligation to the estate is joint since it provides that one
party would indemnify the other for any failure to meet his respective
obligation. Other than that, the
obligation to the estate is not the subject matter of the term sheet, to which
Ross’s estate is not even a party. The
method for determining the end date of the obligation is set forth in the 2004
agreement and the 2009 addendum. The
term sheet cannot be read as superseding the agreements with Ross and his
estate, and the terms of those agreements are readily ascertainable.
The 2004 agreement provides
that the purchase price for Ross’s practice will be recomputed at the end of
the fiscal year of purchase based on the previous year’s revenue, and a new
note will be prepared, reduced by the down payment and monthly payments already
made. The new note will be payable at
most in 36 monthly installments of 25 percent (or more) of collected fees. The 2009 addendum provides that the date of
down payment (May 15, 2009) is to start the fiscal year at the end of which the
purchase price will be recomputed, and the 25 percent monthly payments are to
begin on June 15, 2009.
In May 2010, Leventhal
signed a separate promissory note to Ross’s estate, with a maturity date in
June 2013. His monthly revenues from Ross’s clients were higher than
Newman’s, and he paid 25 percent of these higher revenues to the estate each
month without dividing the revenues with Newman. Thus, any disparity in the rate of payments
to Ross’s estate was due to the parties’ unequal monthly collections from
Ross’s clients, which is what the term sheet sought to equalize. The complained-of uncertainty about the end
date of the parties’ respective obligations to the estate was not an aspect of
the term sheet itself.
Leventhal represents that
Newman offered no evidence that he was actually paying off Ross’s estate. This representation is contrary to the
record. At trial, Newman testified he
was close to paying off the estate and offered to show the court the record of
his payments. The court stated it would
get the record later. The actual record
of payments to the estate eventually was attached to the opposition to the
motion for a new trial. It confirms what
Newman’s monthly schedules of fees independently showed at trial: that between January 2010 and May 2011 (the
period for which damages were awarded), Newman allocated 25 percent of the
monthly fees he collected from Ross’s clients to Ross’s estate.
The 2009 addendum provides
for a separate schedule of factors for adjusting the monthly payments, starting
with the first payment in June 2009.
Leventhal argues this schedule was not presented to the court. But there is no evidence it was an essential
term of the addendum, let alone of the term sheet. If it were, its absence would invalidate the
addendum, an argument Leventhal does not make.
Leventhal argues the
agreed-upon client list that was to be attached to the term sheet was an
essential part of the parties’ mediation agreement, and the term sheet is
uncertain because no such list was attached.
But there was no dispute about clients at trial, and neither side takes
issue with the court’s conclusion that exhibits 111, A27, and A28 reflect each
party’s clients as of 2010. Newman
testified that he attended the mediation only to be compensated for the unequal
division of Ross’s clients rather than to claim any clients Leventhal already
had obtained. The record indicates that
the allocation of clients was complete by the time of the mediation, and there
is no reason to conclude that the term sheet is too uncertain to be enforced.
B.
Mistake
A party may rescind a
contract if its consent was based on a mistake of fact. (Civ. Code, § 1689, subd. (b)(1); see Civ.
Code, § 1577.)
title="">[2] A unilateral mistake of fact “is ground for
relief where the mistake is due to the fault of the other party or the other
party knows or has reason to know of the mistake. [Citation.]â€
(Architects & Contractors
Estimating Service, Inc. v. Smith (1985) 164 Cal.App.3d 1001,
1007–1008.) Mistake is an affirmative
defense that must be pled in the answer.
(G. W. Andersen Construction Co.
v. Mars Sales (1985) 164 Cal.App.3d 326, 339.)
The statement of decision
rejected the mistake defense because it was not pled or proven. Indeed, the defense was waived since it was
not pled as an affirmative defense in the answer. (California
Academy of Sciences v. County of Fresno (1987) 192 Cal.App.3d 1436,
1442.) The defense also failed on its
merits. Although he instituted the
mediation, Leventhal refused to abide by the term sheet, claiming he had made
an error regarding funds payable to Newman.
His trial testimony suggests that he had second thoughts about
the equal division of revenue from Ross’s clients until the obligation to the
estate was paid off. That deal point
“seemed reasonable†at the time Leventhal signed the term sheet, but “within a
couple of days of studying it,†he realized it was inequitable because “that’s
future money, and it wasn’t something that was obvious at the time. I had to sit down and analyze what would
be the effects of the future money of the clients that I had, and of the
clients that Mr. Newman had.†Leventhal
also claimed he went to mediation to divide up the clients and “never
considered the division of collections.â€
The term sheet
clearly states that income from Ross’s clients is “to be equally divided until the
obligation to E. Ross has been paid in full.â€
It is undisputed that at the time of mediation the obligation to the
estate was outstanding. There is no
indication that Leventhal communicated his confusion about the future effect of
this deal point to anyone. We are not
persuaded that, because Newman is “a seasoned accountant,†he had reason to
know that Leventhal, also a seasoned accountant, did not fully understand it at
the time he signed the term sheet. Thus,
Newman cannot be charged with any fault or knowledge for purposes of the
defense of unilateral mistake.
Rather than
supporting a mistake defense, Leventhal’s claimed subjective failure to fully
understand the deal point’s future effect at the time of signing runs up
against several cardinal rules of contract law.
One is that a party’s failure to “carefully read a contract . . . is no
defense to the contract’s enforcement.â€
(Desert Outdoor Advertising v.
Superior Court (2011) 196 Cal.App.4th 866, 872.) Another is that a bad bargain, if that is
what Leventhal made, is not a ground for setting aside the agreement. (See Odorizzi
v. Bloomfield School Dist. (1966) 246 Cal.App.2d 123, 132 [“If we are
temporarily persuaded against our better judgment to do something about which
we later have second thoughts, we must abide the consequences of the risks
inherent in managing our own affairs [citation]â€].) A third is that mutual consent is determined by objective
rather than subjective criteria. (
942–943.) Viewed objectively,
Leventhal’s signing of the term sheet would lead a reasonable person to believe
that he understood and agreed to its terms.
His undisclosed misunderstanding of one deal point is irrelevant. (Steller
v. Sears, Roebuck & Co. (2010) 189 Cal.App.4th 175, 185.)
The term sheet is
enforceable.
II
In its tentative
decision, the trial court concluded that the term sheet foreclosed Leventhal’s
cross-complaint since it superseded all prior agreements. The statement of decision added a separate finding
that Leventhal also had failed to prove his claims of breach of contract,
promissory estoppel, and unjust enrichment.
On
appeal, Leventhal challenges the court’s finding that the term sheet superseded
or subsumed the various claims advanced in his cross-complaint. Specifically, he argues the subject matter of
the term sheet is not the subject matter of the 2004 agreement with Ross; if
the term sheet indeed superseded that agreement, it lacked the essential
element of reimbursement for services Leventhal rendered while Ross was alive,
and it also lacked consideration for Leventhal’s giving up his right to seek
reimbursement for those services. He
also argues promissory estoppel cannot be subsumed in contract actions.
The
argument that the court found the 2004 agreement with Ross was superseded by
the term sheet is not supported by the record.
Neither the oral nor the written decisions specifically make that
finding. The court generally found that
the term sheet superseded all agreements between the parties. But, as we already explained, the 2004
agreement with Ross determined the parties’ rights with respect to Ross, rather
than as against each other. It expressly
provides that work would be distributed between Newman and Leventhal according
to a separate agreement between the two.
Newman testified they orally agreed to divide the revenue from Ross’s
clients equally and neither of them was expected to do an “inordinate amount of
work.†Leventhal similarly testified
that the intent was to share the workload and revenues equally.
Leventhal does not argue
that the cross-complaint was based on this oral agreement, and the
cross-complaint itself did not seek reimbursement for the services to Ross’s
clients while Ross was alive. Rather, it
alleged that, after Ross’s death in 2009, Leventhal serviced clients of Ross
with the expectation of an accounting and reimbursement for such services and a
proper allocation of such clients. At
trial, Leventhal advanced a different claim.
He testified that, in 2004, Newman had asked him to take on the
accounting and bookkeeping services for Ross’s clients because Newman had no
bookkeeper capable of performing those services until 2008, a claim Newman
disputed. Leventhal was under the
impression that Newman’s time sheets from that period showed no actual work
performed for Ross’s clients, but the parties eventually stipulated that the
time sheets did show such work. The work
consisted mostly of data entry, since Ross generally preferred to do his own
bookkeeping and accounting. Leventhal
claimed he had sought to be reimbursed for what he perceived to be his
excessive share of the work on Ross’s clients between 2004 and 2008, but when
asked what agreement his cross-complaint was based upon, he referenced only an
oral agreement to account and allocate Ross’s clients, which was made after
Ross’s death in 2009. He did not seek to
amend the cross-complaint to conform to his testimony at trial that he expected
to be reimbursed for services to Ross’s clients rendered between 2004 and
2008.
Even
were we to assume the cross-complaint could be so amended and was not barred by
the term sheet, Leventhal does not specifically challenge the separate finding
in the statement of decision that he failed to prove he did more work than
Newman or that Newman promised to reimburse him. Leventhal broadly claims that “the
unsubstantiated factual findings†against him were made “despite contrary
evidence which the court found credible.â€
To the extent that he asks that we reweigh the evidence, we decline to
do so. The court found all witnesses
credible, in the sense that none “said anything intentionally to deceive the
court.†That finding does not mean we
should resolve conflicts in the evidence in Leventhal’s favor.
“[W]here the issue on appeal turns on a failure of proof at trial,
the question for a reviewing court becomes whether the evidence compels a
finding in favor of the appellant as a matter of law. [Citations.]
Specifically, the question becomes whether the appellant’s evidence was
(1) ‘uncontradicted and unimpeached’ and (2) ‘of such a character and weight as
to leave no room for a judicial determination that it was insufficient to
support a finding.’ [Citation.]†(In re
I.W. (2009) 180 Cal.App.4th 1517, 1528.)
The appellate court cannot substitute its factual determinations for
those of the trial court; it must view all factual matters most favorably to
the prevailing party and in support of the judgment. (Campbell
v. Southern Pacific Co. (1978) 22 Cal.3d 51, 60.) “‘All conflicts, therefore, must be resolved
in favor of the respondent.’
[Citation.]†(
Leventhal’s claim for
reimbursement was based on the assumption that he did the bulk of accounting
and bookkeeping work for Ross’s clients between 2004 and 2008. That claim was
disputed. Newman, who brought Ross’s
practice into the office, testified that Ross needed help mostly with data
entry since he did his own tax, accounting, and bookkeeping work. Newman also testified he never promised or
agreed to divide the revenue from Ross’s clients unevenly.
In sum, even were we to
conclude Leventhal’s cross-complaint was not foreclosed by the term sheet, we
cannot conclude that the evidence
compels a finding in his favor as a matter of law.
III
Leventhal argues that the
damage award is excessive. We agree in
part. The excessiveness of damages
generally must be challenged in a motion for a new trial except that legal
errors may be raised for the first time on appeal. (Glendale
Fed. Sav. & Loan Assn. v. Marina View Heights Dev. Co. (1977) 66
Cal.App.3d 101, 122.) Leventhal raised
all his claims for excessive damages in the motion for a new trial. Thus, all his challenges are preserved.
Code of Civil Procedure
section 634, on which Newman relies to argue that Leventhal waived his
challenge, has no application here. It
requires that objections be made to omissions or ambiguities in the statement
of decision’s factual findings in order to avoid an inference on appeal that
the court made implied factual findings to support the judgment. (Fladeboe
v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 59.) The statute says nothing about errors
appearing on the face of the statement of decision, or in this case, the
judgment. (See ibid.)
A.
Payments to Ross’s Estate
The statement of decision
found that between January 1, 2010 and May 23, 2011 Leventhal collected
$115,730 from Ross’s clients while Newman collected $79,383.50. The difference in collected fees was
$36,346.50. Leventhal conceded these figures were correct. Newman was awarded one half of the
difference, or $18,173.25. Leventhal
argues this amount was excessive since it failed to take into account that 25
percent of the monthly collections was paid to Ross’s estate. While the evidence did show that both
accountants set aside 25 percent of the monthly collections for the estate
during this period, we disagree that Newman’s damages must be limited to the
difference in the net collected fees.
Exhibit A30
indicates that when Newman handled the accounting in 2009 he divided the gross,
rather than net, monthly fees from Ross’s clients. The division of gross fees equalized revenues
and placed the parties in the same position with regard to their obligation to
the estate. Each could pay the estate 25 percent
of the same amount and move towards extinguishing the obligation at the same
pace. Leventhal’s refusal to share fees
equally gave him the unfair advantage of paying the estate 25 percent of a
higher monthly income from Ross’s clients.
Thus, he paid off his obligation to the estate with a portion of the
monthly revenues that should have been divided with Newman. The $18,173.25 award was correct.
B.
Compensation for Services
The statement of decision awarded Newman $3,600 in
damages for 16 hours he
spent accounting for and distributing funds received from Ross’s clients,
as well as paying the office rent and parking.
The damages were computed using the normal rate Newman charged his
clients, which was $225 an hour. Under
the term sheet, these tasks should have been performed by Leventhal. Leventhal does not challenge the number of
hours or hourly rate, but argues that this item of damages was improper since
Leventhal was expected to perform the tasks for free and the evidence showed
that he directly paid the Ross estate.
Contract
damages are meant to place the plaintiff in the position he or she would have
been in had the contract been performed.
(New West Charter Middle School v.
Los Angeles Unified School Dist. (2010) 187 Cal.App.4th 831, 844.) That Leventhal was expected to undertake
these tasks for free is not determinative.
Had he performed as agreed, Newman would not have spent time on these
tasks and could have spent it on other aspects of his business. That Leventhal paid his obligation to Ross’s
estate on his own is not determinative either since Newman testified Leventhal
did not take over the handling of the joint bank account, and Newman continued
to collect rents from other tenants, as well as pay the office and parking
bills. We find no error. The addition of this item brings the total
amount of allowed damages to $21,773.25.
As we explain next, the portion of the award above this amount was
excessive.
C.
Collected Accounts
Receivable
Newman testified he was
entitled to half of Leventhal’s accounts receivable from Ross’s clients that
were outstanding as of November 30, 2009 and collected after that date. He recognized that the actual collections of
accounts receivable could be included in Leventhal’s monthly collections. The statement of decision awarded Newman
$5,462.50, which was one half of Leventhal’s collected accounts receivable, as
recorded on Exhibit A37. As Newman
recognized, these amounts were included in Leventhal’s monthly schedules of
fees collected between January and June 2010.
Those collected fees, including collected accounts receivable that were
outstanding as of November 30, 2009, were used to compute the $18,173.25
award, which we examined above. Thus, Newman was not
entitled to a separate award of $5,462.50 in damages for collected accounts
receivable.
D.
Double Damages
The amounts compensating Newman for services Leventhal
was to perform under the term sheet ($3,600) and for collected accounts
receivable ($5,462.50) were added twice to the award. They were used first to compute the
$27,235.75 total in the statement of decision and then were added again to that
total in the judgment. The double award
of these amounts was improper.
E.
Offset
Leventhal argues the damages
should have been offset by $4,000 because Ross’s clients that were allocated to
Leventhal at the time of the purchase on March 3, 2009 were valued at $72,395
while those allocated to Newman were valued at $80,395. Leventhal does not take issue with the court’s
conclusion that the parties’ actual clients are those identified as of December
31, 2010, not March 3, 2009. As of
December 2010, the client lists show Newman with substantially fewer clients
than Leventhal. Leventhal argues that
the purchase price of Ross’s practice was determined based on the March 3, 2009
values, and he should be compensated for the unequal division of clients as of
that date. But under the agreements with
Ross and his estate, the purchase price was to be recomputed based on actual
collections during the first year after the purchase. Thus, the March 3, 2009 values were not
intended to determine the final purchase price.
Leventhal is not entitled to an offset.
The judgment is affirmed
in part and reversed in part. The
damages award is reduced to $21,773.25, plus 10 percent interest from the time
of the breach. Newman is entitled to his
costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
EPSTEIN, P. J.
We concur:
WILLHITE, J.
SUZUKAWA, J.
last names.
the neglect of a legal duty on the part of the person making the mistake, and
consisting in: [¶] 1. An unconscious
ignorance or forgetfulness of a fact past or present, material to the contract;
or, [¶] 2. Belief in the present existence of a thing material to the contract,
which does not exist, or in the past existence of such a thing, which has not
existed.â€
