George v. Tirri













Filed 1/23/13 George v. Tirri CA3









NOT TO BE PUBLISHED















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opinion has not been certified for publication or ordered published for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

THIRD APPELLATE
DISTRICT

(Shasta)

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>

ROY GEORGE et al., Plaintiffs and Respondents, v. DOUG TIRRI, Defendant and Appellant.

C064412 (Super. Ct. No. 163993)

The trial court found defendants
Doug Tirri and his former spouse, Joann Tirri, liable for fraud in failing to
disclose to plaintiffs Roy and Jennifer George that the home they sold to them
was not constructed with required permits and was defective. Only Mr. Tirri appeals from the
judgment. He claims the trial court committed
evidentiary errors, errors in awarding
damages, and that it was biased.
Plaintiffs request we impose sanctions for a frivolous appeal. We conclude none of defendant’s arguments
have merit and we affirm the judgment.
We also deny plaintiffs’ request for sanctions.





FACTS

This appeal is prosecuted on a
settled statement written by the trial court.
Plaintiffs purchased a home in href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Shasta
County from defendants for $180,000.
Defendants disclosed to plaintiffs that the construction of a back porch
was not done with permits. However,
defendants did not disclose that the entire home was built without permits or
that there were defects in the home’s foundation.

After escrow had closed, plaintiffs
learned from a county building inspector that the only permit issued for the
site was for construction of a garage.
The home was deemed uninhabitable, and plaintiffs and their children had
to live in a travel trailer on the property and store their belongings while the
home was reconstructed and brought up to code.


Plaintiffs filed a complaint for
fraud and other causes of action against defendants and the real estate agency
and agents who handled the sale. The
realtor defendants settled for payment of $1,800. Plaintiffs also received $23,200 from their
title insurance agency.

Following a court trial, the court
found in favor of plaintiffs. It awarded
plaintiffs $180,000 in damages: $72,000
in out-of-pocket damages and an additional $108,000 in general damages.

Defendant contends the court erred
by:

(1) Admitting
oral testimony by plaintiffs that contradicted their earlier responses to a
request for admissions;

(2) Admitting
testimony of real property valuation from plaintiffs’ expert witnesses who had
not been adequately disclosed before trial, and from plaintiff Roy George;

(3) Awarding
damages under the wrong standards and without substantial evidence; and

(4) Harboring
bias due to the fact that plaintiff Jennifer George is a Shasta County Superior
Court employee.

DISCUSSION

I

Testimony that Contradicted Admissions

Defendant claims the trial court
erred when it did not exclude portions of plaintiffs’ testimony that
contradicted earlier admissions. In
response to a request for admissions, plaintiffs admitted defendants told them
they had obtained a permit to construct only a garage, and that defendants told
them they (defendants) knew at all times they had built the residence without
obtaining any required permits.

At trial, however, plaintiffs
testified they had no knowledge the residence was constructed without permits
until a county inspector told them after they had purchased the property. Plaintiffs also testified defendants never
disclosed to them that all of the work performed on the residence, except for
construction of a porch, was done without permits. Defendant contends the trial court erred in
admitting plaintiffs’ testimony.

Defendant’s argument, that the
court erred in admitting testimony that contradicted earlier admissions, as a
general legal matter is correct, but the record does not contain sufficient
evidence on which we can determine the trial court actually erred. This point exposes the risks inherent when
proceeding on a settled statement.

An admission made in response to a
request for admission “is conclusively established against the party making the
admission in the pending action, unless the court has permitted withdrawal or
amendment of that admission under [Code of Civil Procedure] Section 2033.300.” (Code Civ. Pro., § 2033.410, subd. (a).)

The record includes plaintiffs’
admissions, but it is silent regarding how they and the conflicting testimony
were addressed in court. The record does
not indicate whether defendants objected to the plaintiffs’ contradictory
testimony, or whether the court permitted plaintiffs to withdraw or amend their
admissions. Because we must assume all
intendments necessary to affirm the judgment unless the short record
contradicts them (Dumas v. Stark
(1961) 56 Cal.2d 673, 674), we presume the court took whatever action was
necessary to admit the testimony and we affirm the court’s action on that
basis.

When proceeding by means of a
settled statement, the appellant bears the responsibility of ensuring the
settled statement is a “condensed narrative of the oral proceedings >that the appellant believes necessary for
the appeal.” (Cal. Rules of Court,
rule 8.137(b)(1), italics added.)
Neither in his proposed settled statement, nor in his reply to
plaintiffs’ proposed statement, did defendant include any information of the
proceedings surrounding admission of the contradictory testimony. Without such evidence, we are unable to
review what transpired, and thus we must presume the court complied with the
law and did not abuse its discretion admitting and relying upon plaintiffs’
trial testimony.

II

Admission of Expert Witness Testimony

Defendant contends the trial court
erred when it admitted valuation testimony from expert witnesses plaintiffs had
not adequately disclosed, and from plaintiff George Tirri. We conclude the trial court did not abuse its
discretion in admitting the testimony because it could conclude plaintiffs did
not unreasonably fail to comply with the statutory disclosure requirements, and
because Mr. Tirri could testify as a percipient witness as to value. Even if the trial court erred, however, the
error was not prejudicial, as the court did not rely upon the expert testimony.

A. >Additional background information

In response to defendant’s demand
to exchange expert witness information, plaintiffs’ counsel forwarded a letter
listing two witnesses she intended to call as percipient witnesses and could
also call as expert witnesses:
construction contractors Robert Sims and Mike Wheeler. Counsel indicated the two men would testify
they submitted bids and provided estimated costs for bringing the residence
into compliance under all required permits.


Defendant objected to counsel’s
response. He asserted the letter did not
comply with the statutory requirements governing responses to demands to
exchange experts found at Code of Civil Procedure section 2034.260.

Plaintiffs’ counsel then provided a
second response, this one in the form of a pleading. In this response, counsel stated Sims and
Wheeler would be called to testify as expert witnesses. Counsel provided the witnesses’ addresses,
phone numbers, and state contractors’ license numbers. Counsel stated neither of the experts had
prepared or provided written reports for purposes of their testimony. Neither had indicated they would charge a fee
for their appearances. Both would
testify to being familiar with the case, as both had submitted bids to
plaintiffs for the cost of construction to bring the residence up to code. Both were licensed California contractors,
each with more than 20 years of experience.


Defendant filed motions in limine
to prevent plaintiffs’ experts from testifying and to prevent any of
plaintiffs’ lay witnesses from providing expert opinion. Defendant argued the court was obligated to
exclude the expert opinion offered by any witness because plaintiffs had failed
to comply with the statutory expert witness disclosure requirements. (Code Civ. Proc., § 2034.300.)

The trial court denied both in
limine motions. It ruled the motion to
exclude expert witnesses was denied without prejudice.

Sims and Wheeler both testified at
trial. However, the trial court
determined their testimony was not material to its findings, and it did not
include any description of their testimony in the settled statement.

Plaintiff Roy George also testified
at trial. According to the settled
statement, “Roy testified as to the damages he incurred through-out the
ordeal.”

Defendant claims the court erred in
admitting the expert testimony of Sims and Wheeler, and Mr. George’s testimony
of damages, and that the errors were prejudicial.

B. >Analysis

Code of Civil Procedure section
2034.300 directs a court to exclude from evidence the expert opinion of any
witness offered by any party who “unreasonably” failed to comply with the
expert witness disclosure requirements.
We review a trial court’s ruling on a motion to exclude an expert’s
opinion, as well as the trial court’s reasonableness determination under Code
of Civil Procedure section 2034.300, for abuse of discretion. (See Boston
v. Penny Lane Centers, Inc. (2009) 170 Cal.App.4th 936, 950.)

The trial court did not abuse its
discretion in denying defendant’s in limine motions. On this record, it could conclude plaintiffs
did not unreasonably fail to comply with the disclosure requirements. Plaintiffs disclosed the names, addresses,
and phone numbers of their proposed expert witnesses. Plaintiffs also explained no fee had yet to
be demanded by the witnesses and the witnesses had no reports. This information substantially complied with
the requirements of expert witness disclosure (Code Civ. Proc., §§ 2034.260,
2034.270), and the court could determine plaintiffs did not unreasonably fail
to comply with those requirements.

Even if the court had erred, we
still would not reverse on this point.
Defendants suffered no prejudice by the court admitting the
testimony. In the settled statement, the
court stated it did not consider the experts’ testimony in reaching its judgment. Thus, defendants cannot show they would have
received a more favorable judgment had the court not admitted the testimony,
the showing of prejudice required to reverse on an evidentiary decision. (Winfred
D. v. Michelin North America, Inc. (2008) 165 Cal.App.4th 1011,
1038-1040.)

Also, the court did not err by
admitting plaintiff Roy George’s testimony on damages. As explained below, Mr. George was certainly
able to testify, as a percipient witness and as to the issue of value, on the
costs he incurred in restoring the residence.


III

Errors in Damage Award

The trial court awarded plaintiffs
$180,000 in damages, calculated as follows:
$72,000 in actual damages (the difference between what plaintiffs paid
for the home ($180,000) and the value of what they received); plus $108,000 in
general damages. The court found plaintiffs
were entitled to an award of $216,000 in general damages, but it honored
plaintiffs’ request to reduce that amount to $108,000.

Defendant claims the court
committed numerous errors in reaching its damage award:

(1)
The court used the wrong standard of damages.

(2)
No substantial evidence supports the award as plaintiffs presented no
expert testimony on the value of the property;

(3)
General damages are not allowed for fraudulent real property
transactions;

(4)
If the court awarded tort damages under Civil Code section 3333 instead
of damages for fraud under Civil Code section 3343, it failed to account for
plaintiffs’ contributions to their damages; and

(5)
The court failed to deduct from the damage award the amounts plaintiffs
received from the defendant real estate agents in settlement and from
plaintiffs’ title insurance company.

We address, and reject, each
contention.

A. >Standard of damages

Defendant claims the court used the
wrong standard of damages. He asserts
the court was required to apply the out-of-pocket standard of damages provided
in Civil Code section 3343 to determine the damage award. He claims the court instead awarded
plaintiffs their costs in refurbishing the property.

Defendant correctly claims damages
for fraud in real property transactions are governed by Civil Code section
3343. However, contrary to defendant’s
assertion, the trial court in fact calculated damages according to Civil Code
section 3343.

Civil Code section 3343,
subdivision (a), describes the out-of-pocket standard as follows: “One defrauded in the purchase, sale or
exchange of property is entitled to recover the difference between the actual
value of that with which the defrauded person parted and the actual value of
that which he received . . . .”

This is the very standard the court
applied here. The court wrote: “The Court FINDS the difference between the actual value of that which the
Plaintiffs parted and the value of what was received to be the amount requested
by Plaintiffs: $72,000.” The court thus applied the correct standard.href="#_ftn1" name="_ftnref1" title="">[1] (Original capitalization & boldface
type.)

That this amount of out-of-pocket
damages may have equaled plaintiffs’ costs, as contended by defendant, is
irrelevant. Without a reporter’s
transcript, we assume sufficient facts exist on which the court could make this
award.

B. >Evidence of value

Defendant claims href="http://www.fearnotlaw.com/">fraud damages under Civil Code section
3343 require evidence of value presented by expert testimony, not evidence of
the cost of repair. He claims
plaintiffs’ lack of expert testimony on the issue of value is fatal to their
recovery.

Defendant is incorrect. The market value of real property may be
established by the testimony of either the owner of the property or an expert
witness. (Evid. Code, § 813.) A buyer may testify regarding value without
qualifying as an expert. (>Buist v. C. Dudley DeVelbiss Corp.
(1960) 182 Cal.App.2d 325, 334.)

In addition, the cost of repairs
caused by misrepresentations about the property’s condition, although not an
element of recoverable damages, may be introduced to show the property’s actual
value. (Glendale Fed. Sav. & Loan Assn. v. Marina View Heights Dev. Co.
(1977) 66 Cal.App.3d 101, 148.)

In the settled statement, the court
stated plaintiff Roy George testified “as to the damages he incurred though-out
the ordeal.” We presume the court in
part meant Mr. George testified as to the costs he incurred in rehabilitating
the property, as also shown on a listing of expenses prepared by plaintiffs,
and the court relied upon that evidence to establish the property’s value in
order to calculate damages.

The court had additional evidence
of value before it. Defendants
introduced the appraisal prepared when plaintiffs purchased the property. That appraisal valued the property at
$200,000, without accounting for the permitting and structural defects
discovered later. Without a reporter’s
transcript to augment this testimony, we presume sufficient evidence exists in
the record to support the court’s determination of $72,000 as the difference
between the amount plaintiffs paid for the property and the property’s true
value.href="#_ftn2" name="_ftnref2" title="">[2]

C. >Award of general damages

Defendant faults the court for
awarding general damages for personal injuries.
The record does not indicate general damages were awarded for personal
injuries. However, Civil Code section
3343 allows the court to award additional damages along with the out-of-pocket
fraud damages. The statute entitles the
fraud victim to his out-of-pocket loss “together with any additional damage
arising from the particular transaction,” including an amount “which would
compensate the defrauded party for loss of use and enjoyment of the property to
the extent that any such loss was proximately caused by the fraud.” (Civ. Code, § 3343, subd. (a)(2).)

According to the settled statement,
there was evidence plaintiffs suffered loss-of-use damages due to defendant’s
misrepresentations and omissions. The
residence was uninhabitable. Thus,
plaintiffs were not allowed to live in it until it was brought up to code and
permitted legally. As a result, they had
to live in a travel trailer on the property and store their belongings at a
cost. Without a reporter’s transcript,
we are left to presume the award of general damages was based on plaintiffs’
loss of use of the property. This award
was consistent with the standard of damages allowed by Civil Code section 3343.

D. >Offset for settlement amounts

Defendant argues the court was
required to offset the damages award with the amount of money plaintiffs
received in a settlement with the realtor defendants and in a payment from the
title insurance company, amounts totaling $25,000. A release or dismissal given in good faith by
one joint tortfeasor reduces the claims against the nonsettling tortfeasors in
the amount of the settlement paid. (Code
Civ. Proc., § 877,
subd. (a).)

Here, the trial court determined
plaintiffs were entitled to an award of $72,000 in fraud damages and $216,000
in general damages. Plaintiffs, however,
requested general damages be reduced in half to $108,000. This reduction satisfied the requirements of
Code of Civil Procedure section 877, as it included the offset of $25,000
plaintiffs received in settlement, and then some.

At oral argument, counsel for
defendant asserted there was no offset because the court did not first find
plaintiffs were entitled to $216,000 in general damages. He claims the court found only that
plaintiffs were entitled to the $108,000 in general damages it actually
awarded, and it took no offset from that amount.

Counsel is incorrect. In its statement of decision, the trial court
stated: “The Court FINDS that the Plaintiffs have established that they are entitled
to general damages in the sum of $216,000; however, Plaintiffs have
specifically requested a reduced sum.
Accordingly, and at the specific request of the Plaintiffs, the Court
awards the sum of $108,000 as and for general damages.” (Original capitalization & boldface
type.)

Clearly, the court offset its
finding of damages by an amount that included any offset to which defendant was
entitled under Code of Civil Procedure section 877.

IV

Bias Due to Plaintiff’s Employment by Court

Defendant accuses the trial court
of bias based on the fact plaintiff Jennifer George is an employee of the
Shasta County Superior Court. He claims
that when he raised this issue with the court, the court “simply brushed it
off, ignoring [his] concerns.” Not true.

Defendant first raised the issue in
his settlement conference statement. At
that time, however, he made no objection nor sought any relief based on
plaintiff’s employment status. He
wrote: “Defendants have concern in this
regard, but simply ask that [plaintiff] have no involvement in the
administrative handling of this case, and that her only involvement be as a
party.” By this remark, defendant
forfeited any objection he may have had based on plaintiff’s employment. And, in fact, the record discloses no further
objection by defendant throughout the trial.
His forfeiture of the issue before the trial court forfeits it on
appeal. (In re Marriage of Broderick (1989) 209 Cal.App.3d 489, 501.)

In any event, the issue next
surfaced after trial and entry of judgment.
At a hearing on a motion by plaintiffs for prejudgment interest, defense
counsel informed the court of plaintiff’s employment status and asked the court
if a disclosure had been made. According
to the court’s minutes, the court advised counsel “that it is unaware if
Jennifer George is a Court employee or not AND DOES NOT KNOW A Jennifer George
outside of their lawsuit.” (Original
capitalization.) By this remark, the
court did not “brush off” defendant. It
simply and directly answered defendant’s question and his underlying concern of
bias. There was no bias.

V

Request for Sanctions

Plaintiffs claim this appeal is
frivolous and ask us to impose sanctions against defendant and his
attorney. While this appeal comes close
to being frivolous, we cannot conclude “any reasonable attorney would agree that
the appeal is totally and completely without merit.” (In re
Marriage of Flaherty (1982) 31 Cal.3d 637, 650.) We deny the request.

DISPOSITION

The judgment is affirmed. Costs on appeal are awarded to
plaintiffs. (Cal. Rules of Court, rule
8.278(a).) Plaintiffs’ request for
sanctions is denied.









NICHOLSON , Acting P. J.







We concur:







BUTZ , J.







MAURO , J.