Opinion
G055665
08-27-2018
BEST 4U, INC., et al., Petitioners, v. THE SUPERIOR COURT OF ORANGE COUNTY, Respondent; SHADFAR TORANJI et al., Real Parties in Interest.
Thomas E. Elenbaas for Petitioners. No appearance for Respondent. Commerce Law Group and Sassan MacKay for Real Parties in Interest.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2014-00740285) OPINION Original proceedings; petition for a writ of mandate to challenge an order of the Superior Court of Orange County, David R. Chaffee, Judge. Petition denied and remanded with directions. Thomas E. Elenbaas for Petitioners. No appearance for Respondent. Commerce Law Group and Sassan MacKay for Real Parties in Interest.
* * *
INTRODUCTION
Plaintiffs Shafar Toranji and his wife Firoozeh Arghavani (collectively plaintiffs) sued defendants Chris Sungduk Lim, Justin Jinhyong Bae, and Best 4U, Inc. (collectively defendants). Plaintiffs alleged their real estate broker failed to timely communicate a third party's competing and ultimately successful offer to purchase a home in Newport Coast (the property) which plaintiffs were interested in buying. Following a bench trial, the trial court entered judgment awarding damages against defendants for that omission. The damages award was based on the difference between the amount the court found was the property's fair market value and what plaintiffs would have paid for the property.
In our prior opinion Toranji v. Lim (Jun. 21, 2017, G053434) (nonpub. opn.) (Toranji I), we reversed the judgment on the ground insufficient evidence supported the damages award. We explained Evidence Code section 813, subdivision (a) provides that fair market value may only be proven by the testimony of an expert or the property's owners. (All further statutory references are to the Evidence Code unless otherwise specified.) No such testimony was provided at trial.
On remand, defendants moved to have judgment entered in their favor. The trial court denied the motion, ruling that the reversal of the judgment in Toranji I entitled plaintiffs to a new trial.
We deny the petition to enter judgment at this stage, but we remand with directions to the trial court to exercise its discretion and either (1) award plaintiffs $1 in nominal damages and enter judgment against defendants accordingly or (2) enter judgment in defendants' favor.
Plaintiffs are not entitled to a new trial. They were given a full and fair opportunity to litigate their claims against defendants. The trial court granted a motion in limine excluding plaintiffs' expert witnesses from testifying regarding fair market value because plaintiffs failed to produce such experts for depositions. That ruling was made after plaintiffs refused the trial court's offer to continue the trial to enable defendants to take such depositions. Section 813, subdivision (a)(2) allowed plaintiffs to prove fair market value through the testimony of the property owners; plaintiffs called both owners of the property to testify at trial but did not ask either about the fair market value of the property.
We reject plaintiffs' argument that our unqualified reversal in Toranji I automatically reopens discovery and expert depositions, and permits a retrial. Plaintiffs' inability to prove damages as a result of the ruling on expert testimony was a direct consequence of their failure to produce their experts for depositions. As we will explain in detail, post, California case law does not support a do-over when a judgment is reversed due insufficient evidence in the circumstances of this case. We follow and apply the well-settled law as set forth in McCoy v. Hearst Corp. (1991) 227 Cal.App.3d 1657 (McCoy).
BACKGROUND
A summary of the trial evidence underlying the plaintiffs' claims is set forth in Toranji I, supra, G053434; we do not restate that summary here.
I.
PLAINTIFFS' CLAIMS; PLAINTIFFS' COUNSEL DECLINES OPPORTUNITY TO HAVE TRIAL
CONTINUED TO ENABLE DEFENDANTS TO DEPOSE PLAINTIFFS' EXPERT WITNESSES; THE
TRIAL COURT GRANTS DEFENDANTS' MOTION IN LIMINE TO EXCLUDE PLAINTIFFS'
EXPERT WITNESSES BECAUSE THEY WERE NOT PRODUCED FOR DEPOSITIONS.
In January 2015, plaintiffs filed a second amended complaint against defendants containing claims for breach of contract, negligence, breach of fiduciary duty, fraud and deceit, and negligent misrepresentation. The second amended complaint sought compensatory damages, punitive damages, and costs of suit. (Toranji I, supra, G053434.) The trial court sustained without leave to amend defendants' demurrer to plaintiffs' claims for fraud and deceit and negligent misrepresentation. (Ibid.) The court also sustained defendants' demurrer to plaintiffs' breach of contract claim against Bae. Plaintiffs' remaining claims for breach of contract, negligence, and breach of fiduciary duty were tried to the court. (Ibid.)
Clark Kim and Kyoung Kim owned the property which plaintiffs sought to purchase; the Kims were named as defendants in the second amended complaint. (Toranji I, supra, G053434.) Before trial, the parties stipulated to dismiss Clark Kim because plaintiffs' claim against him was discharged in bankruptcy. (Ibid.) After plaintiffs rested their case at trial, the court granted Kyoung Kim's motion for judgment. (Ibid.) Neither Clark Kim nor Kyoung Kim is a party to this appeal. (Ibid.)
Before trial, defendants filed a motion in limine seeking to exclude plaintiffs' expert witnesses from testifying at trial. On the day set for the bench trial, the court stated that the first order of business was for the court to rule on the pending motion in limine and other motions. The court stated on the record that the previous day, the court offered to all the parties a chance to trail the trial for a week to complete the depositions of expert witnesses. The court stated, "the plaintiffs and the attorneys for the agent, Mr. Elenbaas declined that offer and would prefer to go forward with the trial and the attorney for the defendants Kim said he would go either way." The court further stated, "[s]o for that reason there is no trailing of the trial." The court later reiterated: "I just want to put on the record that you were given a chance to depose the experts, everybody was and the consensus was we'd rather go forward with the trial" to which plaintiffs' counsel responded, "Thank you, your honor." The trial court granted defendants' motion to exclude plaintiffs' experts on the ground plaintiffs did not produce them for their depositions.
II.
DURING THE BENCH TRIAL, THE TRIAL COURT DENIES DEFENDANTS' MOTION FOR
JUDGMENT MADE ON THE GROUND PLAINTIFFS FAILED TO PROVE DAMAGES.
The matter proceeded to a bench trial. Plaintiffs called both Clark Kim and Kyoung Kim (the owners of the property) as witnesses, but neither was asked about the fair market value of the property. After plaintiffs' called their last scheduled witness, plaintiffs' counsel stated, "[W]e'd like to make a motion for your Honor to reconsider with respect to the ruling on the motion in limine excluding the plaintiff[s'] expert." The trial court denied the motion. Plaintiffs thereafter rested their case.
Defendants' counsel moved for judgment pursuant to Code of Civil Procedure section 631.8 on all three of plaintiffs' claims, arguing with regard to damages: "[T]here was absolutely no competent evidence that was received that would show that any of the acts of defendants, even if they were considered a breach of contract, negligence or a breach of fiduciary duty, caused any pecuniary harm or loss to the plaintiffs in this case." Defendants' counsel further argued, "I recognize that [in] any breach of fiduciary duty case that a court can impose nominal damages, but at best that's the only thing that would be sustained because there was no evidence of pecuniary loss."
While the court responded by stating that while there had been "questionable conduct" on defendants' part, it asked, "[W]hat about the issue of damages? That's to me the 800-pound gorilla in the case. In my mind if your client looks to win, the damage really would be—correct me if I'm wrong—the fair market value of the property minus what he would have paid for it had the deal gone through. Let's say at 2.25 million, but there's no evidence of what the fair market value is. [¶] I recognize that it's because your experts were disallowed because of my ruling on that, but I still think that ruling was correct. [¶] How do you prove damages?" The court also asked how the amount of damages should be determined, noting: "I can't just pull a number out of the air. I have to have some evidence as to what the value of the property was."
Plaintiffs' counsel responded: "If we go by the documents that were produced and particularly Exhibit 87, your Honor, it's a foreclosure auction. The auction starts at $2.3 million. That's the starting point. [¶] And in fact, it's listed at $2.6. The fair market value in that document that started at $2.6 million, so we have some range that we can assess what was the fair market value at least based upon what has been testified to and what we have seen through the exhibits."
The court stated it would exercise its discretion under Code of Civil Procedure section 631.8 and wait until it heard all the evidence before making a ruling; the court then denied the motion. Defendants rested without calling any witnesses. Following closing arguments, the court took the matter under submission.
III.
THE TRIAL COURT ISSUES A DECISION AWARDING PLAINTIFFS DAMAGES; DEFENDANTS
REQUEST A STATEMENT OF DECISION AND REPEATEDLY RAISE THE ISSUE THAT
PLAINTIFFS' PROOF OF FAIR MARKET VALUE WAS INSUFFICIENT UNDER SECTION 813.
The court issued a minute order stating the court found defendants liable on plaintiffs' claims and awarded plaintiffs damages in the amount of $409,846 based on the difference between the bank's demand of $2.25 million and the fair market value of the property in the amount of $2,659,846. The minute order stated: "While the plaintiffs were precluded from calling their appraisal expert to establish the fair market value of the property at the time of the transaction by the granting of defendants' motion in limine, there was evidence of the fair market value introduced, without objection, in Exhibit 87. That document sets forth the fair market value of the property at $2,659,846 close in time to the lost transaction. There was no contrary evidence on the fair market value offered by defendants."
Defendants filed a request for a statement of decision which asked, as pertinent to the issues in this proceeding: (1) "What is the factual and legal basis for the court's valuation of $2,659,846.00 for the property"; (2) "In the absence of opinion evidence given by (a) a witness qualified to express such opinion; (b) the owner or spouse of the owner of the property; or (c) an officer, employee or other qualified person affiliated with an entity which owns the property [see Evidence Code § 813], was there any competent evidence before the court sufficient to allow the court to make a determination of the value of the property"; and (3) "To the extent the court is relying on Exhibit 87, the RealtyTrac foreclosure status sheet, to establish the value of the property located at [the property], is Exhibit 87 sufficient proof under Evidence Code § 813 of the fair market value of the property?"
After the proposed statement of decision reiterated the court's reliance on Exhibit 87 as the evidence establishing fair market value necessary to calculate damages, defendants filed objections to the statement of decision (and the court's proposed judgment) asserting that the fair market value finding was not supported by competent evidence required by section 813. The trial court overruled the objections to the proposed statement of decision.
IV.
THE TRIAL COURT ISSUES ITS STATEMENT OF DECISION AND ENTERS JUDGMENT IN
FAVOR OF PLAINTIFFS.
The court thereafter issued a statement of decision in which it found that defendants' wrongful conduct "would amount to negligence, breach of fiduciary duty, breach of contract and fraud." The court found, however, that defendants' conduct did not cause harm to plaintiffs "with one exception, the failure to tell plaintiff[s] that there was another competing offer pending." (Toranji I, supra, G053434.)
It appears the statement of decision's reference to fraud was in error given that the court had previously sustained defendants' demurrer to the fraud and negligent misrepresentation claims without leave to amend.
With regard to the fair market value of the property, the statement of decision continued: "While the plaintiffs were precluded from calling their appraisal expert to establish the fair market value of the property at the time of the transaction by granting of defendants' motion in limine, there was evidence of the fair market value introduced, without objection, in Exhibit 87, RealtyTrac Foreclosure Auction flyer. That document sets forth the fair market value of the property at $2,659,846 close in time to the lost transaction. There was no contrary evidence on the fair market value offered by defendants. Thus, if plaintiffs had met the bank's demand of $2.25 million, they would have acquired a property worth $2,659,846. Their damage is the difference between these two numbers, $409,846.00." (Toranji I, supra, G053434.)
The trial court responded to defendants' specific requests for findings regarding the court's determination of the property's fair market value in the calculation of damages, reiterating that the court relied exclusively on the RealtyTrac foreclosure sheet in finding the fair market value of the property. (Toranji I, supra, G053434.)
Judgment in the amount of $409,846 was entered in plaintiffs' favor and against defendants jointly and severally. (Toranji I, supra, G053434.) Defendants appealed. (Ibid.) In Toranji I, we reversed the judgment, holding that insufficient evidence as required by section 813, subdivision (a) proved plaintiffs suffered any damage as a result of any of their claims. (Ibid.) Our disposition reads: "The judgment in favor of plaintiffs is reversed. Defendants shall recover costs on appeal." (Ibid.)
V.
FOLLOWING TORANJI I, DEFENDANTS FILE A MOTION IN THE TRIAL COURT REQUESTING
THAT JUDGMENT BE ENTERED IN THEIR FAVOR; THE TRIAL COURT DENIES THE MOTION
AND DEFENDANTS FILE THE INSTANT PETITION.
After our prior opinion in Toranji I issued, defendants filed a motion in the trial court requesting that judgment be entered in their favor. In a detailed two-page minute order, the trial court denied the motion and concluded that the unqualified reversal in Toranji I triggered a new trial in the matter.
Defendants thereafter filed the instant petition seeking the issuance of a writ of mandate directing the trial court to enter an order granting defendants' motion to enter judgment following the appeal and enter judgment in their favor. We issued an order to show cause before this court why mandate or other appropriate relief should not issue and invited formal briefing. Plaintiffs filed a formal return, defendants filed a formal reply brief, and the parties participated in oral argument.
DISCUSSION
I.
THE TRIAL COURT DID NOT ERR BY DENYING DEFENDANTS' MOTION FOR ENTRY OF
JUDGMENT IN THEIR FAVOR BECAUSE PLAINTIFFS MIGHT BE ENTITLED TO AN AWARD
NOMINAL DAMAGES.
In the petition, defendants contend that on remand after Toranji I, the trial court erred by denying their motion for entry of judgment in their favor following the reversal of the judgment. In Toranji I, we concluded plaintiffs did not prove they suffered any damages because they failed to prove the fair market value of the property, and we reversed the judgment accordingly. As pointed out in our opinion, the trial court's statement of decision showed the trial court found defendants had engaged in wrongful acts that constituted negligence, breach of fiduciary duty, and breach of contract. Although plaintiffs were precluded from recovering compensatory damages due to the failure of proof, given the court's other findings, plaintiffs might be entitled to an award of nominal damages under Civil Code section 3360, which provides: "When a breach of duty has caused no appreciable detriment to the party affected, he may yet recover nominal damages." (Italics added; see Werschkull v. United California Bank (1978) 85 Cal.App.3d 981, 1009 ["We agree with the trial court's award of a nominal sum as actual damages suffered by plaintiffs on account of the wrongful diversion of trust funds, since any amount in excess of $1 necessarily would be based upon speculation and conjecture"].)
Whether to award nominal damages under such circumstances is within the trial court's discretion unless such an award would entitle a party to recover costs as a matter of right; the court's failure to award nominal damages in that circumstance would constitute error. (Staples v. Hoefke (1987) 189 Cal.App.3d 1397, 1406 ["[a] judgment is erroneous in failing to grant nominal damages, however, if nominal damages would carry costs or determine some question of permanent right" but "[w]here there is no absolute entitlement to costs, the failure to award nominal damages is not reversible error"].) Here, even if plaintiffs were awarded nominal damages, they would not necessarily be entitled to an award of costs. Code of Civil Procedure section 1033, subdivision (a) makes an award of costs discretionary in unlimited civil cases when the judgment awarded an amount of damages that is less than what may be recovered in a limited civil case. (See Carter v. Cohen (2010) 188 Cal.App.4th 1038, 1053.)
Code of Civil Procedure section 1033, subdivision (a) provides: "Costs or any portion of claimed costs shall be determined by the court in its discretion in a case other than a limited civil case in accordance with [Code of Civil Procedure] Section 1034 where the prevailing party recovers a judgment that could have been rendered in a limited civil case."
In the instant case, the parties agree that plaintiffs might be entitled to nominal damages in the total amount of $1; plaintiffs argue they are entitled to them. (See Avina v. Spurlock (1972) 28 Cal.App.3d 1086, 1089 ["nominal damages are limited to an amount of a few cents or a dollar"].) Even with an award of nominal damages, however, plaintiffs would recover less than the $25,000 limit of damages that might be recovered in a limited civil case. (Code Civ. Proc., § 85, subd. (a).) Because an award of costs might follow from an award of nominal damages, we remand to the trial court to exercise its discretion in the first instance regarding whether nominal damages should be awarded and enter judgment accordingly.
II.
PLAINTIFFS ARE NOT ENTITLED TO A NEW TRIAL.
The trial court's ruling was correct in denying defendants' motion for entry of judgment in their favor because of the possibility of a nominal damages award. However, the court's minute order stated the ruling was based on the court's conclusion plaintiffs were entitled to a new trial on remand following Toranji I. For the reasons we explain, plaintiffs are not entitled to a new trial.
A.
Following An Unqualified Reversal of a Judgment for Insufficiency of the Evidence, the
Parties Return to the Positions They Were in Before They Rested at Trial; No New Trial
is Ordinarily Called For Except in the Event There is Newly Discovered Evidence and
Remaining Issues to Try.
After an appellate court reverses a judgment without directions to the trial court on remand to enter judgment for the defendants, commonly referred to as an "unqualified reversal," what happens next depends on the basis for the reversal of the judgment. If an unqualified reversal is based on some form of prejudicial error that deprived the appellant from receiving a fair trial, the matter is remanded for a new trial in which the parties are placed "'in the same position as if the case had never been tried.'" (McCoy, supra, 227 Cal.App.3d at pp. 1660-1661 [interpreting Erlin v. National Union Fire Ins. Co. (1936) 7 Cal.2d 547, 549 (Erlin II)].) The appellate court in McCoy, supra, 227 Cal.App.3d at page 1661 explained: "A reversal under these circumstances informs the trial court that a proper motion for new trial, had it been made, should have been granted."
When, as here, an unqualified reversal is solely based on the insufficiency of the evidence, however, "the appellate court is, in effect, advising the trial court that a nonsuit, directed verdict or JNOV should have been entered." (McCoy, supra, 227 Cal.App.3d at p. 1661.) The McCoy court explained: "When the plaintiff has had full and fair opportunity to present the case, and the evidence is insufficient as a matter of law to support plaintiff's cause of action, a judgment for defendant is required and no new trial is ordinarily allowed, save for newly discovered evidence. [Citations.] When trial courts grant nonsuits or judgments notwithstanding the verdict based on insufficiency of the evidence and are affirmed on appeal, new trials do not follow as a matter of course. Certainly, where the plaintiff's evidence is insufficient as a matter of law to support a judgment for plaintiff, a reversal with directions to enter judgment for the defendant is proper. [Citations.] It is anomalous to end the case when the trial court correctly enters a nonsuit or JNOV on the ground that the plaintiff has, as a matter of law, failed to prove a cause of action, but to allow plaintiff another trial when the appellate court makes the same determination, since the standard applied by the respective courts is virtually identical." (Ibid., fn. omitted.)
The general rule that a litigant who had a full and fair opportunity to prove his or her case is not entitled to a new trial after a judgment is reversed due to insufficiency of the evidence was addressed in Cassista v. Community Food, Inc. (1993) 5 Cal.4th 1050, 1066 (Cassista). In Cassista, the California Supreme Court, citing McCoy, held: "It follows that the trial court erred in denying [defendant's] motion for nonsuit, which was based squarely on plaintiff's failure to adduce any evidence, 'medical, competent or otherwise, to establish that [plaintiff's weight] is a physical or a perceived physical handicap.' As previously discussed, the requirement that plaintiff establish a physiological basis for her alleged handicap was relatively settled at the time of trial. Furthermore, she was clearly on notice of the potential importance of such evidence through the motions of defendants. Having thus received a full and fair opportunity to prove her case, she is not entitled to a new trial." (Ibid., italics added; Frank v. County of Los Angeles (2007) 149 Cal.App.4th 805, 834 ["'[f]or our justice system to function, it is necessary that litigants assume responsibility for the complete litigation of their cause during the proceedings'"].)
The appellate court in Licudine v. Cedars-Sinai Medical Center (2016) 3 Cal.App.5th 881 stated: "This general rule is grounded in two rationales. The first is judicial economy and, in particular, the recognition that a trial 'is not a practice run to be scrapped in favor of a more complete proceeding in the event of an adverse judgment.' [Citation.] If the plaintiff did not adduce sufficient evidence in the first trial, the logic goes, why should she be given a second bite at the apple? The second rationale is procedural symmetry: If a trial court grants a nonsuit or directed verdict due to insufficient evidence, the remedy is entry of judgment for the moving party, not a new trial; why should the remedy be any different when the finding of insufficient evidence is made in a posttrial motion for judgment notwithstanding the verdict?" (Id. at pp. 899-900.)
While neither Cassista nor Licudine was decided in the procedural context of an unqualified reversal for insufficient evidence, McCoy was. In McCoy, supra, 227 Cal.App.3d 1657, the trial court denied the defendant's motion for judgment notwithstanding the verdict and motion for new trial following an adverse jury verdict in a defamation action; the appellate court affirmed the trial court's judgment. The California Supreme Court reversed the judgment on the ground insufficient evidence supported the malice element. (Id. at p. 1659.) The appellate court in McCoy stated, "[t]he Supreme Court's reversal was unqualified: 'The judgment of the Court of Appeal is reversed with directions to reverse the judgment of the trial court.'" (Ibid.) Similar to the instant case, the plaintiffs thereafter filed a new at-issue memorandum and the defendants moved for judgment on the ground the Supreme Court's decision was a final determination precluding retrial. (Ibid.) The trial court granted the motion for judgment. (Ibid.)
The McCoy court addressed the plaintiffs' reliance on Erlin II, supra, 7 Cal.2d 547 in its argument that the Supreme Court's unqualified reversal automatically awarded it a completely new trial in the matter. (McCoy, supra, 227 Cal.App.3d at pp. 1659-1660.) The McCoy court summarized the Erlin II line of cases as follows: "Erlin II is one of a series of California Supreme Court cases, commencing with Stearns v. Aguirre (1857) 7 Cal. 443, applying the general rule that an unqualified reversal remands the case for new trial. Stearns involved an action on a promissory note in which a judgment for the plaintiff was previously reversed without direction by the Supreme Court for reasons relating to the manner in which a judgment was entered by the trial court. [Citation.] The trial court ultimately denied a new trial and entered judgment for the defendant. Plaintiff appealed, contending he was entitled to a new trial." (Id. at p. 1660.)
The Supreme Court in Stearns v. Aguirre, supra, 7 Cal. at page 448 held: "We are now called on, for the first time, to determine whether a simple judgment of reversal is bar to further proceedings in the same suit, and as the point has never before been adjudicated by this Court, and we have no rule of Court or of law which would control our judgment in the premises, we think it would be more just to follow the rule of the common law on this subject, by which the parties in this suit have in all probability been governed. At common law, the Appellate Court either affirms or reverses the judgment, upon the record before it. The opinion which is rendered is advisory to the inferior Court, and after the reversal of an erroneous judgment, the parties in the Court below have the same right that they originally had."
In Erlin II, supra, 7 Cal.2d at page 549, the California Supreme Court held that the prior unqualified reversal of the judgment remanded the case for a new trial, "plac[ing] the parties in the same position as if the case had never been tried" but, significantly, added that "upon a retrial the decision of the appellate court becomes the law of the case upon the facts as then presented." (Italics added.) The McCoy court noted: "The statement in Erlin II that a reversal without directions 'remands the case for a new trial and places the parties in the same position as if the case had never been tried' is understandable in the ordinary case of prejudicial error. [Citation.] In such a situation an error of law has occurred during the proceedings which prevented the appellant from receiving a fair trial. . . . However, a reversal for insufficiency of the evidence is based on the fact that the plaintiff's evidence does not, as a matter of law, support the plaintiff's cause of action." (McCoy, supra, 227 Cal.App.3d at pp. 1660-1661.)
The McCoy court held that the effect of the new trial rule of Erlin II in the context of an unqualified reversal solely based on the insufficiency of the evidence, given the law of the case doctrine, is to justify a new trial only for newly discovered evidence. The McCoy court explained: "For these reasons, it appears more reasonable that when the plaintiff has had full and fair opportunity to present his or her case, a reversal of a judgment for the plaintiff based on insufficiency of the evidence should place the parties, at most, in the position they were in after all the evidence was in and both sides had rested. A judgment for the defendant would then be entered, and a new trial permitted only for newly discovered evidence. [Citation.] A new trial under such circumstances is governed by the law of the case doctrine as defined by the appellate decision [citations], and the law of the case doctrine applies to an appellate decision on the sufficiency of the evidence. [Citation.] 'The question whether the evidence in the record in a defamation case is sufficient to support a finding of actual malice is a question of law.' [Citations.] Consequently, retrying the case on the same evidence is a needless exercise, since the law of the case would compel another decision for the defense." (McCoy, supra, 227 Cal.App.3d at pp. 1661-1662, italics added.)
B.
The Stromer Exception
The appellate court in McCoy, supra, 227 Cal.App.3d at page 1662 further observed: "The obvious problems caused by rigid application of the Erlin II rule has led to recognition of an exception" set forth in Stromer v. Browning (1968) 268 Cal.App.2d 513, 518-519 (Stromer). In Stromer, the appellate court explained: "It has been stated: 'An unqualified reversal ordinarily has the effect of remanding the cause of a new trial on all of the issues presented by the pleadings.' . . . But the rule that an unqualified reversal without directions remands the case and sets it at large for further trial is a general one. . . . [¶] The fact that the rule . . . is a 'general' rule implies that it has limitations. One limitation is that a case is to be set at large for retrial only when that is the intent of the appellate court. 'Judgment reversed' at the end of an opinion is, of course, strong indication of such intent. But when the opinion as a whole establishes a contrary intention, the rule is inoperative. To hold otherwise would be to make a fetish of form."
In Stromer, supra, 268 Cal.App.2d at page 517, the appellate court analyzed the effect of the Supreme Court's reversal of the trial court's judgment after concluding insufficient evidence showed the defendant had acted arbitrarily or in bad faith to support the judgment entered against him. The appellate court observed the Supreme Court had reversed the trial court's judgment without directions "as to the future fate of the litigation." (Id. at p. 515.) Indeed, the last sentence of the Supreme Court's opinion simply read: "'The judgment is reversed.'" (Id. at p. 517.) The appellate court in Stromer concluded that the intent of the Supreme Court was patent that judgment should have been entered in the defendant's favor notwithstanding the Supreme Court's failure to expressly say so, given that the case was fully tried with facts not in dispute. (Id. at p. 518.) The Stromer court noted: "We can find nothing left for the trial court to retry. Except for formalities, the litigation had ended." (Ibid.)
The appellate court in Stromer, supra, 268 Cal.App.2d at page 519 cited Snapp v. State Farm Fire & Casualty Co. (1964) 60 Cal.2d 816 in support of its analysis, noting that in that case, the California Supreme Court did not give the last sentence of the opinion, which simply reversed the judgment, "such overriding importance." In Snapp v. State Farm Fire & Casualty Co., supra, 60 Cal.2d at page 821, the appellate court had concluded a judgment should have awarded a higher amount in damages and in the disposition reversed the judgment with directions to so increase the damages. The Supreme Court held that although the appellate court's disposition stated the judgment was reversed, "[n]o issues remained to be determined. No further evidence was necessary. Thus, the so-called 'reversal' with directions, was, in fact and in law, a 'modification.'" (Id. at p. 820). The Supreme Court stated in Snapp: "It is not the form of the order on the first appeal that controls, but the substance of that order. . . . The important question as to when interest commences should not depend on mere formalism, but on the substance of the order." (Id. at p. 821.)
In determining that the Supreme Court's simple disposition reversing the judgment did not open the door to a new trial under the circumstances of the case, the appellate court in Stromer, supra, 268 Cal.App.2d at pages 520 to 521 stated: "If we are also mistaken about the intent of the Supreme Court on the first appeal of Stromer v. Browning [(1966)] 65 Cal.2d 421, we are sure that court will be given an opportunity to set us straight. There is one matter about which we are absolutely sure. Appellant Stromer does not now have any new evidence which he was willing to disclose to the trial court or which he has been willing to relate to us upon the basis of which a judgment for Stromer could be legally supported. [¶] We have read the record . . . of the proceedings before the trial court . . . . It was pointed out that the facts relating to both the purchase and sale negotiations and the brokerage contract ha[ve] been exhaustively tried. Effectually, Stromer was challenged to explain any possible new evidence or theory which would justify the time and expense to the parties and to the courts if a new trial was had. Counsel for Stromer declined that challenge. The trial court in ruling upon Stromer's motion concluded there was no reason to vacate its judgment because there was nothing to retry. On this appeal appellant's briefs are silent as to the existence of any new evidence or theory upon which Stromer could recover his commission. At oral argument questioning by this court could elicit no information on that subject. Effectually, Stromer's position adds up to: Wait and see!"
The Stromer court further stated: "Appellant concedes that the doctrine of the law of the case would apply on any retrial of the case. The doctrine deals with the effect of the first appellate decision upon the subsequent retrial or appeal. It says that the decision of an appellate court stating a rule of law necessary to a decision establishes that rule and makes it determinative of the rights of the parties on any subsequent retrial or appeal. [Citation.] The rule established by the first appeal in Stromer v. Browning was that there was no sufficient evidence to establish that Browning had acted arbitrarily or in bad faith. If there were a retrial (assuming, contrary to our belief, that one was ordered) and no substantial difference in the evidence at the retrial, the former decision is the law of the case." (Stromer, supra, 268 Cal.App.2d at p. 521.)
The Supreme Court has not questioned, much less overruled, the Stromer court's holding and reasoning since Stromer was issued in 1968. On the other hand, "[t]he Stromer exception has been adopted and applied by other Courts of Appeal." (McCoy, supra, 227 Cal.App.3d at p. 1662.)
The appellate court in McCoy, supra, 227 Cal.App.3d at pages 1662 to 1663 further explained: "We conclude we need not decide whether Stromer applies, since we are of the opinion that insofar as reversals for insufficiency of the evidence are concerned, Erlin II has been modified by statute. At the time Erlin II was decided, [Code of Civil Procedure] section 629 provided that the trial court could, in its discretion, enter a JNOV only when the aggrieved party had previously moved unsuccessfully for a directed verdict, and if a motion for JNOV was denied it was discretionary with the appellate court to 'order judgment to be so entered when it appears from the whole evidence that a verdict should have been so directed at the trial . . . .' [¶] As a result of post-Erlin II amendments, section 629 now provides, in part: 'The [trial] court, . . . , either of its own motion, . . . , or on motion of a party against whom a verdict has been rendered, shall render judgment in favor of the aggrieved party notwithstanding the verdict whenever a motion for a directed verdict for the aggrieved party should have been granted had a previous motion been made . . . .' (Italics supplied.) The appellate courts' duty was also rendered mandatory: 'If the motion for [JNOV] be denied and if a new trial be denied, the appellate court shall, when it appears that the motion for [JNOV] should have been granted, order judgment to be so entered on appeal . . . .' (§ 629, italics supplied.) [¶] Consequently, as stated by Division Two of this court in Bank of America v. Superior Court (1990) 220 Cal.App.3d 613, 624: 'The effect of section 629 is that a reversal on appeal for insufficiency of the evidence concludes the litigation just as it would have been concluded if the trial court had correctly entered [JNOV].'" The instant case involved a bench trial to which Code of Civil Procedure section 629 was inapplicable. --------
For example, in Moore v. City of Orange (1985) 174 Cal.App.3d 31, 36 to 37 (Moore) a panel of this court applied the Stromer exception in rejecting the petitioner's argument she was entitled to a new trial on all issues presented by the pleadings because the prior opinion concluded with an unqualified reversal of the judgment. The Moore court reasoned: "What Moore overlooks is a new trial, if intended by the reversal, gives only '"an opportunity to present evidence in support of the allegations of [her] complaint."' [Citation.] Unqualified reversals which contemplate a new trial envision '"a re-examination of an issue or fact."' [Citation.] The judgments [here] are reversed on the ground the findings were not justified by the evidence." (Id. at p. 34.)
Citing Stromer, the Moore court held: "Similarly, in this instance, we find it difficult to believe the court intended a rerun of the trial after its firm announcement: 'We conclude that respondent served at the pleasure of the city clerk, that she had no constitutionally protected property interest in the petition and could be discharged without cause. [¶] Since respondent was not entitled to any substantive relief sought in her petition for writ of mandate, the award of attorney's fees and costs was improper. [¶] Judgment reversed." (Moore, supra, 174 Cal.App.3d at pp. 36-37.) The court noted there was no allegation Moore had been deprived of other rights, such as a pretermination hearing. (Id. at p. 37.) The court concluded: "Our reading of the prior appellate opinion convinces us the court intended judgment to be entered for the city and the city clerk." (Ibid.; see Bank of America v. Superior Court, supra, 220 Cal.App.3d at p. 622 [commenting "it would have been senseless [for the Moore court] to follow the general rule that an unqualified reversal remands the case for a new trial"].)
C.
A New Trial Is Not Warranted in This Case.
This case involved an unqualified reversal solely based on the insufficiency of the evidence of damages. The law of the case doctrine applies to our holding in Toranji I that the evidence plaintiffs produced at trial to prove fair market value, a determination indisputably essential to proving damages, was insufficient as a matter of law pursuant to section 813, subdivision (a). Therefore, following our unqualified reversal of the judgment in Toranji I, based solely on the insufficiency of the evidence, on remand, a new trial would be permitted only for newly discovered evidence that, if credited, would be legally sufficient to prove the property's fair market value.
Plaintiffs were fully on notice during trial that their evidence of fair market value was insufficient under section 813, subdivision (a). Defendants raised the issue that such evidence was insufficient during trial when they moved for judgment. Defendants again raised the issue in their request for a statement of decision and in their objections to the proposed statement of decision. Plaintiffs did not do anything in the trial court to address the problem they had with their proof of fair market value but instead opted to take their chances that the insufficient evidence they offered would stick.
In this writ proceeding, plaintiffs do not suggest the existence of any newly discovered evidence that would be sufficient to prove fair market value, and they do not argue there are other issues to try in the case (they prevailed at trial on issues of liability). Instead, plaintiffs assert only that our disposition in Toranji I reversing the judgment without specific instructions on remand automatically results in a complete retrial of all the issues in the case, sans the pretrial evidentiary ruling excluding their expert witnesses. Thus, plaintiffs argue, they will be able to prove fair market value on retrial because they will then be able to offer new expert witness testimony that had been excluded in the first trial. In their informal response to the petition, plaintiffs argued: "The parties are entitled on remand for a new trial, to reopen discovery; and to a new trial on all evidentiary issues. This means that the Defendants will be entitled to take new discovery including depositions of any and all of the Plaintiffs' experts, and Plaintiffs will be entitled to designate new experts on the issue of the value of the property. The trial court's order granting the Defendants' motion in limine will not apply in the new trial proceedings, and Plaintiffs will then have their full and fair opportunity [to] present new evidence on that issue."
The above cited authorities do not support plaintiffs' argument. The record shows plaintiffs already had a full and fair opportunity to litigate their claims. They have not demonstrated in Toranji I or in the instant proceeding that the trial court's ruling excluding their experts was in error. But even if that ruling had been in error, any such error was not prejudicial because plaintiffs refused to accept the trial court's offer to continue the trial to afford defendants the opportunity to depose plaintiffs' experts.
Plaintiffs cite Fairmont Ins. Co. v. Superior Court (2000) 22 Cal.4th 245 and Hirano v. Hirano (2007) 158 Cal.App.4th 1 in support of their argument. Neither case supports plaintiffs' position.
In Fairmont Ins. Co. v. Superior Court, supra, 22 Cal.4th at page 246, the California Supreme Court granted review to address the cutoff date to complete discovery following a mistrial, an order granting a new trial, or a remand for a new trial following reversal of a judgment on appeal. The court generally held that in those contexts, "the last date for completing discovery is 15 days before the date initially set for the new trial of the action." (Ibid.) Fairmont Ins. Co. did not address the circumstances in which a new trial should be held, or what further discovery should be allowed, following an unqualified reversal of a judgment based solely on the insufficiency of the evidence.
In Hirano v. Hirano, supra, 158 Cal.App.4th at page 5, the trial court entered a judgment of dismissal on the ground the plaintiff had failed to timely prosecute the action. Before the dismissal, the defendant sought to preclude the plaintiff from calling expert witnesses at trial because the plaintiff had not complied with an expert witness demand, but apparently no ruling was made on the matter before the dismissal of the action. (Ibid.) The appellate court reversed the judgment of dismissal on the ground insufficient notice had been given the plaintiff. (Ibid.)
On remand, in Hirano v. Hirano, supra, 158 Cal.App.4th at pages 5 and 7, even though neither party demanded an exchange of expert witnesses in relation to the new trial date, the trial court ruled that the plaintiff's expert witness's testimony would be excluded because the plaintiff had failed to make a timely exchange of expert witness information before the dismissal. The appellate court reversed, explaining that, following a reversal of judgment in the context of prejudicial error (in that case, the dismissal of the matter for failure to prosecute without proper notice), results in discovery being automatically reopened. (Id. at p. 8.) Hirano thus involved a case in which the plaintiff had not had a full and fair opportunity to litigate before the judgment of dismissal. Trial had not even occurred before the dismissal. Hirano is therefore inapt.
DISPOSITION
The petition for a writ of mandate is denied. The matter is remanded with directions that the trial court exercise its discretion and either (1) award plaintiffs nominal damages in the amount of $1 and enter judgment in their favor and against defendants accordingly or (2) enter judgment in favor of defendants and against plaintiffs. Each side shall bear their own costs in this proceeding.
FYBEL, J. WE CONCUR: BEDSWORTH, ACTING P. J. ARONSON, J.