R.F.F. Family Partnership v. Seven Arts Pictures

Filed 7/14/10 R.F.F. Family Partnership v. Seven Arts Pictures CA2/1

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

APPEAL from a judgment of the Superior Court of Los Angeles County. Michael L. Stern, Judge. Affirmed in part, reversed in part and remanded with directions.

Peter M. Hoffman; Gipson Hoffman & Pancione and Gregory A. Fayer for Defendant and Appellant.

Parcells Law Firm and Dayton B. Parcells III for Plaintiff and Respondent.

__________________________________

Defendant Seven Arts Pictures Inc. (Seven Arts) appeals from a judgment awarding plaintiff R.F.F. Family Partnership, LP (RFF) damages, prejudgment interest and attorney fees under agreements related to a loan transaction. Seven Arts contends RFF did not prove that it was entitled to any monies from Seven Arts and the trial court, therefore, erred in denying its motion for nonsuit[1] and in entering judgment in favor of RFF. We agree with Seven Arts contention that RFF is not entitled to an award of attorney fees against Seven Arts. We also find that Seven Arts is liable for only a portion of the interest on the loan that was included in the judgment. We remand for recalculation of the interest as specified below. We reject Seven Arts additional contentions that the trial court committed reversible error in (1) admitting certain evidence, (2) denying relief from its waiver of jury trial, and (3) not issuing a statement of decision.

BACKGROUND

In 2006, defendant Seven Arts entered into four agreements with Pool Boy Movie LLC and Autopsy Movie LLC regarding the production and distribution of two motion pictures. These four agreements are collectively referred to as the Contracts. Seven Arts is the managing and controlling member of a business called New Moon Pictures, LLC (New Moon). New Moon is the manager of Pool Boy Movie LLC and Autopsy Movie LLC. Seven Arts President and counsel, Peter Hoffman, signed the Contracts on behalf of Seven Arts. The producer on the two motion pictures, Warren Zide, signed the Contracts on behalf of Pool Boy Movie LLC and Autopsy Movie LLC.

Under the Contracts, Zide agreed to produce the two motion pictures, and Seven Arts was responsible for arranging financing for the pictures and for distribution of the pictures in international territory. The production budgets for the pictures were to be mutually approved by Seven Arts anddepending on the movieby Pool Boy Movie LLC or Autopsy LLC. The Contracts listed a maximum production budget for each picture. With respect to Pool Boy, however, that budget was increased with Seven Arts approval before filming even began on the picture. The Contracts provided that Zides company, Ham and Eggs, Inc.,[2]would receive a producing fee for each picture.[3]The Contracts also addressed how revenues from the distribution of the pictures would be divided among the parties.

In or about February 2007, Zide sought to borrow $650,000 for purposes apparently not related to the two motion pictures. He contacted plaintiff RFF, a California licensed finance lender. Zide offered to assign to RFF his and Ham and Eggs rights in the Contracts described above in consideration for a loan. RFFs counsel, Dayton Parcells, informed Zide that it was not clear to RFF how Zide would be paid sufficient monies under the Contracts to repay the proposed loan amount ($650,000 plus interest). Zide told Parcells that Seven Arts would guarantee payment of the loan in exchange for Zide giving Seven Arts the first right to recoup the payments made from his shares of the revenues on the two motion pictures. Zide gave Parcells contact information for Peter Hoffman, Seven Arts president and counsel. When Parcells and Hoffman met to discuss the proposed loan transaction, Parcells informed Hoffman that RFF would only loan Zide the money if it was clear that Seven Arts would pay RFF the amount which would be due on the loan at the end of a six-month term ($750,000.) Based on Seven Arts representations, RFF agreed to loan Zide the money.

There were three documents executed on February 9, 2007 as part of the loan transaction. Zide and Ham and Eggs executed an agreement assigning their rights in the Contracts described above (the Assignment). Zide also signed a promissory note in the principal amount of $650,000 plus interest at the rate of 3.33 percent per month, computed and applied on the basis of a 360 day year, actual days elapsed [39.96 percent annually] (Promissory Note). All amounts under the Promissory Note were due by August 9, 2007. The total amount due at the end of the six-month term of the Promissory Note was $750,000.

On behalf of Seven Arts, Hoffman signed a document entitled Consent to Assignment (Consent), in which Seven Arts stated that it consents to the assignment to [RFF] of the [C]ontracts, and also made the following four representations:

(1) As of the date of this Consent to Assignment, no person or entity other than Assignors have accrued any lien, right, title or claim to the Contracts, and Assignors[] have not sold or assigned these rights to any other party. [] (2) As of the date of this Consent to Assignment, the Contracts are valid and fully collectible. [] (3) As of the date of this Consent to Assignment, none of the parties to the Contracts have claims against the amounts owed in the Contracts to Assignors by offset, counterclaim, or otherwise, and there are no other circumstances entitling the parties to the Contracts to refuse to pay the amounts owed or to be owed to Assignors. [] (4) Assignors will receive from Seven Arts Pictures Inc. by no later than August 9, 2007 the sum of no less than $750,000, and such payment(s) will be made directly to R.F.F. Family Partnership, LP.

In a February 9, 2007 e-mail to RFFs counsel (Parcells), Seven Arts counsel and president (Hoffman) confirmed that the three documents are acceptable to Seven Arts and also stated: We will agree that Mr. Zide will receive within the term of your note no less than $750,000, and we will work with him how this is to be applied.

On February 14, 2007, Hoffman, on behalf of Seven Arts, and Zide, on behalf of Ham and Eggs, executed a letter drafted by Hoffman, confirming the agreement we reached on Saturday, February 10, 2007, as part of the agreement of [Seven Arts] to guarantee certain sums to you [Zide] in connection with your personal financial transactions. The letter agreement addresses the reallocation of monies that otherwise would have been payable to Zide and his company from the revenues of the two motion pictures. RFF did not see this letter agreement before it prepared the loan documents, including the Consent.

By August 9, 2007, the amounts due under the Promissory Note had not been paid. Seven Arts and Zide informed RFF that they needed time to secure additional financing so that they could pay the obligation. In late August 2007, Seven Arts requested a six month extension of the obligation, and agreed to pay the interest that came due under the Promissory Note during that six month period. During an exchange of e-mails with RFF, Seven Arts mentioned that it believed it had defenses to payment of the obligation because one of the motion pictures (Pool Boy) went over budget which required the use of all the cash . . . raised on the picture. Seven Arts made some payments to cover the interest that accrued, at the interest rate set forth in the Promissory Note, but not enough to cover six months worth of interest payments.

On May 2, 2008, RFF filed this action, asserting one cause of action against Seven Arts for breach of obligation to pay money (the sixth cause of action). In support of its allegations against Seven Arts, RFF attached to the complaint and incorporated by reference the Consent and the February 9, 2007 e-mail from Hoffman to Parcells, referenced above. RFF also asserted several causes of action against Zide based on the Promissory Note.[4]

On March 2, 2009, RFFs action was called for a bench trial. Neither Zide nor Ham and Eggs appeared at trial. The court entered default against these two defendants. The trial proceeded on RFFs cause of action against Seven Arts. At the close of RFFs case, Seven Arts made a motion for nonsuit (a motion for judgment in a court trial), which the trial court denied after oral argument from the parties. In the defense case, Seven Arts sought to prove that it did not owe Zide any monies under the Contracts that were assigned to RFF and, therefore, was not obligated to pay RFF the $750,000 referenced in the Consent.

On March 3, 2009, the trial concluded and the matter was submitted. After trial, RFF submitted declarations and exhibits in support of its application for default judgment against Zide and Ham and Eggs.

On March 30, 2009, the trial court issued a minute order with its ruling on the bench trial. The court stated that it found in favor of RFF and against Seven Arts in the sum of $1,237,875.00; prejudgment interest in the sum of $524,613.99, and attorneys fees in the sum of $32,052.50 for a total amount of judgment in the sum of $1,269,927.50. Although RFFs complaint alleged that Seven Arts owed interest on the $750,000 obligation at the legal rate, RFF argued at trial, and the trial court concluded, that Seven Arts owed interest at the rate set forth in the Promissory Note (nearly 40 percent).

Also on March 30, the court entered judgment, which was both a judgment by default against Zide and Ham and Eggs, and a judgment after court trial against Seven Arts. The court indicated on the judgment that it found the three defendants jointly and severally liable for the same amounts: $1,237,875.00 in damages; $524,613.99 in prejudgment interest; and $32,052.50 in attorney fees, for a total judgment of $1,269,927.50.[5]

Neither party requested a statement of decision prior to the submission of the matter for decision. After the trial court issued its minute order and entered judgment against Seven Arts, Seven Arts requested a statement of decision on April 8, 2009. Seven Arts filed its notice of appeal on April 30, 2009. The trial court did not issue a statement of decision.[6]

After Seven Arts appealed, it petitioned this court for a writ of supersedeas staying enforcement of the judgment. We granted the petition.

DISCUSSION

I. Sufficiency of the Evidence

RFF asserted one cause of action in its complaint against Seven Arts. The complaint alleged that there was an account stated between Seven Arts and Zide/Ham and Eggs and the account balance of $750,000 was stated to be due to Warren Zide and Ham & Eggs, Inc. on or before August 9, 2007. Zide and Ham and Eggs assigned the account and indebtedness, as well as their rights in the motion picture Contracts, to RFF. The complaint further alleged: On or about February 9, 2007, Defendant Seven Arts Pictures Inc. was given notice of the assignment, consented to the assignment, and agreed to pay directly to [RFF] the sum of $750,000 on or before August 9, 2007. Seven Arts did not pay, and [t]here is now due, owing, and unpaid from [Seven Arts] to [RFF] the sum of $750,000, together with interest thereon at the legal rate from August 9, 2007. RFF attached to the complaint and incorporated by reference the Consent and the February 9, 2007 e-mail from Seven Arts counsel to RFFs counsel, describing the agreement that had been reached between the parties.

RFF called its cause of action against Seven Arts breach of obligation to pay money. While the cause of action may not have been artfully pleaded, it is clear what RFF was alleging: Seven Arts agreed to pay RFF $750,000 as reflected in the Consent and the February 9 e-mail. The underlying basis of this agreement was the motion picture Contracts between Seven Arts and Zide and the assignment to RFF of Zide and Ham and Eggs rights in those Contracts. Seven Arts breached its agreement to pay the $750,000, and RFF was damaged. This is a breach of contract cause of action, as RFF argued below in opposition to Seven Arts motion for judgment. The agreement is based on multiple contracts and writings (the Consent, the motion picture Contracts, the February 9 e-mail),[7] not one integrated contract.

One of Seven Arts contentions on appeal is that RFF failed to prove an account stated. As the trial court concluded, RFFs cause of action against Seven Arts is not for account stated.[8] In alleging an account stated, RFF was alleging that Seven Arts owed Zide $750,000 under the contracts, and this debt was the basis for Seven Arts agreement to pay RFF $750,000 as repayment of Zides loan from RFF. RFF did not allege that there was an account stated between Seven Arts and RFF.[9]

Having concluded that RFF stated a cause of action, we now review whether RFF proved that cause of action. Seven Arts contends that the trial court erred in denying its motion for nonsuit because RFF failed to prove its case. We review the trial courts ruling on a motion for judgmentthe appropriate title of the motion made in this caseunder the same standard as we review the judgment. The substantial evidence standard applies to both. We view the evidence most favorably to the respondent[] and uphold the judgment if there is any substantial evidence to support it. (Pettus v. Cole (1996) 49 Cal.App.4th 402, 424-425.)

To prove its cause of action against Seven Arts, RFF presented evidence supporting the following facts: As consideration for a loan from RFF, Zide offered to assign to RFF his and Ham and Eggs rights in the Contracts. RFF reviewed the Contracts and could not determine how Zide would earn enough money under those Contracts to repay the loan. Zide told RFF that Seven Arts would guarantee repayment of the loan in exchange for Zides agreement to take less of the proceeds from the motion pictures. RFF informed Seven Arts that it would not loan Zide the money unless it was clear that Seven Arts would pay RFF the amount which would be due on the loan at the end of a six-month term ($750,000.)

The Contracts provided that RFF would receive a producing fee for each motion picture as well as proceeds from the pictures. The March 2007 budgets for the movie Pool Boy included an $850,000 producing fee to Zide. Seven Arts indicated that Zide and Ham and Eggs interest in the Contracts was at least $750,000. In approving the loan transaction documents, including the Consent, Seven Arts confirmed in the February 9 e‑mail to RFF: We will agree that Mr. Zide will receive within the term of your note no less than $750,000, and we will work with him how this is to be applied. The parties signed the loan transaction documents, including the Consent.

By August 9, 2007, Seven Arts had not paid any part of the $750,000. Seven Arts negotiated a six-month extension of its obligation and agreed to pay all interest which came due on the Promissory Note during that period. Seven Arts made some payments to cover the interest that accrued, but not enough to cover six months worth of interest payments.

Seven Arts objected to the admission of certain written correspondence between Seven Arts and RFF, dated after August 9, 2007 (trial exhibits 7, 8 & 9), on grounds that it constituted settlement discussions. The trial court overruled the objections, concluding, these are negotiations regarding further terms, they are not settlement discussions. Seven Arts contends that the trial court committed reversible error in admitting this evidence. We disagree.

Evidence Code section 1152, subdivision (a), provides: Evidence that a person has, in compromise or from humanitarian motives, furnished or offered or promised to furnish money or any other thing, act, or service to another who has sustained or will sustain or claims that he or she has sustained or will sustain loss or damage, as well as any conduct or statements made in negotiation thereof, is inadmissible to prove his or her liability for the loss or damage or any part of it. Although Seven Arts alluded to its defenses in this correspondence, the evidence presented by RFF demonstrates that Seven Arts was not seeking a compromise on its $750,000 obligation. Seven Arts was seeking a six-month extension to pay that obligation. In negotiating the extension, Seven Arts agreed to additional terms: it would pay all interest due under the Promissory Note during that period.And Seven Arts, in fact, made some interest payments under that agreement.[10] We find no abuse of discretion in the admission of exhibits 7 and 8. (Dart Industries, Inc. v. Commercial Union Ins. Co. (2002) 28 Cal.4th 1059, 1078 [[A]n appellate court reviews any ruling by a trial court as to the admissibility of evidence for abuse of discretion].)[11]

Based on the foregoing, RFF presented substantial evidence establishing that it had an agreement with Seven Arts, Seven Arts breached that agreement and RFF was damaged. Thus, the trial court properly denied Seven Arts motion for judgment (erroneously brought as a motion for nonsuit).

The trial court then heard evidence on Seven Arts defense that it did not owe Zide any monies under the Contracts, and therefore did not owe RFF any amount under the Consent. We agree with Seven Arts contention that it did not waive its defenses under the Consent. The Contracts were executory bilateral contracts, not fully performed by Zide or Seven Arts at the time the Consent was executed. RFF took the assignment of the Contracts subject to Seven Arts defenses in the event Zide breached the Contracts. (See Bliss v. California Cooperative Producers (1947) 30 Cal.2d 240, 250.) The language of the Consent is consistent with these general principles in that Seven Arts represented in the Consent that: As of the date of this Consent to Assignment, none of the parties to the Contracts have claims against the amounts owed on the Contracts to Assignors by offset, counterclaim, or otherwise, and there are no other circumstances entitling the parties to the Contracts to refuse to pay the amounts owed or to be owed to Assignors. (Italics added.) Seven Arts did not waive the defense that Zide might not perform under the Contracts.

Seven Arts sought to prove that Zide breached the Contracts by causing the production of the motion picture Pool Boy to exceed the budget. Seven Arts presented evidence that it was required to secure additional financing and use some of its own money for production of the picture. Seven Arts did not establish how much of its own money it used. It is not clear based on the face of the Contracts, or the testimony of witnesses, that Zide would not be entitled to any moneyeither in producing fees or proceeds from distribution of the pictureif the picture went over budget. Moreover, evidence was presented indicating that Seven Arts, as well as others who were not under Zides control, also bore responsibility for ensuring that the picture stayed within budget. After hearing RFFs and Seven Arts evidence, the trial court found that Seven Arts did not prove its affirmative defense. The court entered judgment in favor of RFF. We have no basis to disturb the trial courts finding on Seven Arts affirmative defense.

Substantial evidence supports the trial courts finding that Seven Arts was liable for breach of the agreement between RFF and Seven Arts. We conclude, however, that Seven Arts is not liable for all of the amounts listed in the judgment, as explained below.

II. The Judgment

Seven Arts attacks the judgment on several grounds. First, Seven Arts asserts that the trial court entered a default judgment against it. Not so. The judgment clearly indicates that it is both a default judgment (against Zide and Ham and Eggs) and a judgment after court trial (against Seven Arts).

Seven Arts also challenges the finding of joint and several liability. As discussed above, substantial evidence supports Seven Arts liability for the $750,000 due by August 9, 2007, as well as some of the interest due under the Promissory Note after that date. Zide also is responsible for these amounts under the Promissory Note he signed.

Seven Arts does not owe all of the interest that the trial court awarded, however. The trial court found Seven Arts liable for all interest due under the Promissory Note at the rate of nearly 40 percent. As set forth above, Seven Arts negotiated a six-month extension of payment on the $750,000 obligation. In exchange, Seven Arts agreed to pay interest due under the Promissory Note during that six-month period (August 9, 2007 through February 8, 2007). It did not agree to pay interest under the Promissory Note after that period. Seven Arts is not a party to the Promissory Note. Prejudgment interest from February 9, 2007 forward should have been charged at the legal rate. We remand for the trial court to recalculate these interest amounts.

Moreover, RFF did not present any evidence demonstrating that Seven Arts is obligated to pay RFFs attorney fees. The only agreement which includes an attorney fee clause is the Promissory Note. Seven Arts did not sign this agreement or otherwise agree that it would be bound by the attorney fee clause. Accordingly, we order the trial court to strike the award of attorney fees, as to Seven Arts only.[12]

III. Waiver of Jury Trial

Seven Arts contends the judgment must be reversed because the trial court denied [Seven Arts]s right to jury trial. Seven Arts waived its right to jury trial, as explained below. The issue on appeal is whether the trial court abused its discretion in denying Seven Arts request for relief from its waiver of jury trial. We find no abuse of discretion.

Under Code of Civil Procedure section 631, a party waives its right to jury trial if it fails to deposit jury fees with the court 25 calendar days before the date initially set for trial. (Code Civ. Proc., 631, subds. (b) & (d)(5).) Here, Seven Arts filed its Civil Deposit form on February 6, 2009, only 17 days before the date set for trial (February 23).[13]At the final status conference on February 17, the trial court found that jury fees were not deposited timely, and the matter would be heard by the court.

A trial court may exercise its discretion upon just terms to relieve a party of its waiver of the right to jury trial. (Code Civ. Proc., 631, subd. (e).) On February 20, Seven Arts filed a motion for trial by jury despite late filing of jury fees, to be heard on the first day of trial. Thereafter, Seven Arts filed an ex parte application for an order shortening time on the motion. Seven Arts counsel claimed that an inadvertent error in counsels office was the cause of the late payment. Seven Arts also asserted: There is no conceivable prejudice to Plaintiff by a jury trial since Plaintiffs request for a jury trial was announced in open court at the time of the first continuance and the work between Plaintiff and Seven Arts regarding the jury instructions and the statement of the case was completed to the maximum extent possible and filed by February 2, 2009 as requested by the Court. As the Court is aware, both Plaintiff and Seven Arts requested and had expected a continuance of trial in this matter, and at such continuance, Plaintiff fully expected a trial would be by jury.

RFF opposed the ex parte application. RFF argued, among other things, that it would suffer prejudice if the trial court granted the requested relief: Plaintiff has prepared for a bench trial. Plaintiff and the Court and Counsel have not reviewed and argued Defendants proposed jury instructions, which consist of all special jury instructions and no CACI instructions. Plaintiff has prepared this case for presentation before the Court and not a jury. The parties updated the witness list and abbreviated the testimony of all witnesses in light of the fact that this case would be tried to the Court. Plaintiff has not prepared blow ups of exhibit [sic] or slide presentations in anticipation of this case being tried to the Court and not to a jury.

The trial court denied the ex parte application. The minute order does not state the reason for the denial. The record does not include a transcript from the proceedings on the ex parte application.

Seven Arts relies on Massie v. AAR Western Skyways, Inc. (1992) 4 Cal.App.4th 405 (Massie) in support of its claim of error. There, the Court of Appeal stated: The court abuses its discretion in denying relief where there has been no prejudice to the other party or to the court from an inadvertent waiver. [Citations.] The prejudice which must be shown from granting relief from the waiver is prejudice from the granting of relief and not prejudice from jury trial. [Citation.] [Citation.] (Id. at p. 411.)

Below, RFF argued that it would suffer prejudice if the trial court granted Seven Arts ex parte application. RFF stated that it had prepared for a bench trial. We can appreciate that preparation for a court trial and preparation for a jury trial can be very different, and that there are usually additional tasks and expenses that go into preparation for a jury trial. Although Seven Arts asserted that it had made its request for a jury trial known in a timely manner, the first indication in the record on appeal of Seven Arts desire for a jury trial is the jury instructions it filed on February 2, 2009. Seven Arts already had waived its right to jury trial on January 29 by failing to deposit jury fees.

Based on the record before us and RFFs showing of prejudice, we cannot find that the trial court abused its discretion in denying Seven Arts relief from its waiver of its right to jury trial.[14]

IV. Statement of Decision

Seven Arts contends that the trial court erred in not issuing a statement of decision. Seven Arts has not demonstrated error.

The trial court issued its minute order on the bench trial and entered judgment on March 30, 2009. On April 8, 2009, Seven Arts filed its request for statement of decision. On April 15, 2009, RFF filed its opposition to Seven Arts request. On April 30, 2009, before the trial court had ruled on Seven Arts request, Seven Arts filed this appeal.

Seven Arts asserts that the trial court ordered RFF to prepare a statement of decision and RFF refused. The record does not support Seven Arts characterization of what occurred. The clerks transcript does not include the order to which Seven Arts refers or any other documents related to its request for statement of decision, other than those referenced above. The order is not reflected on the Civil Case Summary included in the clerks transcript.

In connection with its Petition for Writ of Supersedeas, however, Seven Arts submitted a minute order, dated May 1, 2009, the day after Seven Arts filed its notice of appeal. The order stated that RFF should prepare a proposed statement of decision and that Seven Arts should serve RFF with notice of the order. The order indicates that it was served only on Seven Arts. There is no indication that Seven Arts ever gave RFF proper notice of this order. Presumably, Seven Arts did not follow through because it already had filed its notice of appeal.

Seven Arts cannot demonstrate that the trial court erred in not issuing a statement of decision. Seven Arts frustrated the trial courts ability to issue a statement of decision.

DISPOSITION

The judgment is reversed and the cause remanded for recalculation of the interest Seven Arts owes on the $750,000 obligation, to be calculated in the following manner: from August 9, 2007 through February 8, 2008, interest at the rate set forth in the February 9, 2007 Promissory Note between Zide and RFF; from February 9, 2008 forward, interest at the legal rate. The award of attorney fees is stricken, as to Seven Arts only. In all other respects, the judgment is affirmed. Each side is to bear its own costs on appeal.

NOT TO BE PUBLISHED.

CHANEY, J.

We concur:

MALLANO, P. J.

JOHNSON, J.

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[1]Seven Arts made a motion for nonsuit at the close of RFFs case, which the trial court denied. This was a court trial. A motion for nonsuit is appropriate in a court trial only at the close of the plaintiffs opening statement. (Code Civ. Proc., 581c, subd. (a); Lingenfelter v. County of Fresno (2007) 154 Cal.App.4th 198, 208.) A motion made at the close of the plaintiffs evidence in a court trial is a motion for judgment, as RFF pointed out to the trial court. (Code Civ. Proc., 631.8, subd. (a).)

[2]Throughout the record, this company is referred to as both Ham and Eggs, Inc and Ham & Eggs, Inc. For consistency, we will refer to the company as Ham and Eggs, as it was referred to in the earliest agreements between the parties.

[3]Budgets prepared in March 2007 for the motion picture Pool Boy, included a producing fee for Zide in the amount of $850,000.

[4]The complaint also includes several causes of action against Zide and Ham and Eggs, based on a December 12, 2007 promissory note that those defendants allegedly signed. That promissory note was not admitted into evidence or otherwise put at issue in the trial against Seven Arts.

[5]It appears that the $524,613.99 in prejudgment interest is included in the $1,237,875.00 damages total. The total judgment amount equals the damages plus the attorney fees. Seven Arts does not challenge the computation of the amounts in the judgment or mention these figures at all. The focus of Seven Arts appeal is its contention that it does not owe RFF any amount. Assuming that this court were to affirm the trial courts finding that Seven Arts owes money to RFF, Seven Arts does not ask this court to calculate the amounts differently.

[6]In the absence of a statement of decision, the appellate court will presume that the trial court made all factual findings necessary to support the judgment for which substantial evidence exists in the record. (Slavin v. Borinstein (1994) 25 Cal.App.4th 713, 718.)

[7]At trial, RFF claimed that it was a third party beneficiary under the February 14, 2007 letter agreement in which Seven Arts and Zide restructured their arrangement concerning the allocation of proceeds from the motion pictures in exchange for Seven Arts agreement to guarantee the payment on the loan. RFF did not allege this theory in its complaint and we need not address it here, given our conclusion that RFF proved its breach of contract cause of action based on the agreement between RFF and Seven Arts.

[8]In denying Seven Arts motion for judgment, the trial court did not state what particular cause of action it believed RFF had stated, although it found that the cause of action was adequately pleaded. It did state, however, that it believed the cause of action was not account stated. We agree.

[9]Nor did RFF assert a cause of action against Seven Arts for promissory fraud. Seven Arts contends that the trial court should have entered judgment in its favor because RFF failed to prove promissory fraud. Given our conclusion that RFF stated and proved its breach of contract cause of action, we need not address this issue.

[10]Even after the six-month extension period, Seven Arts continued to tell RFF that it was trying to come up with the money to pay RFF all amounts due under the Promissory Note, including interest.

[11]We find that the trial court erred in admitting exhibit 9. This series of e-mails between Hoffman and Parcells was sent less than a month before RFF filed this action and concerns negotiations to avoid a lawsuit. The error is harmless.

[12]RFF claims that Seven Arts guaranteed that it would pay all amounts due under the Promissory Note in the February 14, 2007 letter agreement between Seven Arts and Zide. We disagree with RFFs interpretation of the February 14 letter. As set forth above, that letter agreement addresses the reallocation of monies that otherwise would have been payable to Zide and his company from the revenues of the two motion pictures. Although Seven Arts stated in that letter that it agreed to guarantee certain sums to you [Zide] in connection with your personal financial transactions, Seven Arts did not state that it agreed to be bound by all terms of the Promissory Note between RFF and Zide, including 40 percent interest and attorney fees.

[13]The form indicates that the fees were paid on February 9, 2009.

[14]Seven Arts claims that the trial court was required to make a specific finding of prejudice on the record, and its failure to do so is reversible error. Seven Arts has not cited any authority for this proposition. In Massie, the only case cited by Seven Arts, the Court of Appeal reviewed the record to determine whether there had been a showing of prejudice. The court reversed, not because the trial court failed to make a finding of prejudice, but because nothing in the record suggest[ed] granting Massie relief from the jury waiver would prejudice AAR, among other grounds. (Massie, supra, 4 Cal.App.4th at p. 412.)