Bova v. Wicks
Filed 1/6/14 Bova v. Wicks
CA2/8
OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a),
prohibits courts and parties from citing or relying on opinions not certified
for publication or ordered published, except as specified by rule
8.1115(b). This opinion has not been
certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
ANTHONY BOVA
et al.,
Plaintiffs and Respondents,
v.
MATTHEW WICKS
et al.,
Defendants and Appellants.
B243064
(Los
Angeles County
Super. Ct. No.
NC054922)
APPEAL
from a judgment of the Superior Court of
Los Angeles County. Douglas M.
Haigh, Commissioner. Affirmed.
Corcovelos
Law Group and Thomas C. Corcovelos, for Defendants and Appellants.
Law
Offices of Lottie Cohen and Lottie Cohen, for Plaintiffs and Respondents.
____________________________
Anthony Bova and Lorinda LeBlanc (plaintiffs)
filed suit against Matthew and Chi Wicks (defendants). Plaintiffs alleged defendants failed to
disclose material facts when selling plaintiffs a duplex. Following a
against defendants. On appeal, defendants
contend substantial evidence did not
support the judgment. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
The
record on appeal does not include a reporter’s transcript or settled statement. Our summary of facts is taken from the
court’s statement of decision. (
Cal.App.4th 510, 512.)
In
2007, plaintiffs became interested in a property in Long Beach that was
advertised on a real estate website. The
advertisement listed the property as a duplex with 2,038 square feet of actual
living space, “plus a 650 sq. ft. (approx.) bonus room with ¾ bathroom (all
permitted by seller.)†Plaintiffs
reviewed the multiple listing service (MLS) information which contained
identical language. The MLS listed rents for three units on the
property, including $600 in rent from the bonus room. In reliance on the income figures in the MLS,
plaintiffs bought the property. During escrow,
plaintiffs did not ask if the bonus room was a lawful rental unit. However defendants knew, at least by the time
of escrow, that the bonus room permit (1954 permit) explicitly stated the room
was not to be used for residential purposes.
After plaintiffs purchased the property the existing tenant in the bonus
room stayed for several years.
In
2009, a power outage in the bonus room led to plaintiffs’ first in-person
encounter with defendants. A comment defendants
made about work in the kitchen not being permitted made plaintiffs wonder about
other aspects of the property. Plaintiffs
hired a contractor to complete a thorough inspection
of the property. The contractor
concluded the wiring in the kitchen was completed without a permit; certain
structural changes in the kitchen had no permit; there were many problems with
wiring in the building; and the bonus room was not permitted as a residential
unit.
This was the first time plaintiffs learned the bonus room was not a
lawful rental unit. Plaintiffs retained
a lawyer and eventually filed suit. Plaintiffs’
complaint alleged causes of action for breach of contract, fraud, and failure
to provide full transfer disclosure in violation of
The court conducted a bench trial in October
2011. There was no court reporter. Defendants testified they did not tell plaintiffs
whether the bonus room was, or was not, a lawful rental unit. Defendants listed the bonus room rental
income on the MLS, but also stated the property was a duplex, not a triplex. Defendants also testified they gave a copy of
the 1954 permit to their realtor. Defendants
testified that although they knew the bonus room was not a legal rental unit, they
thought identifying the property as a duplex was sufficient. They also told their broker the bonus room was
a “bootleg†unit. Defendants contended
they disclosed to plaintiffs that certain kitchen work in the kitchen was done
without permits. They also claimed the structural
repairs took place before defendants purchased the building. They argued various documents notified plaintiffs
it was their responsibility to investigate permits and zoning issues regarding
the property.
The court issued
a proposed statement of decision, to which Defendants filed “objections to
omissions and ambiguities.â€
name="_ftnref1" title="">[1] Defendants argued the
proposed statement of decision failed to resolve several controverted issues
“through ambiguity or omission.†They
asserted the court’s finding that there was non-disclosure of the illegality of
the bonus room as a rental unit was ambiguous because the court did not
explicitly reconcile numerous facts.
These facts included that the 1954 permit was a public record; defendants
gave the 1954 permit to their broker; “plaintiffs were advised to review a copy
of the bonus room permit through escrowâ€; plaintiffs did not ask for the 1954
permit and did not obtain a copy; Anthony Bova was a licensed real estate
agent; the property was listed as a duplex; and plaintiffs waived all contingencies,
including permit issues. Based on these
same facts, defendants asserted the court’s finding of a misrepresentation with
respect to the legality of the bonus room as a rental unit was ambiguous; the
finding of fraud was ambiguous; and the finding of reasonable reliance was
ambiguous. Defendants also asserted the
damages findings were ambiguous because they did not reconcile the additional
facts that plaintiffs made only a 5 percent down payment on the property; the
closing price was increased to provide plaintiffs a credit back for closing
costs; and the property was appraised at $910,000 “showing no damage.â€
The trial court considered
defendants’ objections and issued a final statement of decision. The court rejected plaintiffs’ claims based
on the lack of permits for structural repairs in the kitchen and the kitchen
wiring. But the trial court found defendants
did not disclose that the bonus room was not a legal dwelling unit, and the
issue was material. It found there
was no credible evidence that the 1954 permit was ever given to plaintiffs
during escrow. The court further found
that “[w]hile the sellers never expressly represented that the back unit was a
legal (or illegal) residence, the implication was clear from the MLS and the
conduct of the sellers that it was, and that was false. [Civil Code section] 1102.7 calls for honesty
in disclosure. Sellers failed in that
obligation.â€
The court thus
concluded: “The court finds that the failure of the sellers to reveal in an
unambiguous manner the fact that the back unit was not a lawful residence
constituted a failure to disclose a material fact affecting the desirability
and marketability of the property. The
evidence is virtually uncontradicted that the income flow from that unit was a
major factor in leading the plaintiffs to purchase the building, and had they
known that they were not allowed to rent the back unit, they may well not have
bought the property in the first place.
Their reliance on defendants’ non-disclosure constitutes a violation of
[Civil Code section] 1102 and constitutes fraud.â€
The court
rejected plaintiffs’ theories for the calculation of damages, which were based
on the percentage of illegal bedrooms or square footage. The court also found there was insufficient
evidence to support damages based on cost of repair. It noted there was insufficient evidence
to determine whether the bonus room could be a legal unit even if plaintiffs
fixed all permit issues and brought the unit up to code. The court instead concluded the potential
income stream from the property was a major factor in plaintiffs’ decision to
buy, and 16 percent of that income was attributable to rent from the bonus
room. The court reduced the “sales priceâ€
by 16 percent, then subtracted from that number the bonus room rents received
from the date of the sale until the tenant left in 2010. Total damages based on this calculation amounted
to $118,576. The court also awarded
plaintiffs $2,500 in punitive damages.
DISCUSSION
I. The
Incomplete Record is Fatal to This Appeal
Our review in
this case is necessarily limited by the absence of a reporter’s
transcript. All of defendants’ arguments
concern an alleged lack of substantial evidence to support the trial court’s
findings. However, “[w]here no reporter’s
transcript has been provided and no error is apparent on the face of the
existing appellate record, the judgment must be conclusively presumed
correct as to all evidentiary matters. To put it another way, it is
presumed that the unreported trial testimony would demonstrate the absence of
error. [Citation.] The effect of this rule is that an appellant
who attacks a judgment but supplies no reporter’s transcript will be precluded
from raising an argument as to the sufficiency of the evidence.†(Estate
of Fain (1999) 75 Cal.App.4th 973, 992, italics in original.)
Defendants
contend there was no substantial evidence they did not honestly prepare the
Transfer Disclosure Statement, thus there was no evidence to support the trial
court’s findings of breach of contract, fraud, or a violation of Civil Code
section 1102.7. Defendants also argue
there was no substantial evidence of misrepresentation because any misreading
of the MLS was “not credible†and the MLS “contradicts the Trial Court’s
finding that Defendants fostered an inference that the bonus room was legally
permitted for rental occupancy.†Defendants
assert there was no evidence of intent to defraud, and no “credible evidenceâ€
of justifiable reliance. This last
argument is supported mainly by references to documentary evidence, which defendants
claim establishes plaintiffs could not have reasonably relied on any
representations contrary to the documents. As to damages, defendants do not argue the
trial court’s method of calculating damages was incorrect, or assert any other
argument presenting a purely legal question.
Instead, they contend only that there was no substantial evidence of
contract damages or fraud damages because there was no evidence the market
value of the property was less than the purchase price.
We must reject
all of these arguments. With or without
a record of the oral proceedings we would reject arguments that evidence was
not substantial because it was not credible.
On appeal, we do not reweigh the evidence, make our own factual
inferences that contradict those of the trial court, or second guess the trial
court’s credibility determinations. (
(2013) 218 Cal.App.4th 602, 613.)
Further, in the
absence of a reporter’s transcript, or agreed or settled statement, it is
conclusively presumed that substantial evidence supported the trial court’s
findings. (Ehrler v. Ehrler (1981) 126 Cal.App.3d 147, 154 (
contradicted plaintiffs’ claims, but none of it was dispositive on the relevant
issues in this case as a matter of law.
argue the trial court failed to consider the evidence, we must disagree. We presume the trial court carried out its
duties as the finder of fact. It was not
required to address in the statement of decision all factual issues the parties
raised. (Muzquiz v. City of Emeryville (2000) 79 Cal.App.4th 1106,
1124-1125 [statement of decision need not address all legal and factual issues
raised by the parties; it need only state the grounds upon which the judgment
rests without necessarily specifying the evidence considered in reaching the
decision].)
Moreover, the
court explicitly resolved many of the conflicting factual issues defendants
raised. For example, the court
acknowledged defendants testified they offered the 1954 permit to their realtor,
and defendants’ broker had the 1954 permit.
The court also recognized that defendants argued several documents
placed a duty on the plaintiffs to investigate permits and zoning issues. Yet, the court explicitly concluded there was
“no credible evidence that the 1954 permit . . . was ever given to the buyers
during escrow.†It concluded that even
though defendants never explicitly told plaintiffs the bonus room was permitted
for residential occupancy, their conduct and statements constituted a failure
to disclose a material fact affecting the property. Defendants’ claim that the trial court failed
to resolve conflicting evidence is inaccurate.
Defendants do
not argue the trial court’s findings are insufficient to support the judgment,
or that the findings are incorrect as a matter of law and the error is apparent
on the face of the existing appellate record.
They argue only that insufficient evidence supported the findings, which
implicates portions of the record we do not have. (Ehrler, supra,
126 Cal.App.3d at p. 154 [“‘on a clerk’s transcript appeal the appellate
court must conclusively presume that the evidence is ample to sustain the
findings, and that the only questions presented are as to the sufficiency of
the pleadings and whether the findings support the judgment’â€].) The documentary evidence defendants have
presented is only one portion of the evidence.
When determining whether substantial evidence supports a judgment after
trial, we are not limited to the evidence cited in the trial court’s statement
of decision. Indeed, this court must
consider the entire record. (
Cal.App.4th 43, 49-50.) We cannot conduct
a meaningful substantial evidence review when all of the testimonial evidence is missing. (Foust
v. San Jose Construction Co., Inc. (2011) 198 Cal.App.4th 181, 186-188.)
It is the
appellant’s burden to present an adequate record for review. Defendants have failed to do so. We presume the unreported trial testimony
would demonstrate the absence of error.
(Estate of Fain, supra, 75
Cal.App.4th at p. 992.) Since
defendants’ only argument is that substantial evidence did not support the
trial court’s findings we must affirm the judgment. (Oliveira
v. Kiesler (2012) 206 Cal.App.4th 1349, 1362.)
DISPOSITION
The
judgment is affirmed. Respondents shall
recover their costs and attorney fees on appeal. (Starpoint
Properties, LLC v. Namvar (2011) 201 Cal.App.4th 1101, 1111.)
BIGELOW,
P. J.
We concur:
RUBIN,
J.
GRIMES, J.
name="_ftn1" title="">[1] The proposed statement of decision is not included in the
record.
the trial court erred in calculating damages as a matter of law. To the extent defendants’ contention was
intended to differ from those asserted in the appellate briefing, we note that
we need not consider arguments raised for the first time at oral argument. (In re
Estate of McDaniel (2008) 161 Cal.App.4th 458, 463.)
