Jones
v. Polk
Filed 6/21/12
Jones v. Polk CA2/3
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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115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
THREE
LILLIAN H. JONES,
Plaintiff and Respondent,
v.
MARCUS J. POLK,
Defendant and Appellant.
B232906
(Los Angeles County
Super. Ct.
No. GC041763)
APPEAL
from a judgment of the Superior Court
of
County, C. Edward Simpson, Judge. Affirmed with directions.
Law
Firm of David Dunlap Jones, David D. Jones; Law Offices of
Jeffrey A. Coleman and Jeffrey A. Coleman for Defendant and
Appellant.
Counts
Law Firm, Jeffrey J. Williams and Emahn Counts for Plaintiff and Respondent.
_______________________________________
Marcus
J. Polk appeals a judgment quieting title to real property in favor of
Lillian H. Jones, canceling his note and
attempted foreclosure sale. The trial
court entered the judgment on equitable counts after the jury found that Polk
had committed fraud in connection with Jones’s execution of the note and deed of
trust. Polk contends the evidence does
not support the jury verdict. We
conclude that Polk has shown no error in the judgment and therefore will affirm
the judgment.
AND PROCEDURAL BACKGROUND
1. Factual
Background
Jones
is a retired college teacher with a Bachelor of Arts degree in sociology and
a Master of Arts degree in history.
She has never worked in the real estate industry. Jones first met Celia Gallardo when Gallardo
was 13 years old and was a friend of Jones’s daughter. Gallardo was a frequent visitor in Jones’s
home and resided with Jones for three and one-half years during a time that
Gallardo was experiencing difficulties with her parents. Gallardo later became a real estate agent. Gallardo helped Jones to purchase investment
properties and managed properties on her behalf.
Jones
resides in Altadena in a house that she purchased in
April 2005. She purchased an investment
property located on Sand Canyon Road
in Canyon Country in July 2007. She
understood that Gallardo would arrange for a loan to finance improvements and
agreed that Gallardo would handle the money and oversee the construction. Jones executed a $1 million deed of
trust against the Sand Canyon Road
property in August 2007 and executed a $2.1 million deed of trust against the
property September 2007.
Gallardo
telephoned Jones in January 2008, approximately one week after Jones was
released from the hospital where she underwent heart surgery. Gallardo stated that Jones needed to sign
some documents so they could complete the Sand Canyon
Road house.
Gallardo suggested that they go out to dinner afterwards. Gallardo presented several documents for
Jones to sign on February 1, 2008,
and they went to a notary public together.
The documents stated the legal description of the property, but not the
street address. Jones did not read the
documents before signing them.
Jones
believed at the time that the documents related to a construction loan for the Sand
Canyon Road house.
In fact, the documents she signed were a $390,000 promissory note
and a deed of trust against her Altadena home. The note and deed of trust were in favor of
Polk as beneficiary. Jones had never
met, seen or communicated with Polk in any way and knew nothing about him. Jones never received any money pursuant to the
promissory note. Instead, $390,000 was
transferred from one account to another as part of a transaction that Jones
apparently knew nothing about and in which she received no consideration.
That
transaction involved a $390,000 loan from Polk to Gallardo’s sister-in-law,
Sung-Hee Linda Zagha, for Zagha’s purchase of real property in Newhall. Polk borrowed $390,000 from El Camino
Partners LLC in order to lend it to Zagha.
The escrow company handling the purchase escrow, Executive Escrow,
prepared three separate $390,000 promissory notes and three separate deeds of
trust for three individuals relating to the same $390,000 loan from Polk to
Zagha. The purported borrowers from Polk
were Jones, Zagha and Jean Littleton.
The $390,000 loan proceeds were deposited in escrow, and Executive
Escrow disbursed the funds to the Newhall property seller or for the benefit of
the seller. Neither Jones nor Littleton
was a party to the purchase escrow, and neither one authorized the
disbursement of the loan proceeds. The
purchase of the Newhall property was never completed.
Peppertree
Financial, Inc. (Peppertree), as agent of the trustee under the deed of trust,
recorded a notice of default and election to sell against the Altadena
property in June 2008.
2. Trial
Court Proceedings
Jones
filed a complaint against Gallardo, Polk and Peppertree in October 2008. She alleged that the defendants had
misrepresented and concealed the facts relating to the $390,000 promissory note
and deed of trust. A default was entered
against Gallardo in June 2010, and the trial court entered a default judgment
against her on July 27, 2010,
awarding Jones $390,000 in damages and $6,210 in attorney fees and costs.
Jones
filed an amended complaint against Gallardo, Polk and Peppertree in December
2010, alleging counts for (1) fraud, against Gallardo and Polk; (2) breach
of contract, against Polk; (3) cancellation of the $390,000 promissory note and
deed of trust, against Polk; (4) quiet title, against Polk; and (5) an
injunction against any foreclosure, against Polk and Peppertree. Polk filed a cross‑complaint
against Jones in December 2010, alleging a single count for breach of the
promissory note.
A
jury trial took place in February 2011 on Jones’s counts for fraud and breach
of contract. Polk voluntarily dismissed
his cross-complaint without prejudice during the trial. The trial court granted Polk’s motion for
nonsuit against the count for breach of contract. The jury returned a special verdict finding
in favor of Jones and against Polk on theories of intentional and negligent
misrepresentation, constructive fraud, intentional concealment and false
promise. The jury found that Jones had
suffered $390,000 in damages plus reasonable attorney fees.
The
trial court then considered the equitable counts. The court stated that in light of the jury’s
findings and in the exercise of the equitable powers of the court, it would
declare the promissory note and deed of trust void and cancel and rescind them.
award damages against Polk. No party
requested and the court did not issue a statement of decision.
The
court entered a judgment on March 4,
2011, stating that the $390,000 promissory note and deed of trust
are canceled, rescinded and void; that title to the Altadena
property is quieted in Jones; and that Polk and Peppertree are permanently
enjoined from foreclosing on the property.
The trial court denied Polk’s motion for judgment notwithstanding the
verdict or for a new trial. Polk timely
appealed the judgment.
Polk contends there is no evidence
that he made any representation, or any communication, to Jones, directly or
indirectly, so there could be no intentional or negligent misrepresentation and
no false promise; (2) the evidence cannot support his liability for
is no evidence that Gallardo acted as his agent or that he ratified any act by
Gallardo and therefore no basis for his liability for any fraud; and
(4) there is no evidence that he had a confidential or fiduciary
relationship with Jones as necessary to support liability for constructive
fraud.
1. We
Must Infer Factual Findings in Support of the Judgment
A
trial court may conduct a jury trial on legal issues and a nonjury trial on
equitable issues arising in the same action.
(Hoopes v. Dolan (2008) 168
Cal.App.4th 146, 156-157.) The preferred
practice ordinarily is to try the equitable issues first if the decision on
those issues may obviate the need for a jury trial. (Id.
at p. 157; Nwosu v Uba (2004) 122
Cal.App.4th 1229, 1238, 1242.) If the
legal issues are decided first, however, the jury’s factual findings are
binding on the trial court deciding the equitable issues to the extent that the
equitable issues are based on the same facts.
(Hughes v. Dunlap (1891) 91
Cal. 385, 388-390; Hoopes,
fact not decided by the jury, the trial court decides those factual questions
as the trier of fact. (
A
court that tries a question of fact must issue a statement of decision
explaining the factual and legal bases for its decision as to the principal
controverted issues at trial, but only if timely requested by a party appearing
at trial. (Code Civ. Proc., § 632.) The request must specify the issues as to
which the party is requesting a statement of decision. (Ibid.) After a party has requested a statement of
decision, any party may make proposals as to the content of the statement of
decision. (Ibid.) If a nonjury trial on
equitable issues conducted after a jury trial involves questions of fact that
were not conclusively decided by the jury, the nonjury trial involves the trial
of a question of fact by the court within the meaning of Code of Civil
Procedure section 632, so a statement of decision is required upon timely
request.
A
statement of decision explains the bases for the trial court’s decision. Absent a statement of decision, the
reviewing court must presume that the trial court resolved all factual disputes
in favor of the prevailing party as necessary to support the judgment. (In re
Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133-1134;
229, 267; see Code of Civ. Proc., §§ 632, 634.) A statement
of decision may reveal that the trial court made factual findings in favor of
the prevailing party on some contested issues but not others, thus depriving
the prevailing party of the benefit of inferred findings in its favor on those
other issues. A reviewing
court must not infer findings in favor of the prevailing party on any issues
that the statement of decision does not resolve or on which the statement of
decision is ambiguous, if the omission or ambiguity was brought to the trial
court’s attention either before the entry of judgment or on a motion for a new
trial or to vacate the judgment. (Code
of Civ. Proc., § 634.)
The
trial court entered a judgment in favor of Jones on the equitable counts
decided by the court and awarded her no relief on the legal counts decided by
the jury. To the extent that the
equitable issues presented questions of fact not decided by the jury, we must
infer factual findings in support of the judgment absent a statement of
decision.
Polk
argues that the trial court’s statement at the conclusion of trial (quoted in
fn. 1, ante) shows that the
court relied exclusively on the factual findings by the jury and made no
factual findings of its own. We disagree. An oral or written statement by the court
explaining its intended decision at the conclusion of a nonjury trial is
a tentative decision and is nonbinding.
(Shaw v. County of Santa Cruz,
supra, 170 Cal.App.4th at pp.
268-269; County of Orange v. Barratt
American, Inc. (2007) 150 Cal.App.4th 420, 438-439.) California Rules of Court, rule 3.1590(a)
states:
“On
the trial of a question of fact by the court, the court must announce its
tentative decision by an oral statement, entered in the minutes, or by a
written statement filed with the clerk.
Unless the announcement is made in open court in the presence of all
parties that appeared at the trial, the clerk must immediately serve on all
parties that appeared at the trial a copy of the minute entry or written
tentative decision.â€
California
Rules of Court, rule 3.1590(b) states:
“The
tentative decision does not constitute a judgment and is not binding on the
court. If the court subsequently
modifies or changes its announced tentative decision, the clerk must serve a
copy of the modification or change on all parties that appeared at the trial.â€
The
provisions of the California Rules of Court have the force of statutes to the
extent that they are not inconsistent with legislative enactments or constitutional
law. (Silverbrand v. County of Los Angeles (2009) 46 Cal.4th 106,
125.) We conclude that the trial court’s
oral statement at the conclusion of trial was a nonbinding tentative decision
pursuant to California Rules of Court, rule 3.1590 rather than a binding
tentative decision. There is no need to
interpret the tentative decision because regardless of our interpretation of
the tentative decision, it was nonbinding and does not preclude inferred
findings in support of the judgment.
2. Substantial
Evidence Supports the Implied Finding that the Promissory
Note and Deed of
Trust Are Void for Lack of Consideration
A
court may cancel a written instrument that is void or voidable if there is
a reasonable apprehension that it may cause serious injury to the
plaintiff. (Civ. Code, § 3412.)
an equitable action. (
642-643; Hironymous v. Hiatt (1921)
52 Cal.App. 727, 731.)
The
absence of consideration for a promissory
note or a deed of trust is grounds for cancellation. (Hunter
v. Hunter (1942) 21 Cal.2d 228, 231-232; Hironymous v. Hiatt, supra,
52 Cal.App. at p. 731.) Whether a
note or a deed of trust was given for consideration is a question of fact. (Hunter,
supra, at pp. 231-232;
We review the sufficiency of the evidence to support a factual finding
under the substantial evidence standard.
(Mealy v. B-Mobile, Inc. (2011)
195 Cal.App.4th 1218, 1222.)
Substantial
evidence is evidence that a rational trier of fact could find to be reasonable,
credible and of solid value. We view the
evidence in the light most favorable to the judgment and accept as true all
evidence tending to support the judgment, including all facts that reasonably
can be deduced from the evidence. We
must affirm the judgment if an examination of the entire record viewed in this
light discloses substantial evidence to support the judgment. (Crawford
v. Southern Pacific Co. (1935) 3 Cal.2d 427, 429; Mealy v. B-Mobile, Inc., supra,
195 Cal.App.4th at p. 1223.)
Polk
does not contend the evidence is insufficient to support the implied factual
finding that Jones received no consideration for the promissory note and deed
of trust. Instead, he argues that the
oral statement by the trial court at the conclusion of trial shows that the
court made no such finding. We have
already rejected that argument. We must
presume that the evidence supports the trial court’s factual findings unless
the appellant affirmatively demonstrates to the contrary. (In re
Marriage of Fink (1979) 25 Cal.3d 877, 879.) By failing to cite and discuss the evidence
on point, Polk abandons any claim of error as to the sufficiency of the
evidence to support the judgment. (
(1971) 3 Cal.3d 875, 881; Bullock v. Philip Morris USA, Inc. (2008)
159 Cal.App.4th 655, 677.)
We
conclude that Polk has shown no error in the judgment canceling the promissory
note and deed of trust based on the absence of consideration, quieting title in
favor of Jones and enjoining Polk and Peppertree from foreclosing on the
property. In light of our conclusion, we
need not decide whether the evidence supports the jury verdict on the various
fraud theories.
3. The
Default Judgment Must Be Modified
The
default judgment against Gallardo awards Jones $390,000 in damages arising from
the deed of trust and $6,210 in attorney fees and costs. The trial court’s cancellation of the deed of
trust, which we affirm, completely eliminates the $390,000 in damages arising
from the deed of trust. Jones does not
dispute this and does not object to a reduction of the default judgment in that
amount. Accordingly, the trial court
will be directed to modify the default judgment filed on July 27, 2010, by
striking the award of $390,000 in damages.
The
judgment is affirmed with directions to modify the default judgment against
Gallardo filed on July 27, 2010, as reflected herein. Jones is entitled to recover her costs on
appeal.
NOT TO BE PUBLISHED IN THE
OFFICIAL REPORTS
CROSKEY,
J.
We Concur:
KLEIN, P. J.
KITCHING, J.
name="_ftn1" title="">[1]
trial court stated: “The court, in light
of the findings of the jury and in the exercise of the equitable powers of the
court, the court will declare that the promissory note and deed of trust are
void and are to be cancelled and rescinded, if not voidable.â€
name="_ftn2" title="">[2]
Rules of Court, rule 3.1590(c) provides that the court in its tentative
decision may state that the tentative decision is the court’s proposed
statement of decision, subject to any party’s objection, or that the tentative
decision will become the statement of decision unless a party timely specifies
additional controverted issues as to which the party is requesting a statement
of decision or makes proposals not included in the tentative decision. The trial court did not do so here.
