Robynaire v. Cutter Aviation
Filed 9/13/07 Robynaire v. Cutter Aviation CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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
ROBYNAIRE, INC., et al.,
Plaintiffs and Respondents,
CUTTER AVIATION SANTA MONICA, INC.,
Defendant and Appellant.
(Los Angeles County
Super. Ct. No. BC286882)
APPEAL from a judgment of the Superior Court of Los Angeles County. Brett C. Klein, Judge. Affirmed.
Dwyer, Daly, Brotzen & Bruno, Peter P. Brotzen and Gregory L. Anderson for Defendant and Appellant.
Esner, Chang & Ellis, Stuart B. Esner, Andrew N. Chang, and Gregory R. Ellis for Plaintiffs and Respondents.
In this consolidated appeal, appellant Cutter Aviation Santa Monica, Inc. (appellant) appeals from a judgment entered after a jury trial and an amended judgment entered after respondents Robynaire, Inc.(Robynaire) and Robyn Astaire (Astaire) (collectively respondents)accepted a remittitur under a ruling on appellants motion for a new trial. Pursuant to the amended judgment, respondents were awarded $691,915.40 plus prejudgment interest and costs on their claims for negligence and breach of contract arising out of an action for damage to respondents personal property, an Aerostar aircraft. We affirm the judgment.
Appellant contends that the trial court erred in denying its motion for a new trial. Specifically, appellant contends that it was deprived of a fair trial because: (1) the jury engaged in prejudicial misconduct; (2) the trial court erred in admitting respondents experts testimony regarding fair market value of the aircraft and cost of repair to the aircraft; and (3) the damage award was not supported by substantial evidence. Appellant also argues that trial court improperly interpreted the collateral source rule when it refused to apply an insurance payment received by respondents as an offset against the verdict.
In June 2001, respondents took their Aerostar airplane to appellant for an annual inspection and other maintenance work. According to respondents, the plane was in very good condition when it was delivered to appellant. Respondents had made significant improvements to the plane in the eight years that they had owned it, and meticulously maintained it. According to Astaires testimony, the airplane had been voted by fellow Aerostar owners as the best Aerostar plane. Astaire also testified that the airplane had much sentimental value to her, as she and her late husband had discussed and planned its purchase.
1. The Oil Loss Event in June 2001
As part of the annual inspection, appellant performed a run-up on respondents plane. According to Astaires testimony, a run-up is a procedure during which the engine of the plane is run, then shut down, in order to determine whether there are any oil leaks. Astaire testified that she participated in all of the run-ups on her plane, including the one that appellant performed in June 2001.
Astaire and one of appellants mechanics, William Fryer, were in the plane for the June 2001 run-up. Astaire moved the throttles to 1,000 rpm, which she believed was normal for an oil check. Despite Astaires reluctance, Fryer pushed the plane to full power, or 2,500 rpm. Astaire noted abnormalities in the functioning of the plane, but was instructed by Fryer not to worry about it. Soon after, the engine stopped suddenly. It was ultimately determined that the engine stopped because oil pressure was lost due to a loose oil line. Appellants head mechanic, Ron Gard, testified that the oil connection was probably left loose by one of the mechanics working on the plane. But he also indicated that Fryer should have performed a leak check prior to the run-up. Fryer admitted that he had deviated from standard procedure that day and that it was a mistake to do so.
Astaire requested that the affected engine be sent to the manufacturer to be torn down in order to determine what damage was done. She was informed that this would occur, although she discovered at the time of trial that the engine was not sent to the manufacturer but was sent to a different company, without Astaires permission. It was estimated that the engine inspection would take from six weeks to two months. Astaire requested that preservation work be performed on the planes other engine during the time that the plane would be inactive, but Gard responded that this was not necessary.
2.Additional Problems With the Plane, July 2001 Through September 2002
The parties set forth different versions of the events which took place over the course of the following year.
According to appellant, the engine affected in the oil loss incident was returned shortly after the attacks of September 11, 2001 and, due to flight restrictions, appellant was prevented from performing essential test flights. Appellant acknowledges that flight restrictions were lifted in late 2001, but states that in January 2002, the Federal Aviation Administration (FAA) ordered that respondents aircraft be grounded because the propellers had an unapproved, and hence illegal, polished finish which respondents refused to correct until June 2002.
According to respondents, the affected engine was returned in late July 2001 and reinstalled in approximately the first week of August. At the time, Astaire was in Arizona undergoing flight training. However, she arranged for two friends, John Vandervort and John Weselis, to perform the necessary run-ups and test fly the plane in her absence. After one run-up during the time that Astaire was in Arizona, Weselis found that the plane was leaking oil and the cables were not matched or aligned. During a second run-up, Weselis experienced problems with the planes left engine. This event recurred on a test flight about one week later. Weselis gave notes to appellants mechanic, Fryer, indicating that problem and other technical problems. Two weeks later, Weselis participated in another test flight and experienced all of the same problems that he had explained to Fryer. ~(RT 3930-3933)~ In October or November 2001, Weselis participated in a third test flight with Astaire in which the same problems with the left engine were present. Two weeks later, all the problems Weselis had reported were still present.
Astaires friend John Vandervort noted the same problems that Weselis had noted. He had flown with Astaire for approximately 30-35 hours and testified that Astaire maintained her plane meticulously prior to the time that she took it to appellant in June 2001. However, following appellants 2001 service, Vandervort participated in many run-ups with the plane in which the engines had trouble, the steering was not straight, and the cables were not matching. Vandervort participated in approximately 8 to 10 test flights from June of 2001 to September of 2002.
Astaire testified that upon her return from Tucson, she performed a total of six run-ups until September 28, 2002, the date appellant closed its operations at Santa Monica airport. She testified that [t]here was a problem every time. She further testified that she had not experienced any of those problems with the airplane prior to the time that she brought it to appellant for service in 2001.
3. The Propeller Delay
The parties descriptions of the problem with the planes propellers, and their communications regarding the subject, also differ dramatically. The parties agree that after an FAA representative informed appellant that the planes propellers needed to be painted, a period of several months passed before the required painting was accomplished. Each party blames the other for the delay.
According to respondents, appellants manager, John Schaper, told Astaire that he knew someone who could assist her in getting FAA approval on the propellers without having to paint them. After repeated assurances that she should be patient, however, Schaper never obtained the approval. After four months passed, Astaire reluctantly decided to paint the propellers.
According to appellant, for six months Astaire refused to accept the FAAs determination that she must paint the propellers. Appellants manager, without pay and on his own time, tried to get the FAA to allow respondents to use the polished propeller blades. Appellant argues that it is unfair to say that this kindness on the part of appellants manager caused the delay, because it was at all times within respondents power to do what they finally did in June 2002 paint the propellers and get on with the repairs.
4. Events Following the Closing of Appellants Operations at Santa Monica Airport, September 2002 through October 2004
Appellant closed its operations at Santa Monica airport on September 28, 2002. The parties dispute the condition of the airplane at that time.
According to Astaire, on September 28, 2002, she and Vandervort took the plane to Mammoth on a test flight. Astaire recalled that it was very difficult to start the engines, there was a problem with the fuel, and the throttles were still not matched. In addition, there was still a problem with the left engine, the right speed brake did not work on descent, the heater did not work, and both engines quit the minute she touched down the wheels. After shutting down the plane, Astaire noted that there was oil all over the wing flaps and dripping on the ramp.
According to Astaire, she immediately called Bill Forbes, and met with him and a mechanic named James Butler at appellants hangar two or three days later. Upon inspection of the plane, Butler acknowledged a significant oil leak. He indicated that he had to go out of town but would contact her upon his return in a couple of days. However, Astaire claims that she never heard from Butler or appellant again. Astaire points out that appellants manager, John Schaper, testified that he had hoped to get the plane back to its original condition but the shop was shut down before we achieved our goal. Respondents claim that appellant never signed off on its 2001 annual inspection.
Appellant disputes respondents claim that in September/October 2002, significant repairs still needed to be done on the airplane. Appellant claims that at that time, appellant declared that the repairs and performance adjustments were complete. Bill Forbes testified that he believed that the 2001 annual inspection had been signed off on in September of 2001. Appellant claims that in September or October 2002, its mechanic advised Astaire that the aircraft only needed a normal post-maintenance test flight required under FAA regulations after maintenance completion. The flight would need to be performed by Astaire or an independently hired pilot because, according to appellant, it had been under instruction from Astaire not to operate the aircraft for any reason.
The parties also disagree over the reason that the airplane sat in appellants hangar for the next two years. Again, each party blames the other. Appellant describes the two-year period of time as the abandonment event, claiming that Astaire refused to take the airplane back and stated to appellants manager you just bought yourself an airplane. Thereafter, appellant admits, the aircraft sat in its hangar for more than two years, during which time the condition of the aircraft deteriorated. Appellant also admits that some of the deterioration could have been prevented by operating and flying the airplane on a regular basis, or preserving the engines by servicing them. Appellant claims it was prevented from any such preservation efforts by the express direction of Astaire, who had told them not to operate the aircraft. Appellant states that during this two-year period, appellant placed locks on the aircraft to prevent theft and recorded a mechanics lien on the aircraft for amounts owed for work performed.
Respondents tell a different story. They point to the testimony of appellants manager John Schaper, who stated that he wanted to get the plane back into the same condition it was when Astaire brought it to appellant, but Bill Forbes told him that appellant had spent enough money on the plane and ordered him not to spend any more money trying to fix it. Respondents claim that after appellant ceased its repair efforts, appellant placed the plane in its hangar and locked the propellers, thus denying Astaire access to the aircraft. Respondents claim that Astaire asked appellant to get to the bottom of the problem and at least maintain the aircrafts engines, which appellant refused to do. Respondents claim that appellants action in placing a mechanics lien on the aircraft made it even more inaccessible to Astaire.
Respondents hired John Jackson to conduct an inspection of the planes engines on October 13, 2003. According to his testimony, the inspection revealed that the two engines had significant oil pooling and rust, and were not acceptable for flying. He determined that the right engine had serious defects and the left engine also was in need of additional inspection and was still leaking oil. When asked if he came to any conclusion about what caused the condition of the planes right engine, Mr. Jackson responded, Well, primarily, the rust corrosion was from the plane just being inactive and sitting and not preserved.
Respondents filed their complaint against appellant in December 2002. In April 2005, the matter proceeded to trial on respondents claims for breach of contract and negligence as well as appellants cross-claim that there was an implied contract for respondents to pay appellant for the storage of the aircraft. The jury found in respondents favor on each of their claims and found against appellant on its cross-claim for storage. As to the negligence claim the jury awarded respondents $880,702 and found that Astaire was five percent comparatively at fault. As to the contract claim, the jury awarded respondents $51,800.
After trial, appellant filed an appeal from the judgment as well as a motion for a new trial. In its motion for a new trial, appellant argued that it was deprived of a fair trial because the jury committed misconduct, the damages were excessive and not supported by the evidence, and the trial court committed error in making certain evidentiary rulings. Respondents opposed the motion. In support of their opposition, respondents submitted juror affidavits on the issue of juror misconduct. Respondents also argued that the damages were supported by the evidence and that the trial courts evidentiary rulings were correct.
Following a hearing on appellants motion, the trial court issued an order conditionally granting a new trial limited to the issue of damages. The order was subject to the condition that the motion for new trial would be denied if respondents consented to a reduction in the judgment on the ground of excessive damages under Code of Civil Procedure section 657, subdivision (5). The court stated that respondents must consent to a reduction in the judgment to $691,915.40 principal, plus costs and postjudgment interest.
The court set forth its rationale in detail. The court explained:
The verdict found the negligence damages to be an amount equal to the decrease in value of the airplane plus the rental value of a comparable airplane during the period that plaintiffs were deprived of its use. This decrease in value far exceeded the cost of repairing the aircraft fully. Under the law, and under the Courts instructions to the jury, the negligence damages finding was limited to loss of use plus the lesser of decrease in value or cost to repair fully. Thus the damages awarded in the verdict [were] excessive, within the meaning of Code of Civil Procedure section 657, subdivision (5). The remittitur amount is, therefore, the sum of the cost to repair fully and the rental value, plus costs, plus interest on principal and costs from the date of the verdict.
Respondents accepted the remittitur and an amended judgment was entered accordingly. Appellant filed a timely notice of appeal from the amended judgment, and the two appeals were consolidated.
I. Juror Misconduct
Appellants first argument concerns juror misconduct. To prevail on a claim of juror misconduct, appellant must show both misconduct and resulting prejudice. (Hasson v. Ford Motor Co. (1982) 32 Cal.3d 388, 415.) Appellant points to several topics it claims were inappropriately discussed amongst the jurors. Appellant also claims that one juror improperly concealed information during voir dire. Appellant argues that these acts resulted in prejudice, therefore the judgment should be reversed.
We address separately each of appellants arguments regarding juror misconduct. As explained more fully below, we conclude that none of the issues raised by appellant constitutes prejudicial jury misconduct warranting a reversal of the judgment.
A. Standard of Review
When reviewing a claim of juror misconduct, we accept the trial courts credibility determinations and findings on questions of historical fact if supported by substantial evidence. (People v. Nesler (1997) 16 Cal.4th 561, 582.) Whether prejudice arose from any juror misconduct is a mixed question of law and fact subject to our independent determination. (Ibid.)
In the matter before us, the trial court did not specify its reasons for denying a new trial on juror misconduct grounds. We therefore must infer factual findings in support of the judgment, and uphold those findings if supported by substantial evidence. (Jie v. Liang Tai Knitwear Co. (2001) 89 Cal.App.4th 654, 666-667.)
B. Discussion of Astaires Identity
Appellants first claim is that, at the commencement of deliberations, the jurors discussed the plaintiffs identity as the widow of the late entertainer Fred Astaire. Because Astaires association with Fred Astaire had been ruled inadmissible by the court pursuant to a motion in limine, appellant claims that the jurors who either knew or figured out that Astaire was the widow of Fred Astaire committed misconduct by sharing this information, which must have been obtained outside the courtroom. Appellant directs us to People ex rel. Dept. of Public Works v. Curtis (1967) 255 Cal.App.2d 378, 390, which confirms that it is misconduct for a juror to receive any information on the subject of the litigation except in open court and in the manner provided by law. Appellant claims that the stories told at the commencement of deliberations included an account of Astaires career as a jockey, her marriage to Fred Astaire, and a touching story about Fred Astaires death. According to appellant, these stories injected Astaires celebrity into the deliberations and also created a great deal of sympathy in favor of respondents.
Citing Hasson v. Ford Motor Co., supra, 32 Cal.3d at page 416, appellant points out that juror misconduct creates a presumption of prejudice. Appellant also claims that the jurors conduct demonstrated their sympathy for Astaire. Citing to the declarations of two of appellants attorneys, appellant informs us that following the rendition of the verdict, several jurors gathered around Astaire, laughed and joked with her and even obtained her autograph. In addition, the foreperson, Juror Romero, waited in the hallway for Astaire and her attorney and accompanied them out of the building.
Respondents rejoinder is twofold. First, respondents argue that a brief mention at the commencement of deliberations of such common knowledge as a celebritys status falls far short of establishing misconduct, particularly because there was no express or implied agreement to base the verdict on Astaires identity. (See Moore v. Preventative Medicine Medical Group, Inc. (1986) 178 Cal.App.3d 728, 740-741 [juror declarations did not establish an agreement to base the verdict on improperly considered information and the discussion on the subject could hardly be characterized as extensive]; Gorman v. Leftwich (1990) 218 Cal.App.3d 141, 147 [juror declaration indicating that a discussion of malpractice insurance had taken place did not require reversal where there was no express agreement, or extensive discussion evidencing an implied agreement, to base the verdict on the existence of insurance].) In addition, respondents argue, even if it could be considered misconduct, it was so trifling that it could not have been prejudicial. (See City of Pleasant Hill v. FirstBaptistChurch(1969) 1 Cal.App.3d 384, 430 [jurors discussion of case during trial not prejudicial]; Joyce v. Simi Valley Unified School Dist. (2003) 110 Cal.App.4th 292, 306-307 [same].)
The trial court impliedly found that the jurors declarations describing the alleged discussion regarding Astaires identity which one juror described as lasting at most five minutes did not describe an extensive or significant enough event to have had any impact on the jurys decision. Substantial evidence supports this implied finding. The jurors sat through a trial that lasted nearly two months, during which time they obeyed the courts orders not to discuss the case. At the commencement of deliberations, they held a brief conversation regarding Astaires association with a celebrity. There is no indication in the record that the jury ever discussed her identity again. There is also no indication that any juror stated a specific inclination to make an award in Astaires favor on the basis of her association with a celebrity. Under these circumstances, we find that the record supports the trial courts implicit ruling that the jurors conversation regarding Astaires identity was insignificant and that no agreement to base the verdict on Astaires identity existed.
We also conclude, upon independent review of the record, that the discussion regarding Astaires identity was not prejudicial. In order to make a finding of prejudice, we must determine that it is reasonably probable that a result more favorable to the complaining party would have been achieved in the absence of the misconduct. (Hasson v. Ford Motor Co., supra, 32 Cal.3d at p. 415.) Under the facts of this case, we decline to make such a determination. The subject matter of the case damage to an aircraft is entirely unrelated to Astaires identity. Throughout the trial, the jury heard extensive testimony from the involved parties and aircraft experts, none of whom referenced Astaires identity. As the trial court noted, the verdict, while erroneous in one respect, did appear to be based on a logical calculation of damages grounded in respondents experts testimony. There is no indication that the jury would have reached a different conclusion had Astaire been an individual who was not married to a celebrity.
Appellants attorneys declarations regarding the conduct of the jury after the verdict is also not persuasive evidence of prejudice. Again, the trial court implicitly found the jurys actions in approaching Astaire and obtaining her autograph to be insignificant. This implicit finding is supported by the record. There was no evidence as to any conversations that occurred between the jurors and Astaire during that time. While the attorney declarations make it apparent that certain jurors were interested in Astaires status as a person closely affiliated with a celebrity, there is absolutely no indication that her status affected the verdict in any way. The attorneys descriptions of a festive atmosphere may well have been the result of relief at coming to the end of a long trial and do not come close to describing any actions that indicate improper prejudice.
C. Forepersons Knowledge of FAA Paperwork and Procedures
Appellants next argument regarding juror misconduct is that the foreperson, Juror Romero, interjected into the deliberations personal knowledge of FAA paperwork which she learned while employed as a secretarial employee of Douglas Aircraft Company. According to appellant, the declarations of Jurors Williams and Diaz show that Juror Romero educated the jury on FAA signature requirements and the concept of airworthiness. Because it is misconduct for a juror to receive any information on the subject of the litigation except in open court and in the manner provided by law, appellant argues that Juror Romeros insertion of personal knowledge into the deliberations was improper. (See People ex rel. Dept. of Public Works v. Curtis, supra, 255 Cal.App.2d at p. 390.)
The declaration of Juror Williams states the following: Mrs. Romero was adamant that the aircraft was unairworthy and dangerous. She told us that she had worked at McDonnell Douglas in a position where she maintained the records for test flight aircraft and the components. Mrs. Romero told us how the sign-offs for FAA approved work based on her own experiences and work at McDonnell Douglas. The declaration of Juror Diaz states: Mrs. Romero stated that the aircraft was unairworthy and dangerous. She talked about her experience at McDonnell Douglas when she worked with the test pilots there. Mrs. Romero explained how sign-offs are dealt with based on her own prior experience keeping records for test flights at McDonnell Douglas. Mrs. Romero said that the reason why Mrs. Astaires aircraft was not test flown was because it was not signed-off and not airworthy.
However, these declarations are contradicted by Juror Romeros own declaration. It states:
When I worked at Douglas Aircraft, I did not deal with test pilots, and I did not maintain records for test flights. I am at a loss as to how Mr. Diaz and Mrs. Williams got those ideas. Further, I never claimed any special knowledge of FAA paperwork. In fact, I specifically tried to keep my work experience at Douglas Aircraft and my flying experience to myself during the discussions and deliberations. . . . I mentioned Douglas Aircraft only once during deliberations. . . . I simply mentioned that, at Douglas, on one occasion when I worked in the experimental office, that an aircraft was not allowed to fly until some paperwork was found and proved to be signed off. I doubt that everyone heard my comment because this was one of the times when everyone seemed to be talking . . . [t]his was the only time I mentioned Douglas aircraft or any experience in aircraft or flying . . . . I did not relate that incident at Douglas to the case.
As set forth above, we must infer factual findings in support of the judgment, and uphold those findings if supported by substantial evidence. (Jie v. Liang Tai Knitwear Co., supra, 89 Cal.App.4th at pp. 666-667.) We therefore assume that the trial court believed that Juror Romero accurately portrayed her comments regarding FAA paperwork. We uphold this implicit determination, as it is supported by Juror Romeros declaration as well as the declarations of two other jurors who declared that they had no idea that Juror Romero had any experience with FAA procedures or paperwork.
We further find that the passing comment regarding an experience at McDonnell Douglas, which was not communicated to the entire jury and was not related to the matter before them, was not prejudicial. Given the extensive evidence that the jury was considering on the questions of negligence, breach of contract, and damages, it would be unreasonable to conclude that this minor remark had any effect on the verdict.
D. Implied Agreement to Award Attorney Fees
Appellant next argues that the jury made an implied agreement to include attorney fees. Citing Krouse v. Graham (1977) 19 Cal.3d 59, 81, appellant argues that [a]n express agreement by the jurors to include [attorney] fees in their verdict, or extensive discussion evidencing an implied agreement to that effect, constitutes misconduct requiring reversal. [Citations.]
Appellants argument is based the declarations of Jurors Diaz and Williams, which indicate that certain jurors mentioned during deliberations that Astaire would not keep the entire amount awarded because she would have to pay attorney fees. Again, these declarations are contradicted by the declarations of Jurors Thompson, Romero and Wilhoyte, all of whom stated that they had no recollection of anyone raising the issue of attorney fees except in passing, and that the issue of attorney fees did not play any role in the deliberations, the calculation of damages, or the verdict. We find that implicit in the trial courts ruling is a determination that the Jurors Thompson, Romero and Wilhoyte more accurately portrayed the deliberations, and that determination is amply supported by their declarations.
Respondents agree that evidence of extensive discussions regarding improper information can be used to infer an agreement to base the verdict on that information. (See Krouse v. Graham, supra, 19 Cal.3d at p. 81.) However, here there is no evidence of such extensive discussions. In fact, as the trial court pointed out, the jurys verdict could be easily calculated as being derived from expert testimony regarding the diminution of fair market value and loss of use. Therefore, reversal is not warranted.
E. Concealment of Bias
Appellants final argument regarding juror misconduct involves concealment of bias. Appellant argues that during voir dire, Juror Romero failed to disclose her bias in favor of Astaire and failed to disclose that she participated in two conservatorship proceedings, one of which involved an aircraft and hangar at Santa Monica airport. Appellant retrieved records from these proceedings and attached them to its motion for a new trial.
In response to appellants allegations regarding her concealment of bias, Juror Romero filed a declaration. In it, she stated, I had no idea of Mrs. Astaires relationship to Mr. Astaire or any idea who Mrs. Astaire was until it became apparent during testimony. Assuming that the trial court found this statement to be credible, as we must, there is no possibility that any supposed bias was concealed during voir dire.
As to the conservatorship proceedings, Juror Romero indicated that she did in fact disclose them during voir dire but was not questioned about them further. She explained, During questioning as a prospective juror, I specifically stated: And Ive had some experience in courts because, due to my divorce, there was a 20-year property situation. This 20-year property situation included the conservatorship proceedings. The subject of the conservatorship proceedings, Mr. Fulks, who apparently purchased Juror Romeros former husbands interest in certain property, had a hangar at Santa Monica airport. However, Juror Romero stated, I had never even thought about any connection between Mr. Fulks and Santa Monica airport.
Again, we must assume that the trial court found Juror Romeros declaration to be credible. The declaration provides ample support for the trial courts conclusion that there was no concealment of bias.
II. The Trial Courts Evidentiary Decisions
Appellants next argument involves the trial courts decision to admit expert testimony which appellant claims was erroneous and thus legally irrelevant. Appellant claims that over its repeated objections, the trial court allowed respondents expert, James Christy (Christy), to testify as to the airplanes replacement cost, rather than fair market value; and restoration with betterment, rather than cost of repair.
We address each argument separately. As discussed in more detail below, we conclude that the trial court acted within its discretion in allowing the testimony.
A. Standard of Review
The trial courts rulings as to the admissibility of expert testimony are reviewed for abuse of discretion. (City of Santa Clarita v. NTS Technical Systems (2006) 137 Cal.App.4th 264, 275.) Under this standard, we will not reverse a trial courts ruling if it was based on a reasoned judgment. (City of San Diego v. Rancho Penasquitos Partnership (2003) 105 Cal.App.4th 1013, 1027.) Rather, we will only overturn the courts decision if it exceeds the bounds of reason, all of the circumstances before it being considered. [Citation]. (Ibid.)
B. The Fair Market Value Testimony
Appellant argues that Christys description of fair market value was in fact a description of replacement cost. Appellant has provided a chart comparing the Actual Definition of fair market value with Christys Definition. According to appellants chart, the definition of fair market value is the highest price that a willing buyer would have paid to a willing seller, assuming: 1. that there is no pressure on either one to buy or sell; and 2. that the buyer and seller are fully informed of the condition and quality of the [item of personal property]. According to the chart, Christys definition is: a price thats pretty close to something that recently sold at a comparable value and also pretty close to what it would cost to duplicate the airplane. A price thats very close to what it would cost to duplicate it and probably slightly less Plus 30%.
Preliminarily, we note that the final judgment, based on the trial courts remitittur, was not based on the fair market value or what appellant describes as replacement cost of the aircraft. Instead, the trial court determined that because the cost of repair was lower than the fair market value of the aircraft, the damages award must be based on cost of repair. [W]here the trial court has required a remission as a condition to denying a new trial a verdict is reviewed on appeal as if it had been returned in the first instance by the jury in the reduced amount. [Citations.] [Citation.] (West v. Johnson & Johnson Products, Inc. (1985) 174 Cal.App.3d 831, 877.) Because the remittitur was not based on fair market value, Christys complaints about the fair market value of the aircraft are moot.
Even if Christys fair market value analysis were relevant here, it is clear from the record that the trial court acted well within its discretion in admitting it. Christy had extensive experience buying and selling Aerostar airplanes. He also was very familiar with Astaires Aerostar, having known the previous owner. He therefore came into contact with the airplane for the first time approximately two to three years before Astaire purchased it. It is apparent from Christys testimony that his opinion regarding the planes fair market value was grounded on the aircraft bluebook, price digest, numerous pages in that book, a copy of the Aerostar installed price list that we published, and a copy of a value analysis from an Aerostar that we had recently sold. Christy further testified that before Astaires plane went in for its 2001 annual, it was what the Bluebook refers to as a prime condition airplane. He added 30 percent value based on his evaluation of that portion of the aircraft bluebook which deals with valuing a prime condition airplane. Christy explained that a prime condition airplane has an increased value of 30 percent because the owner will save on future maintenance costs and down time, and the plane provides greater safety and trade-in value.
Christys opinion thus appears to have been grounded in solid authority and expertise. Appellant was permitted to fully cross-examine him and thus expose any flaws in his analysis to the jury. It was up to the jury to weigh his credibility and compare it with the testimony of appellants experts. The trial courts decision to admit the testimony appears to be based on reasoned judgment, therefore we decline to reverse it. (City of San Diego v. Rancho Penasquitos Partnership, supra, 105 Cal.App.4th at p. 1027.)
C. The Cost of Repair Testimony
According to appellants chart, the actual definition of cost of repair is [t]he cost to repair damage caused by the acts or omissions of [appellant] or the breach of contract by [appellant]. According to the same chart, Christys definition of cost of repair was [t]he cost to restore the aircraft to the condition it was in as of 1999, two years prior to the oil loss event irrespective of whether or not any restoration item was caused by any acts or omissions of [appellant] or the breach of contract by [appellant].
A review of the testimony itself, however, again reveals that it was based on specific calculations of various damages to the plane. Christys cost of repair estimate included the cost of an annual inspection; two new engines; labor to assemble various engine parts; the cost of the new engine parts required to make the engine installations; overhauls of various parts of the plane; air conditioning repair and service; resealing the landing gear and brake systems; and replacing parts that were likely corroded from sitting for so long, among other things. Christy explained the reason for each repair or replacement and explained his position that each item was a result of appellants negligence. He also explained his method for arriving at the dollar figure for each repair.
Appellants main complaint appears to be that Christy included in his estimate various items that appellant insists were not a direct result of the oil loss event. For example, appellant complains that Christy included in his calculation the costs of a new interior, a new coat of paint, and two new engines. Christy explained that, prior to the oil loss event, he had last seen the airplane in 1999. As far as he knew, there were no problems with the plane before it was placed in appellants care in 2001, and by all accounts Astaire had maintained it meticulously. His inclusion of a new interior and new paint job were based on his observation that these areas of the plane had deteriorated over the time period that the plane sat in appellants hangar, due to corrosion and lack of maintenance.
Contrary to appellants argument, the jury was not required to find that these items were a direct result of the oil loss event. The jury was entitled to find that appellant was at fault for the planes long detention in appellants hangar with no service or maintenance. The jury was also entitled to give substantial weight to Christys testimony that the lack of maintenance caused the damage that Christy described. Again, appellant had the opportunity to fully cross-examine Christy and cast doubt on his opinions.
Christys opinions regarding cost of repair were grounded in detailed calculations and observations. Appellants position is that Christys cost of repair estimate added up to more than the damage actually caused by appellant. Appellant had the opportunity to convey this position to the jury. The trial courts admission of the testimony was not an abuse of its discretion.
III. Substantial Evidence in Support of the Verdict and Remittitur
Appellant next argues that neither the verdict nor the remittitur are supported by substantial evidence. Appellant advances several separate arguments as to why the evidence did not support various findings underlying the verdict. Appellants substantial evidence arguments culminate with its contention that the total remittitur should not have exceeded $80,000, or the cost to replace the one engine damaged by the oil loss event. We review the evidence supporting each of appellants contested issues below, and conclude that ample evidence supports each finding.
A. Standard of Review
When reviewing facts on appeal, the power of the appellate court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted, to support the findings below. [Citation.] We view the evidence most favorably to the prevailing party, giving it the benefit of every reasonable inference and resolving all conflicts in its favor. [Citation.] Substantial evidence is evidence of ponderable legal significance, reasonable, credible and of solid value. [Citation.] [Citation.] (Goehring v. ChapmanUniversity(2004) 121 Cal.App.4th 353, 366.) However, the evidence must be substantial proof of the essentials which the law requires. [Citation.] (Ibid.) We bear these principles in mind while analyzing the factual issues raised by appellant.
B. Evidence Regarding Diminution in Value and Cost of Repair
Appellants first argument in support of its substantial evidence claim essentially restates its evidentiary argument regarding Christys expert testimony. Appellant claims that Christys cost of repair evidence, which the trial court accepted in calculating the remittitur, was in fact the cost to fully restore the Aerostar including a substantial betterment to the aircraft in the form of new engines, a new paint job, and a new interior, among other things. Appellant argues that the trial courts remittitur figure of $691,915 erroneously incorporated the cost of restoration of the aircraft rather than cost of repair.
The jury was permitted to make the determination of whether the costs of new engines, a new paint job, and a new interior were necessary repairs due to damage caused by appellant, or were restorative costs not related to appellants negligence. Because it awarded respondents the full amount of Christys diminution in value estimate, it appears that the jury accepted that all of the damage described by Christy was in fact caused by appellant, either during the oil loss event or during the time that the aircraft was stored without maintenance. In issuing the remittitur, the trial court sought to carefully preserve the jurys apparent decision to find the facts in favor of the plaintiffs. The court thus used Christys cost-to-repair estimate, which was approximately $150,000 less than the decrease in value of the unrepaired airplane, to determine the amount of the remittitur.
Substantial evidence supported this decision. As set forth above, Christy was a qualified expert whose opinions were based on sound calculations and specific items of damage. While appellant presented different opinions about the damage and the cost of repair, we must resolve this conflict in favor of respondents. (Goehring v. Chapman University, supra, 121 Cal.App.4th at p. 366.)
C. Evidence Regarding Appellants Care of Aircraft While It Was at Appellants Facility
Appellant next argues that the undisputed evidence showed that it met the applicable standard of care during the time that the aircraft was stored at appellants hangar. On the question of appellants duty of care during the time that the airplane sat in appellants hangar, the trial court instructed the jury:
While the aircraft was at [appellants] premises by agreement of both parties, defendants had a legal duty to use reasonable care for the protection of the aircraft. If, during any part of time the aircraft was at [appellants] premises, it was there without agreement of both parties, then during that period defendants had a legal duty to use only slight care for the protection of the aircraft.
Appellants position is that it was required to at most exercise slight care, and that appellant clearly met this standard. The slight care standard applies, according to appellant, because appellant only had possession of the aircraft during the two-year period of time following its closing of its facilities at Santa Monica airport due to respondents refusal to take possession of it.
The reason for the airplanes long confinement in appellants hangar was disputed at trial. As explained in greater detail in the factual background section, appellant claims that Astaire refused to take the airplane back and stated to appellants manager you just bought yourself an airplane. Appellant admits that the condition of the aircraft deteriorated during the two years that followed, but claims that it was prevented from undertaking any preservation efforts by the express direction of Astaire, who had told appellant not to operate the aircraft. Respondents, on the other hand, place the blame on appellant, claiming that appellant placed the plane in its hangar, locked the propellers and recorded a mechanics lien, thus denying Astaire access to the aircraft. Respondents claim that Astaire specifically asked appellant to maintain the aircrafts engines, but appellant refused to do so.
We must resolve this factual dispute in favor of respondents, as did the jury. Appellants contention that it was forced to hold the aircraft against its will was rejected by the jury, as evidenced by the jurys finding against appellant on its cross-claim for storage costs of the aircraft. Thus, the jury was entitled to apply a reasonable care standard.
The jurys finding is amply supported by Astaires testimony that appellant had the only set of keys to the aircraft and that she had no way of getting to the plane. While appellant represents that there was no evidence that Astaire made any demands on appellant to return the aircraft, she did testify that she tried to get personal items out of the airplane and found it locked, and that she made many attempts to have [appellant] give me back my keys. Thus, the jury could reasonably have found that Astaire was denied access to her aircraft.
The jury could also reasonably have found that appellant did not meet the reasonable care standard. Appellant claims that it met this standard because the aircraft was kept inside the hangar, and secured against theft. However, the jury was justified in determining that this was insufficient. Respondents witnesses testified that an aircraft must be preserved if it is to sit for a period of longer than 30 days. There was ample testimony, and in fact appellant concedes, that the aircraft deteriorated mechanically during the time that it sat in appellants hangar. Astaire testified that she specifically requested that appellant perform necessary maintenance work so that the engines would not deteriorate in the corrosive salt air of Santa Monica airport. Several of respondents witnesses testified that the deterioration of the airplane from lack of maintenance was apparent. The jury was therefore justified in determining that appellants action in simply locking up the aircraft, without further care, was not reasonable.
D. Evidence Regarding Loss of Use
Appellant next argues that substantial evidence did not support the loss of use award. Christys testimony regarding the reasonable rental value of a similar aircraft was $10,000 per month. He presented proof that he had leased an Aerostar to a customer for that amount per month. The trial court explained that the jury had apparently figured in this rental value as loss of use damages to Astaire for the 38-month time period during which she was deprived of its use. The trial court also explained that it would correct the jurys error in awarding diminution in value rather than cost of repair, but that the jurys loss of use award would remain.
Appellant claims that this loss of use award constituted error because respondents failed to prove that Astaire used the aircraft to a degree that warranted such an award. Appellant cites Metz v. Soares, supra, 142 Cal.App.4th 1250, in support of its argument. In Metz, the plaintiff, a car collector, took his vintage car to a shop for repairs. The shop left the car out in the elements, causing deterioration. The shop settled for the full value of the car, but the plaintiff brought an action based on loss of use. The Court of Appeal held that, since it was shown that the plaintiff had not used the car for years prior to taking it to the shop, and that the plaintiff never tried to get the car back from the shop, he was not deprived of use of the car.
The evidence in this case is different. There was evidence that Astaire used the aircraft regularly. She testified that she flew it to flight safety training, and to San Luis Obispo to conduct business with family members. She also flew passengers to locations such as San Francisco, San Diego, and Cedar City, Utah. She estimated that she flew the plane between 80 and 100 hours per year. The jury apparently found Astaires testimony to be credible and found her to be damaged by the loss of use of her airplane.
Appellant attempts to convince us that the $10,000 per month rental value is based on the assumption that the renter is using the aircraft for 24 hours per day, 30 days per month, for a total of 720 hours per month. Because Astaire did not fly her plane for 720 hours out of every month, appellant argues, her loss of use award should be reduced to less than $5,000.
We disagree. Christys monthly rental value estimate was not based on an assumption that the renter would be using the plane for every hour of the month. Astaire testified that she used the plane regularly, and the jury found that appellant was responsible for depriving her of its use. Christys estimate was based on solid evidence an invoice from a similar plane that he had recently rented out. Substantial evidence thus supports the loss of use award.
IV. Application of the Collateral Source Rule
Respondents aircraft was insured for $400,000 for property damage. In September 2003, respondents made a claim to their insurer for the damage to the aircraft caused by appellant. The insurance company distributed the full amount of the policy with a $350,000 payment to Robynaire, Inc. and a $50,000 payment to appellant in order to release appellants mechanics lien on the plane.
Appellant argues that the trial court misapplied the collateral source rule in failing to use respondents insurance payment to offset the negligence damage award. We review each of appellants arguments independently, as this is a question of law subject to our independent review. (Crocker National Bank v. City and County of San Francisco (1989) 49 Cal.3d 881, 888.)
A. The Collateral Source Rule
The collateral source rule dictates that, if an injured party receives some compensation for his injuries from a source wholly independent of the tortfeasor, such payment should not be deducted from the damages which the plaintiff would otherwise collect from the tortfeasor. [Citation.] (Rotolo Chevrolet v. Superior Court (2003) 105 Cal.App.4th 242, 245.) However, the collateral source rule does not apply in contract actions. (Plut v. Firemans Fund Ins. Co. (2000) 85 Cal.App.4th 98, 107-108.) In this matter, respondents brought both a breach of contract claim and a negligence claim against appellant. The jury found for respondents on both claims, awarding them $51,800 on the breach of contract claim and $880,792, later reduced by the trial court to $691,915.40, on the negligence claim. The trial court allowed appellant a collateral source setoff as to the contract damages; therefore respondents were not awarded any net recovery on the contract.
B. The Collateral Source Rule is Applicable
Appellants first argument is that the collateral source rule is not applicable in this matter because it was essentially a contract dispute. Appellant argues that respondents did not seek any different damages for the breach of contract claim as opposed to the tort claim and consequently, the only recoverable damages were the same whether awarded for tort or contract. Appellant cites no authority for its position that, in a case involving both contract and tort claims, the collateral source rule does not apply. Instead, appellant argues that we should apply the rule against double recovery, which does apply to contract actions. However, the only case cited by appellant, Ferraro v. Southern Cal. Gas Co. (1980) 102 Cal.App.3d 33, does not support appellants position that respondents here are receiving a double recovery. Instead, it expresses concern regarding a situation in which a tortfeasor is required to pay doubly for its wrong, once to the injured party and again to reimburse the plaintiffs collateral source. [Citation.] (Id. at pp. 46-47.) That is not the situation here.
Appellant has failed to cite any authority in support of its position that the collateral source rule does not apply in this action. Therefore we decline to reverse the judgment on this basis.
C. The Purpose Behind the Collateral Source Rule is Served Under the Present Circumstances
Next, appellant argues that the collateral source rule should not be applied in this case because the facts do not promote the purpose behind the rule. As set forth in Ferraro v. Southern Cal. Gas Co., supra, 102 Cal.App.3d at page 45: The collateral source rule expresses a policy judgment in favor of encouraging citizens to purchase and maintain insurance for personal injuries and other eventualities. . . . If we were to permit a tortfeasor to mitigate damages with payments from plaintiffs insurance, plaintiff would be in a position inferior to that of having bought no insurance, because his payment of premiums would have earned no benefit. [Tortfeasors] should not be able to avoid payment of full compensation for the injury inflicted merely because the victim has had the foresight to provide himself with insurance. [Citation.] However, appellant claims that here, allowing respondents to keep the $350,000 payment plus the damage award allows them to turn their claims into a profit center. In essence, appellants position is that allowing respondents to take home that much money is simply not fair.
In support of its argument, appellant cites Rotolo Chevrolet v. Superior Court, supra, 105 Cal.App.4th at page 246, footnote 3. There, the Court of Appeal indicated that courts should not accept unfair applications of the collateral source rule, such as the one present in that case. In Rotolo, the plaintiff had sued an automobile dealer which supplied a defective vehicle to the plaintiffs employer. The plaintiff sought damages based on lost income, and additional damages based on lost retirement benefits. The plaintiff sought to exclude evidence that the regular retirement benefits, which he lost, would be replaced by disability retirement benefits. The Court of Appeal reversed the trial courts application of the collateral source rule to exclude evidence of the disability retirement benefits, finding that two potential types of pension benefits does not make one type collateral to the other, which is already collateral to [the plaintiffs] lost earnings. (Id. at p. 247.) The Court of Appeals decision was based on its conclusion that the plaintiff would wind up with triple compensation damages based on lost income, damages based on his lost retirement benefits, and his actual disability retirement benefits. (Id. at p. 246.)
The present case is distinguishable from Rotolo. Respondents have received an award of damages from the appellant. Respondents have also received compensation for the loss of the aircraft from their insurance carrier. Respondents insurance is a collateral source, unrelated to the tortfeasor, therefore proceeds received from the insurance are properly subject to application of the collateral source rule. (See Helfend v. Southern Cal. Rapid Transit Dist. (1970) 2 Cal.3d 1, 13-14 [reaffirming adherence to the collateral source rule in tort cases in which the plaintiff has been compensated by an independent collateral source such as insurance].) Unlike the plaintiff in Rotolo, respondents will not receive triple recovery. They will receive compensation from the tortfeasor plus their insurance benefit, to which they were entitled due to their purchase and maintenance of the policy through payment