Tuttle v. Coastal Auto Mart

Filed 4/2/08 Tuttle v. Coastal Auto Mart CA1/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FIRST APPELLATE DISTRICT

DIVISION ONE

Coastal Auto Mart, Inc. (Coastal), and Carl Schneider and Ed OMeara through Coastal (Coastal, Schneider, and OMeara are hereafter collectively called cross-defendants), owned automobile dealerships in Eureka; Charles Tuttle (Tuttle) was for a time the dealerships general manager. Coastal sued Tuttle for embezzlement, and also sued Tuttle and Dr. Wendell Row, a Coastal customer, for extortion; Tuttle cross-complained against cross-defendants for intentional infliction of emotional distress. Judgment was entered for Tuttle on special jury verdicts rejecting cross-defendants claims and awarding Tuttle $300,000 on his cross-complaint. Cross-defendants challenge the judgment on multiple grounds, including evidentiary error, improper jury argument, use of a defective special verdict form, and the award of excessive damages. As we explain below, the arguments are lacking and we affirm the judgment.

I. BACKGROUND

OMeara worked as Schneiders accountant since they met in Wisconsin in 1974. He moved with Schneider to California in 1988, when Coastal, one of Schneiders many corporations, purchased two automobile dealerships in Eureka. OMeara had a small ownership stake in Coastal, and kept the dealerships books. Schneider initially operated the dealerships; after 1993, he continued to visit them, but was not active in their day-to-day operations.

Tuttle moved with his wife and children to Eureka in 1996 to work as Coastals general manager; he left a job with an automobile dealership in Fremont were he was making over $16,000 per month. His salary at Coastal was only $8,000 per month, but he wanted to get away from the long hours he worked in Fremont. He hoped to buy the dealerships from Coastal, but the purchase was never consummated. Tuttle and his wife separated after they moved to Eureka, and he entered into a romantic relationship with Schneiders daughter. Shortly after that relationship ended in 2000, Schneider fired Tuttle from his position at Coastal.

After firing Tuttle, Schneider asked an official with the Department of Motor Vehicles (DMV) to review Coastals records for improprieties on the part of Tuttle. Schneider and OMeara brought the information they received from the DMV to the district attorney, and Tuttle was indicted for embezzlement, a charge that was eventually dropped.

Coastals extortion claim against Tuttle and Row stemmed from Rows demand for $16,000 that he claimed Coastal owed him after Tuttles employment with Coastal was terminated. OMeara testified that, although Coastal did not owe Row any money, Coastal paid him $8,500 after he threatened to report Coastal to the DMV and sales tax authorities, among others. After Schneider refused to pay Row any more money, Row contacted the DMV, and the DMV filed charges against Coastal. Row said he endorsed the $8,500 check to Tuttle as a loan; Tuttle admitted telling Row about the DMV violations at Coastal.

The embezzlement charges against Tuttle were based on various allegedly improper transactions, including, for example, his bartering of a car for dental work for Schneiders daughter. OMeara testified that Coastal lost approximately $131,000 because Tuttle gave too much credit for trade-ins, and approximately $128,000 because he agreed to have the dealership finance purchasers with poor credit and failed to collect down payments. Coastal maintained that these transactions were not merely bad business decisions by Tuttle; rather, he was seeking, at Coastals expense, to boost new car sales to facilitate his acquisition of the dealerships. To refute the claims that he caused Coastal to lose money, Tuttle elicited testimony from Schneider that, while he was offered only $300,000 for the dealerships at the beginning of Tuttles tenure as general manager, Schneider was able to sell them for $1.8 million after Tuttle was terminated.

Tuttles cause of action for emotional distress was predicated on several acts of cross-defendants, including: terminating his employment in retaliation for his breakup with Schneiders daughter, soliciting the DMV investigation into his transactions, facilitating the filing of the criminal charges against him, disputing his entitlement to unemployment benefits, and cutting off his health insurance and that of his autistic child. He testified that his life changed and that he struggled after being fired and charged with embezzlement. He said that he had not been able to obtain employment in the automobile business because, after the indictment, he could not get a fidelity bond and dealers in town would not hire him. Tuttle said that he got plumbing, electrical, and remodeling work from time to time after being fired by Coastal, but that he no longer had any bank accounts or credit cards. He was in psychotherapy, suffered from anxiety and depression, and had become a recluse. He testified, I have no self-confidence, no self-esteem. I feel like Ive been kicked around the block and cant get up. Row said that Tuttle was crying when they spoke right after he was fired. Row described him as energetic and enthusiastic before his firing, and discouraged in the wake of it.

II. DISCUSSION

Cross-defendants contend that the special verdicts on the emotional distress cause of action are hopelessly ambiguous or incomprehensible because the questions on the verdict form asked for findings with respect to Coastal, Schneider and/or OMeara. While the and/or language could be taken to mean that less than all of the cross-defendants were liable, the court entered judgment making them jointly and severally liable for Tuttles damages. The record does not disclose which side prepared the special verdict form on Tuttles cause of action; cross-defendants assert in their brief that it was prepared by Tuttles counsel. Cross-defendants, however, did not object to the form until their motion for new trial, which the court denied.

A party generally waives any objection to a special verdict form by failing to object before the court discharges the jury. (Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112, 131.) Unless the verdict itself is inconsistent, [f]ailure to object to a verdict before the discharge of a jury and to request clarification or further deliberation precludes a party from later questioning the validity of that verdict if the alleged defect was apparent at the time the verdict was rendered and could have been corrected. (Henrioulle v. Marin Ventures, Inc. (1978) 20 Cal.3d 512, 521, and ibid., fn. 11.) The defect alleged here was waived because it was apparent on the face of the form, and cross-defendants could have requested that the jury determine their individual liability if that were really an issue in the case or a matter of any concern to them. But cross-defendants made no attempt at trial to distinguish their individual roles in the case. Their counsel, for example, referred to Coastal, Schneider, and OMeara in the singular as my client in argument, and OMeara described actions that we, meaning he, Schneider, and Coastal, had taken.[1] Ambiguity in a verdict form can be waived where, as here, it is reflective of a partys trial strategy (see Schiernbeck v. Haight (1992) 7 Cal.App.4th 869, 879), and is raised only as an afterthought.

The court was empowered to construe the special verdict in light of the evidence (Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 894), and properly exercised that power in holding cross-defendants jointly and severally liable in the judgment. According to the evidence, Schneider was the one who had it in for Tuttle because of the breakup with his daughter, OMeara acted as an agent of Schneider, his long-term business associate and boss, and OMeara and Schneider were agents of Coastal.[2] Given cross-defendants symbiotic relationship, there was no prospect that the jury would have found that less than all of them were liable to Tuttle had they been asked to make that determination.

Cross-defendants other objection to the special verdict form is that it failed to specify the economic and noneconomic components of the damage award. These categories of damages are distinguished in order to implement Proposition 51 (Civ. Code,  1431.1 et seq.), which limits joint tortfeasors liability for noneconomic damages to their proportionate share of fault. (See Note to CACI No. 3902 (Feb. 2008 ed.) p. 877 and authorities cited.) It was unnecessary to separate the noneconomic damages in this case because cross-defendants were each intentional tortfeasors, who are not entitled to apportionment of such damages under Proposition 51 (Thomas v. Duggins Construction Co. (2006) 139 Cal.App.4th 1105, 1108). Even if such an instruction should have been given, the error was, again, waived. Apportionment of damages would have been for cross-defendants benefit, and if they wanted the jury to sort out their respective liabilities they should have had the jury do so before it was discharged. (See Greer v. Buzgheia (2006) 141 Cal.App.4th 1150, 1159 [party waived argument that verdict was not sufficiently specific to suit his purposes].)

Cross-defendants contend that the damage award was excessive. It is well settled, however, that (a) reviewing court must uphold an award of damages whenever possible (citation) . . . . (Bertero v. National General Corp. (1974) 13 Cal.3d 43, 61.) [I]t is the province of the jury, and then the trial court upon motion for new trial, to determine and fix the amount of damages to be awarded; . . . absent any showing of passion and prejudice, all presumptions are in favor of the correctness of the judgment. (Citation.) (Davis v. Local Union No. 11, Internat. etc. of Elec. Workers (1971) 16 Cal.App.3d 686, 697; see also Ward v. Litowsky (1970) 5 Cal.App.3d 437, 440.) (Rhode v. National Medical Hosp. (1979) 93 Cal.App.3d 528, 535.) The jury was entitled to credit Tuttles testimony that cross-defendants conduct left him psychologically devastated and unemployable in the automobile industry, where he was making $96,000, and had made $192,000, per year. That testimony was easily sufficient to support the $300,000 award.

Cross-defendants argue that Tuttles counsel improperly appealed to the passion and prejudice of the jury by repeatedly referring in closing argument to the $1.8 million received upon the sale of the dealerships. Cross-defendants submit that [n]ot only was the wealth of the litigants irrelevant to a claim for intentional infliction of emotional distress, it was prejudicial because the jurors would certainly think that [Coastal], Schneider and OMeara could afford to pay Tuttle a large sum of money. But while the sale price of the dealerships may not have been relevant to Tuttles claim for emotional distress, it was relevant to cross-defendants cause of action for embezzlement. To rebut the contention that he made improper transactions costing the dealerships hundreds of thousands of dollars during his tenure, Tuttle pointed out the difference between the price paid for the dealerships after he was fired and the far lower one that was offered before he managed them. The $1.8 million sale was thus a relevant and fair matter for argument.

Cross-defendants maintain that Tuttles counsel committed further misconduct by referring to matters not in evidence when he argued that Schneider kited checks, and took out over $300,000 from Coastal at a time when Coastal was allegedly losing money because of Tuttles malfeasance. When Schneider was shown records of payments by Coastal to his trust of almost $50,000 during a month in 2000, he denied any knowledge of the payments. Tuttle testified that Coastals check records showed that it paid Schneider affiliates $307,000 in the first six months of 2000. OMeara testified in rebuttal that he wrote checks from Coastal to Schneider affiliates for $258,000 from December 10, 1999 through April 11, 2000, but that Schneider loaned Coastal $261,051.46 during that same period. He said that he had access to Schneiders checkbook and that Schneider didnt know anything about this. He said that he was borrowing Mr. Schneiders funds for a short period of time to cover GMAC checks that I had to write because I didnt have the cash in the company to do it.

The alleged $300,000 in withdrawals from Coastal, if not check kiting, was a proper subject for argument on the foregoing record. In any event, cross-defendants forfeited their objections to all of the arguments cited as misconduct by failing to assert them when the arguments were made. (Menasco v. Snyder (1984) 157 Cal.App.3d 729, 733; Kostecky v. Henry (1980) 113 Cal.App.3d 362, 378-379.)

Cross-defendants next contend that the court erred in overruling their hearsay objection to Tuttles testimony about what other car dealers told him when he applied for jobs after being indicted for embezzlement. The transcript reads: Q. Did you apply for work at any other car dealerships? [] A. Yes, I did go to all the dealers in town here. [] Q. What was the response? [] A. Id been indicted on embezzlement charges and I would show them where the court had cleared me and they would say thats great, but[] [Defendants counsel]: Objection. Hearsay. [] The court: It will be overruled. [] Go Ahead. [] [Tuttle]: They would say well thats great, but well only remember the indictment and thats all anyone will remember and thats all anybody remembers. So my ability to return to my career of thirty years is nonexistent. My Fidelity Bond isIm unable to get a Fidelity Bond. [] Q. Have you been unable to get a job in the car business ever since youve been accused of this embezzlement? [] A. No, I have not (sic).

Even if one assumes for the sake of argument that the court erred by admitting the testimony in question, we are not persuaded that cross-defendants were prejudiced by the error. Tuttle could, and did, testify consistent with the hearsay rule that he was unable to get a job in the industry after being indicted. The causal link between his indictment and unemployment was thus clear without the allegedly inadmissible statements, and it is not reasonably probable from a review of the record that a different result would have been obtained if the statements had been excluded. (Cal. Const., art. VI,  13; Evid. Code,  353, subd. (b); see generally Taylor v. Varga (1995) 37 Cal.App.4th 750, 759, fn. 9.)

Cross-defendants contend finally that the judgment must be reversed because their conduct in requesting the DMV to investigate Tuttles transactions was privileged. The jury was instructed under former CACI No. 1605: Carl Schneider, Edward OMe[a]ra, Coastal Auto Mart claim that they are not responsible for Charles Tuttles harm, if any, because their conduct was permissible. To succeed, they must prove all of the following: One, they were exercising their legal rights in protecting their economic interests; two, their conduct was lawful and consistent with community standards; and, three, they had [a] good faith belief that they had a legal right to engage in the conduct. [] If you find all of the above, then Carl Schneider, Ed OMe[a]ra and Coastal Autos conduct was permissible and privileged.

Cross-defendants did not argue below or on appeal that their reporting of Tuttle to the DMV was privileged as a matter of law under the rule protecting communications made to instigate governmental investigation into wrongdoing (Hagberg v. California Federal Bank (2004) 32 Cal.4th 350, 370), perhaps because their extortion claim was based in part on Rows threat to report them to the DMV. Rather, cross-defendants claim that the evidence compelled findings in their favor on all of the issues specified in the above-quoted jury instruction. The difficulty for them is that the instruction calls for an assessment of their good faith, a quintessential jury question that was effectively resolved against them by the finding in the special verdict that their actions against Tuttle were outrageous. Since the evidence did not establish as a matter of law that cross-defendants were acting in good faith when they contacted the DMV about Tuttle, the privilege argument also fails.

III. DISPOSITION

The judgment is affirmed.

______________________

Marchiano, P.J.

We concur:

______________________

Swager, J.

______________________

Margulies, J.

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[1] Counsels opening statement indicated that Tuttle was asserting that because he was fired, my client also acted in the concerted manner to destroy his reputation in the community so he couldnt get the job as general manager of other dealerships. OMeara said that, when the DMV filed its accusation against Coastal, We got an attorney to defend us in it, and the attorney reached a compromise with them where we paid $12,000 instead of being shut down for three days. And we paid their costs.

[2] When asked whether Coastal routinely cheated customers, OMeara responded, Whos Coastal Auto Mart? Carl Schneider. I dont think Carl Schneider cheated any customers. At another point, OMeara joked that he, too, was synonymous with Coastal: Q. Thats why you sold it, to defraud Santa Barbara Classics? [] A. Santa Barbara Classics still owes me ten grand, so I dont think Ive defrauded them. [] Q. You owe (sic)? [] A. They owe Coastal, sir, but youve used me and Coastal the same before too. [] Q. Well, youre a lot more than a bookkeeper sir. [] A. Detailer. I do a good job. [] Q. Detailer. You go out and wash and wax the cars? [] A. Absolutely.