Filed 10/21/26 Tillerson v. Nature Works Global CA4/1
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
WILLIAM E. TILLERSON, JR., D084332
Plaintiff and Appellant,
v. (Super. Ct. No. 37-2021-
00032844-CU-FR-CTL)
NATURE WORKS GLOBAL, INC. et al.,
Defendants and Appellants.
APPEALS from a judgment of the Superior Court of San Diego County,
Marcella O. McLaughlin, Judge. Cross-appeal dismissed in part; judgment
reversed and remanded with directions.
Halimi Law Firm and Daniel I. Halimi for Plaintiff and Appellant.
Klinedinst and Robert M. Shaughnessy for Defendants and Appellants.
Over a period of ten years, William E. Tillerson, Jr.—an investor in
Nature Works Global, Inc. (Global)—contends he loaned that entity; its
principals, Nancy Moran and Valerie Salatino; and Moran and Salatino’s
other company, Nature Works Sculpture, Inc. (Sculpture) (collectively,
Defendants), $160,000. After sending a demand letter and receiving no
repayment, Tillerson sued Defendants in the superior court. Following a
bench trial, the court issued a statement of decision concluding Tillerson
prevailed on his cause of action for negligent misrepresentation as to some of
the loans but did not prevail on his causes of action for fraud—false promises,
intentional misrepresentation, and financial elder abuse. Both sides
appealed.
We conclude we have jurisdiction over Tillerson’s appeal as to Salatino,
which was timely, but that we lack jurisdiction to hear his appeal as to the
remaining Defendants, as to whom his notice of appeal was untimely.
Tillerson’s deadline to appeal as to Salatino was extended by an automatic
bankruptcy stay and 11 United States Code section 108(c)(2). But that stay
did not extend to the other Defendants, so section 108(c)(2) did not extend
Tillerson’s deadline to appeal as to them.
Defendants argue the trial court erred as a matter of law in deciding in
Tillerson’s favor on his negligent misrepresentation cause of action because
none of the statements on which Tillerson allegedly relied were actionable.
We agree. Most of the purported misrepresentations concern promises or
intentions to do something in the future rather than misstatements of a past
or existing material fact. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991)
2 Cal.App.4th 153, 158.) Others are nonactionable omissions (Lopez v.
Nissan North America, Inc. (2011) 201 Cal.App.4th 572, 596), opinions (Neu-
Visions Sports, Inc. v. Soren/McAdam/Bartells (2000) 86 Cal.App.4th 303,
308), or misstatements of the law (Cicone v. URS Corp. (1986) 183 Cal.App.3d
194, 202). We thus reverse the judgment in Tillerson’s favor on his negligent
misrepresentation cause of action.
Tillerson contends the trial court erred by excluding as a settlement
communication under Evidence Code section 1152 a letter written by
Defendants in response to his demand letter, which he intended to introduce
2
to show Defendants’ fraudulent intent. We agree the letter was not made in
the context of settlement negotiations and therefore was not made
inadmissible on this ground. Nonetheless, the letter’s exclusion was
harmless given its characterization of Tillerson’s loans as philanthropy was
elicited through other sources at trial, making the letter cumulative.
Tillerson further claims the trial court erred in concluding that
Defendants lacked fraudulent intent, contending they never intended to
repay him or, to the extent they did, that they only intended to conditionally
repay if they succeeded in obtaining their attorney fees in another action, a
condition never conveyed to Tillerson. We conclude, however, that
substantial evidence supports the court’s finding that Defendants did not act
with an intent to defraud.
Finally, as to his financial abuse of an elder claim, Tillerson maintains
the trial court erred in failing to determine whether he proved Defendants
took his money for a wrongful purpose. But Tillerson forfeited this argument
by failing to raise this alternate theory for Defendants’ liability in the trial
court.
Accordingly, we dismiss Tillerson’s cross-appeal as to Moran,
Sculpture, and Global; reverse the judgment as to the negligent
misrepresentation claim; and remand with directions to enter judgment in
favor of Defendants.
I.
Tillerson is a Navy veteran and retired commercial airline pilot.
Salatino is the Chief Financial Officer of both Sculpture and Global. Moran
is the Chief Executive Officer of both Sculpture and Global.
3
According to Salatino, Sculpture, also known as Nature Works, Inc., is
a “design build focused small business” that “specialize[s] in replicating
nature sculpture.” Salatino and Moran are the only owners.
Salatino describes Global as “geared toward the lawn and garden
industry, [and] based on the creation of tools [that have] never been invented
before.”
A.
In 2010, a neighbor introduced Tillerson to Salatino and Moran.
Tillerson invested $25,000 to obtain 10,000 shares in Global.
Over the next 10 years, Tillerson made 16 loans totaling $160,000 to
Defendants.
1.
On December 31, 2010, Tillerson loaned Salatino $12,500. In the
check’s memo section, Tillerson wrote, “Nature Works Global, NWG.”
According to Tillerson, Salatino conveyed that “the money was for her
company,” which was experiencing financial difficulties.
Salatino subsequently informed Tillerson he “could keep it as a loan or
convert it to stock.” Tillerson elected to convert the loan to stock.
2.
On April 5, 2011, Tillerson made his second loan. Following a
discussion with Moran and Salatino, who were “desperate for more money”
and talked about making Tillerson a vice president, Tillerson wrote a $12,500
check to cash. When Tillerson went to the bank, the teller told him a
cashier’s check was “just as good,” so he “had a cashier’s check made up”
instead to Salatino. The money was supposed to go to the company for
“research and development” and “creating tools” for their product. Salatino
and Moran never again mentioned making Tillerson a vice president. But
4
Tillerson testified that this representation did not motivate him to make the
loan.
3.
In December 2015, Tillerson loaned Salatino $2,500. Tillerson made
out a check to himself for $7,000. He gave Salatino $2,500 in cash and kept
the remainder for himself.
4.
Tillerson made his fourth loan on January 9, 2017. He wrote a check
for $3,000 made out to Salatino as a personal loan. Tillerson misplaced the
document Salatino drew up memorializing this loan as well as loan 3.
5.
In July 2018, Tillerson met with Salatino, who requested a loan “to get
the commercial product . . . all the way through samples in hand.”
In an e-mail several days later, Salatino wrote to Tillerson that she and
Moran were “‘motivated to follow through on getting the Hydravine moving.
We are almost there. If you can help in any way, we would be interested in
making it worth your while in shares or in interest or both or any other ideas
you might have.’”
On August 5, 2018, Tillerson wrote a check for $12,500 payable to
Salatino, with “Nature Works” on the memo line. Tillerson told Salatino he
was “giving her extra money to make sure [she] finish[ed] this product.”
In a subsequent e-mail, Salatino confirmed that the money was a loan.
She indicated that $4,000 of the money went toward “fix[ing] the suspended
status” of Sculpture.
At trial, Salatino contested that the sole purpose of the loan was to
fund the Hydravine project.
5
6.
In October 2018, Salatino asked Tillerson “for a loan for attorney fees”
in litigation the City of Temecula had brought against Sculpture. In an e-
mail, she also indicated that “‘[o]ur shop’s base is in jeopardy’” and “‘[w]e
stand to be evicted if we don’t pay $2,800 by the 29th of October.’”
On October 29, Tillerson met with Salatino and Moran. Tillerson
initially wrote a check for $1,500, but Salatino “looked at it and didn’t take it
and said, we need more than $10,000.” Tillerson then made out a check for
$12,500 payable to Sculpture. According to Tillerson, the loan was intended
for use for attorney fees only, although no limitations on the use of the money
were expressly conveyed in writing. Tillerson asked if he was “going to get
anything in writing for this,” but Salatino and Moran responded with “total
silence.”
In November, Salatino e-mailed Tillerson and indicated she and Moran
“‘were able to make the payment’” to their landlord thanks to Tillerson’s loan.
7.
In March 2019, Salatino e-mailed Tillerson that “‘[o]ur warehouse and
our homes are at risk right now’” and that $9,000 “‘would keep the ship
steady until settlement’” of the Temecula litigation. Salatino said that once
the case settled, she and Moran “‘will promptly pay you back the loans you
have helped us with.’” Tillerson e-mailed back that he would give Salatino
and Moran the loan because he did not “‘want either of [them] to lose [their]
homes.’”
On March 21, Tillerson initially made out a $9,000 check to Sculpture.
Salatino accompanied him to the bank, where she was told the money would
not be available until the next day. She then asked Tillerson to write a
personal check to her instead, which he did.
6
A month later, Salatino e-mailed Tillerson, copying Moran, to thank
him “‘for all you have done for us. We will prevail and repay you.’”
8.
In April 2019, Salatino e-mailed Tillerson asking him to help raise
$25,000 to hire an attorney for the Temecula litigation, offering to back the
loan with “a promissory note on” her home. Moran also offered to “use the
equity on her home as collateral.”
Tillerson responded that if he “‘were to provide any funds today, [he]
would be hiring an attorney upon [his] return from visiting [his] uncle for the
sole purpose of filing a lawsuit against both of [them] by year’s end’” “‘for full
repayment of all loans and more.’” He indicated “‘[t]he stipulations for any
additional loans include the following. You will pay back all professional
loans and personal loans to everyone providing you money by the end of the
year. That includes all other investors in Nature Works.’”
After a phone call with Moran, Tillerson contacted Salatino and told
her he would give her the loan.
On May 1, Tillerson wrote a check for $20,000 payable to Sculpture to
be used as the retainer fee for its new counsel. It was intended as a loan to
be repaid regardless of the outcome of the Temecula litigation. No
promissory note was ever provided to Tillerson.
9.
Tillerson made his ninth loan on June 19, 2019.
About a week earlier, Salatino e-mailed Tillerson asking for $5,000 “to
finalize payment to our new lawyer” in the Temecula litigation. Salatino
said, “We will be awarded our attorney fees” and “we are going to [pay] you
back.” She reiterated in a subsequent e-mail that “we will pay you back
when we win this case.”
7
Tillerson wrote a check for $5,000 payable to Nature Works, Inc. with
“P.G.” in the memo line—the initials of the lawyer Salatino had indicated
Defendants intended to retain.
10.
Tillerson’s tenth loan—evidenced by an August 8, 2019 check for $800
made payable to Nature Works, Inc. with the memo “Lawyer”—was for “an
additional fee that [the Defendants] were requested to pay to” their attorney.
11.
In late August 2019, Salatino “called and left a message . . . that
they . . . wanted [Tillerson] to come in and help them out with mortgage
payments.” On August 31, 2019, Tillerson wrote a check for $12,000 payable
to Nature Works, Inc.
In September, Tillerson followed up on the outstanding loans, and
Salatino e-mailed back: “We both acknowledge the loan amount and we
intend on paying you back.”
12.
In October 2019, Salatino e-mailed Tillerson, copying Moran, to ask for
yet another loan for attorney fees for the Temecula litigation. On October 22,
2019, Tillerson wrote a check for $7,500 payable to Nature Works, Inc. to
provide a retainer fee for a new attorney.
13.
When Tillerson handed Salatino the check for loan 12, she asked for
another loan to cover her and Moran’s mortgages and living expenses. So, on
October 22, 2019, Tillerson wrote a check for $5,500 for that purpose.
14.
In December 2019, Salatino again e-mailed Tillerson. She promised to
pay Tillerson and “‘others who have helped us’” back but said she and Moran
8
needed “‘one last loan.’” Salatino offered to “‘back the loan with [her] condo,’”
but never prepared the paperwork to do so.
On December 22, 2019, Tillerson wrote and gave to Salatino a check in
the amount of $4,500, payable to Nature Works, Inc., for Salatino and Moran
to pay their mortgages.
15.
In early January 2020, Salatino called Tillerson to tell him “her home
was in trouble” and that she needed a $35,000 loan. He refused to give her
the money. A couple weeks later, she informed Tillerson that “her home had
gone into foreclosure.”
In late January, Salatino called him and “plead[ed] for a loan” because
her home was going to be auctioned on February 19. Tillerson said he would
provide the loan if an attorney wrote up a loan agreement, it was witnessed,
and the agreement offered her home as collateral.
On February 11, 2020, Tillerson wrote a check payable to Salatino for
$35,000. She provided a promissory note, but it was not written by an
attorney, was not witnessed, and did not offer her home as collateral. The
promissory note indicated she would pay the loan back within one year.
16.
Tillerson made another loan that was omitted from the original
complaint but included in the amended complaint as “loan #2.5.”
(Capitalization omitted.) In September 2013, he gave Salatino a personal
loan of $5,200 in cash to help her “get back on track with [her] home and the
agreement that she had with” a bank. The loan was memorialized with a
loan agreement. The loan was never repaid.
9
B.
After making loan 13, Tillerson decided to seek legal counsel. On
November 29, 2019, he wrote demand letters to both Salatino and Moran
demanding full and immediate repayment of all loans once the Temecula
litigation was finally settled. In early December, he mailed Moran her
demand letter and gave Salatino her letter during a meeting. Tillerson
decided not to pursue a civil lawsuit against them at this time because of
their promises to repay the loans upon the conclusion of the Temecula
litigation.
Salatino and Moran won the Temecula litigation and assured Tillerson
they were going to recover their full attorney fees and court costs. But they
only ended up recovering about $8,000. Tillerson had to call the courthouse
himself to find this out; Salatino never updated him.
About six weeks later, Tillerson requested a promissory note from
Salatino and Moran evidencing the loans for which he had received no
promissory notes. After about six months of e-mailing back and forth,
Salatino “said it would be too stressful to do that.”
Afterwards, while making some public records requests regarding
Salatino’s property, Tillerson discovered she had nine liens on her home, six
of which existed before Tillerson even met her. He also discovered a number
of foreclosures and auction dates during the period he made her loans of
which he had not previously been aware.
C.
On August 2, 2021, Tillerson sued Defendants for “fraud—false
promises,” intentional misrepresentation, negligent misrepresentation,
conversion, breach of contract, “common count: money had and received,”
breach of the implied covenant of good faith and fair dealing, and financial
10
elder abuse. Tillerson alleged “that each Defendant was the agent, servant,
and employee of each and every other Defendant and, in doing the acts herein
alleged, was acting within . . . the scope and pursuant to such agency and
employment.” Tillerson “[a]lternatively” alleged “each Defendant ratified,
approved[,] or condoned the actions of every other Defendant.”
On July 6, 2022, Salatino filed a chapter 7 bankruptcy petition in the
United States Bankruptcy Court for the Southern District of California. In
September, Tillerson moved for relief from the automatic bankruptcy stay “to
permit [him] to proceed against” Salatino in the pending litigation. In
November, the bankruptcy court granted the requested relief, ordering that
the litigation “may continue against Debtor Valerie Salatino to judgment. To
the extent the stay continues following Debtor’s discharge, it shall remain in
effect as to the enforcement of any resulting judgment.”
A four-day bench trial was held in November 2023. Tillerson, Salatino,
and Moran all testified. The parties filed a stipulated first amended
complaint and first amended answer midtrial. At the conclusion of the bench
trial, counsel for both sides made a general request for a statement of
decision.
D.
In February 2024, the court issued its final statement of decision. Prior
to that, both parties had objected to the proposed statement of decision.
“The [c]ourt found credibility issues regarding . . . Salatino’s
testimony.” In particular, the court noted that “[s]he was not particularly
forthcoming with [Tillerson] about the status of her property or the property’s
foreclosure history”; “did not disclos[e] her financial struggles with clarity to
Mr. Tillerson, nor the history of liens on her property”; and “was evasive . . .
during trial testimony about the same.” “The [c]ourt also found defendant
11
Moran’s testimony to lack credibility on several points.” Specifically, Moran
“characterized [Tillerson] simply [as] a generous person, feigned ignorance
about [the] history of [the] loan transactions when an email she sent to
[Tillerson] communicated clear understanding of [the] relationship, and
attempted to distance herself from the loan transactions when she is the CFO
of both companies and [Salatino]’s business partner.”
The court concluded Defendants were equitably estopped from
asserting the statute of limitations. It concluded all Defendants were jointly
and severally liable for negligent misrepresentations as to loans 5 through
14. As to loan 15, the court found Salatino, Global, and Sculpture jointly and
severally liable, also on the basis of negligent misrepresentation.
The court concluded Tillerson failed to prove “specific intent to defraud”
for purposes of his elder abuse cause of action. The court further concluded
Tillerson “[fell] short on his burden” to establish “both fraud and intentional
misrepresentation.” Given these conclusions, the court found “it is
unnecessary to address the other causes of action,” comprising conversion,
breach of contract, money had and received, and breach of the implied
covenant of good faith and fair dealing.
E.
On February 16, 2024, judgment was entered in Tillerson’s favor.
Defendants unsuccessfully moved to set aside and vacate the judgment. On
May 30, Defendants timely filed and served their notice of appeal from the
February 16 judgment. The superior court clerk served notification of the
notice of appeal on May 31.
On September 18, the bankruptcy court issued an order on pretrial
status conference in bankruptcy case number 22-01799-LT7 (Tillerson’s
adversary proceeding against Salatino). The order “sua sponte retroactively
12
lift[ed] the automatic stay as to” Salatino “related to her filing of an appeal in
the California Fourth Appellate District Division One.” It also “sua sponte
approve[d] relief from stay as to” Tillerson so he “may also pursue appeal-
related proceedings . . . , including any appeal of his own.” The court
indicated that Tillerson’s “time for filing any appeal and/or cross appeal”
would “commence upon the signed and entered date of this order.”
Tillerson filed his notice of cross-appeal on September 18.
II.
A.
As an initial matter, we address our jurisdiction over Tillerson’s cross-
appeal. We requested briefing on this fundamental issue from the parties.
We conclude Tillerson’s notice of appeal was timely as to Salatino and that
we have jurisdiction over his appeal as to her; however, we conclude his
notice of appeal was untimely as to the remaining Defendants, so we dismiss
the appeal as to them.
“[F]iling a timely notice of appeal is a jurisdictional requirement.”
(Bourhis v. Lord (2013) 56 Cal.4th 320, 329.) “In the absence of statutory
authorization, neither the trial nor appellate courts may extend or shorten
the time for appeal”—“even to relieve against mistake, inadvertence,
accident, or misfortune.” (Estate of Hanley (1943) 23 Cal.2d 120, 123.)
“If an appellant timely appeals from a judgment or appealable order,
the time for any other party to appeal from the same judgment or order is
extended until 20 days after the superior court clerk serves notification of the
first appeal.” (Cal. Rules of Court, rule 8.108(g)(1).)
The parties appear to agree that the clerk served the relevant
notification on May 31, 2024. Accordingly, Tillerson’s deadline to appeal was
20 days later, on June 20. (Cal. Rules of Court, rule 8.108(g)(1).) He did not
13
file until nearly three months after that, on September 18. Absent any basis
for extending the deadline, his notice of appeal was therefore untimely.
Tillerson argues a combination of the automatic bankruptcy stay and a
statutory extension save his cross-appeal from untimeliness. We agree as to
Salatino but disagree as to the remaining Defendants, none of whom were
debtors to whom the automatic stay extended.
In general, the filing of a bankruptcy petition “operates as a stay” of
“the commencement or continuation . . . of a judicial . . . action or proceeding
against the debtor that was or could have been commenced before the
commencement of the [bankruptcy] case.” (11 U.S.C. § 362(a)(1).) “The
automatic stay is an injunction issuing from the authority of the bankruptcy
court, and bankruptcy court orders are not subject to collateral attack in
other courts.” (In re Gruntz (9th Cir. 2000) 202 F.3d 1074, 1082.)
Accordingly, “[a]ny state court modification of the automatic stay would
constitute an unauthorized infringement upon the bankruptcy court’s
jurisdiction to enforce the stay” (ibid., italics added), although this does not
mean “that states lack jurisdiction to determine the applicability of . . . the
stay” (In re Lenke (Bankr. D.Ariz. 2000) 249 B.R. 1, 8, italics added). In
short, we examine whether the stay affects our jurisdiction, but in doing so
we defer to the bankruptcy court’s interpretation of its own stay order.
Here, the bankruptcy court lifted the automatic stay in 2022 to permit
the matter in the superior court to “continue against Debtor Valerie Salatino
to judgment.” During a hearing in the bankruptcy adversary proceeding in
August 2024, the bankruptcy court noted an “ambiguity” in the order lifting
the stay, noting it “arguably[] stops stay relief at the end of the jury trial or
the trial by Judge McLaughlin.” Accordingly, the bankruptcy court decided
“to clarify it for everybody.”
14
In its tentative ruling the day of the hearing, the bankruptcy court
indicated that “[t]he automatic stay does not protect third parties in virtually
all circumstances” and that it “does not believe that the stay bars pursuit of
claims against third parties here.” In its subsequent September 18 order, the
bankruptcy court retroactively lifted the stay as to Salatino to make her
notice of appeal timely. The bankruptcy court noted it was granting relief
from the stay “so that William Tillerson may file a timely appeal and/or cross
appeal from the final judgment entered in” the superior court matter. The
bankruptcy court specified “[t]he time for filing any appeal and/or cross
appeal by Plaintiff William Tillerson shall commence upon the signed and
entered date of this order lifting the stay”—i.e., September 18.
We interpret the bankruptcy court’s order as concluding that the
automatic stay went back into effect after the superior court entered
judgment in this matter, and we consider ourselves bound by that ruling.
Accordingly, Tillerson could not appeal as to Salatino without violating the
stay until the bankruptcy court granted relief from the stay.
Under 11 United States Code section 108(c)(2), accordingly, Tillerson’s
appeal as to Salatino is timely. That provision provides that, “if applicable
nonbankruptcy law . . . fixes a period for commencing or continuing a civil
action in a court other than a bankruptcy court on a claim against the
debtor . . . and such period has not expired before the date of the filing of the
[bankruptcy] petition, then such period does not expire until the later of”
“30 days after notice of the termination or expiration of the stay.” We agree
with other courts that have concluded that the filing of a notice of appeal
constitutes “continuing a civil action” under this provision. (§ 108(c); see, e.g.,
In re Hoffinger Industries, Inc. (8th Cir. 2003) 329 F.3d 948, 953;
Vitamins Online, Inc. v. Heartwise, Inc. (10th Cir. 2023) 71 F.4th 1222, 1235.)
15
Because section 108(c)(2) extended the deadline for Tillerson to file his notice
of appeal as to Salatino until thirty days after notice of the stay’s
termination, and because the bankruptcy court granted relief from the stay
on September 18, Tillerson’s September 18 notice of appeal is timely as to
Salatino.
The analysis is different, however, as to the non-debtor Defendants. In
the Ninth Circuit, the “‘general rule’” is “‘that the automatic stay does not
apply to actions against non-debtors.’” (International Petroleum Products
and Additives Company, Inc. v. Black Gold S.A.R.L. (9th Cir. 2024) 115 F.4th
1202, 1216.) Tillerson argues the bankruptcy court “intended” to extend the
stay to the remaining Defendants pursuant to A.H. Robins Co. v. Piccinin
(4th Cir. 1986) 788 F.2d 994, 999, which holds that “‘unusual circumstances’”
may merit extending the stay to non-debtor codefendants. But the
bankruptcy court’s minute order issued the day of the hearing, stating that it
“does not believe that the stay bars pursuit of claims against third parties
here,” suggests otherwise. Because the stay did not apply to the remaining
non-debtor Defendants, section 108(c)(2) cannot extend the time in which
Tillerson was required to file a notice of appeal as to them. His appeal as to
them was therefore untimely.
We are mindful of comity, but that the bankruptcy court stated that
Tillerson’s “time for filing any appeal and/or cross appeal . . . shall commence
upon the signed and entered date of this order” does not affect this
determination. While the bankruptcy court can indirectly extend the
deadline to file a notice of appeal as a result of its rulings concerning the
scope of its stay, we conclude a federal bankruptcy court is just as powerless
to directly extend our appellate deadline as a state court is. (Estate of
Hanley, 23 Cal.2d at p. 123.) Thus, absent a ruling that the stay extended to
16
the non-debtor Defendants, the bankruptcy court could not declare Tillerson’s
time to commence his appeal as to the remaining Defendants began at some
later time. Because the notice of appeal was untimely as to the remaining
Defendants, we dismiss this appeal as to them. (See Annette F. v. Sharon S.
(2005) 130 Cal.App.4th 1448, 1454.)
B.
“In reviewing a judgment based upon a statement of decision following
a bench trial, we review questions of law de novo.” (Thompson v. Asimos
(2016) 6 Cal.App.5th 970, 981.) “We apply a substantial evidence standard of
review to the trial court’s findings of fact.” (Ibid.) “[F]indings of fact are
liberally construed to support the judgment and we consider the evidence in
the light most favorable to the prevailing party, drawing all reasonable
inferences in support of the findings.” (Ibid.)
C.
Defendants argue Tillerson’s negligent misrepresentation cause of
action fails as a matter of law and the court accordingly erred in granting
judgment in Tillerson’s favor on this cause of action because, among other
alleged defects, the purported misrepresentations were opinions or forward-
looking statements that are unactionable as negligent misrepresentations.
We agree.
The elements of a claim of negligent misrepresentation are “(1) the
misrepresentation of a past or existing material fact, (2) without reasonable
ground for believing it to be true, (3) with intent to induce another’s reliance
on the fact misrepresented, (4) justifiable reliance on the misrepresentation,
and (5) resulting damage.” (Apollo Capital Fund, LLC v. Roth Capital
Partners, LLC (2007) 158 Cal.App.4th 226, 243.)
17
For purposes of element one, the alleged misrepresentation cannot be
“a promise to perform at some future time.” (Tarmann, 2 Cal.App.4th at
p. 158.) Neither are omissions actionable as negligent misrepresentations: an
affirmative statement is required. (Lopez, 201 Cal.App.4th at p. 596.) “The
law is quite clear that expressions of opinion are not generally treated as
representations of fact, and thus are not grounds for a misrepresentation
cause of action.” (Neu-Visions, 86 Cal.App.4th at p. 308.) “Under certain
circumstances, expressions of professional opinion are treated as
representations of fact.” (Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370,
408, italics added.) But generally, “‘[p]redictions as to future events, or
statements as to future action by some third party, are deemed opinions, and
not actionable fraud.’” (Tarmann, at p. 158.)
Tillerson fails to point to specific statements for some loans, and the
statements he identifies cannot ground a negligent misrepresentation claim.
Tillerson argues Defendants’ representations “that prevailing at trial
results in the other side paying attorneys’ fees, when that is simply not true
in California,” “misrepresent an underlying existing fact.” But “[a]
misrepresentation of law is ordinarily not actionable in the absence of a
confidential relationship or other special circumstance.” (Cicone,
183 Cal.App.3d at p. 202.) “The theory is either that everyone is bound to
know the law, or that a statement regarding the law is a mere opinion on
which one may not rely.” (Ibid.) The record evidence does not establish any
confidential relationship existed between Tillerson and Defendants, nor does
the evidence disclose any special circumstances that might otherwise make
this statement actionable. The statement is therefore not actionable as a
negligent misrepresentation.
18
As to many of the loans—including loans 7, 9, 11, 14, and 15—Tillerson
claims Defendants promised he would be repaid but failed to follow through.
These representations are similar to the statements Tarmann found
nonactionable: promises made by the defendant insurance company’s agents
to pay the plaintiff for her automobile repairs “‘immediately upon completion
of those repairs.’” (Tarmann, 2 Cal.App.4th at pp. 156-157, 158.) These
statements are “promise[s] to perform at some future time” rather than a
statement of past or existing material fact. (Id. at p. 158.) Accordingly, to
the extent Tillerson relies on promises to repay the loans as negligent
misrepresentations, those statements are not actionable on a negligent
misrepresentation theory. (Ibid.)
As to loan 5, Salatino requested funds “to get the commercial
product . . . all the way through samples in hand.” Defendants, however,
used a portion of the money to fix Sculpture’s suspended corporate status.
This was a statement about the intended future use of the loan proceeds
rather than a statement of past or existing fact. Even Tillerson, in his
respondent’s brief, acknowledges as much. Accordingly, it is not an
actionable negligent misrepresentation, either.
As to loan 6, Salatino requested “a loan for attorney fees” in the
Temecula litigation, although she also indicated to Tillerson that Defendants
were facing eviction from their workspace. While Tillerson intended the loan
to only be used for attorney fees, he did not testify that he conveyed any such
limitation on the use of the money to Salatino or Moran, whose request, once
more, concerned a future use of the funds. Accordingly, this, too, is not an
actionable negligent misrepresentation.
As to loan 8, Tillerson provided a loan of $20,000 for a retainer fee for
the Temecula litigation. Before he made the loan, both Salatino and Moran
19
offered to repay the loans and use their homes as collateral, but they did not
provide Tillerson a promissory note. They also represented he would be
repaid “when” they prevailed in the Temecula litigation. These
representations are, respectively, a promise to perform some act at a future
time and a prediction of future events rather than a misrepresentation of
past or existing material fact; thus, neither is actionable as a negligent
misrepresentation.
As to loan 9, to the extent Tillerson claims the misrepresentation was
Salatino’s representation to Tillerson that Defendants would be awarded
their attorney fees in the Temecula litigation and he would be repaid from
those funds, this is a prediction of future events, which cannot ground a
negligent misrepresentation claim.
As to loans 10, 12, and 13, it is unclear what negligent
misrepresentation Defendants allegedly made. Tillerson identifies none in
his respondent’s brief’s loan-by-loan analysis, but from the background
section it appears he may be relying generally on Salatino’s repeated
statements that Defendants would repay the loans. As promises of future
action rather than statements of existing or past material fact, however,
these statements are not actionable as negligent misrepresentations.
As to loan 11, to the extent Tillerson relies on Salatino’s failure to
disclose that she was delinquent on her homeowners’ association fees and her
mortgage, a negligent misrepresentation claim cannot be premised on an
omission. (Lopez, 201 Cal.App.4th at p. 596.)
As to loan 14, Salatino represented that she would “‘back the loan with
[her] condo’” but failed to provide the relevant paperwork. Salatino also
indicated she and Moran “‘will be paying [him] back.’” As with many of the
loans already addressed, these are promises to perform some act at a future
20
time rather than misrepresentations of past or existing material facts. These
statements thus cannot form the basis of a negligent misrepresentation
claim.
Finally, as to loan 15, Tillerson asked that Salatino have an attorney
write up a loan agreement, have the loan agreement witnessed, and offer her
home as collateral. There is no indication she ever represented she would
comply with these specific requirements, however, and she ended up not
doing so. Salatino instead provided Tillerson with a promissory note in
which she agreed to pay him back within one year, offering no collateral.
That is, as Defendants argue, “clearly a forward-looking promise.” We
accordingly fail to perceive the basis for a negligent misrepresentation for
this loan.
Because we conclude that, under any standard of review, none of the
statements were actionable as negligent misrepresentations as a matter of
law, we must reverse the judgment partly in Tillerson’s favor on this cause of
action. Given this result, we do not address the other purported errors
Defendants identify as to this cause of action.
D.
We now turn to Tillerson’s arguments.
1.
Tillerson contends the trial court erred “by excluding admissible
evidence of Salatino and Moran’s fraudulent intent[] when it sustained
[Defendants’] objection to the introduction of their written letter responding
to an attorney’s demand letter[] on the grounds that it was a ‘settlement
communication’ under Evidence Code section 1152.” We agree this was error
but conclude it was harmless.
21
Section 1152(a) provides: “Evidence that a person has, in compromise
or from humanitarian motives, furnished or offered or promised to furnish
money . . . to another who has sustained or will sustain or claims [to have]
sustained or will sustain loss or damage, as well as any conduct or
statements made in negotiation thereof, is inadmissible to prove [that
person’s] liability for the loss or damage or any part of it.”
“[W]hen the issue involves evaluating particular facts and applying
established law to those facts,” a “trial court’s ruling excluding evidence
under section[] 1152 . . . is properly reviewed for an abuse of discretion.”
(Zhou v. Unisource Worldwide (2007) 157 Cal.App.4th 1471, 1476.) But
where “the trial court’s decision depends on the proper construction of
section[] 1152 . . . , as here, the issue is a question of law, which we review de
novo.” (Ibid.)
We conclude section 1152 cannot reasonably be interpreted to extend to
Defendants’ response to Tillerson’s demand letter. The letter was not sent as
a compromise or even as part of a negotiation to try to settle the dispute.
Rather, the letter flatly denies any liability at all, claiming the money
Tillerson gave Defendants was “philanthropy.” Such a letter is not in any
way related to settlement negotiations and therefore is not excludable under
section 1152.
Nonetheless, the error is harmless.
“Claims of evidentiary error under California law are reviewed for
prejudice applying the ‘miscarriage of justice’ or ‘reasonably probable’
harmless error standard of People v. Watson (1956) 46 Cal.2d 818,
836, . . . that is embodied in article VI, section 13 of the California
Constitution.” (Christ v. Schwartz (2016) 2 Cal.App.5th 440, 447.) “Under
the Watson harmless error standard, it is the burden of appellants to show
22
that it is reasonably probable that they would have received a more favorable
result at trial had the error not occurred.” (Ibid.)
In her testimony, Salatino agreed she may have told Tillerson his loans
were “contributions.” Moran acknowledged using the term “philanthropy” “to
characterize the money that [Tillerson] had provided to” Defendants. Moran
and Salatino were questioned regarding their responses to Tillerson’s
requests for admission, which were admitted at trial and in which they
indicated that Tillerson “‘did not loan [them] any money.’” Sculpture’s and
Global’s responses to requests for production of documents, also admitted into
evidence, similarly claimed Tillerson “‘did not loan [them] any money.’” And
Moran’s and Salatino’s interrogatory responses, about which they were also
questioned at trial, classified the money given as “[c]ontributions, gifts[,] or
investments.” During closing arguments, Tillerson’s counsel argued
Defendants’ intent not to pay was evidenced by their refusal “to acknowledge
the debt that was owed to” Tillerson. He noted Defendants “started referring
to what he did as philanthropy, as contributions, as gifts.”
Because the evidence that Defendants classified the loans as gifts or
philanthropy and denied any obligation to repay Tillerson was admitted
through multiple other sources, the response to the demand letter was
cumulative. (Robinson v. U-Haul Co. of California (2016) 4 Cal.App.5th 304,
323.) As the court received this evidence through Salatino and Moran’s
testimony as well as documentary evidence, it was unlikely the trial court
would have been swayed by the letter. (Ibid.) Accordingly, Tillerson has
failed to establish prejudice by its exclusion.
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2.
Tillerson argues the trial court erred “by failing to find fraud . . . where
undisputed evidence in the record establishes that Salatino and Moran
manifested ongoing intent to defraud Tillerson.”
“[Q]uestions of ‘intent’ and ‘purpose’ are ordinarily questions of fact to
be determined by the trial court.” (Redke v. Silvertrust (1971) 6 Cal.3d 94,
103; accord Locke v. Warner Bros., Inc. (1997) 57 Cal.App.4th 354, 368 [“[T]he
issue of fraudulent intent is one for the trier of fact.”].) Accordingly,
fraudulent intent is an issue we review for substantial evidence. (Nevada
National Leasing Co. v. Hereford (1984) 36 Cal.3d 146, 153.)
For factual findings, our “power begins and ends with a determination
of whether there is any substantial evidence—contradicted or
uncontradicted—to support the trial court findings.” (Schmidt v. Superior
Court (2020) 44 Cal.App.5th 570, 582.) “Substantial evidence is evidence of
ponderable legal significance, reasonable in nature, credible, and of solid
value.” (Ermoian v. Desert Hospital (2007) 152 Cal.App.4th 475, 501.) We
view the evidence in the light most favorable to the prevailing party and
resolve any evidentiary conflicts and draw all reasonable inferences in
support of the judgment. (Schmidt, 44 Cal.App.5th at p. 582.) We neither
reweigh the evidence nor revisit the court’s credibility findings. (In re
Alexander P. (2016) 4 Cal.App.5th 475, 492.)
Here, the court decided against Tillerson and in favor of Defendants on
his claims for “fraud and intentional misrepresentation” because it did “not
find a basis to [find in his favor] here based on [the] facts and evidence
presented.” The court found “[D]efendants may have held an honest belief in”
the truth of their “multiple representations to” Tillerson. The court
accordingly concluded Tillerson “has fallen short on his burden.” And as to
24
the elder abuse claim, the court specifically found that “specific intent to
defraud . . . was not proven.” The court thus found Defendants did not act
with fraudulent intent when soliciting loans from Tillerson.
Tillerson claims “[t]here was simply no substantial evidence showing
that [D]efendants honestly believed their unconditional promise to repay.”
He argues the “[c]ircumstantial evidence of [D]efendants’ [intent to de]fraud
is essentially undisputed and overwhelming in this case,” pointing to their
“insolvency, their hasty repudiation of the promises, their failure even to
attempt performance, or their continued assurances of performance even
after it was clear they would not perform.” While we agree some such
circumstantial evidence is within the appellate record, we disagree this
evidence is undisputed or that no contrary evidence exists.
When asked at trial if she intended to repay Tillerson from the attorney
fees she anticipated recovering in the Temecula litigation, Salatino replied,
“Absolutely.” She further testified Defendants “had full intention of repaying
Mr. Tillerson, our family members, keeping our business going.” While the
court expressly found particular aspects of Salatino’s testimony not
credible—i.e., those aspects relating to her property and its foreclosure
history—from this specificity we infer it found her testimony in other regards
credible to the extent it supports the court’s judgment. (See Schild v. Rubin
(1991) 232 Cal.App.3d 755, 762 [“We resolve all . . . questions of credibility in
favor of the prevailing party and indulge in all legitimate and reasonable
inferences to uphold the finding of the trial court . . . .”].) Even Tillerson
testified, “I view”—in the present tense—“these two women as honest people
and that they were going to repay all their debt.” This testimony is
substantial evidence the court could reasonably rely on to conclude that
25
Defendants lacked fraudulent intent and instead intended to repay Tillerson
regardless of the outcome of the Temecula litigation.
Tillerson argues “[a]t best, the evidence shows that defendants
harbored a conditional intention to repay Tillerson only if they recovered a
large fee award . . . that defendants never communicated to Tillerson.” While
at least some of the evidence is capable of being read that way, the evidence
can also reasonably be construed as supporting an unconditional intention to
repay. For example, as the court noted in its statement of decision, Salatino
represented as to Loan 7 that they would repay Tillerson “‘[a]fter this case
settles . . . and when we get the reimbursement of’” a retainer fee from a prior
lawyer. This is a promise to repay untethered to Defendants’ potential
recovery of prevailing party attorney fees. Thus, while any attorney fee
recovery in the Temecula litigation would have provided a ready source of
money for repayment, we agree with the trial court that the evidence can also
be interpreted as a “‘when we win not if we win’” promise. Substantial
evidence supports the trial court’s conclusion Defendants intended to repay
Tillerson whether or not they recovered attorney fees and therefore did not
act with fraudulent intent.
Accordingly, as Defendants argue, Tillerson “essentially asks this Court
to reweigh the evidence,” but that we cannot do. (Alexander P., 4 Cal.App.5th
at p. 492.) Because substantial evidence supports the trial court’s finding
that Defendants lacked fraudulent intent, it was not error for the trial court
to find in favor of Defendants and against Tillerson on his fraud causes of
action.
Perhaps perceiving the weakness of this argument, Tillerson attempts
in his reply brief to invoke misrepresentations other than Defendants’
promises to repay—for example, misrepresenting the purpose of requested
26
loans or their intentions to offer collateral—to demonstrate their fraudulent
intent. But we conclude he forfeited these additional grounds by failing to
raise intent-based challenges as to them in his opening brief and waiting
until his reply brief to do so. (Golden Door Properties, LLC v. County of San
Diego (2020) 50 Cal.App.5th 467, 518.)
3.
Finally, Tillerson claims the trial court erred “as a matter of law when
it denied [his] elder abuse claim based on an alleged failure to show ‘specific
intent to defraud’” because “‘it is not necessary that the taker maintain an
intent to defraud if it can be shown that the person [who] took the property
“knew or should have known that [that person’s] conduct is likely to be
harmful to the elder.”’” (Quoting Bonfigli v. Strachan (2011) 192 Cal.App.4th
1302, 1315.) We requested supplemental briefing from the parties on the
issue of whether Tillerson forfeited this claim, either by failing to advance it
at trial or by failing to object to the statement of decision on this ground. We
conclude the issue is, indeed, forfeited.
As relevant here, under Welfare and Institutions Code
section 15610.30(a), a person or entity financially abuses an elder if they
assist in or directly “[t]ake[], secrete[], appropriate[], obtain[], or retain[]” the
elder’s “real or personal property” “for a wrongful use or with intent to
defraud, or both.” Property is deemed to be taken “for a wrongful use if,
among other things, the person or entity takes, secretes, appropriates,
obtains, or retains the property and the person or entity knew or should have
known that this conduct is likely to be harmful to the elder.” (§ 15610.30(b).)
Tillerson forfeited this claim by failing to pursue a wrongful use theory
of elder abuse below, instead focusing solely on an intent to defraud theory.
In pleading his cause of action for elder abuse, Tillerson claimed that “Moran
27
and Salatino obtained and retained [Tillerson’s] property with the intent to
defraud” him. (Italics added.) While Tillerson’s trial brief recited all the
elements of elder abuse, including the alternative bases by which a defendant
may be found liable, he argued only intent to defraud: “At trial the facts will
show that . . . Defendants Moran and Salatino obtained and retained the
property with the intent to defraud” Tillerson. In his opening statement,
Tillerson’s counsel indicated that, “in order to prove financial elder abuse, one
of the elements is that fraud needs to be shown. . . . [W]e believe the evidence
that will be presented during this trial is going to show that fraud did in fact
occur. It occurred to Mr. Tillerson, who was over 65 years old, and
Mr. Tillerson has been damaged.” Indeed, “wrongful use” was not mentioned
at trial until Tillerson’s counsel’s closing argument. Tillerson’s counsel
primarily argued that, “if you find fraud in this case, that alone, I think, gets
us to the finding of financial elder abuse.” Counsel then stated, “[i]f you don’t
find fraud, you can find wrongful use of the funds,” arguing that “goes to that
Transaction Number 5.” While Tillerson claims otherwise, the record
supports a determination that he first raised the issue of wrongful use after
all the evidence had already been developed at trial.
“‘Appellate courts are loath to reverse a judgment on grounds that the
opposing party did not have an opportunity to argue and the trial court did
not have an opportunity to consider.’” (Green v. Healthcare Services, Inc.
(2021) 68 Cal.App.5th 407, 419.) “‘Bait and switch on appeal not only
subjects the parties to avoidable expense, but also wreaks havoc on a judicial
system too burdened to retry cases on theories that could have been raised
earlier.’” (Ibid.) Here, neither the court nor Defendants were on notice that
Tillerson would pursue a wrongful use theory of elder abuse. Defendants
accordingly had no reason to elicit evidence rebutting this theory. In this
28
circumstance, we conclude Tillerson’s failure to claim Defendants took his
money for wrongful use until closing arguments was a forfeiture of that
theory of recovery. Accordingly, the court did not err by failing to analyze
Tillerson’s elder abuse claim on this ground.
* * *
While both parties contend the doctrine of implied findings is
inapplicable to this appeal, we do not need to resolve this issue given the
foregoing analysis.
III.
We dismiss Tillerson’s cross-appeal as to Moran, Sculpture, and Global;
reverse the judgment partially in favor of Tillerson as to his negligent
misrepresentation claim; and remand for the trial court to enter judgment in
favor of Defendants consistent with this opinion. The parties shall bear their
own appellate costs. (Cal. Rules of Court, rule 8.278(a)(3), (5).)
CASTILLO, J.
WE CONCUR:
DO, Acting P. J.
BUCHANAN, J.
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