Opinion
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Orange County, No. 05CC09933 William M. Monroe, Judge.
Stephen Garrick Zimmerman for Plaintiffs and Appellants.
Rutan & Tucker, Richard K. Howell and Alejandro S. Angulo for Defendant and Respondent.
OPINION
ARONSON, J.
Candice and Paul Collins appeal from a jury verdict in favor of Jimmie McGee in a lawsuit arising from McGee’s 2004 sale of his waterfront home in Huntington Beach to plaintiffs. At trial, plaintiffs claimed defendant breached a mandatory disclosure obligation in the sales contract “by failing to disclose one or more of the following facts: [¶] (1) there were pre-existing water intrusion problems; [¶] (2) there was remodeling work done without necessary permits; and [¶] (3) the property’s boat dock cannot accommodate a 90 foot boat.” In addition to breach of contract, plaintiffs alleged the same disclosure omissions as the basis for claims of negligence, intentional misrepresentation, and negligent misrepresentation.
Defendant admitted at trial to several water intrusion problems dating back to 1997, but testified he did not reveal them or his remediation measures because he had corrected the problems. Having received instructions on a seller’s statutory disclosure obligations incorporated in the contract, the jury found in a special verdict form that defendant “fail[ed] to do something the contract required him to do.” The jury, however, also concluded plaintiffs were not “harmed by Jimmie McGee’s failure to do something the contract required him to do” and, accordingly, entered a defense verdict rejecting their damages claim.
On appeal, plaintiffs’ sole challenge is to the sufficiency of the evidence supporting the jury’s finding they suffered no harm. Plaintiffs contend their evidence was so compelling that the jury was required to enter a finding in their favor concerning damages. But the applicable standard of review, under which we may not second-guess the jury’s resolution of credibility issues or conflicting factual matters, stands as an insurmountable roadblock to plaintiffs’ challenge. We therefore affirm the judgment.
I
Factual and Procedural Background
Defendant originally listed his home, located along Piedmont Cove in Huntington Harbor, for almost $2.5 million dollars, but he accepted plaintiffs’ offer of $2,275,000 in July 2004. The parties closed escrow without either side raising concerns about water intrusion issues, except that plaintiffs’ inspection revealed a small area of the garage ceiling damaged some years earlier. Defendant replaced the ceiling drywall, and plaintiffs were satisfied there was no ongoing leak. Plaintiffs began renovations to the home that were so substantial their real estate agent described the property as having been “destroyed” and “taken apart” when he visited in December 2004. He testified, “I was in total shock. It was a shell of a home.” Plaintiffs’ design called for converting the home from its modern contemporary visage to “an upscale beach[] Tuscany home.”
Plaintiffs retained a water intrusion expert in January 2005. The expert concluded the home suffered from pervasive, longstanding water intrusion problems throughout the house. According to the expert, defendant must have known of the issues because the expert found evidence of inadequate repairs. Defendant had been the home’s only owner since it had been built.
Defendant admitted to undertaking repairs and water insulating measures he had not disclosed to plaintiffs, dating back to 1997. But he introduced evidence from his contractors and a water intrusion expert establishing that his efforts redressed existing damage, including replacing joists and drywall, and prevented any further water intrusion. Defendant produced numerous visitors to the home who declared they observed no water intrusion problems after the repairs. Defendant also produced entries from the Farmer’s Almanac suggesting the home had been exposed to unusually heavy rainfall during plaintiffs’ renovations, including more than 20 inches of rain between the close of escrow in August 2004 and March 2005.
Plaintiffs sought more than $500,000 in damages from defendant, including almost $200,000 for representing in a sales flier for the property that its dock could accommodate a 90-foot boat. On appeal, plaintiffs do not contend the jury’s no-damages conclusion is erroneous because of any issue concerning the boat dock. Instead, plaintiffs focus their substantial evidence challenge on damage amounts related to the home’s balconies where, unlike the rest of the house, defendant had undertaken little or no renovation. They claim the evidence conclusively demonstrates they suffered approximately $40,000 in undisclosed water damage to the balconies and a $3,000 charge to seal uncontested, preexisting window leaks. In their only challenge that does not involve water intrusion, plaintiffs claim the jury was required to award them about $9,000 because defendant did not seek or obtain a permit from the city for a deck on the roof of the home, which plaintiffs removed, albeit under no compulsion from the city. Assuming their damages were established beyond dispute, plaintiffs contend the jury was required to award them approximately $60,000 in consequential damages for expenses they incurred while vacating the home during the time the balconies and roof were under repair.
II
Discussion
Plaintiffs challenge the sufficiency of the evidence to support the jury’s special verdict finding that defendant’s nondisclosures caused them no harm. In contesting the jury’s conclusion they failed to prove damages, plaintiffs face a daunting hurdle on appeal. Where, as here, the party challenging the verdict shouldered the burden of proof at trial, the question for the reviewing court is whether the evidence required a verdict for the appellant as a matter of law. (Roesch v. De Mota (1944) 24 Cal.2d 563, 570-571; Caron v. Andrew (1955) 133 Cal.App.2d 402, 409.) It is not enough that reasonable minds may disagree; when two or more inferences can be reasonably deduced from the evidence, the appellate court may not substitute its judgment for the trier of fact’s. (Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 571.) In sum, the reviewing court has “‘“no power to judge of the effect or value of the evidence, to weigh the evidence, to consider the credibility of the witnesses, or to resolve conflicts in the evidence or in the reasonable inferences that may be drawn therefrom.” [Citation.]’ [Citation.]” (People v. Orange County Charitable Services (1999) 73 Cal.App.4th 1054, 1071-1072, original italics.)
Relying on Huber, Hunt & Nichols, Inc. v. Moore (1977) 67 Cal.App.3d 278, plaintiffs claim the jury was required to accept their expert’s opinion concerning water damage to the home as conclusive. But unlike plaintiffs’ case, Huber involved expert testimony concerning an architect’s professional negligence. Howard v. Owens Corning (1999) 72 Cal.App.4th 621 (Howard) explains the importance of the distinction. On appeal in Howard, citing Huber, the plaintiffs “strenuously maintained that the jury was required to accept his experts’ diagnosis of asbestosis . . . .” (Howard, at pp. 631-632.)
The Howard court rejected the contention, explaining: “Appellants have seriously misstated the law. A careful examination of the cases they cite reveals that the stated principle — uncontroverted expert opinion testimony may be ‘conclusive’ on the jury — is actually the ‘single exception’ to the general rule that ‘expert testimony, like any other, may be rejected by the trier of fact, so long as the rejection is not arbitrary.’ . . . The exceptional principle requiring a fact finder to accept uncontradicted expert testimony as conclusive applies only in professional negligence cases where the standard of care must be established by expert testimony. . . . [Fn. omitted.] [¶] Because the instant case does not present any issues of professional negligence or medical malpractice, there was no reason to require the trier of fact to accept as ‘conclusive’ the uncontradicted testimony of appellants’ experts. Instead the general rule applies.” (Howard, supra, 72 Cal.App.4th at pp. 632-633.) The same is true here, all the more so because defendant presented both lay and expert witness testimony contradicting plaintiffs’ expert’s opinion and observations.
Plaintiffs point to areas of the home they did not renovate, primarily the balconies, where they claim they “[c]onclusively [e]stablished” water damage resulting from inadequate repairs that defendant failed to disclose. First, plaintiffs focus on the master bedroom balcony. Defendant admitted he discovered a water leak in the balcony in 1997 and that he did not disclose the leak or his ensuing repairs to plaintiffs when he sold them the property in 2004. The leak was caused by deterioration in the balcony’s scuppers — metal tubes designed to carry water out through the balcony’s solid walls. In 1997, defendant paid a contractor $6,000 or $7,000 to replace the scuppers, tear out and replace the rotten wood in the balcony, and replace its waterproof surface.
Plaintiffs assert they conclusively established a water intrusion problem on the balcony despite defendant’s claimed repairs. They point to stains their expert discovered under the carpet on the plywood subflooring in the bedroom inside the balcony doors, on the framing inside a vent the expert removed beneath the balcony, and in an area where plaintiffs removed drywall from a ceiling one level below the balcony. But as defendant’s expert pointed out, plaintiffs could not establish the nature of the staining or that it occurred after defendant’s repairs. Accordingly, the jury could reasonably infer the stains predated defendant’s repairs and therefore did not represent an ongoing water intrusion problem, but rather one that defendant had fixed.
Plaintiffs assert defendant admitted he only had his contractor remove “maybe 25 percent” of the rotted wood in the balcony when he made his repairs in 1997, but this mischaracterizes the record. Defendant testified the contractor “cut out all the wood, the wet wood, and replaced it with good wood.” The jury could reasonably infer that 25 percent of the wood in the balcony had rotted, and that the contractor cut out all the rotted wood, not just a quarter of it.
The jury also could reasonably conclude plaintiffs’ renovations and repair work hindered their efforts to demonstrate defendant’s liability. For example, plaintiffs removed large lag bolts that formerly secured stairs from the master bedroom balcony up to the roof deck, allowing water to drip through the bolt holes into the balcony’s wood cavity. Because the record showed copious amounts of rain after plaintiffs removed the bolts, the jury could reasonably infer plaintiffs caused any water damage to the balcony. Plaintiffs insist the damage must have resulted from the failure of defendant’s contractor to bind the new scuppers to the balcony with a watertight seal, but plaintiffs presented no evidence this oversight caused any damage. The jury could reasonably infer that although the scuppers were not as securely in place as they might have been, they still carried water away as designed. There was no evidence that, as in 1997, the scuppers had deteriorated. Even if there were evidence the scuppers posed a problem, that would only establish conflicting causes as between the lag bolts plaintiffs removed and anything defendant did or failed to do. But we may not second-guess the jury’s resolution of conflicts in the evidence. The jury could reasonably conclude plaintiffs failed to carry their burden to show defendant caused the water damage in the master bedroom balcony.
The same is true for plaintiffs’ claim concerning the kitchen balcony. Defendant admitted he did not tell plaintiffs of his 1997 scupper problem with this balcony. His contractor replaced the scuppers, confirmed the balcony cavity was undamaged and, after defendant himself fixed a leak in the office door leading to the balcony, he experienced no further problems. Plaintiffs’ expert, however, again discovered staining on and below the balcony and in the balcony doors and door frame, along with small knots of wood rot partially filled in and painted over. But, again, the jury could reasonably conclude this showed nothing more than a corrected water intrusion problem rather than ongoing damage. The jury could reject cracking along the front of the balcony and “dark” thermal imaging of the garage ceiling below the balcony as inconclusive or, again, as signifying a past intrusion problem, not a present one. Plaintiffs did not seek to rescind the sales contract on grounds they would not have purchased the home had defendant fully disclosed the water intrusion problems, but rather sought damages for defendant’s failure to remedy these problems, which the jury could reasonably conclude no longer existed.
Alternatively, the jury could again conclude alterations the plaintiffs made prevented them from proving their case for damages. Plaintiffs’ expert claimed a spray test he conducted on the balcony doors and windows showed leaking, including drainage into the framing and subfloor of the office inside one of the kitchen balcony doors. But defendant established the expert conducted the test in a nonstandard manner and alterations to the balcony, including forcible removal of a portion of a window frame with a crowbar and hammer to induce leaking, compromised the test’s probative value. Faced with this conduct, the jury was entitled to doubt the credibility of plaintiffs’ evidence, and we may not reweigh its determination.
The jury similarly could reject plaintiffs’ claim the water intrusion damages on the dining room balcony stemmed from defendant’s failure to disclose the 1997 scupper problem and repairs. Again, plaintiffs’ expert identified cracking and staining on the lower edge of the perimeter walls of the balcony and on its underside, inside the two vents he removed below the balcony, and on the flooring just inside the balcony doors. Plaintiffs contend the import of this evidence was “‘clear, positive, and of such a nature that it cannot rationally be disbelieved.’” (Adoption of Arthur M. (2007) 149 Cal.App.4th 704, 717.) As noted, however, the jury was not required to conclude the staining demonstrated an existing problem rather than a corrected one. The expert, moreover, testified he saw water staining in the soffit area on the level below the balcony doors, but the plaintiffs’ own contractor, who removed the soffit, contradicted him. We will not revisit the jury’s conclusion on credibility issues.
The plaintiffs’ expert also claimed he found mold inside the vents under the balcony, but admitted he lacked any qualifications to determine the degree, duration, or pervasiveness of moisture necessary for such growth, or any other relevant conclusions from the particular spore. The expert identified what he claimed were problems with the tile on the balcony floor that could lead to water intrusion, but the jury’s verdict reveals its conclusion that either no such damage resulted or that defendant knew nothing about this particular problem, though he knew about the problem with the scuppers. Plaintiffs presented no evidence defendant knew of any issue with the tile, and the jury therefore could reasonably conclude they failed to carry their burden to establish damages attributable to defendant for any water intrusion via the balcony floor tile.
Plaintiffs contend defendant’s water intrusion expert conceded a $3,000 sealant procedure was necessary to repair preexisting window leaks. Based on this concession, the record is wholly lacking, according to plaintiffs, to support the jury’s failure to award damages. But plaintiffs mischaracterize the record. The expert’s recommendation for a window sealant was based on the condition of the property in December 2006, more than two years after the close of escrow, more than a year after plaintiffs began their extensive renovations, and nearly a year after plaintiff’s expert conducted his window water test by prying off structural supports. The defense expert, in recommending the sealant, did not state it was necessary to correct preexisting damage caused by defendant. Consequently, the jury could reasonably reject plaintiffs’ $3,000 sealant claim.
Changing tacks away from water damage, plaintiffs contend they presented conclusive evidence they suffered economic damage because defendant failed to notify them the property’s roof deck lacked a city permit. Plaintiffs paid a contractor $9,168 to remove the deck. They presented no evidence, however, that the city required them to remove the deck. Nor did they present any evidence from the city that a permit was necessary, relying instead on equivocal statements from defendant’s contractor concerning permitting requirements. When plaintiffs cross-examined defendant, insisting “the contractor that you hired on this work told you a permit was needed,” defendant replied, “[N]o, he didn’t.” On this conflicting evidence, the jury could reasonably conclude plaintiffs failed to carry their burden of proof to show the city required them to remove the deck because it had been constructed without a permit. Consequently, they failed to establish the removal charge was attributable to defendant’s nondisclosure.
Plaintiffs also failed to show damages on the theory they would not have purchased the home had defendant disclosed he had no permit for the deck. Not only did plaintiffs fail to demonstrate a permit had been necessary to construct the deck, they vacillated in their testimony about whether the issue was important to them. In particular, the jury could reasonably conclude the absence of a permit affected neither plaintiffs’ decision to purchase the home, nor the renovations they undertook. Large-scale changes necessarily involve tear-outs, mooting the issue of whether dismantled areas previously had the city’s imprimatur. Plaintiffs have pointed to no evidence in the record showing they would have kept the roof deck had defendant supplied a permit, or that they relied on the roof deck as a feature when purchasing the home. Again, the jury could reasonably conclude plaintiffs failed to carry their burden of proof that defendant’s nondisclosure harmed them.
Finally, plaintiffs argue that the only explanation for the jury’s failure to award damages is that defendant’s attorney misled the jury in closing argument about how to calculate damages under the jury instructions. Plaintiffs and defendant jointly agreed, in submitting proposed instructions to the trial court, that plaintiffs’ measure of damages, if any, included “[t]he difference between the amount that Candice and Paul Collins paid and the fair market value of the property at the time of the sale[.]”
Defendant’s expert testified the home’s fair market value was $2.49 million, but plaintiffs established he did not factor in any diminution due to water damages or other damages they claimed. In closing argument, counsel for defendant explained his view of how the jury should proceed with calculating damages: “What you have to do first is figure out what this unimpaired value of the property is. I think — Mr. Sanders testified the unimpaired value is just under 2.5 million dollars. And from there, you subtract the cost of repair; and you figure out what that number is. If that number is over the purchase price, then the plaintiffs haven’t suffered damages.” Counsel used the following example: “[I]f the property is valued at 2.5 million as of the date of the sale, and the damage — let’s say the damages are 20 thousand dollars, you would . . . subtract 20 thousand from 2.5 million, and since that number is over the purchase price in this case, which is 2.275 [i.e., $2,275,000], there’d be no damages to award.”
Plaintiffs complain this method robs them of what’s known in legalese as the “benefit of the bargain.” Simply put, if a buyer manages to negotiate a purchase price that is below market value, he or she is entitled to the bargain. (See, e.g., Akin v. Certain Underwriters at Lloyd’s London (2006) 140 Cal.App.4th 291, 298.) That price, not the putative market price, should form the floor from which water damage repairs and any other damages are subtracted, according to plaintiffs. Put another way, the price the buyers actually paid — not a defense expert’s valuation — should be considered the home’s “fair market value” and, moreover, the “fair market value at the time of purchase” should be understood as the price actually paid minus any amounts proved as damages resulting from the seller’s omissions. According to plaintiffs, opposing counsel’s incorrect explanation of the “benefit of the bargain” concept presented the risk that even if the jury concluded defendant’s nondisclosures harmed them by as much as $225,000, the jury would erroneously award them no damages if it subtracted that damage figure from the $2.5 million dollar valuation, rather than from the $2,275,000 they paid.
There are three problems with plaintiffs’ argument. First, by failing to object below when the trial court could have corrected any error, plaintiffs forfeited the challenge they now raise for the first time on appeal. (Saret-Cook v. Gilbert, Kelly, Crowley & Jennett (1999) 74 Cal.App.4th 1211, 1230.) Second, the damages calculation instruction — which plaintiffs jointly submitted to the court with defendant — was not a model of clarity on the issue plaintiffs now raise. It did not mention or define “benefit of the bargain.” Nor did it define “fair market value” or otherwise instruct the jury how to arrive at a number for that value. Plaintiffs’ counsel attempted to explain the benefit of the bargain concept to the jury, but if plaintiffs desired a clarifying or pinpoint instruction, it was incumbent on them to ask for one (Suman v. BMW of North America, Inc. (1994) 23 Cal.App.4th 1, 9), particularly where they agreed to the instruction given.
Third, plaintiffs’ argument fails as a matter of logic because they assume the jury concluded they proved their damages case against defendant, and that the no-damage award is merely the result of a miscalculation plaintiffs claim opposing counsel induced. The problem with this approach is that, as established ante, the record supports the jury’s verdict that plaintiffs failed to prove damages. Plaintiffs have failed to meet their high burden on appeal to show that no reasonable jury could reach that conclusion. We may not substitute our judgment for the jury’s. Because substantial evidence supports the jury’s verdict, there is no basis to overturn the judgment.
III
Disposition
The judgment is affirmed. McGee is entitled to his costs on appeal.
WE CONCUR: RYLAARSDAM, ACTING P. J., FYBEL, J.