Filed 8/5/26 Domingo Villas v. Tarnutzer CA4/3
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
DOMINGO VILLAS, INC., et al.,
Plaintiffs, Cross-defendants and G065208
Appellants,
(Super. Ct. No. 30-2011-
v. 00484245)
BYRON RICHARD TARNUTZER, OPINION
individually and as Trustee, etc.,
Defendant, Cross-complainant
and Respondent.
Appeal from a judgment and postjudgment orders of the Superior
Court of Orange County, Erick L. Larsh, Judge. Affirmed.
Thomas Vogele & Associates and Thomas A. Vogele; Jeff Lewis
Law, Jeffrey Lewis, Kyla R. Dayton and Tim Cotter, for Plaintiffs, Cross-
defendants and Appellants.
FBFK Law, George L. Hampton IV, Stephanie A. Pittaluga and
Christopher M. Keirnan, for Defendant, Cross-complainant and Respondent.
* * *
Plaintiffs and cross-defendants Domingo Villas, Inc. (Domingo
Villas) and David T. Chamberlain appeal the judgment entered against them
in the underlying action, as well as a postjudgment order in which the trial
court denied plaintiffs’ posttrial motions, including a motion for new trial, for
judgment notwithstanding the verdict (JNOV), and to vacate and set aside
the judgment. The judgment was based on a unanimous jury verdict finding
Domingo Villas had breached the terms of a 2007 promissory note, as
amended (the Note), in favor of defendant and cross-complainant Byron
Richard Tarnutzer as Trustee for the 1997 Troy Trust established August 11,
1997 (Troy Trust). The verdict (and resulting judgment) awarded damages to
Tarnutzer of $2,790,033 on his cross-claims for breach of promissory note and
guaranty, and the jury rejected all of plaintiffs’ claims against Tarnutzer. The
gravamen of plaintiffs’ affirmative claims against Tarnutzer and defenses to
his cross-complaint was that Tarnutzer violated Civil Code section 2943
(Section 2943) by failing to provide plaintiffs a payoff demand statement
reflecting the exact amount owing under the Note and the per diem interest
rate, which in turn relieved plaintiffs of one or more of their obligations
under the Note and also entitled them to recover damages due to the alleged
noncompliance.1
1
This case has been pending since 2011 and has a long and
extensive procedural history. The case originally was tried to a jury in 2015,
and another panel of this court reversed the judgment in 2019 and remanded
the case. (Domingo Villas, Inc. v. Tarnutzer (Oct. 3, 2019, G054492) [nonpub.
opn.].) This appeal relates only to the retrial and resulting judgment
following remand.
2
On appeal, plaintiffs make several arguments regarding the
conduct of the trial and verdict, including that the trial court committed
instructional and evidentiary errors and there is no substantial evidence to
support the jury’s verdict finding that Tarnutzer complied with Section 2943.
We affirm.
FACTUAL AND PROCEDURAL SUMMARY
I.
BACKGROUND REGARDING DOMINGO VILLAS
Domingo Villas was formed as a corporate entity by Chamberlain
and his then co-owner, Walter Mitchell, to acquire an eight-unit apartment
complex in the city of Newport Beach and convert it to condominiums.
Domingo Villas purchased the property in 2004 for $2.5 million. The City of
Newport Beach approved the proposed conversion project on August 18, 2005.
In 2006, however, Domingo Villas discovered a deed restriction
on the property in favor of the Irvine Company that impacted the proposed
conversion. On November 28, 2006, Domingo Villas sued First American Title
Insurance Company, the company that issued the title policy in favor of
Domingo Villas (FATIC lawsuit).
II.
THE SHORT TERM LOAN BY TARNUTZER
In May 2007, during the pendency of the FATIC lawsuit,
Tarnutzer, as Trustee for the Troy Trust, loaned Domingo Villas $2.6 million
pursuant to the Note, which was secured by a deed of trust on the property
(we refer to this transaction as the Loan).2 The Note had a one-year maturity
2
Tarnutzer was aware of the FATIC lawsuit when he made the
Loan. At the time, Domingo Villas was in default on its purchase money loan
on the property from another lender.
3
date and required interest-only payments at an annual rate of 10 percent.
Chamberlain and Mitchell personally guaranteed the Loan obligations.
In or about October 2007, the FATIC lawsuit settled and
Domingo Villas received $1.9 million, from which it paid certain litigation
expenses and $100,000 to TIC in resolution of the deed restriction. Neither
Chamberlain nor Mitchell paid Tarnutzer any of the net settlement money in
satisfaction of the outstanding amounts due under the Loan. Tarnutzer was
not aware of the settlement until sometime after May 2008.
On May 2, 2008, Domingo Villas and Tarnutzer entered into a
“First Amendment to Promissory Note,” which extended the maturity date of
the Note six months to November 2, 2008, in consideration of a $32,500
payment to Tarnutzer. The first amendment provided the Note could be
extended another six months to May 2, 2009, if Domingo Villas received
necessary approvals for the project on or before August 31, 2008, and
Domingo Villas paid the $32,500 extension payment. Domingo Villas was
required to continue making monthly interest-only payments on the Note at a
rate of 10 percent. Domingo Villas tendered a check for $32,500 for the
extension payment on May 2, 2009, but the check was returned for
insufficient funds. The payment ultimately was paid on July 3, 2009.
III.
THE 2009 FORBEARANCE AGREEMENT AND “FRIENDLY FORECLOSURE”
By July 15, 2009, the Loan was in default. As of that date,
Chamberlain and Tarnutzer entered into a written agreement (2009
Agreement), in which Chamberlain agreed to make monthly payments of
$100,000 to Tarnutzer, which would be credited against Chamberlain’s
liability under his guaranty. The 2009 Agreement also provided Chamberlain
a right to acquire the property via a so-called “friendly foreclosure,” which
4
Chamberlain believed would eliminate any ability for his former partner,
Mitchell, to claim continued ownership in the property. Although
Chamberlain never went forward with the friendly foreclosure, this is
essentially how it would have worked: Tarnutzer would initiate non-judicial
foreclosure proceedings and Domingo Villas would not cure the default and
instead would allow the property to be sold. At the foreclosure sale,
Tarnutzer would make a credit bid for the entire amount owing to it and
certain sums expended by Chamberlain for improvements made on the
property. If the credit bid was successful, Tarnutzer would sell the property
to Chamberlain for a purchase price to be determined by Chamberlain, which
would not be less than $1.5 million in cash, subject to, among other things,
Chamberlain paying all amounts due under the Note.
Over the next 19 months, Chamberlain made payments to
Tarnutzer pursuant to the 2009 Agreement totaling $1.6 million, but he
missed three of the payments.
By the end of 2010, Chamberlain started working on finding new
financing to pay off the Loan. He received a “letter of interest” from a bank
for a loan in the amount of $1.226 million, which stated, “this letter is not
intended to convey or constitute a commitment, promise, agreement or offer
to lend but rather to summarize the loan terms that [lender] is interested in
considering at this time based upon representations and other information
provided by you.” Even had he secured this loan, Chamberlain would have
needed additional funds to pay off the Loan.
IV.
CHAMBERLAIN’S REQUEST FOR PAYOFF DEMAND AND TARNUTZER’S RESPONSE
At some point in early 2011, after Chamberlain had
unsuccessfully asked Tarnutzer, both verbally and in writing, to provide him
5
a payoff demand so that Chamberlain could refinance the Loan, Chamberlain
prepared and sent to Tarnutzer for his signature a written payoff demand
stating what Chamberlain believed was owing under the Loan. That amount
was $1,345,000. Tarnutzer’s attorney responded he would not let Tarnutzer
sign it because it was incorrect. Instead, on February 7, 2011, Tarnutzer e-
mailed Chamberlain that the “[p]ayoff is $2,098,422” and forwarded a
spreadsheet prepared by Tarnutzer’s attorneys and accountant entitled
“Domingo Loan Default Detail,” which broke down the amount Tarnutzer
claimed was owed (collectively, the February 2011 Tarnutzer e-mail and
spreadsheet). Approximately two months later, on April 13, 2011, Tarnutzer
filed a notice of default and election to sell under deed of trust, which
indicated the amount owed was $3,503,056.48.
At some point, Chamberlain listed the property for sale, but
Tarnutzer had recorded a lis pendens against the property, which prevented
its sale. Tarnutzer initiated foreclosure proceedings against the property on
April 7, 2011, and Domingo Villas filed for bankruptcy protection.
Chamberlain also filed for bankruptcy protection at some point. The property
was sold for $2.9 million, generating net proceeds from which Tarnutzer and
Chamberlain each received $400,000.
V.
THE UNDERLYING CASE AND BIFURCATED TRIAL
Plaintiffs initiated this case against Tarnutzer on June 15, 2011.3
The operative complaint at the retrial (following remand) was the fourth
3
Plaintiffs sued Tarnutzer both individually and in his capacity
as Trustee for the Troy Trust.
6
amended complaint, which was filed on or about June 10, 2021.4 Tarnutzer,
in his capacity as Trustee of the Troy Trust, filed a cross-complaint against
Domingo Villas, Chamberlain, and Mitchell.5 The operative cross-complaint
as of the retrial was the second-amended cross-complaint filed on or about
August 22, 2012. The claims by Domingo Villas against Tarnutzer included
breach of the implied covenant of good faith and fair dealing in connection
with the Loan, intentional interference with a contract between Domingo
Villas and third party Novus Financial Group, LLC, with whom Domingo
Villas had contracted to sell the property, intentional and negligent
interference with an economic relationship between Domingo Villas and third
party Apartment Bank, and violation of Section 2943. Tarnutzer’s cross-
claims included breach of the Loan by Domingo Villas, breach of the guaranty
by Chamberlain, and intentional and negligent misrepresentation against
Domingo Villas.
The trial was bifurcated into two phases. The first phase of the
trial, addressing purely legal issues for the court’s determination, took place
in January 2024.6
4
When we refer to the trial in this opinion, we are referring only
to the retrial in August 2024 and not the first trial in 2015.
5
Although the record is not entirely clear on the procedural
history regarding Mitchell, he was not a party to the litigation as of the
retrial and is not a party to this appeal. In July 2009, after a falling out and a
lawsuit between the two, Chamberlain bought out Mitchell’s interest in
Domingo Villas and became its sole owner and the principal guarantor under
the Loan.
6
The legal issues decided by the trial court, which plaintiffs do
not challenge in this appeal, included whether Tarnutzer could properly
charge Domingo extension fees, liquidated damages in the form of a six
7
The second phase, a jury trial, took place over six days in August
2024. At the close of the evidence, Tarnutzer made an oral motion for a
directed verdict on the basis that all of the conduct by Tarnutzer about which
plaintiffs complained—including the recording of the notice of default and
notice of sale and the service of a payoff demand statement—is privileged
pursuant to Civil Code section 47. Tarnutzer’s motion argued that the service
of a payoff demand is subject to a qualified privilege, and to overcome that
privilege, plaintiffs would have to show Tarnutzer acted with malice.
Plaintiffs opposed the motion for a directed verdict. The trial court denied
Tarnutzer’s motion but agreed to give Tarnutzer’s proposed special jury
instructions on the litigation privilege and qualified privilege over plaintiffs’
objections.
The jury returned a unanimous verdict. The jury found in favor of
Tarnutzer on his cross-claims against Domingo Villas and Chamberlain for
breach of the Note and guaranty, and awarded Tarnutzer damages against
plaintiffs (in their capacities as cross-defendants) in the amount of
$2,790,033.20.7 The jury rejected Tarnutzer’s cross-claims against Domingo
Villas for intentional and negligent misrepresentation.
percent maturity date penalty, late fees, and compound interest, and whether
Tarnutzer could increase the interest rate under the Loan.
7
The jury awarded Tarnutzer approximately $454,804 less than
the amount he requested as damages. In closing argument, Tarnutzer’s
attorney requested an award of $3,244,837.70, consisting of $1,380,702 the
parties stipulated was owing on the Loan as of February 1, 2011, plus
interest from that date through August 1, 2024, of $1,864,055.70. In closing
argument, plaintiffs’ attorney told the jury it was undisputed Tarnutzer
received $400,000 from the bankruptcy sale of the property.
8
As to Domingo Villas’ affirmative claims against Tarnutzer, the
jury found—contrary to Tarnutzer’s vigorous arguments at trial to the
contrary—that Domingo Villas had made a written demand on Tarnutzer for
a payoff demand statement. Then, in response to the next question on the
verdict form—“Did [Tarnutzer] or his agents, respond within 21 days to the
written request made by Domingo Villas or its agents, to provide a payoff
demand statement which complied with Civil Code Section 2943?”—the jury
responded, “Yes.” The jury thus rejected plaintiffs’ contention that the payoff
demand statement provided by Tarnutzer did not comply with Section 2943.
The jury also rejected the other claims alleged by Domingo Villas
against Tarnutzer, including breach of the implied covenant of good faith and
fair dealing, intentional interference with contractual relations, and
intentional and negligent interference with prospective economic advantage.
Based on the verdict, the trial court entered judgment in favor of
Tarnutzer on November 19, 2024. On December 4, 2024, plaintiffs moved for
judgment notwithstanding the verdict, for a new trial, and to set aside and
vacate the judgment. Tarnutzer opposed the motions. The court heard
argument, took the motions under submission, and denied them on February
5, 2025. Plaintiffs timely appealed.
DISCUSSION
I.
PLAINTIFFS FAILED TO SHOW REVERSIBLE ERROR
RELATING TO THEIR SECTION 2943 CAUSE OF ACTION AND DEFENSE
On appeal, plaintiffs contend (1) the trial court failed to instruct
the jury that Tarnutzer was required, but failed, to provide an accurate
9
payoff demand in order to comply with Section 2943,8 and (2) the evidence
was undisputed that Tarnutzer failed to do so, which makes the jury’s verdict
“at odds with the undisputed facts.”9 We disagree with both contentions.
Plaintiffs have failed to show instructional error relating to Section 2943 or
that they were entitled to judgment as a matter of law.
A. Section 2943 and the Special Jury Instructions Given in This Case
Section 2943 creates a private right of action if a party who is
asked to provide a “payoff demand statement” willfully fails to comply with
the terms of the statute.10 (§ 2943, subd. (e)(4).) A “‘[p]ayoff demand
8
At trial, there was no dispute the February 2011 Tarnutzer e-
mail and spreadsheet, in which Tarnutzer claimed the payoff amount was
$2,098,422, did not reflect the actual amount owed under the Loan as of that
date. Indeed, on July 9, 2024, many years later, the parties stipulated the
amount owed as of February 1, 2011 was only $1,380,782.
9
According to plaintiffs, Tarnutzer never provided an accurate
payoff amount, including a per diem figure or other information that would
have allowed Chamberlain (or a new lender) to calculate the payoff amount.
Specifically, according to plaintiffs, the initial spreadsheet provided by
Tarnutzer was $700,000 too high because it failed to include loan payments
Chamberlain made in May and June of 2009, and included a 13 percent
interest rate the trial court later found to be inapplicable. The numbers
stated on the notice of default and other foreclosure documents continued to
escalate and were, according to plaintiffs, inaccurate and grossly inflated.
10
In addition to asserting an affirmative claim for violation of
Section 2943, plaintiffs asserted Tarnutzer’s alleged failure to comply with
Section 2943 as a defense to Tarnutzer’s claims for breach of the Loan and
guaranty. In this regard, the trial court instructed the jury they “may find
that Domingo Villas’ repayment obligation was suspended as of February 1,
2011, if [they] find: [¶] (1) [Tarnutzer] breached Civil Code [section] 2943 by
willfully failing or refusing to provide a timely and accurate payoff demand to
Domingo Villas; and [¶] (2) [t]his was a material breach of the contract.”
(Special Instruction No. 3.)
10
statement’” means “a written statement, prepared in response to a written
demand made by an entitled person or authorized agent, setting forth the
amounts required as of the date of preparation by the beneficiary, to fully
satisfy all obligations secured by the loan that is the subject of the payoff
demand statement. The written statement shall include information
reasonably necessary to calculate the payoff amount on a per diem basis for
the period of time, not to exceed 30 days, during which the per diem amount
is not changed by the terms of the note.” (§ 2943, subd. (a)(5).)
If a lender (like Tarnutzer) “willfully fails to prepare and deliver”
the payoff demand statement “for a period of 21 days after receipt of the
written demand” statement, he becomes “liable to the [borrower] for all
damages which he or she may sustain by reason of the refusal . . . .” (§ 2943,
subd. (e)(4).) “‘[W]illfully’” is defined by the statute to mean “an intentional
failure to comply with the requirements of this section without just cause or
excuse.” (Ibid.) In other words, there is an intent element to the statute.
With respect to the cause of action against Tarnutzer for violation
of Section 2943, the trial court gave Special Instruction Nos. 1 and 2, which
instructed the jury as follows:
“Plaintiff Domingo Villas Incorporated contends that defendant
Byron Richard Tarnutzer as trustee of The Troy Trust violated Civil Code
section 2943 by willfully failing or refusing to timely provide a payoff demand
statement when requested in writing. [¶] According to Civil Code section
2943, a payoff demand statement means a written statement prepared in
response to a written demand made by an entitled person or authorized agent
setting forth the amounts required as of the date of preparation by the
beneficiary to fully satisfy all the obligations secured by the loan that’s the
subject of the payoff demand statement. [¶] The written statement shall
11
include information reasonably necessary to calculate the payoff amount on a
per diem basis for the period of time not to exceed 30 days during [which] the
per diem amount is not changed by the terms of the note.
“In determining whether Mr. Tarnutzer as trustee of The Troy
Trust violated Civil Code section 2943, you must decide [1] whether
Domingos Villas or an authorized agent on its behalf made a written demand
on Mr. Tarnutzer as Trustee of the Troy Trust, or as authorized agent, for [a
payoff] statement. [¶] And [2] whether Mr. Tarnutzer as Trustee of the Troy
Trust or an authorized agent willfully failed or refused to provide Domingo
Villas with a payoff demand statement within 21 days of the receipt of the
written demand.
“[¶] . . . [¶]
“If a lender within 21 days of receipt of a written demand for a
payoff statement willfully fails or refuses to prepare and deliver the
statement, the lender is liable to the borrower for all damages which the
borrower may sustain by reason of the failure or refusal, and whether or not
actual damages are sustained, he or she shall forfeit to [the] entitled person
the sum of $300.
“[¶] . . . [¶]
“Willfully means an intentional failure to comply with the
requirements of this section without just cause [or excuse].”
B. The Trial Court Had No Duty to Instruct the Jury Sua Sponte That a
Payoff Demand Statement Must Be Accurate
Plaintiffs argue the trial court erred by not instructing the jury
that Tarnutzer failed to comply with Section 2943 because he never served an
accurate payoff demand. Plaintiffs cite to cases that have interpreted Section
12
2943 to require that payoff demands provide accurate or exact calculations,
as well as legislative history.11 We find no reversible error.
First, a trial court hearing a civil case has no independent
obligation to instruct the jury on the law. “[U]nlike a trial court in a criminal
case that has ‘the ultimate responsibility for properly instructing the jury’
[citations], a trial court in a civil case has ‘“no duty to instruct on its own
motion”’ [citations] and no duty to revise incorrect instructions.” (Drink Tank
Ventures LLC v. Real Soda in Real Bottles, Ltd. (2021) 71 Cal.App.5th 528,
543–544.) Here, plaintiffs have not shown—and the record nowhere reflects—
that they asked the court to instruct the jury that a payoff demand statement
under Section 2943 must be accurate.12 (See Hyatt v. Sierra Boat Co. (1978)
79 Cal.App.3d 325, 335 [“In order to complain of failure to instruct on a
particular issue the aggrieved party must request the specific proper
instructions”]; Cal. Rules of Court, rule 3.1580 [“Whenever a party desires
11
Plaintiffs rely on Venhaus v. Schultz (2007) 155 Cal.App.4th
1072, California Nat. Bank v. Havis (2014) 120 Cal.App.4th 1122, and Catlin
v. Superior Court (2011) 51 Cal.4th 300, for the proposition that, although not
provided in the statute itself, Section 2943 requires that lenders provide an
accurate payoff demand statement.
12
Although plaintiffs do not address this in their briefing, we note
the trial court did instruct the jury using plaintiffs’ Special Instruction No. 3
in connection with plaintiffs’ defense to enforcement of the Loan, which did
refer to the need to serve an accurate payoff demand statement. Specifically,
that instruction stated: “In this action, plaintiff Domingo Villas, Inc. contends
that defendant Byron Richard Tarnutzer breached the loan agreement by
willfully failing or refusing to provide an accurate payoff statement in
January 2011” and “[y]ou may find that Domingo Villas’ repayment
obligation was suspended as of February 1, 2011, if you find: [¶]
(1) [Tarnutzer] breached Civil Code § 2943 by willfully failing or refusing to
provide a timely and accurate payoff demand to Domingo Villas.” (Italics
added.)
13
special findings by a jury, the party must, before argument, unless otherwise
ordered, present to the judge in writing the issues or questions of fact on
which the findings are requested, in proper form for submission to the jury,
and serve copies on all other parties”].)
Plaintiffs also failed to show they asked the court to decide, as a
matter of law, either in connection with phase 1 of the trial or during phase 2,
that the February 2011 Tarnutzer e-mail and spreadsheet, notice of default,
and other foreclosure documents did not comply with Section 2943. And we
agree with Tarnutzer that the determination of whether he complied raised
questions of fact for the jury’s determination. Where there are factual
disputes, the issue of whether a party complied with a statute generally
presents a question of fact for the jury to decide. (See Nevarrez v. San Marino
Skilled Nursing & Wellness Centre, LLC (2013) 221 Cal.App.4th 102, 124–
125.) And “the question of intent is a question of fact to be determined by the
trial court or jury upon all of the circumstances surrounding the transaction.”
(Blackburn v. Drake (1963) 211 Cal.App.2d 806, 811.) Here, the statute
includes an element of intent so, at a minimum, whether Tarnutzer willfully
failed to comply with the statute raises an issue for the jury’s determination.
(Ibid.)
Finally, plaintiffs have failed to show the alleged instructional
error was prejudicial. Instructional error in a civil case warrants reversal
only if it is reasonably probable plaintiffs would have obtained a more
favorable result absent the error. (Soule v. General Motors Corp. (1994)
8 Cal.4th 548, 573–574; Alamo v. Practice Management Information Corp.
(2013) 219 Cal.App.4th 466, 475–476.) This requires an evaluation of the
entire record, including the evidence, other instructions, counsel’s arguments,
14
and whether there are any indications the jury was misled. (Soule, supra, at
pp. 573–574.)
Plaintiffs have failed to show it is reasonably probable they would
have obtained a more favorable result had the jury been instructed that
Tarnutzer’s payoff communications were not compliant with Section 2943
because they were not accurate. And after reviewing the record, we conclude
plaintiffs cannot make that showing because, as explained below, plaintiffs
have not shown there was incontrovertible evidence at trial that Tarnutzer’s
claimed noncompliance with the statute was willful.
Based on our conclusion, we need not address plaintiffs’
argument that the trial court was required to grant their new trial motion
based on the jury’s purported misunderstanding of the law.13
C. The Verdict is Supported by Substantial Evidence
In their JNOV motion, and on appeal, plaintiffs argue no
reasonable juror could have found Tarnutzer issued a payoff demand
statement in compliance with Section 2943, and the trial court therefore was
required to grant the JNOV. We disagree.
Generally, the standard of review on a motion for JNOV is
“‘whether any substantial evidence—contradicted or uncontradicted—
supports the jury’s conclusion.’” (I.C. v. Compton Unified School Dist. (2025)
108 Cal.App.5th 688, 698.) In cases like this, however, where a plaintiff has
failed to establish some fact they had the burden to prove, they face an
“extremely high burden on appeal” and “‘“it is misleading to characterize the
13
Plaintiffs submitted a juror declaration in support of their
motion for new trial stating that juror was unaware that “to be compliant
with Civil Code § 2943, a payoff demand statement must be accurate as a
matter of law . . . .” For the same reason, we need not decide whether the
juror’s declaration was admissible.
15
failure-of-proof issue as whether substantial evidence supports the
judgment.”’” (Estes v. Eaton Corp. (2020) 57 Cal.App.5th 636, 651.) Rather,
“‘“the question for a reviewing court becomes whether the evidence compels a
finding in favor of the appellant as a matter of law.”’” (Ibid.) In conducting
this review, “we ‘must resolve all conflicts in the evidence in favor of the
prevailing party and must draw all reasonable inferences in support of the
trial court’s judgment.’” (Ibid.)
“‘Specifically, we ask “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.] This is ‘an onerous standard’ [citation] and
one that is ‘almost impossible’ for a losing plaintiff to meet, because unless
the trier of fact made specific factual findings in favor of the losing plaintiff,
we presume the trier of fact concluded that ‘plaintiff's evidence lacks
sufficient weight and credibility to carry the burden of proof.’” (Estes v. Eaton
Corp., supra, 51 Cal.App.5th at p. 651.)
Here, plaintiffs have failed to show there was incontrovertible
evidence Tarnutzer’s alleged failure to comply with statutory requirements of
Section 2943 was willful—a requirement for liability under the statute—and
plaintiffs failed to point to uncontroverted evidence at trial they contend
shows Tarnutzer’s intent.14 Plaintiffs’ failure to do so is dispositive.
14
Tarnutzer introduced evidence at trial that he did not intend to
provide inaccurate figures in the payoff demand statement. He testified he
provided all documents in his possession regarding the Loan to his attorneys
and CPA and relied on them to provide accurate payoff figures. In addition,
Tarnutzer’s declaration submitted in connection with his claim in
bankruptcy, which was admitted into evidence at trial without objection,
stated as follows: “When [Tarnutzer] retained The Ryan Firm, it provided
The Ryan Firm with documents detailing the terms of the loan (i.e., the Note,
16
After reviewing the trial record, we have little difficulty
concluding the jury’s unanimous verdict reflected its careful consideration of
the evidence and the law it was instructed to follow.15
II.
PLAINTIFFS FAILED TO SHOW REVERSIBLE ERROR FROM THE SPECIAL JURY
INSTRUCTIONS REGARDING PRIVILEGE
Plaintiffs contend the judgment must be reversed because (1) the
trial court improperly instructed the jury regarding the absolute litigation
privilege in Civil Code section 47, which improperly submitted a legal
question to the jury and prevented the jury from examining Tarnutzer’s
“escalating” and “wildly exaggerated” payoff demands in his foreclosure and
bankruptcy filings and (2) the trial court improperly instructed the jury the
qualified common interest privilege in Civil Code section 47, subdivision (c)(1)
applies to a written demand made pursuant to Section 2943 because it
increased the evidentiary burden on plaintiff from “mere willfulness” to
malice. We reject plaintiffs’ contentions.
the Deed of Trust, the Amendment, and the Agreement) in addition to
information regarding payments it received from Domingo Villas under the
loan, including payment amounts, the date upon which each payment was
made, and whether the payment was honored. It is my understanding that
The Ryan Firm prepared a spreadsheet detailing the payment history for the
Domingo Villas loan and which calculates the amount of default under the
loan. I personally reviewed said spreadsheet and the information contained
therein accurately reflects the information Troy Trust provided to The Ryan
Firm.”
15
We note the jury did not find entirely in favor of Tarnutzer. For
example, the jury (1) rejected Tarnutzer’s claim that plaintiffs never made a
written payoff demand, finding that they did, (2) did not award Tarnutzer all
of the damages he requested, and (3) rejected Tarnutzer’s fraud claims.
17
A. Special Instructions
At the outset, we note that plaintiffs incorrectly refer to Special
Instruction Nos. 2 through 5 as the instructions the trial court gave the jury
regarding the absolute and qualified privileges set forth in Civil Code section
47. The instructions as they were given to the jury were renumbered Special
Instruction Nos. 4, 5 and 6. The instructions provided as follows:
1. Special Instruction Nos. 4 and 5
“You may not use statements protected by the litigation privilege
in reaching your decision. [¶] The litigation privilege applies to statements
made in connection with judicial proceedings and other official proceedings.
The litigation privilege is not limited to statements made during a trial or
other proceedings but may extend to steps prior to trial or afterwards such as
the recording of a lis pendens if the lis pendens identifies and [sic] action
previously filed with the court which affects the title of real property.
“The litigation privilege applies to statements made in connection
with those proceedings even if those statements are alleged to be fraudulent,
perjurious, unethical, or even illegal.
“The litigation privilege is absolute and applies regardless of
malice.
“The litigation privilege also applies to Notices of Sale and
Notices of Default recorded in connection with foreclosure proceedings.”
2. Special Instruction No. 6
“Statements made in response to a written demand pursuant to
Civil Code section 2943 are entitled to qualified privilege. Qualified privilege
applies to communications that are made without malice, to a person
interested therein, by one who is also interested.”
18
B. Analysis
Plaintiffs have failed to show reversible error with respect to any
of these instructions. First, many of plaintiffs’ arguments on appeal are
conclusory and unsupported by citation to legal authority. We therefore treat
them as waived. (See Kaufman v. Goldman (2011) 195 Cal.App.4th 734, 743
[“Every argument presented by an appellant must be supported by both
coherent argument and pertinent legal authority. [Citation.] If either is not
provided, the appellate court may treat the issue as waived”].) For instance,
plaintiffs do not provide developed argument with citation to authority in
support of their contention that (1) the instructions are incorrect statements
of the law; (2) contrary to Special Instruction Nos. 4 and 5, it was proper for
the jury to consider Tarnutzer’s notices of sale, notices of default and
bankruptcy filings in considering whether he complied with Section 2943;
(3) Special Instruction No. 6 improperly increased the evidentiary burden of
proof on plaintiffs with respect to their Section 2943 claim (and defense to
enforcement of the Loan) and confused the jury because it refers to malice
rather than willfulness; and (4) “while ‘willfulness’ is an element of proof as
to [plaintiffs’] affirmative statutory claim against Tarnutzer for damages,
proof of ‘willfulness’ is not an element of proof and should not have been
imposed on them in defending against Tarnutzer’s [cross-]claim.”
Second, plaintiffs waived their contention the trial court should
have instructed the jury using CACI No. 1723 rather than Special Instruction
No. 6 relating to the common interest privilege in Civil Code section 47,
subdivision (c). Plaintiffs never asked the trial court to give the jury CACI
No. 1723. (See Suman v. BMW of North America, Inc. (1994) 23 Cal.App.4th
1, 9 [“When a trial court gives a jury instruction which is correct as far as it
goes but which is too general or is incomplete for the state of the evidence, a
19
failure to request an additional or a qualifying instruction will waive a
party’s right to later complain on appeal about the instruction which was
given”].) Moreover, plaintiffs did not object to Special Instruction Nos. 4 and 5
on the grounds they would be prevented from proving their claim or defense;
nor did they request clarifying language or alternative instructions. (Ibid.)
Finally, even assuming for the sake of argument the trial court
erred in giving any of these special instructions, plaintiffs have not shown it
is reasonably probable they would have obtained a more favorable result in
the absence of the instructions. (Soule v. General Motors Corp., supra, 8
Cal.4th at pp. 573–574.) The jury found Tarnutzer provided a payoff demand
statement within 21 days of receipt of plaintiffs’ written demand that
complied with Section 2943. The jury, therefore, never needed to and did not
decide whether Tarnutzer’s alleged noncompliance was willful, and did not
need to consider Tarnutzer’s subsequent payoff numbers in his foreclosure-
related and bankruptcy documents. In addition, plaintiffs failed to show how
the trial court’s alleged failure to decide as a matter of law which statements
made by Tarnutzer were privileged, which left the question for the jury,
affected the outcome of the case.
III.
THE TRIAL COURT’S EVIDENTIARY RULINGS CHALLENGED BY PLAINTIFFS WERE
NOT AN ABUSE OF DISCRETION
We review rulings on evidence for abuse of discretion.
(Uspenskaya v. Meline (2015) 241 Cal.App.4th 996, 1000.) Plaintiffs contend
the trial court abused its discretion by excluding certain evidence at trial. We
disagree.
20
A. Evidence Regarding Third Party Asset Management
Plaintiffs sought to introduce at trial evidence Tarnutzer pledged
the deed of trust that secured the Note as collateral in favor of a third party
lender, Asset Management, who later sued Tarnutzer for fraud. Plaintiffs
contend the trial court’s ruling excluding this evidence was error because,
during an approximately six month period in 2011, Tarnutzer lacked
standing to foreclose on the loan. Plaintiffs argue, at a minimum, the trial
court should have issued a limiting instruction regarding Tarnutzer’s lack of
standing.
First, we find plaintiffs’ arguments regarding the probative value
of this evidence to be confusing and convoluted. Plaintiffs’ briefing also
suffers from the same deficiencies discussed above regarding alleged
instructional error by the court: Plaintiffs failed to show they requested and
were denied a limiting instruction regarding Tarnutzer’s lack of standing.
(See Metcalf v. County of San Joaquin (2008) 42 Cal.4th 1121, 1130–1131
[trial court in a civil case has no duty to instruct on its own motion].)
Plaintiffs failed to cite to legal authority supporting their argument that,
during the time period Tarnutzer allegedly lacked standing, Tarnutzer’s
communications regarding what was owing “were not subject to privilege,”
and the court therefore erred in excluding the evidence and instructing the
jury Tarnutzer’s statements were subject to privilege. Plaintiffs also failed to
provide citations to the record in support of their factual assertions.16
16
For example, plaintiffs assert as facts—without citation to the
record—that there was evidence Tarnutzer “said false things about the value
of the Domingo Villas note to Asset Management,” and that Chamberlain
“would have continued to make payments on the loan but the pendency of the
Asset Management litigation prevented him from doing so.”
21
In addition, one of plaintiffs’ attorneys conceded at trial that the
evidence plaintiffs now claim the trial court erred by excluding should
properly be excluded under Evidence Code section 352, which we consider to
be a waiver of the right to appeal.17
B. Evidence Regarding the 2009 Agreement
Prior to trial, plaintiffs sought to exclude references to the
friendly foreclosure provision of the 2009 Agreement between Chamberlain
and Tarnutzer. The court denied the motion without prejudice to another
objection at trial under Evidence Code section 352.
We find no abuse of discretion in the court’s admission of this
evidence. At trial, Chamberlain explained the friendly foreclosure was his
way to extricate Mitchell from any further interest in Domingo Villas.18
17
During the trial, counsel for plaintiffs asked Tarnutzer if, in
2011, after the current lawsuit was pending, he had pledged the Loan and
deed of trust on the property as collateral for a loan. The trial court sustained
the relevance objection asserted by Tarnutzer’s counsel. Plaintiffs’ counsel
argued the information was relevant to whether Tarnutzer had standing to
pursue his claims on the Note. Tarnutzer’s attorney argued the standing
issue had already been decided earlier in the case on demurrer and the issue
was not teed up as part of the list of controverted issues for trial. After the
court indicated it was inclined to sustain the objection based on Evidence
Code section 352, one of plaintiffs’ attorneys conceded the issue would
consume a lot of time and would confuse the jury. The court sustained the
objection under that section. At oral argument, plaintiffs’ counsel
acknowledged the waiver by one of plaintiffs’ attorneys but suggested we
should not deem the objection waived because both of plaintiffs’ attorneys did
not agree to waive the objection. We decline to do so. Plaintiffs did not cite
any legal authority that would require multiple counsel for a party to join in
a waiver to an evidentiary objection in order for it to be effective, and we are
not aware of any such authority.
18
In his opening statement, Chamberlain’s attorney stated
Chamberlain “wanted to get Walter Mitchell out of his life, out of this project.
22
Tarnutzer and Chamberlain both called the agreement a “friendly
foreclosure,” and it was Chamberlain who came up with the plan. Tarnutzer’s
counsel also referred to the document as a forbearance agreement.
First, there can be no question the 2009 Agreement was relevant
to Tarnutzer’s damages. Pursuant to the agreement, Chamberlain agreed to,
and did, make monthly payments of $100,000, and those payments were
directly relevant to the total amount Tarnutzer was owed. Plaintiffs do not
dispute this but instead contend the friendly foreclosure aspect of the 2009
Agreement caused jury confusion and undue prejudice to Chamberlain.
Plaintiffs have shown nothing in the record to support this assumption and
how it was an abuse of discretion to allow the jury to consider the agreement
in its entirety. “Undue prejudice under [Evidence Code] section 352 occurs
when the jury is emotionally inflamed against a party without regard to the
issues in the case. [Citation.] It does not occur merely because evidence is
admitted that might hurt a party’s case.” (Smalley v. Baty (2005) 128
Cal.App.4th 977, 985.) Further, any alleged prejudice to Chamberlain
resulting from the jury hearing the phrase “friendly foreclosure” and hearing
about a plan that never occurred was adequately addressed by plaintiffs’
explanation to the jury about how the 2009 Agreement came about and why
the friendly foreclosure provision was part of it. The court did not abuse its
discretion by allowing the jury to hear the full history of the parties’ dealings
with respect to the Loan.
So he came up with this idea that he would agree with Mr. Tarnutzer that
there would be a foreclosure, very quickly, and that Mr. Tarnutzer would
then sell the property to Mr. Chamberlain for the reduced value, the payoff
amount of the loan after Mr. Chamberlain had made payments on it to
reduce it down to where he could refinance it.”
23
DISPOSITION
The judgment is affirmed. Respondent shall recover costs on
appeal.
GOODING, J.
WE CONCUR:
MOORE, ACTING P. J.
SCOTT, J.
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