De Gutz v. Boisvert
Filed 1/28/13
De Gutz v. Boisvert CA1/2
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opinion has not been certified for publication or ordered published for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 TWO
DONALD M. DE GUTZ,
Plaintiff
and Respondent,
v.
RENE G.
BOISVERT et al.,
Defendants and Appellants.
A126839
(Alameda County Super.
Ct.
No. RG08372963)
Defendant
Rene G. Boisvert, appearing in propria
persona, appeals from a judgment after bench trial in favor of plaintiff
Donald M. De Gutz. Boisvert seeks
reversal of the judgment on five grounds.
De Gutz, also appearing in propria persona, opposes each ground and
urges affirmance. We affirm the
judgment.
At
the outset, we note that both parties are appearing in propria persona Defendant requests that we liberally construe
his briefs based on the
Supreme Court recognition, in Hughes v.
Rowe (1980) 449 U.S. 5, that allegations stated in a prisoner complaint
filed in propria persona in federal court, however inartfully pleaded, should
be held to a less stringent standard than formal pleadings drafted by
lawyers. (Id. at p. 9.) These are not
the circumstances before us. Nor do the
other federal cases cited by defendant persuade us that we should do anything
other than what our own long-standing state law calls for in the circumstances
before us.
That
is, “[w]hen a litigant is appearing in propria persona, he is entitled
to the same, but no greater, consideration than other litigants and attorneys
[citations]. Further, the in propria
persona litigant is held to the same restrictive rules of procedure as an
attorney [citation].†(
623, 638-639, followed in County of
Orange v. Smith 132 Cal.App.4th 1434, 1444, Bianco v.
California Highway Patrol (1994) 24 Cal.App.4th 1113, 1125-1126; accord,
108 Cal.App.4th 956, 958, fn. 1, Burnete
v. La Casa Dana Apartments (2007) 148 Cal.App.4th 1262, 1267.)
Accordingly,
we follow herein certain guidelines regarding factual and legal assertions by
both parties. Regarding factual
assertions, we disregard any that are not supported by a citation to the
record. “ ‘ “It is the duty of the party
to support the arguments in its briefs by appropriate reference to the record,
which includes providing exact page citations.†’ †(Grant-Burton v. Covenant Care, Inc.
(2002) 99 Cal.App.4th 1361, 1379.) “Upon
the party’s failure to do so, the appellate court need not consider or may
disregard the matter.†(
Sheily (2004) 122 Cal.App.4th 824, 826, fn. 1 (Regents); In re S.C. (2006)
138 Cal.App.4th 396, 406-407.)
Furthermore,
we disregard factual assertions based on information that is not in the record
before us. “A reviewing court must
accept and is bound by the record before it [citations], cannot properly
consider matters not in the record [citations], and will disregard statements
of alleged facts in the briefs on appeal which are not contained in the
record.†(Weller v. Chavarria (1965) 233 Cal.App.2d 234, 246 (
a transcript that was not offered in evidence before the trial court was
“clearly outside the scope of our reviewâ€].)
Regarding
legal assertions, we treat as waived arguments that are not supported by
citation to supporting authorities. “
‘[E]very brief should contain a legal argument with citation of authorities on
the points made. If none is furnished on
a particular point, the court may treat it as waived, and pass it without
consideration.’ †(People v. Stanley
(1995) 10 Cal.4th 764, 793 (Stanley).)
Furthermore,
we will not consider legal arguments
based solely on conclusory citations.
“An appellate court is not required to consider alleged errors where the
appellant merely complains of them without pertinent argument†(Strutt v.
Ontario Sav. & Loan Assn. (1972) 28 Cal.App.3d 866, 873 (
of the cited authority is not discussed or points are argued in conclusory form.†(Kim v. Sumitomo Bank (1993) 17
Cal.App.4th 974, 979 (Kim).)
Finally,
we note that “ ‘[a] judgment or order of the lower court is presumed
correct. All intendments and
presumptions are indulged to support it on matters as to which the record is silent,
and error must be affirmatively shown.â€
(Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) Appellant has the burden of affirmatively
showing any error. (Lennane v. Franchise Tax Bd. (1996) 51 Cal.App.4th 1180,
1189.)
In
February 2008, plaintiff filed a complaint against defendant that is not
contained in the record before us.
Plaintiff filed a first amended complaint in March 2008 against
defendant, as well as against the Rene G. Boisvert Revocable Trust and Rene G.
Boisvert, Inc., doing business as Boulevard Equity Group (neither of which are
parties to this appeal), alleging claims of
duty, rescission, unjust enrichment, and negligence.
Defendant
filed a cross-complaint that is not at issue on appeal.
Trial
The
following facts are based on the evidence presented at trial, which began at
the end of August 2009. We disregard
defendant’s characterization of the problems with the trial evidence as stated
in his opening brief because he either
provides no record citations for his assertions (Regents, supra, 122
Cal.App.4th at p. 826, fn. 1) or bases them on “facts†that are not included in the record
before us. (Weller, supra, 233
Cal.App.2d at p. 246.)
In
2004, defendant created 82nd Avenue LLC to own and operate a real estate
project at the corner of 82nd Avenue and A Street in Oakland, California. Defendant improved four lots with a factory
built home and subsequently marketed the properties at $498,000 each. In October 2006, defendant approached
plaintiff, a long-time friend, and asked him to purchase the first of the four
homes, on 8208 A Street (property), to help defendant market the
properties. Plaintiff testified that he
agreed to do so based on his friendship with defendant, and understood from
their discussions that his purchase would be risk-free and that he would receive
a fee for his help.
Plaintiff
testified that he was an engineer with no background in finance or business,
had never invested in real estate and, before the subject transaction, had
owned only one residence. Defendant
testified that in the previous 10 years, he had “done a number of things.†He continued,
“I have done real estate projects which include mortgage brokering. I’ve done mom and pop development. And I’ve done very occasional transaction
brokerage. I consulted in the sport and
entertainment and nonprofit work.â€
In
November 2006, the parties executed a one-page written agreement drafted by
defendant. The agreement lists three
goals of the transaction: to free up
working capital, to encourage sales momentum in the local marketplace, and to
establish market values. Defendant
agreed to pay plaintiff $1,500 immediately following close of escrow on
plaintiff’s purchase of the property. He
would provide plaintiff four months of advance mortgage payments, payable
immediately following the close of escrow, and payment of property taxes and
insurance payments as needed. Defendant
also agreed that plaintiff was to always have a minimum of three mortgage
payments in hand, and advances to replenish this minimum were to be made by the
defendant on a monthly basis. Defendant
would also make additional payments as required “to ensure that there will be
no tax-negative consequence to [plaintiff] for his participation in this
transaction.†In addition, defendant
assumed responsibility for the maintenance, utilities, and repair costs of the
property.
Plaintiff
agreed to provide his financial and credit resume, as well as any supporting
documentation needed to complete the purchase.
Plaintiff agreed to pay the mortgage, taxes, and insurance on a timely
basis, and to execute the necessary documentation for re-sale of the
property.
The
agreement stated that defendant was engaging plaintiff “to temporarily
purchase†the property. It further
stated that the property would be immediately placed back on the market to be
re-sold. Defendant further agreed that,
if the property was not re-sold within five months of the close of escrow, he
would, at plaintiff’s request, purchase it from plaintiff at the original
purchase price plus all closing costs.
Defendant
and plaintiff were listed as parties to the agreement. Defendant acknowledged in the agreement that
the property was an asset of 82nd Avenue LLC, which in turn was an asset of the
Rene G. Boisvert Revocable Trust. The
agreement further stated that, according to the terms of the trust, the acting
trustee had the continuing responsibility to pay out obligations of the trust
or estate to the same extent as defendant under the agreement. The agreement was executed by defendant and
plaintiff.
After
the agreement was executed, defendant drew up an offer and acceptance agreement
for the property, which listed defendant as the agent for both the buyer, who
was plaintiff, and the seller. The
purchase price was set at $510,000 by defendant based on an appraisal, without
any negotiation with plaintiff. To pay
this purchase price, defendant arranged loans for plaintiff from Chase Bank for
$357,000 and from GMAC for $102,000, for a total in loans of $459,000. Plaintiff was required to pay about $51,000
as a down payment to secure the loans, which defendant promised to pay back to
him within four or five days. In
exchange for paying the down payment up front, defendant agreed to raise
plaintiff’s fee from $1,500 to $3,000.
After the loans were secured, the seller’s closing statement, which
plaintiff did not receive, showed that the majority of the proceeds from the
sale went directly to pay certain lenders, defendant received $157,953, and a
$14,940 broker commission was paid to the Boulevard Equity Group.
Defendant
paid plaintiff the amount of his down payment and his $3,000 fee. In February 2007, defendant provided four
months of advance mortgage payments in the amount of $3,136 a month. In the following months, plaintiff received
sporadic payments from defendant to pay for the property’s mortgages. By October, plaintiff had exhausted the last
of the mortgage payment reserves provided by defendant. Meanwhile, defendant sold two of the other
four homes in the project.
In
late October 2007, plaintiff and defendant met to discuss the issues between
them. At the meeting, plaintiff learned
defendant had taken the property off the market and demanded defendant buy the
property back according to the terms of their agreement. Defendant declined to do so and suggested
several alternatives, none of which was acceptable to plaintiff.
In
the latter part of 2007, defendant presented plaintiff with two offers from
third parties to lease the property with an option to buy after six
months. Plaintiff rejected these
options. He testified that he had no
intention to rent the property. He had
been advised by a realtor that new and unlived-in homes carried a higher sales
value than homes that had previously been rented out and that it was difficult,
if not impossible, to evict a tenant in Oakland for the purpose of trying to
sell a property.
Plaintiff
paid the mortgage payments for November and December 2007 out of his own funds,
and met with defendant again in December 2007 to discuss defendant’s failure to
fulfill their agreement. In January
2008, defendant paid plaintiff $13,607.44 for payments made by plaintiff, but
did not supply a reserve of mortgage payments.
This was the last payment made by defendant to plaintiff. Plaintiff continued paying insurance premiums
and taxes on the property, but ceased making mortgage payments; he had lost his
job and could not afford to do so, and the house was “underwater.â€
In
February 2008, plaintiff filed his complaint.
He testified that he negotiated an agreement with GMAC that allowed him
to satisfy the full balance of his loan for $10,000 in cash. However, the other lender, Chase Bank, had
scheduled a foreclosure sale of the property to occur in late September 2009
(which was in the future at the time plaintiff testified).
At
trial, Zachary Epstein testified for plaintiff as a qualified expert in tax
issues and cancellation of debt. Epstein
testified that as a result of the negotiated disposition of the GMAC loan, he
projected that defendant would incur $37,355 in added income tax liability for
2008 based on the amount of debt cancelled by this disposition, which was
taxable as ordinary income. Epstein
further projected that as a result of the impending foreclosure sale by Chase
Bank, plaintiff would incur an additional $91,587 in added income tax liability
in 2009. He calculated this amount based
on the expected, taxable cancellation of the debt amount of $227,000, which was
the difference between the appraised value of the property, $130,000, and the
outstanding debt plaintiff owed on the loan, $357,000. In short, Epstein projected plaintiff’s total
income tax liability for 2008 and 2009 to be $128,942 as a result of
plaintiff’s involvement in the property.
On
cross examination, Epstein testified that, in his opinion, no exception to the
tax liability he projected would be incurred by plaintiff applied under the
circumstances. Epstein said that he had
found no evidence the property was used in a trade or business. He further testified that there had not been
an effort to rent, nor a renting, of the property.
Epstein
also testified that he considered plaintiff’s purchase of the property as
investment property. However, he was
unsure who would be entitled to reduce tax liability based on the resulting
capital loss, plaintiff or defendant. He
opined that, if plaintiff were able to do so, he would only be able to reduce
his tax liability by approximately $1,010.
Defendant
contended that his arrangement with plaintiff amounted to an unwritten lease
agreement and that money he paid to plaintiff was rental income. Defendant sought to have admitted a tax
document, referred to as a “1099,†related to his contention, which document he
said he had submitted to the Internal Revenue Service (IRS) after creating it
“in the last couple of weeks.†The trial
court refused to admit the evidence because of its late creation. The court subsequently admitted into evidence
the document at plaintiff’s counsel’s request for the limited purpose of
showing it had been created in the last couple of weeks.
Defendant
attempted to provide expert testimony
from a witness, James Shum. However,
upon objection from plaintiff’s counsel, the court ruled that Shum could not
testify as an expert witness because defendant had failed to designate him as
an expert witness at trial pursuant to Code of Civil Procedure section 12034;
however, the court allowed Shum to testify as a rebuttal witness regarding
Epstein’s testimony. Shum did not provide
any testimony that contradicted Epstein’s factual assertions.
Following
arguments, the court took the matter under submission and eventually issued
judgment in favor of plaintiff on breach of contract, breach of fiduciary duty,
and fraud.
Regarding
breach of contract, the court found that plaintiff and defendant had entered
into a contract for the purchase and re-sale of the property and that defendant
had breached this contract by failing to repurchase the property. As a result, plaintiff was entitled to
$17,850.56 for expenses he incurred to maintain the property, $37,355.00 in
increased tax liability for 2008, and $91,587.00 in increased tax liability for
2009, for a total of $146,792.56 in breach
of contract damages. The court also
found that Rene G. Boisvert Revocable Trust and 82nd Avenue LLC were liable for
these damages as well.
Regarding
breach of fiduciary duty, the court found that defendant “was and is a real
estate broker, as were the companies he wholly controlled, Rene G. Boisvert,
Inc., and Rene Guy Boisvert LLC,[
which did business under the name Boulevard Equity Group.†The court found that defendant and these
codefendants acted as brokers for plaintiff in his purchase of the property and
had a fiduciary duty to him that they breached by setting up a transaction that
was established to serve defendants’ purposes only, provided minimal benefit to
plaintiff, and exposed him to the very risks that ultimately occurred. The court further found that these defendants
knew or should have known, yet concealed from plaintiff, the risks involved,
and that they “concealed the fact that [defendant] was unable to live up to the
promises that were embodied in the contract entered into with plaintiff.†Furthermore, after completing the sale of the
property to plaintiff, defendants focused their efforts on selling two of the
other properties in the project rather than reselling plaintiff’s property,
which re-sale would reap no advantage to defendants. The court found defendants “put their own
ends above those of plaintiff, to whom they owed a
Furthermore,
the court found that defendants took a “secret profit†of $14,940 in the form
of a real estate commission, which was not disclosed to plaintiff. The court concluded this brokerage commission
caused damages to plaintiff because it “had the effect of inflating the
purchase price, and thus the loan obligation incurred by plaintiff.†As a result of these defendants’ breach of
fiduciary duty, the court found plaintiff was entitled to the $146,792.56 in
damages outlined in the court’s breach of contract findings, and to recover the
“secret profit†of $14,940, for a total of $161,732.56 in damages.
Regarding
fraud, the court found that defendant, on behalf of himself and as agent for
his co-cross-defendants, all of whom defendant completely controlled,
intentionally misrepresented that they could and would live up to their
obligations under the agreement between defendant and plaintiff, that he made
these misrepresentations to induce plaintiff into the agreement, that plaintiff
relied on them and that, as a result of defendant’s fraud, plaintiff was
entitled to the same amount of damages as those awarded for breach of fiduciary
duty, $161,732.56. The court declined to
award punitive damages.
Defendant
filed a timely notice of appeal. While this appeal was pending, defendant
moved to enlarge the record and/or for the matter to be remanded to the trial
court, alleging that plaintiff’s actual tax returns for 2008 and 2009 did not
reflect the tax liability that plaintiff contended at trial he would likely
incur. Plaintiff opposed the
motion. We denied the motion. Defendant then filed an opening brief which
nonetheless attached purported actual tax return information for
plaintiff. Plaintiff moved to strike
this opening brief, including because it cited to evidence not in the record,
which motion we granted. Defendant
subsequently filed an amended opening brief, which contains arguments that we
now consider.
Defendant
asserts five grounds for reversal of the judgment. We conclude none of them provides a basis for
any relief.
Defendant
first argues that the damages awarded to plaintiff for increased tax liability
in 2008 and 2009, totaling $128,942, were improper because they were not
certain. Specifically, he argues that
these damages were impermissibly speculative.
He also argues that allowing the judgment to stand “based on erroneous
hypothetical damages surely violates Due Process.â€
Defendant’s
arguments fail. He asserts that we are
to conduct a de novo review because he has raised questions of law. We fail to see an argument about legal error,
as opposed to one arguing that there was insufficient evidence of damages to
support the court’s judgment. As
plaintiff points out, we review such an appellate claim based on a substantial
evidence standard of review. (See, e.g.,
Parlour Enterprises, Inc. v. Kirin Group,
Inc. (2007) 152 Cal.App.4th 281, 287 [evaluating whether expert opinion on
future lost profits was substantial evidence].)
Regardless
of the nature of defendant’s argument, he does not establish any error of
law. Civil Code section 3300 provides
that, in the event of breach of contract, “the measure of damages,
except where otherwise expressly provided by this code, is the amount which
will compensate the party aggrieved for all the detriment proximately caused
thereby, or which, in the ordinary course of things, would be likely to result
therefrom.†(Civ. Code, § 3300.)
As both parties acknowledge, pursuant to Civil Code section 3301, “No
damages can be recovered for breach of contract which are not clearly
ascertainable in both their nature and origin.â€
(Civ. Code, § 3301.) As plaintiff
points out, “[d]amages may be awarded, in a judicial proceeding, for detriment
resulting after the commencement thereof, or certain to result in the
future.†(Civ. Code, § 3283.)
While
future loss must be shown to be “certain,†it has long been established that
this “requirement of certainty in respect to future damages . . . is satisfied
by a showing of reasonable certainty that substantial future damages will
result [citations], and the fact that the amount thereof may be difficult of
exact admeasurement, or subject to various possible contingencies, does not bar
a recovery.†(Noble v. Tweedy (1949) 90 Cal.App.2d 738, 745, cited in
Cal.App.2d 418, 435, Allen v. Gardner (1954)
126 Cal.App.2d 335, 341.) Furthermore,
plaintiff does not dispute that “ ‘ “damages which are speculative, remote,
imaginary, contingent, or merely possible cannot serve as a legal basis for
recovery.†’ †(Scott v. Pacific Gas & Electric Co. (1995) 11 Cal.4th 454,
473.)
Defendant
does not contend, nor establish, that the trial court’s rulings violated any of
this law, or the related law regarding damages cited by plaintiff in his
respondent’s brief.
Defendant
does argue that plaintiff’s income tax liability damages were special damages that cannot be awarded under
California law.
title="">[3] We are unpersuaded by his argument. As defendant alludes to by his quoting of
145 (Hadley), California follows the
common law rule established in English courts that a party, along with assuming
responsibility for general damages resulting from a breach of contract,
“assumes the risk of special damages liability for unusual losses arising from
special circumstances only if it was ‘advised of the facts concerning special
harm which might result’ from breach†of contract. (Lewis
Jorge Construction Management, Inc. v. Pomona Unified School Dist. (2004)
34 Cal.4th 960, 969.) However, defendant
ignores that it is also correct under California law that “[a]lternatively, the
nature of the contract or the circumstances in which it is made may compel the
inference that the defendant should have contemplated the fact that such loss
would be ‘the probable result’ of the defendant’s breach.†(Id.
at p. 970.)
Based
on Hadley, defendant contends that
plaintiff’s IRS liability was a special circumstance for which he is not liable
because it was not disclosed to him at the time the parties contracted. He states that “[t]he parties did not
contemplate any IRS losses when the contract was made. A simple reading of the contract shows the
parties specifically contemplated other expenses, losses, real estate taxes,
but not internal revenue taxes.â€
There
are several problems with defendant’s argument.
First, aside from his reference to Hadley,
he fails to cite any relevant legal authority, let alone California law, that
supports his argument. Second, he does
not provide record citations for his factual contentions. Therefore, we disregard his argument. (Stanley, supra, 10 Cal.4th at p. 793;
Even
if we were to consider defendant’s argument, he fails to show why, under the
circumstances, it cannot be reasonably inferred from the circumstances at the
time of contracting that plaintiff faced a risk of significant tax liability in
the event of defendant’s breach. Given
the nature of the parties’ agreement about the property, which includes a
reference to additional payments by defendant as required “to ensure that there
will be no tax-negative consequence to [plaintiff] for his participation in
this transaction,†the understanding that plaintiff’s purchase would be largely
financed by $459,000 in loans, and defendant’s own business experience, we see
no reason why he should not have contemplated that tax liability for plaintiff
would be a probable result of his breach.
Defendant
further contends that plaintiff and his witnesses engaged in “impermissible
speculation.†He bases this on citations
to the record indicating that “[p]laintiff’s expert [Epstein] stated he was
‘engaged to prepare actual tax returns’ and later stated he ‘prepared
[plaintiff’s] tax return for 2008.’ Further,
Epstein stated that the ‘tax return . . . will (not) be changed in any way
between now and October 15.†Defendant
does not explain why this establishes his claim of impermissible speculation.
On
the other hand, plaintiff contends there was substantial evidence at trial that
the damages awarded based on future tax liability were reasonably certain to
occur in the future. Epstein testified
as a qualified expert in tax issues that plaintiff would be liable for increased
tax in 2008 and 2009 as a result of his purchase of the property. Epstein testified specifically that whether
or not plaintiff chose to file his returns, the 2008 return reflected
plaintiff’s “actual tax liability†and the 2009 projections reflected the
actual “tax consequences†of the transaction.
We agree that this is substantial evidence supporting the court’s
findings.
In
short, were we to consider defendant’s argument, he gives us no legitimate
reason to question the court’s award of income tax liability damages in light
of Epstein’s testimony.
Defendant
also provides no legal authority (other than a citation to a United Supreme
Court case, which relevance he does not explain) or factual contentions for his
due process argument. Therefore, we
disregard it as well. (Stanley, supra, 10
Cal.4th at p. 793; Regents,
Strutt, supra, 28 Cal.App.3d at p. 873; Kim, supra, 17
Cal.App.4th at p. 979.)
Claim
Defendant
next argues that the judgment below is improper because the court improperly
delegated its duty to determine tax law to an unqualified expert, Epstein, and
that later events demonstrated that the expert used the wrong IRS codes and
regulations in his analysis. This
argument is also unpersuasive.
Defendant
presents a convoluted argument for which he provides few citations to legal
authority, and those he does provide are federal
law. He argues that the court
allowed “erroneous testimony to be presented regarding the application of the
[Internal Revenue Code] and regulations.
Thus the court, not applying the correct law to the facts, . . . came to
the conclusion that there was a future IRS liability.†However, defendant, although he places some portions
of his argument in quotations, does not cite to any relevant California legal
authority in his opening brief, or identify any specific errors in the record
made by the trial court, in support of his argument. Therefore, we disregard it. (Stanley, supra, 10 Cal.4th at p. 793;
relevance of the federal law that he cites to the facts and circumstances of
this case and, therefore, we disregard these arguments as well. (Strutt, supra,
28 Cal.App.3d at p. 873; Kim, supra, 17 Cal.App.4th at p. 979.)
Defendant
also argues that the trial court “erred in applying its interpretation of the
facts in this case but relegated this function as well as the application of
the law to the ‘expert’ witness.†Once
more, defendant does
not cite to any relevant California legal authority in his opening appellate
brief, or identify any specific errors in the record made by the trial court,
to support of his argument. Therefore,
we disregard it. (Stanley, supra, 10
Cal.4th at p. 793; Regents,
court decision without explaining how it applies to the present case and,
therefore, we disregard this portion of his argument as well. (Strutt, supra,
28 Cal.App.3d at p. 873; Kim, supra, 17 Cal.App.4th at p. 979.)
In
short, we find no
merit in defendant’s “delegation of duty†claim.
Defendant
next argues that plaintiff and his attorney intentionally defrauded the court
because “[p]laintiff and his attorney knew at the time of the trial that the
plaintiff may file actual returns showing no tax liability. They wanted to keep this option open during
the trial. The plaintiff did not file
the returns for 2008 although they were due prior to trial. The only reason to introduce the proposed
filings at trial was to establish an IRS liability and thus damages. Without this proposed liability there was no
case! [Defendant] verily asserts that
the plaintiff and his attorney together with their ‘expert’ knew or had reason
to know that the plaintiff’s actual returns might be different than those
introduced at trial.â€
Defendant’s
argument is unpersuasive. While he supports
it with a general discussion of the law regarding fraud on the court, he cites
to nothing in the record in support of his factual contentions. Therefore, we disregard his argument. (Regents,
supra, 122 Cal.App.4th at p. 826, fn.
1.) We note only that his
argument is obviously premised
on speculation in numerous respects, for which we have found no support in our
review of the record before us. Epstein
testified unequivocally that, regardless of what plaintiff chose to report on
his taxes, his projections reflected plaintiff’s “actual tax liability.†Defendant provides no evidence that this
testimony was fraudulent.
Defendant
also cites to California Rules of Court Rule 8.252(c) and Code of Civil
Procedure section 909 in a footnote, without further explanation. Therefore, we disregard these citations. (Strutt, supra,
28 Cal.App.3d at p. 873; Kim, supra, 17 Cal.App.4th at p. 979.)
In
short, we find no merit in defendant’s “fraud on the court†claim.
Defendant
next argues that plaintiff did not actually incur any damages because he has no
IRS tax liability, nor did plaintiff incur any loss for any profits defendant
might have received from the underlying transaction. Once more, his arguments are unpersuasive.
Defendant
makes no legal or factual assertions regarding plaintiff’s tax liability,
instead discussing the elements of fraud without explanation of their
relevance. Therefore, we disregard his
“no tax liability†argument. (Stanley, supra, 10
Cal.4th at p. 793; Regents,
Strutt, supra, 28 Cal.App.3d at p. 873; Kim, supra, 17
Cal.App.4th at p. 979.)
Defendant
also argues that plaintiff incurred no damages related to the “secret profitâ€
of $14,940 in brokerage commission found by the court. According to defendant, the mere fact that he
received this money did not establish loss or damages because, assuming the
court was correct that the commission had the effect of inflating the purchase
price, “there was no demonstrated loss.
Ergo, no damages. Plaintiff never
repaid, nor will he ever have to repay the money that came from the
mortgage. The plaintiff never put any of
his own money into the purchase of the home.
Where is the loss?â€
Defendant
does not support his argument in his opening
brief with citations to any evidence in the record or any case law showing
that the trial court erred. For this
reason alone, we disregard his argument.
(Regents, supra, 122 Cal.App.4th at p. 826, fn. 1; Stanley, supra, 10 Cal.4th at p. 793.)
Even
considering his argument, defendant ignores that one basis for the $14,940
damages award was that it was damages resulting from defendant’s breach of
fiduciary duty. As plaintiff points out,
there is case law indicating that such secret profit by a fiduciary should be
disgorged to the beneficiary. (See
1, 14-15 [an undisclosed commission on a sale of property, taken in breach of a
partnership agreement, had to be disgorged]; Bank of America v. Ryan (1962) 207 Cal.App.2d 698, 705-706 “
‘[w]here a fiduciary in violation of his duty to the beneficiary receives or
retains a bonus or commission or other profit, he holds what he receives upon a
constructive trust for the beneficiary,’ †requiring that a bank officer
disgorge a commission to the beneficiary].)
In light of this law, defendant fails to establish why his commission
was not a proper subject of damages for his breach of fiduciary duty.
In
his reply brief, defendant attaches a purported trial exhibit to his brief to
contend that plaintiff knew at the time he purchased the property that
Boulevard Equity Group was both the selling and buying broker of the
transaction and, therefore, its participation was not a secret. Even accepting for the sake of argument
defendant’s exhibit and representation, this hardly matters; it was the
commission, not the participation of any particular entity, that plaintiff testified
he knew nothing about.
In
short, we find no merit in defendant’s “no resulting damages†claim.
Finally,
defendant argues that plaintiff’s future income tax liability was not a proper
subject for damages because it was not specifically pleaded in plaintiff’s
complaint or first amended complaint, which prevented him from presenting his
own experts. This argument is also
unpersuasive for at least two reasons.
Again,
defendant cites case law that generally discusses rules about pleading without
attempting to relate any of it to the present case (for example, citing
1731, 1744 (discussing the need for pleadings to allege the cause of action
shown by the evidence against defendant at trial). He does not identify any legal authority that
supports his specific argument and, therefore, we disregard it. (Stanley, supra, 10 Cal.4th at p. 793; Strutt, supra, 28
Cal.App.3d at p. 873; Kim, supra, 17 Cal.App.4th at p. 979.)
Even
if we were to consider defendant’s argument, plaintiff alleged breach of
contract caused damages to him because he was not reimbursed for, among other
things, “tax and other payments [plaintiff] has made, and must continue to
make,†and that he was “further damaged in an amount in excess of $150,000, being
the difference between the current value of the property and the amount
plaintiff is liable for on the loans.â€
Defendant then prayed for compensatory damages in excess of $150,000 as
determined by proof, and for “any other relief which the court deems just and
proper.†Defendant fails to explain why
this language is insufficient.
Finally,
defendant raises numerous claims, issues, and arguments for the first time in
his reply brief, including that 82nd Avenue LLC should be the only party to the
judgment, that the other four parties should be excluded from the judgment,
that 82nd Avenue LLC would stipulate to a judgment for the actual loss
reflected in plaintiff’s actual tax returns, that the $10,000 plaintiff paid to
GMAC was an “elective payment†for which he should not be held liable, that he
is at a minimum due a $52,150 “credit†from plaintiff, and that plaintiff was
improperly awarded attorney fees because no document signed by the parties made
any mention of attorney fees.
We do
not consider any of the claims, issues, and arguments raised by defendant for
the first time in his reply brief.
“Points raised in the reply brief for the first time will not be
considered, unless good reason is shown for failure to present them
before. To withhold a point until the
closing brief deprives the plaintiff of the opportunity to answer it or
requires the effort and delay of an additional brief by permission. [Citation.]â€
(Campos v. Anderson, (1997) 57
Cal.App.4th 784, 794, fn.3). Defendant
does not provide any good cause for why he did not present these matters in his
opening brief. Therefore we can, and do,
disregard them.
The
judgment is affirmed. Defendant is
ordered to pay plaintiff costs of appeal.
_________________________
Lambden,
J.
We concur:
_________________________
Kline, P.J.
________________________
Richman, J.
amend the complaint to include a cause of action for fraud to conform to the
proof.
complaint to add Rene G. Boisvert LLC as a defendant.
