Opinion
E043366
2-11-2009
EVELYN LA BAW, Individually and as Trustee, etc., Plaintiff and Respondent, v. CAMERON CAMPBELL, Defendant and Appellant.
Leon E. Campbell for Defendant and Appellant. McQuaid, Bedford & Van Zandt and Lyman D. Bedford for Plaintiff and Respondent.
Not to be Published in Official Reports
Plaintiff and Respondent Evelyn La Baw (Evelyn) and her now deceased husband, Henry La Baw (Henry) sold their family-owned farm to Dawne Carsen (Carsen). As part of the escrow instructions, the La Baws agreed, rather than be paid directly with a lump sum, to have money put into a client trust account managed by defendant and appellant Cameron Campbell (Campbell). The La Baws were to receive monthly payments and a final balloon payment totaling $243,950, plus interest. The La Baws received 17 payments; the payments then abruptly stopped. They were advised by Campbell that the trust account funds had been transferred to a Swiss bank account and that he was having trouble getting back the money from overseas due to the enactment of the United States Patriot Act. The La Baws never received the remaining $99,450, plus interest, owed to them for the sale of their home.
At a jury trial, the jury rendered a verdict against Campbell on the causes of action of intentional misrepresentation, negligent misrepresentation, conversion, and financial elder abuse. They awarded Evelyn $99,450 in compensatory damages and $100,000 in punitive damages.
Campbell makes the following claims:
1. The trial court erred by refusing to stay the instant civil action until after Campbell was tried in a federal criminal case.
2. The trial court erroneously admitted prior deposition testimony that was given before Campbell had been charged in the criminal case and at which he did not invoke his Fifth Amendment privilege.
Campbell also raises an issue that he did not breach any attorney/client relationship with the La Baws. Evelyn agrees there was no attorney/client relationship.
3. Insufficient evidence supports the verdicts of intentional misrepresentation, negligent misrepresentation, conversion, and financial elder abuse.
4. The verdicts of intentional and negligent misrepresentation are inconsistent and should be reversed.
5. There was no substantial evidence to support the compensatory damages awarded by the jury.
6. No punitive damages should have been awarded.
7. The punitive damages awarded were excessive.
We conclude that the verdicts of intentional and negligent misrepresentation are inconsistent and require reversal. Further, the punitive damages awarded were excessive. We remand for retrial on these issues. In all other respects, we affirm the judgment.
I
FACTUAL AND PROCEDURAL BACKGROUND
In 2000, 79-year-old Evelyn and her husband, Henry, decided to sell their farm located at 9465 Oak Glen Road in Beaumont, California. They sold their farm to Carsen.
On or about May 7, 2000, the La Baws received a letter from Campbell. The letter advised the La Baws that Campbell had been retained by the Brixon Group (Brixon) to serve as custodian of sums to be held in his attorney-client trust account on behalf of Brixon. It also advised that Carsen had contracted through Brixon to commit loan proceeds to a Brixon group account. Campbell advised the La Baws that he had been instructed (not saying by whom) to make payments to them from that account in the amount of $8,500 per month for 24 months, plus interest. A balloon payment of $96,000 would be sent at the end of the 24 months, plus interest. Campbell admitted that he had never seen a contract between Brixon and Carsen regarding this arrangement and did not know if one existed.
The La Baws thereafter signed escrow instructions directing the sale proceeds to be wired to the Campbell client trust account. The La Baws received a promissory note from Carsen in the amount of $300,000, in which the payments were detailed as set forth in Campbells letter.
On or about May 26, 2000, $243,950 was transferred into Campbells client trust account. Campbell made 17 payments of $8,500 to the La Baws, the last one made on March 1, 2002. The La Baws were informed by Carsen and Campbell both orally and in writing that the payments would be forthcoming. No further payments were made. In 2002, Henry died.
In April 2003, Campbell sent a letter to Evelyns attorney, Michael Arnold, informing him that the "La Baws[] $300,000" was included in a distribution from "the trust account . . . held with First Zurich Credit in Frankfurt, Germany . . . ." Campbell indicated that due to the United States Patriot Act it was difficult to get the funds into the United States. It was anticipated that the funds would be released by the end of April 2003. However, the letter stated, "[T]he funds are protected and are coming back to the La Baws." Campbell had never informed Evelyn that the funds transferred to his client trust account were invested overseas and did not seek permission to transfer the remaining funds overseas.
On February 28, 2006, Evelyn, as an individual and as the trustee of the La Baw Family Living Trust, filed a second amended complaint against Carsen, Campbell, RE/MAX Advantage (RE/MAX), and Brixon. It alleged causes of action for breach of promissory note (Carsen only), breach of fiduciary duty (RE/MAX only), negligence (RE/MAX only), constructive fraud (RE/MAX only), fraud — intentional misrepresentation (Carsen, Campbell, and RE/MAX), fraud — negligent misrepresentation (Carsen, Campbell, and RE/MAX), conversion (Campbell only), constructive trust (Campbell only), financial abuse of an elder (Carsen and Campbell), and elder abuse (Carsen and Campbell).
The La Baws had hired a realtor from RE/MAX to sell their house.
Campbell filed an answer. The remaining parties defaulted. Campbell filed a motion for a stay of the civil proceedings against him pending resolution of a federal criminal proceeding, which was denied. At trial, Campbell invoked his Fifth Amendment right not to incriminate himself, and a portion of his prior deposition testimony was read to the jury.
In his defense, Campbell presented an expert who testified regarding the effect of the United States Patriot Act on the transfer of funds to the United States. Transfers were halted in order to ensure compliance with the Patriot Act. In particular, transfers of money from outside the United States through an agent or attorney would be given special attention and could be delayed.
The jury rendered a verdict against Campbell on the causes of action of intentional misrepresentation, negligent misrepresentation, conversion, and financial elder abuse. They awarded $99,450 in compensatory damages and $100,000 in punitive damages.
Campbell filed a motion for new trial. He claimed that he did not receive a fair trial due to the trial courts refusal to allow a continuance and the jury being made aware that defendant was claiming the Fifth Amendment privilege not to testify. He claimed there was insufficient evidence of conversion because the La Baws were not rightful owners of the loan proceeds. He also claimed the findings of intentional and negligent misrepresentation were inconsistent. The financial elder abuse and punitive damages must be reversed if the other charges are reversed as no financial tort would exist to support the charges. Furthermore, the punitive damages were excessive. The motion for new trial was denied.
II
DENIAL OF MOTION TO STAY CIVIL PROCEEDINGS
Campbell claims that the trial court erroneously denied Campbells request to stay the instant civil action pending a criminal action filed against him for conspiracy and wire fraud in federal court involving different parties.
A. Additional Factual and Procedural Background
On September 29, 2006, Campbell filed "Defendant Cameron Campbells Notice of Motion and Motion for Stay of Civil Proceedings Gainst [sic] Cameron Campbell Pending Resolution of Criminal Proceedings." Pursuant to that motion, Campbell advised the court that in May 2006 a "secret" federal indictment was brought against Campbell, Joseph Wayne McCool, and Donald Manning, charging them with conspiracy and wire fraud based on their involvement in Brixon. Campbell alleged that many of the "same facts and conduct" in the civil case were at issue in the pending criminal case. Even though the La Baws were not part of the criminal proceedings, the material facts and defenses are the same as the criminal matter. Relying upon Pacers Inc. v. Superior Court (1984) 162 Cal.App.3d 686 (Pacers ), Campbell alleged that to allow the civil trial to continue would violate defendants Fifth Amendment rights, as he had been advised by his criminal counsel to refuse to testify at the civil trial.
Evelyn filed opposition and contended that her suit was not related to the criminal action in any fashion. She contended that the civil and criminal actions involved different parties and subject matter. She also argued that a stay was not in the interests of justice, as she was 85 years old and suffering from Alzheimers disease, making a speedy civil trial necessary.
At the hearing on the matter, the trial court indicated that it had read Pacers and the criminal indictment. The trial court tentatively ruled that there was no sufficient evidence that the criminal case and the civil case arose out of "the same or closely enough related set of facts to justify staying the civil case." Campbell responded that he would have limited opportunity to defend against the civil case because of the jeopardy it imposes upon him in the criminal matter. The criminal action involved European investments; the victims were advised they would receive large gains on their investment but received nothing. The trial court noted that there was no evidence here that Evelyn was even told she was investing in Europe. Campbell himself advised her in a letter that he was holding the loan proceeds in his attorney-client trust account. The trial court could not see how his right to a defense could possibly be impacted.
The trial court found that the two cases did not arise out of the same set of facts and denied the motion. It stated that it was on its 10th criminal trial and was sitting on this civil case because the other criminal law judges were too busy. Further, given Evelyns age, the trial court wanted the case to go forward.
At the next hearing on December 5, 2006, Leon Campbell associated as counsel and asked for a continuance due to deficiencies in the pretrial proceedings. The trial court indicated that it had negotiated hard to get a civil case and wanted to get the case tried. It also stated, "When I get a chance to slip a civil case in, I need to do it." The motion to continue was denied.
In Campbells motion for new trial, he claimed that the trial court erred by denying the continuance. Campbell argued that the jury was motivated to convict him because he invoked the Fifth Amendment privilege. The motion was denied.
B. Analysis
It is well settled that the privilege against self-incrimination may be invoked not only by a criminal defendant, but also by parties or witnesses in a civil action. (Segretti v. State Bar (1976) 15 Cal.3d 878, 886.) However, while the privilege of a criminal defendant is absolute, in a civil case a witness or party may be required either to waive the privilege or accept the civil consequences of silence if he or she does exercise it. (Brown v. United States (1958) 356 U.S. 148, 155-156 [78 S.Ct. 622, 2 L.Ed.2d 589].)
Although the privilege against self-incrimination is one of constitutional magnitude (U.S. Const., 5th Amend.; Cal. Const., art. I, § 15), a party to parallel civil and criminal proceedings does not have a constitutional right to stay the civil matter in order to preserve the privilege in the criminal matter. (Avant! Corp. v. Superior Court (2000) 79 Cal.App.4th 876, 882, 885 (Avant!); see People v. Coleman (1975) 13 Cal.3d 867, 884-885.) In the absence of substantial prejudice, related civil and criminal cases ordinarily may progress in parallel despite any difficulties this may pose for a defendant in the exercise of the privilege against self-incrimination. (Coleman, at p. 885; Fuller v. Superior Court (2001) 87 Cal.App.4th 299, 305-306.)
In exercising its discretion to stay the civil proceedings, a trial court should consider the extent to which the privilege against self-incrimination would be impaired, the degree of prejudice to the party in defending parallel proceedings, the interest of the plaintiff in expeditious litigation, and the courts interest in managing its docket. (Avant!, supra, 79 Cal.App.4th at p. 885; see also Gov. Code, § 68607.)
Initially, Campbell completely failed to show how the criminal and civil proceedings were related in order to justify staying the civil action. The charges in the cases were different and involved completely different parties. This is not akin to the situation in Pacers where the same conduct resulted in both civil and criminal actions. (Pacers, supra, 162 Cal.App.3d at p. 687.) The La Baws were not named in the criminal action, and the transaction was significantly different.
Although Campbell makes general claims that he was unable to explain the relationship with Brixon and Carsen at trial, he freely testified at the deposition. He admitted that he never witnessed an agreement between Brixon and Carsen. He has not established how he would have testified differently had the civil trial been stayed until after the criminal prosecution. It was his obligation to establish the actual burdens that concurrent prosecutions presented; we are not obliged to accept his representations of a burden on their face. (See Fuller, supra, 87 Cal.App.4th at p. 305.)
Campbell also claims that the delay would have been for three months. There clearly is no support for such a statement. The indictment had only recently been filed. There is no indication in the record that the criminal trial would be completed in a three-month period. The privilege issues could persist until a conviction and, should he choose, the resolution of an appeal. (People v. Fonseca (1995) 36 Cal.App.4th 631, 634-635.) It was unreasonable under the circumstances here to put the civil case on hold for a period of potentially years. (Fuller, supra, 87 Cal.App.4th at p. 309.)
In his reply brief, Campbell claims that any testimony used during trial, had he testified, would be used against him in the criminal proceeding. However, by the time of trial, Campbell had already testified at the deposition. Presumably, that deposition testimony could be admitted at the criminal trial. Campbell has not identified any additional testimony that he would have presented at trial that may have incriminated him further.
Further weighing against issuing a stay in this case was the interest of the court system in the efficient management of its dockets. (Fuller, supra, 87 Cal.App.4th at p. 306 ["courts are guided by the strong principle that any elapsed time other than that reasonably required for pleadings and discovery `is unacceptable and should be eliminated"]; Avant!, supra, 79 Cal.App.4th at p. 888.) The court explained that it had conducted numerous criminal trials and that it needed to proceed on a civil case. This was a reasonable consideration in choosing not to stay the civil proceeding.
Finally, Evelyns age was certainly a proper factor to consider in choosing to have the civil trial proceed. (Avant!, supra, 79 Cal.App.4th at p. 887 [interest of plaintiff in expeditious litigation is proper factor in denying stay]) Evelyns son explained that he was paying a large amount of money for Evelyns care. Certainly, resolution of the instant case could help to take care of her.
We cannot conclude based on the record before us that the trial court erred by refusing to stay the civil trial until resolution of the federal criminal case against Campbell.
III
ADMISSION OF DEPOSITION TESTIMONY
Campbell contends that the trial court erred by allowing Evelyn to introduce his deposition testimony in support of her case, which was given prior to the criminal indictment and at which he did not invoke his Fifth Amendment privilege.
A. Additional Factual and Procedural Background
Prior to trial, the trial court agreed that if Campbell invoked his Fifth Amendment privilege, Evelyn could introduce the pertinent parts of Campbells deposition testimony. It believed that, as to any questions posed at the deposition, the deposition testimony could be introduced. Any other questions did not have to be answered by Campbell. It concluded that if Campbell had answered the question once, it did not "see how answering it again would increase his chance of prosecution [in the criminal trial]." It agreed to instruct the jury that they could not be prejudiced against Campbell for invoking the Fifth Amendment privilege.
The trial court reiterated its ruling right before testimony by Campbell: "I found he is not entitled to assert the Fifth Amendment, because hes already answered it. He waived the Fifth Amendment by answering it, and hes not subjected to any more criminal prosecution by saying the same thing twice, as he is from saying it once."
Campbell testified and would not answer any questions other than his name and that he was an attorney and questions regarding his financial status. His deposition testimony as to the following matters was therefore read to the jury: He admitted that he sent the letter to the La Baws dated May 7, 2000; Brixon had been his client but was no longer his client because it was no longer in existence; Carsen was not his client; Campbell believed that $243,950 was transferred to the Campbell Client Trust Account in 2000 that was to be used to pay the La Baws; he made payments to the La Baws starting in 2000 and through December 2001; he stopped making payments because Brixon advised him to stop; Campbell believed that the remaining funds were frozen in a Swiss bank account; all of the money that was remaining in the trust account of the La Baws went to the Swiss bank; the La Baws did not know about the transfer and were not advised their remaining funds were overseas; Campbell never saw a contract between Carsen and Brixon; Campbell wrote the letter to Evelyns attorney dated April 15, 2003; and Campbell had never spoken with the La Baws.
The trial court instructed the jury, "Mr. Campbell has exercised his legal right not to testify concerning certain matters. Do not draw any conclusions from the exercise of this right or let it affect any of your decisions in this case. A party may exercise this right freely and without fear of penalty." The jury was also instructed with Judicial Council of California Civil Jury Instructions (CACI) No. 208, that "[d]uring the trial, you heard testimony read from a deposition. A deposition is the testimony of a person taken before trial. At a deposition, the person is sworn to tell the truth and is questioned by the attorneys. [¶] You must consider the deposition testimony that was read to you in the same way as you consider testimony given in court."
B. Analysis
Code of Civil Procedure section 2025.620 provides, "At the trial or any other hearing in the action, any part or all of a deposition may be used against any party who was present or represented at the taking of the deposition . . . ." Subdivision (b) of that section allows for the admission of a partys deposition at trial regardless of whether the deponent is available to testify at trial.
Campbell has provided no authority to support his claim that when a party invokes his or her Fifth Amendment privilege at trial, prior deposition testimony must also be excluded. We cannot find any such authority. (See Wright v. City of Los Angeles (2001) 93 Cal.App.4th 683, 689 ["[g]enerally, asserted grounds for appeal that are unsupported by any citation to authority and that merely complain of error without presenting a coherent legal argument are deemed abandoned and unworthy of discussion"].)
Moreover, this situation is akin to a defendant who answers questions during a pretrial interview with police but then invokes his or her Fifth Amendment right at trial. Under Evidence Code section 1230, a witnesss pretrial statement may be introduced at trial when the witness chooses to exercise the privilege against self-incrimination because the witness is then deemed unavailable. (People v. Cudjo (1993) 6 Cal.4th 585, 607.) We see no difference in the admission of deposition testimony at trial when the witness decides to invoke the privilege against self-incrimination. The admission of deposition testimony is even less restrictive than pretrial statements in a criminal matter. Campbell has provided this court with absolutely no authority for his claim that the deposition testimony should have been excluded; therefore, we reject his claim.
Furthermore, Campbell, an attorney, would certainly be on notice at the time that he gave his deposition testimony (for a case in which he was being sued for conversion and fraud) that he might be subject to criminal liability based on the charges in this case alone. He chose to go forward and answer the questions posed at the deposition. He cannot claim he was unaware of his right to refuse to answer the questions as possibly incriminating. Based on the foregoing, Campbells deposition testimony was properly admitted.
IV
INCONSISTENT VERDICTS FOR INTENTIONAL AND NEGLIGENT MISREPRESENTATION
Campbell contends that the verdicts for intentional and negligent misrepresentation are inconsistent and must be reversed.
A. Additional Procedural and Factual Background
The second amended complaint alleged causes of action for intentional and negligent misrepresentation. The jury was instructed identically on both those causes of action except for the intent required. As to the intent for intentional misrepresentation, the jury was instructed with CACI No. 1900, which required a finding that a false representation was made and that Campbell "knew that the representation was false when he made it, or that he made the representation recklessly and without regard for its truth." As for negligent misrepresentation, the jury was instructed with CACI No. 1903, that again a false representation was made but that Campbells intent in making the false representation was he had no "reasonable ground for believing the representation was true when he made it."
At trial, Evelyns counsel argued that in reliance on the letter from Campbell that the money would be safely placed in his trust account, the La Baws agreed to the deal to take payments. Such representation was false and supported both intentional and negligent misrepresentation. Campbell knew this statement was false when he made it or he made it without regard for its truth because he had never seen a contract between Carsen and Brixon. Campbell countered that there were absolutely no false representations in the letter to the La Baws.
Campbell brought a motion for new trial on the ground that the verdicts for both intentional and negligent misrepresentation were inconsistent. He claimed the verdicts must be reversed because they were completely irreconcilable. The trial court denied the motion, indicating it was unaware of any authority requiring reversal of one of the verdicts. There was substantial evidence of intentional misrepresentation.
B. Analysis
Initially, we must determine whether a finding of intentional and negligent misrepresentation based on the same evidence constitutes an inconsistent verdict. We believe it does.
The elements of intentional misrepresentation, or actual fraud, are "`(1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to defraud (i.e., to induce reliance); (4) justifiable reliance; and (5) resulting damage. [Citation.] [Citation.]" (Anderson v. Deloitte & Touche (1997) 56 Cal.App.4th 1468, 1474; see also Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184-185.) "The elements of negligent misrepresentation are similar to intentional fraud except for the requirement of scienter; in a claim for negligent misrepresentation, the plaintiff need not allege the defendant made an intentionally false statement, but simply one as to which he or she lacked any reasonable ground for believing the statement to be true." (Charnay, at p. 184.)
On appeal, as in the trial court, Evelyn relies on the same evidence (the letter sent by Campbell that he would keep their money safe in his trust account and the fact that Campbell had not seen an agreement between Brixon and Carsen) to support both the intentional and negligent misrepresentation verdicts. However, Evelyn claims that a representation made "recklessly and without regard for its truth" and a representation where "defendant had no reasonable grounds for believing the representation was true" are equivalent and therefore are not inconsistent. We disagree.
It is has been held that "false representations made recklessly and without regard for their truth in order to induce action by another are the equivalent of misrepresentations knowingly and intentionally uttered." (Yellow Creek Logging Corp. v. Dare (1963) 216 Cal.App.2d 50, 55.) Further, "[n]egligence on the part of the plaintiff in failing to discover the falsity of a statement is no defense when the misrepresentation was intentional rather than negligent." (Seeger v. Odell (1941) 18 Cal.2d 409, 414.)
Although there is case law supporting that both intentional and negligent misrepresentation may be alleged in the same action (see Wilhelm v. Pray, Price, Williams & Russell (1986) 186 Cal.App.3d 1324, 1333, fn. 4), there is no support (and Evelyn provides none) that both causes of action can be found true based on the same evidence. Each requires a different intent, and Campbell could not have possessed the intention to defraud Evelyn at the same time as he acted negligently in defrauding her. As such, the verdicts are inconsistent.
"Inconsistent verdicts are `"against the law," and the proper remedy is a new trial." (Shaw v. Hughes Aircraft Co. (2000) 83 Cal.App.4th 1336, 1344.) A verdict is also against the law where the findings are so ambiguous and uncertain that they are incapable of being reconciled and it is impossible to ascertain how a material issue is decided. (Bray v. Rosen (1959) 167 Cal.App.2d 680, 683.)
"Where there is an inconsistency between or among answers within a special verdict, both or all the questions are equally against the law." (City of San Diego v. D.R. Horton San Diego Holding Co., Inc. (2005) 126 Cal.App.4th 668, 682 (Horton).) "The appellate court is not permitted to choose between inconsistent answers." (Id. at p. 682.) A fact finder may not make inconsistent determinations of fact based on the same evidence because if a correct determination of such issues is necessary to sustain the judgment, the inconsistency is reversible error. (Ibid.)
Since both of the findings of intentional and negligent misrepresentation are equal, we cannot choose which verdict should stand, and the proper disposition is to remand the matter for a new trial on these two causes of action. On retrial (should the La Baws choose to purse the claims), the causes of action should be presented to the jury as alternatives to one another.
V
INSUFFICIENCY CLAIMS
Campbell essentially claims that the verdicts on each of the causes of action — intentional and negligent misrepresentation, conversion, and financial elder abuse — and the compensatory damages were not supported by the evidence. However, since we concluded, ante, that the verdicts of intentional and negligent misrepresentation are inconsistent and must be reversed on that ground, we need not address whether the evidence was sufficient to support those verdicts. Assuming the evidence was sufficient, reversal of both verdicts would be required regardless of the evidence supporting the counts. As such, we only address the sufficiency of the evidence of the causes of action for conversion and financial elder abuse and the compensatory damages.
A. Standard of Review
"In reviewing the sufficiency of the evidence, this court is guided by well-settled principles. `[T]he power of the appellate court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted, to support the trial courts findings. [Citations.] `We must therefore view the evidence in the light most favorable to the prevailing party, giving [him] the benefit of every reasonable inference and resolving all conflicts in [his] favor . . . . [Citation.]" (Estate of Leslie (1984) 37 Cal.3d 186, 201, quoting Crawford v. Southern Pacific Co. (1935) 3 Cal.2d 427, 429 (Crawford).) "When two or more inferences can be reasonably deduced from the facts, the reviewing court is without power to substitute its deductions for those of the trial court. [Citations.]" (Crawford, at p. 429.)
B. Conversion
A cause of action for conversion requires "(1) the plaintiffs ownership or right to possession of the property; (2) the defendants conversion by a wrongful act or disposition of property rights; and (3) damages." (Burlesci v. Peterson (1998) 68 Cal.App.4th 1062, 1066; see also Oakdale Village Group v. Fong (1996) 43 Cal.App.4th 539, 543-544.)
At trial, the jury was instructed on conversion as follows: "La Baw claims that Campbell wrongfully exercised control over her personal property. To establish this claim — and this is the conversion cause of action — La Baw must prove all of the following: [¶] 1. That La Baw owned funds; [¶] 2. That Campbell intentionally prevented La Baw from having access to the funds for a significant period of time; [¶] 3. La Baw did not consent; [¶] 4. That La Baw was harmed; and [¶] 5. That Campbells conduct was a substantial factor in causing La Baws harm."
Evelyn argued at trial that it was clear she owned the funds in the trust account and that Campbell had kept the funds without her consent. Campbell argued that the funds did not belong to Evelyn, but rather to Brixon or Carsen. His sole claim on appeal is that there was insufficient evidence that Evelyn owned the funds in the trust account.
We agree with Evelyn that, based on the letter sent by Campbell to Evelyns attorney on April 15, 2003, Campbell himself believed that the money in the trust account belonged to her. Furthermore, there is absolutely no evidence to support that there was an agreement between Carsen and Brixon regarding the money, only Campbells representation that he was being authorized by Brixon to hold it in his trust account. He himself had not seen an agreement. It was simply his word that he was being advised by Brixon and Carsen regarding the funds. The jury reasonably could conclude the money in the trust account, which was now past due, was owed to Evelyn.
Additionally, the promissory note itself contemplates the payments out of the trust account to pay Evelyn for the sale of the property, and Campbell agreed to make such payments. It is undisputed that the payments stopped and that the balloon payment was never made. The evidence supports that Evelyn was entitled to this money and that Campbell never paid it to her. While it is difficult to understand why the La Baws agreed to this deal and why there was no interest paid, it is clear that at the time the lawsuit was filed, based on the promissory note, Evelyn had an interest in the money held in the Campbell account.
Since the jury could reasonably believe that the money belonged to Evelyn, it could also reasonably infer that Campbell had converted the funds Evelyn had a right to possess.
C. Financial Elder Abuse
Campbell claims that, since there was no evidence of intentional and negligent misrepresentation and conversion, there is nothing to support the jurys verdict of financial elder abuse. However, we have concluded that there was sufficient evidence of conversion.
Under the Elder Abuse and Dependent Adult Civil Protection Act, "`[f]inancial abuse of an elder . . . occurs when a person or entity . . . [¶] . . . [t]akes, secretes, appropriates, or retains real or personal property of an elder or dependent adult to a wrongful use or with intent to defraud, or both." (Welf. & Inst. Code, § 15610.30, subd. (a)(1).)
Based on our conclusion that Campbell was guilty of conversion and the undisputed evidence that Evelyn was an elder, there was substantial evidence of financial elder abuse.
D. Compensatory Damages
Campbell also claims there was insufficient evidence presented to support the compensatory damages of $99,450.
Although not mentioned in the respondents brief, we believe that Campbell cannot attack the sufficiency of the evidence of compensatory damages for the first time on appeal when he inexplicably failed to raise the issue in his motion for new trial. The California Supreme Court case of Schroeder v. Auto Driveway Co. (1974) 11 Cal.3d 908 is directly on point. It found that, despite the fact that this constitutes a sufficiency of the evidence claim that ordinarily cannot be waived since the issue of compensatory damages is best determined by the trial court, the failure to raise the issue below waives it on appeal. (Id. at pp. 918-919.) As such, any claim would not be reviewable on appeal.
Moreover, if we were to address Campbells claim, we would find his argument inadequate and based on pure speculation. The only argument presented by Campbell is that he had no duty to pay any money to Evelyn, including the remaining money owed in payments and the balloon payment, which totaled $99,450. However, as set forth, ante, in discussing the sufficiency of the evidence of conversion, there was substantial evidence that Campbell agreed to pay this amount to Evelyn, that he himself believed that the money belonged to Evelyn, and that he never returned it. The evidence supported the compensatory damages.
VI
PUNITIVE DAMAGES
Campbell makes two related claims that punitive damages could not be awarded and also that they were excessive based on his inability to pay.
The only evidence presented in regard to punitive damages was through Campbell himself. Campbell testified that his wife owned their home through her familys company. Campbell also stated that he had $3,000 in checking, and $1,000 in savings. He owned $6,800 in stocks. He owned a Toyota pickup. He had a solo law practice. Campbell claimed he owed more than he owned.
Civil Code section 3294, subdivision (a) provides: "In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant." Punitive damages are intended to punish wrongdoing and may not exceed an amount necessary to meet this goal. (Adams v. Murakami (1991) 54 Cal.3d 105, 110.) Punitive damages are appropriate for intentional torts, such as conversion. (Lackner v. North (2006) 135 Cal.App.4th 1188, 1212.)
Campbells claim that punitive damages could not be awarded is based on his assumption that he committed no tort against Evelyn. However, as found, ante, the verdicts of conversion and financial abuse of an elder were supported by the evidence. We have also concluded that the compensatory damages were properly imposed. As such, the jury was entitled to impose punitive damages.
The jury was instructed that punitive damages only applied to intentional misrepresentation and conversion.
The question remains whether the punitive damages assessed were excessive. "Because the important question is whether the punitive damages will have the deterrent effect without being excessive, an award that is reasonable in light of the first two factors . . . may nevertheless `be so disproportionate to the defendants ability to pay that the award is excessive for that reason alone. [Citation.]" (Rufo v. Simpson (2001) 86 Cal.App.4th 573, 620.) Therefore, a showing of a defendants financial condition, in addition to information about the nature of the defendants misconduct and the amount of the compensatory damage award, is essential in making this determination. (Adams v. Murakami, supra, 54 Cal.3d at p. 110.) The plaintiff has the burden of producing evidence of the defendants financial condition. (Id. at p. 123.)
In Kenly v. Ukegawa (1993) 16 Cal.App.4th 49, the court held, "We are convinced that in most cases there must be evidence of the defendants net worth in order to support the punitive damage award. An award based solely on the alleged `profit gained by the defendant, in the absence of evidence of net worth, raises the potential of its crippling or destroying the defendant, focusing as it does solely on the assets side of the balance sheet without examining the liabilities side of the balance sheet. Without evidence of the entire financial picture, an award based on `profit could leave a defendant devoid of assets with which to pay his other liabilities." (Id. at p. 57, fn. omitted; see also Baxter v. Peterson (2007) 150 Cal.App.4th 673, 692 ["although the record shows that Peterson owns substantial assets, it is silent with respect to her liabilities. The record is thus insufficient for a reviewing court to evaluate Petersons ability to pay $75,000 in punitive damages"].)
Here, there was little evidence presented regarding Campbells net worth. In fact, the only evidence presented was that he did not own his house, he owned a car, and he had a law practice. He indicated that he did have about $10,000 in cash and stocks but also stated that his debts exceeded his assets. There is no evidence of his liabilities. What Evelyn fails to recognize is that it was her burden to prove defendants net worth, and she presented no evidence that defendant had any net worth. Although she argues the jury could reasonably assume that defendant would make money in his law practice, there simply is no evidence that he would continue to practice or his current worth.
Based on the only evidence before this court, an award of $ 100,000 in punitive damages is excessive based on the fact that Campbells financial condition was not in evidence. Since Evelyn had a "`full and fair opportunity to present [her] case for punitive damages," no retrial on the damages is compulsory. (Baxter, supra, 150 Cal.App.4th at p. 681; Kelly v. Haag (2006) 145 Cal.App.4th 910, 919-920.) We therefore reverse the punitive damages award as excessive.
VII
DISPOSITION
We reverse the findings of the jury on the causes of action of intentional and negligent misrepresentation and remand for a new trial on those causes of action (should Evelyn choose to pursue them) but note that these causes of action should be presented to the jury in an alternative manner. We also conclude the punitive damages award was excessive and reverse. In all other respects, we affirm the judgment.
Plaintiff shall recover her costs on appeal.
We concur:
McKINSTER, Acting P.J.
MILLER, J.