Opinion
E062605
03-26-2018
JUNE DAVIDSON, Plaintiff and Appellant, v. SKIP SOUTHWICK et al., Defendants and Appellants.
Law Offices of Vip Bhola and Vip Bhola for Plaintiff and Appellant. The Southwick Law Firm and Stanley K. Southwick for Defendants and Appellants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. RIC1207543) OPINION APPEAL from the Superior Court of Riverside County. Daniel A. Ottolia, Judge. Affirmed as modified in part and reversed in part. Law Offices of Vip Bhola and Vip Bhola for Plaintiff and Appellant. The Southwick Law Firm and Stanley K. Southwick for Defendants and Appellants.
I. INTRODUCTION
Plaintiff and appellant, June Davidson, brought this suit against her former attorneys, defendants and appellants, Stanley Skip Southwick, Glen Biondi, and the Law Offices of Southwick and Biondi, PLC (the law firm). After a trial, the jury found defendants liable for breach of fiduciary duty, fraud, professional negligence, and money had and received. The jury awarded Davidson damages totaling $48,382.93.
On appeal, defendants argue substantial evidence did not support the jury's verdict. We conclude substantial evidence showed Southwick and the law firm, but not Biondi, were liable for breach of fiduciary duty, fraud, professional negligence, and money had and received, but not in the amount of $43,382.93. Substantial evidence supported an award of only $4,804. Davidson's case faltered on causation. While she contended defendants committed numerous wrongs, this case came down to how Southwick handled, or mishandled, her settlement funds in the underlying action. He gained control of her settlement funds and the law firm withdrew an amount for its legal fees. If she actually owed these fees, then we cannot say she was harmed by having to pay them. And as far as the evidence went, she showed she did not owe $4,804 of what the law firm withdrew—but that was it. Accordingly, we direct the trial court to reverse the judgment against Biondi, modify the judgment against the other defendants by reducing Davidson's damages to $4,804, and otherwise affirm the judgment. Defendants also challenge the special verdict form and raise evidentiary challenges, but we reject these arguments.
In her appeal, Davidson challenges the court's rulings denying her motion for judgment notwithstanding the verdict (JNOV), denying her motion for new trial, denying her motion for attorney fees and costs, and granting defendants' motion for attorney fees on the breach of contract cause of action. We affirm each of these orders, except the one on costs. Davidson was entitled to recover her costs of $7,531.54. Accordingly, we reverse the costs order and direct the trial court to enter an order awarding her costs.
II. FACTS AND PROCEDURE
Davidson's second amended complaint alleges nine causes of action against defendants: (1) breach of contract; (2) money had and received; (3) an accounting; (4) breach of fiduciary duty; (5) fraud; (6) violations of Business and Professions Code section 17200; (7) violations of Business and Professions Code section 17500; (8) elder abuse; and (9) professional negligence. The jury trial took place over the course of seven days in June 2014. At the close of Davidson's case, the court granted defendants' motion for nonsuit on the causes of action for elder abuse and violations of Business and Professions Code sections 17200 and 17500. The remaining causes of action went to the jury. A. The Evidence Adduced at Trial
1. Davidson Retains the Law Firm to Represent Her in the Underlying Action
In March 2007, Davidson filed a real estate action in the Los Angeles County Superior Court against Elaine Pike, Jamie Graciano, Century 21, and Heritage Escrow, among others (the Pike Action). Pike was the seller and Davidson the buyer of the subject real estate in Anza, California (Anza property). Graciano was Pike's real estate agent. Davidson sold another piece of property in Arkansas around the same time and planned to use the proceeds for the purchase of the Anza property. Davidson deposited the proceeds of the Arkansas sale with Heritage Escrow. The Anza property transaction did not close, and Davidson filed the Pike Action in an attempt to force the closing. She sought specific performance or, alternatively, money damages.
The Los Angeles court transferred the Pike Action to the Riverside County Superior Court, where the court consolidated it with an interpleader action filed by Heritage Escrow. Approximately $230,000 in interpleaded escrow funds were deposited with the court, presumably by Heritage Escrow.
"'Interpleader is an equitable proceeding by which an obligor who is a mere stakeholder may compel conflicting claimants to money or property to interplead and litigate the claims among themselves instead of separately against the obligor. . . . After admitting liability and depositing the money or property with the court, the obligor is discharged from liability and freed from the necessity of participating in the litigation between the claimants.'" (Southern California Gas Co. v. Flannery (2014) 232 Cal.App.4th 477, 486.)
Around August 2008, after the transfer to Riverside County, Davidson contacted Southwick to represent her in the Pike Action. Biondi was Southwick's partner, and while he was involved in minor ways in the Pike Action, Southwick took the more active role. Southwick practiced real estate law, among other areas, at the time. He agreed to review Davidson's documents, conduct some research, and formulate an opinion about the matter. They agreed to a flat fee of $3,500 for that preliminary review. According to Davidson, Southwick said "he wouldn't take [the case] if he couldn't win it." Southwick said he never indicated he was going to win the case.
Davidson was alleging Pike had promised to do certain things in connection with the sale of the Anza property, though Southwick was unsure if she alleged that in the complaint, or if the allegation "came in later." In any event, Southwick did not see any written agreement in Davidson's file other than the original contract. He was aware of the statute of frauds at the time he conducted his review. He agreed that the statute of frauds required "a written, signed writing in connection with any type of a promise relating to an interest in real estate." After his review, Southwick did not tell Davidson that some of the promises on which she was suing were not in writing, nor did he tell her that certain contracts relating to an interest in real estate needed to be in writing to be enforceable. He "just said he would take [her] case." There were also times when he said she had "a good case."
The law firm and Davidson executed a retainer agreement in November 2008 calling for an initial deposit of $6,500. Among other things, the retainer agreement stated that the law firm would keep Davidson informed of the progress and developments of the Pike Action and regularly send her billing statements for services rendered. Davidson's payments would be due within 20 days after the law firm mailed the invoices. The agreement also stated the law firm would not settle the Pike Action without her approval, and she had "the absolute right to accept or reject any settlement." In addition, the agreement contained a section titled, "Attorney Fees and Costs Lien" (the lien provision), which stated: "You [Davidson] hereby grant to the [law firm] a lien on any and all claims or causes of action that are the subject of Attorney's representation under this agreement. Attorney's lien will be for sums owing to Attorney for any unpaid costs or attorney fees incurred in representing client under this agreement. The lien will attach to any recovery client may obtain, whether by mediation, arbitration, judgment, settlement or otherwise."
During the Pike Action, Southwick asked Davidson several times for funds that the law firm needed to continue the representation, and she paid with her credit card on these occasions. But the law firm did not send her regular billing invoices. Southwick explained that he and Davidson orally agreed "the bulk" of the law firm's fees would come from the interpleaded funds, when she recovered them. He would periodically ask her if she wanted a bill, and she replied every time, "'No, don't worry about that now.'" But Davidson denied telling Southwick not to send bills and denied any oral agreement to have the law firm take its fees out of the interpleaded funds.
2. The Pike Action Settles
In October 2009, Graciano filed a motion for summary judgment on the causes of action against her, and Davidson agreed to a settlement with Graciano approximately 30 days before trial. According to Davidson, Southwick did not tell her that he failed to file an opposition to Graciano's motion for summary judgment. He advised her to settle with Graciano because "she didn't have any money" and she could be Davidson's expert witness. Davidson did not want to settle with Graciano but ultimately followed his advice to settle. According to Southwick, he discussed the summary judgment motion with her many times, including a conversation at her home in which he explained in detail why an opposition would be futile. He said she ultimately accepted that and dismissed Graciano and Century 21.
The causes of action against Pike were scheduled to proceed to trial in January 2010. Around two weeks before trial, Southwick advised Davidson that she needed to "seriously consider" settling with Pike also. Davidson asked what he could do to assure that she incurred "no additional costs" if she settled before trial. Southwick replied he could not assure her there would be "'no' additional costs" going forward, as she would incur "a couple thousand dollars" more in legal fees to achieve a settlement with Pike, and in the event of a trial, $10,000 to $20,000 more. He further advised her that she probably would not recover all of the interpleaded funds, because Pike was likely entitled to recover her legal fees from the interpleaded funds.
Davidson paid the law firm $2,000 shortly before trial. Southwick was prepared for trial on the scheduled date. On the first day of trial, January 19, 2010, Davidson was present. When the court called the case, Southwick had not yet appeared, but Pike's counsel indicated that the parties had been negotiating a settlement, and the only unsettled issue was the amount of Pike's attorney fees.
Davidson said she "was in a state of shock" when she heard about the settlement. Southwick testified that he had discussed settling the case with Pike's counsel leading up to the trial date, and opposing counsel had made a settlement offer. But Southwick also said he had discussed the settlement options with Davidson several times leading up to trial.
Once Southwick appeared for trial, the court ordered the parties to a settlement conference with a mediator. At the conference, they discussed only the amount Pike could recover for her attorney fees. The parties agreed to a settlement under which Pike would receive $35,000 of the interpleaded funds and Davidson would receive the balance, or approximately $195,000. Pike's counsel recited the terms of the agreement on the record, and Davidson agreed to them on the record. Southwick stated he would prepare a written settlement agreement memorializing these terms. Southwick tried to talk to Davidson after the hearing, but she would not speak to him. She believed he had agreed to a settlement without her knowledge, but she never asked him to undo the settlement. She agreed to the settlement on the record because "[she] didn't know [she] could do otherwise."
Pike's counsel ultimately drafted the settlement agreement and sent it to Southwick in February 2010. The draft stated the court would release the interpleaded funds to Davidson, minus the $35,000 for Pike. Southwick asked Pike's counsel to change that language so that the funds would go to the law firm's client trust account instead. Southwick e-mailed the draft to Davidson.
By May 2010, Davidson had not signed the settlement agreement. Despite the absence of a signed settlement agreement, Pike's counsel submitted a proposed judgment to the court. Southwick knew opposing counsel had been working on a judgment as of April 2010, and around May 6, 2010, Southwick had checked with the court and discovered opposing counsel had submitted the proposed judgment. After he informed Davidson of the proposed judgment, she wrote him an e-mail explaining that she would not sign the settlement agreement because the draft had the funds going to the law firm's client trust account and not directly to her. She told him: "The Judge did not order it that way and I am not signing. Let me know when the Judgment is to be done in court as I will be there."
On May 25, 2010, Southwick appeared at a hearing in the matter, but he did not recall telling the court that Davidson objected to the proposed judgment, and he did not request a hearing on the proposed judgment. He also did not inform Davidson of the hearing in advance, even though she had wanted to be present when "the Judgment [was] to be done in court." Nor did he file a written objection to the judgment. The court entered judgment in the Pike Action on May 28, 2010. The judgment called for the settlement funds to be made payable to the law firm's client trust account on behalf of Davidson.
3. The Law Firm Receives the Settlement Funds on Davidson's Behalf and Bills Her for Services Rendered Since the Beginning of Its Representation
In October 2010, the court dispersed $204,603.55 of the interpleaded funds to the law firm's client trust account. The law firm's office manager tried to contact Davidson three to five times about her settlement funds. First, he mailed a copy of the check to her. After that, he attempted to contact her by telephone. The office manager never received a response from Davidson.
In March 2011, the law firm mailed a bill to Davidson's home in Sierra Madre, California, covering services rendered since August 2008. This was the only billing invoice the law firm ever sent to Davidson. She did not receive this bill. Her home address is not her mailing address. Her home is on a hiking trail near the Angeles forest, and the postal service does not deliver mail there. The attorneys in the Pike Action and the court had previously sent her documents at a mailing address in Pasadena, California, which she has used for over 50 years. The law firm mailed the bill to her home because that was its standard practice, and besides, it had "intermittent success" in the past with mailing items to her other address.
As of March 2011, Davidson had paid the law firm a total of $14,400. The March 2011 bill showed a credit for this amount and charged an additional $17,643.50. The bill contained an entry for appearing in court at a trial setting conference, where the court also considered sanctions against Southwick for failing to appear at an earlier status conference. The bill also contained three entries for work related to a summary judgment motion, but the entries were dated approximately one year after the case had settled. According to Southwick, the law firm had merely misdated these entries, and there were no duplicate entries for these services at an earlier date. To Southwick's knowledge, the law firm had "fully earned" the approximately $17,000 in fees represented in the bill.
Southwick waited to see if Davidson would call or e-mail the law firm to dispute the bill, but she never did. Southwick and Davidson communicated by e-mail throughout the case, but there was no evidence the law firm tried to e-mail Davidson about the bill or the settlement funds it was holding. Southwick had also visited Davidson's home, but again, there was no evidence he tried to discuss the bill or settlement funds in person at her home.
The law firm ultimately withdrew $17,643.50 from the settlement funds in its client trust account, leaving $186,960.05 in settlement funds. Southwick believed the lien provision in the retainer agreement authorized the law firm to withdraw the overdue amount from the settlement funds.
4. Davidson Retains a New Attorney, Who Demands Her Settlement Funds from the Law Firm
Sometime in the summer of 2011, Southwick and Davidson spoke on the phone, and he said he was holding a large sum of money for her. According to Davidson, this was the first and only time she heard from the law firm that it had her settlement funds. Davidson responded that Southwick was violating a court order and instructed him to send the money back to the court. She hung up on him right after saying this, giving Southwick no chance to respond. He called her back at least twice, but she did not answer the call. Southwick did not simply mail her a check because he was uncomfortable sending a check for such a large amount. He wanted to send the funds via wire transfer or have her pick up the check. Davidson, for her part, wanted the court to disperse the money directly to her because the parties had agreed to precisely that on the record.
At some point after this call, Davidson sent someone to retrieve her file at the law firm's office. The file included a copy of the March 2011 bill. Davidson also retained a new attorney, Vip Bhola. Davidson and Bhola reviewed her file together and did not see any billing statement.
In July 2011, Bhola sent a letter to the law firm demanding that it release all the settlement funds, demanding a complete accounting of those funds, and demanding any settlement agreements or other documents relating to the resolution of the Pike Action. Bhola attached an authorization letter signed by Davidson, which directed the law firm to release all the requested information to Bhola.
Southwick's response to Bhola did not provide the requested documents or funds. Southwick responded that the law firm had already given Davidson her original file. He further explained that the law firm was holding $186,960.05 for Davidson, but would send the funds to Bhola's office when Davidson advised the law firm to do so "in appropriate fashion," which her general authorization letter did not do. Around the same time, the law firm's bank statement showed the law firm's client trust account fell to a balance of $185,192.75, rather than $186,960.05. Southwick believed this shortfall occurred because a check for another client's funds had not yet cleared when the law firm wrote a check to a third client.
Bhola sent a second letter to the law firm with written authorization from Davidson to send her settlement funds to Bhola. The law firm sent her settlement funds to Bhola at that point. The law firm possessed the settlement funds for a total of eight to nine months.
When Davidson finally saw the March 2011 bill, it was some time after she had retained Bhola. She disputed that she owed the law firm the additional $17,643.50. She had paid the law firm every time Southwick asked for money, including the last time, when he estimated that he would need several thousand dollars to settle the case. He did not say anything about her owing more fees at that time.
Davidson makes a living training people on how to give seminars of their own. Southwick and Biondi attended one of Davidson's three-day training seminars. Davidson testified that Southwick agreed to credit the cost of the seminar against the law firm's fees. The cost of the seminar for two people was $3,994. The bill did not show a credit for the $3,994 cost of the seminar. According to Southwick, there was no such agreement. He and Biondi attended the seminar because Davidson wanted them to see what she did for a living. Her plans for the Anza property involved her business. She never informed Southwick that she would be charging them for attending the seminar.
5. Davidson's Expert Witness Opines on an Attorney's Duties and Responsibilities, Especially in the Case of a Fee Dispute
Donald Rich has been an attorney since 1978. He was president of the Glendale Bar Association when the organization set up its attorney fee dispute resolution program and was a volunteer mediator and arbitrator in this program.
Rich defined the fiduciary duty that an attorney owes a client as "a duty that encompasses full disclosure, loyalty, truthfulness, keeping someone informed." The attorney also has a duty to follow the client's instructions, unless the instructions are contrary to the ethical rules binding attorneys. California State Bar rules also provide that the attorney must promptly account for any money owed by the client and paid by the client, and the attorney must return any of the client's property to the client, such as documents filed with the court on the client's behalf, or agreements in the client's file.
Rich opined that the lien provision did not entitle the law firm to automatically withdraw its fees from Davidson's settlement funds when there was a dispute. While the lien provision created a lien, establishing the amount of that lien was a different matter. The parties would have to resolve any dispute as to the amount of the lien through mediation, arbitration, or litigation. California State Bar rules provide that, in the case of a dispute, the attorney should hold the disputed amount until the parties can resolve it, but transfer the balance of the settlement funds to the client. State Bar rules also direct that an attorney provide an accounting or billing within 10 days of a client's request for it, unless the attorney has already provided one in the previous 30 days.
Rich acknowledged that if the attorney sends the client a bill, and the client does not dispute the bill, the attorney may take his or her fees from the client's settlement funds, so long as the client consented to the taking. Rich also opined that, if an attorney is holding a client's settlement funds, and the client instructs the attorney "to send the money back to the court," the attorney could accomplish that by filing an interpleader action and depositing the money with the court. B. The Jury's Verdict
The jury rendered the verdict on a special verdict form, which asked a series of questions calling for "yes" or "no" answers. Because defendants challenge the special verdict form on appeal, we set forth the questions asked in detail. The form includes the following questions (with the jury's answers in parentheses): "Did June Davidson enter into a contract with the Defendants?" (Yes); "Did Plaintiff June Davidson do all, or substantially all, of the significant things that the contract required her to do?" (Yes); "Did all the conditions that were required for Defendants' performance occur or were they excused?" (No); "Did Defendants receive money that was intended to be used for the benefit of June Davidson?" (Yes); "What is the amount that should have been given to June Davidson?" ($204,603.55); "Did any of the defendants breach their fiduciary duties to June Davidson?" (Yes); "What are June Davidson's damages?" ($17,643.50); "Do you find by clear and convincing evidence that the defendants acted with Fraud in the Breach of their Fiduciary Duties and/or in the misappropriation of June Davidson's property or funds?" (Yes); "What are June Davidson's damages?" ($13,161.38); "Did Defendants retain June Davidson's personal property (including money) for wrongful use?" (Yes); "What are June Davidson's damages?" ($13,161.38); "Did June Davidson prove by a preponderance of the evidence that Defendants were professionally negligent?" (Yes); "What are June Davidson's damages?" ($4,416.67). The jury calculated Davidson's total damages as $48,382.93.
Notably, because the jurors answered "no" to the question about the conditions required for defendants' performance under the contract, the special verdict form directed them to skip the remaining questions relating to breach of contract, and they did not award any damages on this cause of action.
The court entered a judgment incorporating the jury's special verdict form verbatim. The trial court and the parties construed this as a judgment for Davidson on the causes of action for breach of fiduciary duty, fraud, professional negligence, and money had and received, but against her on breach of contract.
III. DISCUSSION
A. Defendants' Appeal
Defendants contend: (1) substantial evidence did not support the verdict on breach of fiduciary duty, professional negligence, fraud, or money had and received; (2) we must reverse the judgment because the special verdict form was fatally defective; and (3) certain evidentiary rulings constituted prejudicial error. We consider each argument in turn.
1. Substantial Evidence Supported the Judgment Against Southwick and the Law Firm, But Not for the Total Amount of Damages Awarded to Davidson
While substantial evidence supported the judgment against Southwick and the law firm on fraud, breach of fiduciary duty, professional negligence, and money had and received, we must reduce her damages of $48,382.93 to $4,804. There was no substantial evidence these defendants caused $48,382.93 in damages, and no substantial evidence to support the judgment against Biondi on any cause of action.
Davidson argued at trial that defendants committed numerous wrongs, from the time she retained them in the Pike Action to approximately a year and a half after the settlement. We find it useful to consider the evidence with reference to two main time periods—presettlement, and then settlement/postsettlement.
(a) Standard of Review
When a party asserts insufficient evidence supports the jury's verdict, we ask whether any substantial evidence, contradicted or uncontradicted, supported the verdict. (Wilson v. County of Orange (2009) 169 Cal.App.4th 1185, 1188.) Substantial evidence means evidence that is reasonable, credible, and of solid value. (Kuhn v. Dept. of General Services (1994) 22 Cal.App.4th 1627, 1633.) "The ultimate determination is whether a reasonable trier of fact could have found for the respondent based on the whole record." (Ibid.) We view the evidence in the light most favorable to the prevailing party, drawing all reasonable inferences and resolving all conflicts in the prevailing party's favor. (Id. at pp. 1632-1633.) We do not resolve credibility issues, as it is the jury's exclusive province to judge the credibility of witnesses. (Bloxham v. Saldinger (2014) 228 Cal.App.4th 729, 750.)
(b) Defendants' Presettlement Conduct
Defendants moved in limine to exclude certain evidence of legal malpractice, based on the one-year statute of limitations for professional negligence. (Code Civ. Proc., § 340.6, subd. (a).) The court granted the motion, and as a result, it instructed the jurors that they should consider defendants' conduct after January 19, 2010—the day the Pike Action settled—for purposes of professional negligence. Davidson has not challenged this ruling on appeal. Thus, defendants' presettlement conduct could not have provided substantial evidence of professional negligence.
Putting aside professional negligence, none of defendants' presettlement conduct supports the judgment for Davidson on breach of fiduciary duty, fraud, or money had and received. Davidson argued at trial that defendants mispresented the merits of her case, concealed that Pike had a statute of frauds defense, and concealed that they failed to file an opposition to Graciano's summary judgment motion.
Regarding the merits of the Pike Action, there was evidence Southwick told Davidson she had a "good case," or he suggested that he could "win" the case. But the evidence did not show these statements were actually misrepresentations, which is an essential element of fraud. (Civ. Code, § 1710, cls. 1., 2.; Schultz v. Harney (1994) 27 Cal.App.4th 1611, 1622.) Nor did the evidence show these statements violated an attorney's fiduciary duty to "'make a full and fair disclosure'" to his or her client of all facts materially affecting the client's rights and interests. (Cross v. Bonded Adjustment Bureau (1996) 48 Cal.App.4th 266, 281.) There is scant information about the Pike Action in the record. The trial court admitted only the face page of the complaint as an exhibit at trial. Pike allegedly made certain promises in connection with the sale of the Anza property that she failed to keep. Davidson was seeking specific performance of the sale contract or damages, in the alternative. Still, there was no showing on the merits of Davidson's position in the Pike Action, such as what the evidence in that underlying case would have shown. And, Davidson recovered the vast majority of the interpleaded funds in the settlement. Without more, there was no indication that this result was not, in fact, "good" or a "win" for her.
Davidson also relied on evidence that Southwick neglected to tell her about the statute of frauds after his preliminary review of her file—a purported intentional concealment of material fact. Again, because there was so little evidence about the Pike Action, she did not demonstrate the statute of frauds was a defense, such that Southwick had a duty to tell her about it, or that he should have known the statute of frauds applied at the time of his preliminary review. The statute of frauds requires an agreement for the sale of real property to be in writing. (Civ. Code, §§ 1091, 1624, subd. (a)(3); Code Civ. Proc., § 1971.) "A memorandum satisfies the statute of frauds if it identifies the subject of the parties' agreement, shows that they made a contract, and states the essential contract terms with reasonable certainty. [Citations.] 'Only the essential terms must be stated, "'details or particulars' need not [be]. What is essential depends on the agreement and its context and also on the subsequent conduct of the parties . . . ."'" (Sterling v. Taylor (2007) 40 Cal.4th 757, 766.) The essential terms in a contract for the sale of real property include "the buyer, the seller, the price, and the property." (Id. at p. 772.) Here, Davidson made no showing that whatever promises Pike may have made were "essential elements" of the sale contract, or that they constituted some other type of contract that needed to be in writing. Even if these promises were required to be in writing, she also made no showing that Southwick knew, at the time of his preliminary review, that the alleged promises were oral and no writing existed. In short, there was no substantial evidence the statute of frauds constituted a material fact that Southwick had a duty to disclose and intentionally failed to disclose, after he had conducted his review and agreed to take her case. Proof of these essential elements of fraud by concealment was missing (Civ. Code, § 1710, cl. 3.; Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248), as was proof of a violation of the fiduciary duty to disclose.
Defendants' conduct concerning the Graciano summary judgment motion also does not support the judgment. According to Davidson, Southwick concealed that he did not file an opposition to Graciano's summary judgment motion, and told her instead that she should settle with Graciano because Graciano had no money and could be an expert witness. Davidson did not want to settle with Graciano but listened to Southwick's advice. Even if Southwick's actions constituted an intentional suppression of fact or a violation of the fiduciary duty to disclose, there was no proof of resulting damage. The evidence before the jury did not reveal the allegations against Graciano in the Pike Action. The jury thus had no information to determine whether the theory of liability against her would have been successful. In other words, there was no evidence that Davidson suffered damage by dismissing Graciano right before trial instead of proceeding to a trial on the merits. "[R]esulting damage" is an essential element of fraud. (Schultz v. Harney, supra, 27 Cal.App.4th at p. 1622.) Likewise, "damage proximately caused by" the attorney's breach is an essential element of breach of fiduciary duty. (Stanley v. Richmond (1995) 35 Cal.App.4th 1070, 1086.)
As to money had and received, these presettlement acts did not provide substantial evidence of defendants' liability under this cause of action. A plaintiff may use this count when a defendant is allegedly indebted to the plaintiff for money the defendant received for the plaintiff's use. (Avidor v. Sutter's Place, Inc. (2013) 212 Cal.App.4th 1439, 1454.) The plaintiff must show (1) the defendant received money intended to be used for the plaintiff's benefit, (2) the defendant did not use the money for the plaintiff's benefit, and (3) the defendant has not given the plaintiff his or her money. (Ibid.) The evidence showed that the only money the law firm received during the presettlement period was the $14,400 in fees Davidson paid to it. It used that money to pay her debt for legal services rendered. Defendants therefore used the money for her benefit. Davidson made no showing that they did not actually render those services, that their services should have been valued at a lesser amount, or that they did not otherwise earn those fees.
(c) Defendants' Settlement/Postsettlement Conduct
(i) Southwick's and the Law Firm's Liability
In contrast, Davidson adduced substantial evidence that Southwick and the law firm committed fraudulent concealment, breach of fiduciary duty, and professional negligence in connection with the settlement of the Pike Action. By her own admission, Davidson was not claiming defendants "should have obtained a higher settlement amount." The crux of her theory at trial was that the judgment never should have incorporated a term to which she did not agree. The evidence showed Pike's counsel drafted a settlement agreement providing for the court to release Davidson's settlement funds to her. Southwick asked opposing counsel to change the agreement so that the funds would be payable to the law firm's client trust account. Davidson refused to sign the settlement agreement because of this term, but Southwick did not change the agreement back to its original language. Instead, he knowingly permitted the court to enter a judgment that would effectuate this term of the settlement. He did not object to the judgment at the hearing in May 2010 and did not file a written objection. He also knew Davidson wanted to be present when the court considered the judgment—presumably to express her objection—and yet he did not tell Davidson of the hearing.
These facts demonstrate Southwick intentionally concealed information about the court's entry of judgment, which was material to Davidson. They also demonstrate he breached his fiduciary duty "'to make a full and fair disclosure'" of all facts that materially affected Davidson's rights and interests. (Cross v. Bonded Adjustment Bureau, supra, 48 Cal.App.4th at p. 281.) Further, they demonstrate he breached the standard of care—that is, his professional duty "to use such skill, prudence, and diligence as other members of [the] profession commonly possess and exercise." (Budd v. Nixen (1971) 6 Cal.3d 195, 200 [defining the elements of professional negligence for legal malpractice], superseded by Code Civ. Proc., § 340.6 on other grounds.) Defendants contend there was no expert testimony to establish the standard of care because Rich's testimony revolved around certain California Rules of Professional Conduct for attorneys, which are distinct from the standard of care. But expert testimony "is not appropriate in all cases." (Day v. Rosenthal (1985) 170 Cal.App.3d 1125, 1146.) When "'"the failure of attorney performance is so clear that a trier of fact may find professional negligence unassisted by expert testimony, then expert testimony is not required." [Citations.] In other words, if the attorney's negligence is readily apparent from the facts of the case, then the testimony of an expert may not be necessary.'" (Stanley v. Richmond, supra, 35 Cal.App.4th at p. 1093.) This is such a case. The jury did not require expert testimony to conclude concealing material facts from the client, and failing to object to a judgment the client clearly opposed, were failures to use the prudence and diligence a reasonably careful attorney would have used in similar circumstances.
As to fraudulent concealment, substantial evidence also showed the intent and reliance elements were met. Southwick must have acted with intent to defraud Davidson or "intent to induce [her] to alter [her] position to [her] injury or risk." (Civ. Code, § 1709; Boschma v. Home Loan Center, Inc., supra, 198 Cal.App.4th at p. 248.) Further, Davidson must have been unaware of the suppressed facts and would have acted differently, had she known of the suppressed facts. (Boschma v. Home Loan Center, Inc., supra, at p. 248.) The evidence showed that after Southwick concealed the entry of judgment incorporating the objectionable term, he and the law firm gained control of Davidson's settlement funds and made ineffectual attempts to contact her about the funds. The office manager tried to call her and mailed a copy of the check. (It is unclear whether this mail went to her home address—where she did not receive mail—or the mailing address she had been using for 50 years and had previously used in the Pike Action.) Notably, the law firm did not try to notify her by e-mail, although she communicated with Southwick by e-mail throughout the case. The law firm also made one ineffectual attempt to bill her by sending the bill for $17,643.50 to her home address. It did not try sending the bill to her mailing address or e-mailing her. Then, after hearing nothing to dispute the bill, it withdrew $17,643.50 from her settlement funds. The jury could have reasonably inferred from this evidence that Southwick intended to induce Davidson to alter her position to her detriment. That is, he intended to prevent Davidson from objecting to the judgment so that he could gain control of the settlement funds and withdraw the law firm's fees. Likewise, the jury could have reasonably concluded Davidson was unaware of the concealed facts and would not have acted as she did, had she known the facts. Namely, she would have appeared at the May 2010 hearing and ensured the court heard her objection to the judgment, had Southwick informed her of the hearing. Indeed, she told him she wanted to be present when the court considered the judgment.
This leads us to the last essential elements of these causes of action—causation and resulting damage. (Budd v. Nixen, supra, 6 Cal.3d at p. 200; Boschma v. Home Loan Center, Inc., supra, 198 Cal.App.4th at p. 248; Stanley v. Richmond, supra, 35 Cal.App.4th at p. 1086.) This is where Davidson's case against Southwick and the law firm faltered in part. As discussed, Southwick's conduct resulted in him and the law firm gaining control of Davidson's settlement funds without her knowledge and against her wishes, and then withdrawing $17,643.50 in fees from the total. Davidson sought to recover these fees plus the $14,400 she had paid up to settlement. But the law does not permit recovery of fees paid to an attorney on a simple showing that the attorney erred or acted in breach of a duty. Damages do not arise from the mere acceptance of fees for services provided. (Orrick Herrington & Sutcliffe v. Superior Court (2003) 107 Cal.App.4th 1052, 1058.) Rather, there must be a causal connection between the attorney's wrongful acts and the claimed damages. The critical question is: "[W]hat would have happened if the defendant attorney had not" acted negligently, fraudulently, or in breach of fiduciary duty? (Viner v. Sweet (2003) 30 Cal.4th 1232, 1242.) "This is so because the very idea of causation necessarily involves comparing historical events to a hypothetical alternative." (Ibid.)
Here, if Southwick had not surreptitiously gained control of the settlement funds, Davidson still would have owed the law firm fees for services rendered. In this hypothetical setting, the court would have changed the judgment so that the settlement funds went directly to her, but the law firm would have nevertheless billed her for its services and tried to collect. We think the pertinent question is whether Southwick's conduct enabled the law firm to withdraw more than it was entitled to out of the settlement funds. If so, this amount constituted damages caused by Southwick's wrongful conduct.
Substantial evidence showed the law firm was not entitled to a small portion of the funds it withdrew, but this amount is far less than the $48,382.93 in damages awarded by the jury. In her briefing, Davidson suggests defendants falsified all the entries on the March 2011 bill and they were thus entitled to nothing from her. Under this theory, their bad acts enabled them to take control of her money before she could get to it and withdraw made-up fees. But at trial, she established only three billing entries were unsupported—those for work on a summary judgment motion performed long after the Pike Action had settled. The jury could have reasonably concluded the law firm did not actually perform the summary judgment work. She also disputed a fourth billing entry for the court appearance when the court considered sanctions for Southwick's earlier failure to appear. The three hours billed for this appearance included travel time to and from Temecula, waiting for the court to call the matter, and the hearing on both the sanctions issue and the trial setting conference. Southwick was obligated to appear for the trial setting conference, regardless of whether the sanctions issue was also on calendar, and Davidson did not show how much of this hearing should be allocated to the sanctions issue. It was thus not reasonable to conclude the law firm failed to earn these fees. Nor was it reasonable to conclude the entire 19-page bill was falsified because of these three disputed entries. That falls into the realm of pure speculation or conjecture, which does not constitute substantial evidence. (Rodenberry v. Rodenberry (1996) 44 Cal.App.4th 634, 651.) Still, she also established Southwick and Biondi attended one of her seminars at a cost of $3,994 and promised to credit her that amount on their bill. The bill did not include a credit for this amount.
The three disputed summary judgment entries totaled $810, and with the $3,994 for the seminar, the total supported damages amounted to $4,804. Davidson adduced no other evidence that defendants did not actually perform the work or that their fees exceeded the value of the work set forth in the bill. Moreover, even assuming Southwick and the law firm acted improperly by holding the settlement funds for eight to nine months, or refusing to provide her case file to Bhola, Davidson made no showing that this delay or refusal caused her harm. She did not, for instance, show she missed out on a profitable investment for the settlement funds. And, even if defendants permitted the amount in their client trust account to fall about $1,700 below what they believed they owed her, no evidence demonstrated harm caused by this temporary shortfall. Thus, all told, substantial evidence supported economic damages of only $4,804.
Although the court instructed the jury that Davidson was also seeking noneconomic damages for "[p]ast and future inconvenience and emotional distress," Davidson proffered no evidence whatsoever to support noneconomic damages. Like any other element of her case, Davidson bore the burden of proving these damages. "'[D]amages which are speculative, remote, imaginary, contingent, or merely possible cannot serve as a legal basis for recovery.'" (Piscitelli v. Friedenberg (2001) 87 Cal.App.4th 953, 989.) "Plaintiff's counsel must do more than simply talk about pain and suffering in general terms. While opinion testimony is not required to support the amount of the award [citation], evidence must still be presented to establish that plaintiff suffered pain, discomfort, anxiety, etc. as a proximate result of the injury." (Haning et al., Cal. Practice Guide: Personal Injury (The Rutter Group 2017) ¶ 3:620, p. 3-106.) In this case, Davidson did not describe any bodily harm, physical pain, mental suffering, or emotional distress she suffered because of defendants' conduct. No other witnesses— such as a physician, a therapist, friends, or family—attested to her bodily harm, physical pain, mental suffering, or emotional distress. She did not introduce medical records or other documentary evidence to support such pain, suffering, or distress. Simply stated, no substantial evidence supported an award of noneconomic damages. We cannot, therefore, affirm any portion of the $48,382.93 verdict as noneconomic damages.
Defendants contend Davidson cannot recover any of the fees they withdrew from the settlement funds because "[u]nder California law, such monetary sums categorically do not constitute damages for tort claims against an attorney." We disagree. Defendants base this purportedly categorical rule on an overly broad reading of Orrick. In that case, the client alleged his former attorneys committed malpractice by leading him into a "'horribly defective'" marital settlement agreement (MSA). (Orrick Herrington & Sutcliffe v. Superior Court, supra, 107 Cal.App.4th at p. 1055.) In the underlying action, the client unsuccessfully moved to set aside the MSA, and once the court had incorporated the MSA into a judgment, he unsuccessfully moved to set aside the judgment. (Ibid.) In the malpractice action, the client claimed as damages the legal fees he had paid to the defendants, as well as the fees he paid to new attorneys in his futile quest to overturn the MSA. (Id. at pp. 1055-1056 & fn. 1.) The Orrick court held these fees were not "cognizable damages" because the client produced no evidence of a causal link between the alleged malpractice and the fees. (Id. at pp. 1057-1058.) The client had to use the so-called case-within-a-case method to show that, but for the negligence of his attorneys, he could have obtained a better result in the underlying action. (Ibid.) But he did not. He did not, for example, show his ex-wife would have settled for less or would have agreed to more favorable settlement terms, or that he could have obtained a more favorable judgment by going to trial instead of settling. (Id. at p. 1058.) Instead, he showed only that his attorneys "might have erred." (Ibid.) The court concluded that without evidence he could have obtained a better result, he had no cause of action for professional negligence, and he could not recover the fees paid to his former attorneys merely because they might have erred. (Id. at p. 1059.) In this context, the court explained the fees might represent contract damages to the extent they exceeded the value of the services rendered, but they did not constitute tort damages for professional negligence. (Id. at p. 1060.)
Accordingly, Orrick stands for the well-established proposition that the case-within-a-case methodology of proving causation applies whenever a client claims his or her attorney "'has either negligently prosecuted or defended the client's claim.'" (Orrick Herrington & Sutcliffe v. Superior Court, supra, 107 Cal.App.4th at p. 1059.) That is not Davidson's claim here. She does not claim defendants should have obtained a better settlement. Rather, she claims defendants improperly handled her settlements funds. In such a case, "a trial within a trial is not necessary." (Gutierrez v. Girardi (2011) 194 Cal.App.4th 925, 928.) The merits of the Pike Action need not be decided to determine whether the appropriation of her settlement funds caused her damages. (Id. at pp. 928, 936.) In this action, Davidson was required to prove causation, but she was not required to use the trial-within-a-trial or case-within-a-case method. To hold otherwise "would lead to absurd and inequitable results," as explained by the court in Gutierrez: "[S]uppose a plaintiff retains an attorney to represent him in an employment discrimination action on a contingency basis. After the plaintiff's employer settles the case for $100,000, the attorney absconds with the settlement proceeds without paying the plaintiff anything. Under [defendants'] position, if the plaintiff sued the attorney, the attorney could raise each of the employer's defenses to the plaintiff's settled claims and, if the attorney prevailed in this trial within a trial, he could keep the $100,000 with impunity. That is not, should not be, and never has been the law in this state." (Id. at pp. 936-937.) Neither will such an approach be utilized in this case.
Defendants also assert the lien provision of the retainer agreement constituted a complete defense to this action. They argue "uncontroverted evidence at trial showed that Davidson owed the $17,643.50 retained by [defendants] for attorney fees and costs," and their conduct was merely a valid exercise of their rights under the lien provision. This argument misses the point. We would agree that, by virtue of the lien provision, the law firm had a charging lien over the settlement funds to satisfy any outstanding fees and costs. (Fletcher v. Davis (2004) 33 Cal.4th 61, 66.) But the lien was only for sums Davidson actually owed. The evidence was not "uncontroverted" that she owed them $17,643.50. To the contrary, as we have determined, substantial evidence showed she owed the law firm less. And if there was a dispute over the amount owing, under the Rules of Professional Conduct, the law firm was required to keep the disputed amount in the client trust account until it and Davidson finally resolved the dispute. (Rules Prof. Conduct, rule 4-100(A)(2).) It was not entitled to withdraw the disputed amount. (Ibid.) By gaining control of the funds without Davidson's knowledge, and then making one questionable attempt to bill her before withdrawing fees from her funds, Southwick and the law firm prolonged this whole process. The dispute over what she owed has now come to a head, and this action is the end result. Under the circumstances presented here, we cannot say the law firm's lien rights were a complete defense to this action.
(ii) Biondi's Liability
Unlike the evidence against Southwick and the law firm, the evidence against Biondi was insufficient. Biondi was not a participant in Southwick's tortious acts. The undisputed evidence showed Biondi was involved in only minor ways in the Pike Action and Davidson worked principally with Southwick. Indeed, the bill for services from 2008 to 2011 contains only three billing entries by Biondi, and only two other entries by Southwick mention Biondi. Biondi was not present in court the day the parties put the settlement on the record in the Pike Action—Southwick appeared alone. Biondi did not ask opposing counsel to change the settlement agreement so that the settlement funds went to the client trust account instead of directly to Davidson—Southwick did that. There is no evidence Biondi received the e-mail in which Davidson expressed her objection to the settlement agreement and asked to be present when the court entered the judgment—she sent that solely to Southwick. In short, no substantial evidence showed Biondi knew of Davidson's objection to the payment term or her desire to be present in court, that he did anything to conceal the entry of judgment from her, that he did anything to direct payment of the settlement funds to the law firm, or that he knowingly consented to any of Southwick's acts in these respects.
The law firm was a professional law corporation, which is generally subject to the same rules of corporate law as any other corporation. (Bus. & Prof. Code, § 6160; Corp. Code, § 13403.) Corporate shareholders, directors, and officers may be liable for torts along with the corporation only if they are shown to have participated in the tortious conduct. (PMC, Inc. v. Kadisha (2000) 78 Cal.App.4th 1368, 1381-1382.) But they are not vicariously liable for the tortious conduct of other directors or officers, simply by virtue of their official position. (Id. at p. 1379.) "'Their liability, if any, stems from their own tortious conduct, not from their status as directors or officers of the enterprise. [Citation.] "[A]n officer or director will not be liable for torts in which he does not personally participate, of which he has no knowledge, or to which he has not consented . . . . While the corporation itself may be liable for such acts, the individual officer or director will be immune unless he authorizes, directs, or in some meaningful sense actively participates in the wrongful conduct."'" (Ibid.) Because there was no evidence Biondi authorized, directed, or otherwise actively participated in Southwick's tortious acts, there was no basis for finding Biondi liable for fraudulent concealment, breach of fiduciary duty, or professional negligence. We must, therefore, reverse the judgment against him.
(d) No Duplicative Recovery for a Single Injury
We have concluded substantial evidence showed Southwick's and the law firm's breach of fiduciary duty, professional negligence, and fraudulent concealment caused Davidson $4,804 in damages. The same substantial evidence supported the judgment for Davidson on money had and received. The law firm received the settlement funds from the court on Davidson's behalf, improperly retained $4,804 of the funds, and did not use that money for her benefit. (Avidor v. Sutter's Place, Inc., supra, 212 Cal.App.4th at p. 1454; Gutierrez v. Girardi, supra, 194 Cal.App.4th at p. 937.) Nevertheless, Davidson cannot recover this same amount multiple times.
"Regardless of the nature or number of legal theories advanced by the plaintiff, he [or she] is not entitled to more than a single recovery for each distinct item of compensable damage supported by the evidence. [Citation.] Double or duplicative recovery for the same items of damage amounts to overcompensation and is therefore prohibited. [Citation.] [¶] Thus, for example, in a case in which the plaintiff's only item of damage was loss of commissions, two awards of damages identical in amount—one for breach of contract and the other for bad faith denial of the same contract—could not be added together in computing the judgment. Plaintiff was entitled to only one of the awards." (Tavaglione v. Billings (1993) 4 Cal.4th 1150, 1158-1159.)
While substantial evidence showed Southwick's and the law firm's liability under four legal theories, the evidence showed only one item of compensable damage—the amount that the law firm retained as fees but to which it was not entitled. We shall direct the trial court to reduce the judgment against Southwick and the law firm to this single item of damages, $4,804.
2. Defendants' Objections to the Special Verdict Form Do Not Require Reversal
We turn now to defendants' special verdict form argument. They contend the special verdict form was fatally defective because the form failed to ask separate and distinct questions about each element of the offenses. Defendants have forfeited these contentions, and even if they had not, they lack merit.
Jury verdicts fall into two main types—general verdicts and special verdicts. (Code Civ. Proc., § 624.) "A general verdict is that by which [the jurors] pronounce generally upon all or any of the issues, either in favor of the plaintiff or defendant . . . ." (Ibid.) When the plaintiff asserts multiple causes of action, the verdict form may ask the jurors to find generally for the plaintiff or defendant on each separate cause of action, effectively calling for a series of general verdicts. (Shaw v. Hughes Aircraft Co. (2000) 83 Cal.App.4th 1336, 1347, fn. 7.)
"[A] special verdict is that by which the jury find the facts only, leaving the judgment to the Court. The special verdict must present the conclusions of fact as established by the evidence, and not the evidence to prove them; and those conclusions of fact must be so presented as that nothing shall remain to the Court but to draw from them conclusions of law." (Code Civ. Proc., § 624.)
The advantage of a general verdict form for the prevailing party is that it "implies a finding in favor of the prevailing party [on] every fact essential to support that verdict." (Baxter v. Peterson (2007) 150 Cal.App.4th 673, 678.) But when the parties use a special verdict form, we do not imply findings in favor of the prevailing party. (Taylor v. Nabors Drilling USA, LP (2014) 222 Cal.App.4th 1228, 1242 (Taylor).) "'This rule stems from the nature of a special verdict and its "'recognized pitfalls,'" namely, that it requires the jury to resolve all of the controverted issues in the case, unlike a general verdict which merely implies findings on all issues in one party's favor.'" (Ibid.) We review the sufficiency of a special verdict form de novo. (Ibid.)
As a threshold matter, defendants have forfeited their objections to the special verdict form. When a purported defect in the verdict form was apparent at the time the jury rendered the verdict, the failure to object and request clarification or further deliberation before the court discharges the jury precludes a party from later challenging the validity of the verdict. (Taylor, supra, 222 Cal.App.4th at p. 1242.) Such a rule provides a chance to cure the defect, advances efficiency, and deters gamesmanship. (Ibid.) Otherwise, the objecting party has an incentive to carefully remain silent until it is too late to obviate the party's objections. (Ibid.) Here, defendants assert the special verdict form failed to ask the jury about each essential element of the causes of action. For instance, as to breach of fiduciary duty, the form asked if defendants breached their fiduciary duties to Davidson and awarded them damages, but it did not ask if defendants' "conduct was a substantial factor in causing Davidson harm."
The purported defects defendants identify were apparent and could have been corrected by requesting changes to the special verdict form before it went to the jury, or even afterward by requesting that the jury answer further questions before being discharged. Yet defendants did not object to the special verdict form at any time, even in their posttrial briefing. They have, therefore, forfeited their arguments. (Taylor, supra, 222 Cal.App.4th at pp. 1240 & fn. 4, 1242-1243 [holding the defendant forfeited its argument that the special verdict form failed to require answers on two elements of a cause of action]; see also Thompson Pacific Construction, Inc. v. City of Sunnyvale (2007) 155 Cal.App.4th 525, 550 [holding the plaintiff waived its argument that the special verdict form was defective for failing to require a finding on the materiality element of a cause of action].)
Even assuming for the sake of argument that defendants had not forfeited their objections, we would disagree with them on the merits. Although the verdict was labeled a "special verdict form," it is more accurately characterized as a mixture of a general verdict and a special verdict. On money had and received, the verdict form merely found the underlying facts and was thus a special verdict. To review, the elements of this cause of action are (1) defendants received money intended to be used for Davidson's benefit, (2) defendants did not use the money for Davidson's benefit, and (3) defendants have not given Davidson her money. (Avidor v. Sutter's Place, Inc., supra, 212 Cal.App.4th at p. 1454.) The jurors made factual findings sufficient for the court to conclude Davidson had proved each element. The jurors answered "yes" when asked whether defendants had received money intended for Davidson's benefit (the first element). They also answered "yes" when asked whether defendants had "retain[ed]" Davidson's money "for wrongful use." Retaining Davidson's money is the same as not giving her the money (the third element). And, putting the money to "wrongful use" means defendants did not use the money for Davidson's benefit (the second element). The language of the verdict form was not required to precisely track the language of the case law or the jury instructions on each element. The questions and corresponding findings were sufficient.
This is also true of the breach of contract cause of action, on which the form asked a series of questions corresponding to various elements of the claim. Defendants have not challenged the form on that cause of action.
As to the causes of action for breach of fiduciary duty, fraud, and professional negligence, the verdict form was much more akin to a series of general verdicts than a special verdict. The verdict form did not purport to merely find the underlying facts. It asked for conclusions on the causes of action generally and, when the conclusion was in Davidson's favor, awarded damages. ("Did any of the defendants breach their fiduciary duties to June Davidson?" "Do you find by clear and convincing evidence that the defendants acted with Fraud in the Breach of their Fiduciary Duties . . . ?" "Did June Davidson prove by a preponderance of the evidence that Defendants were professionally negligent?") Thus, although the form was denominated a special verdict, according to the statutory definition, there was actually a series of general verdicts. (Chavez v. Keat (1995) 34 Cal.App.4th 1406, 1409, fn. 1.) Consequently, we may imply all findings necessary to support the verdict, including findings in Davidson's favor on the essential elements of the causes of action.
Defendants additionally contend the verdict form was fatally defective for failing to distinguish between economic and noneconomic damages. This contention is moot, given our conclusion that we must reduce the judgment to the proven economic damages alone.
3. Defendants' Evidentiary Arguments Do Not Require Reversal
Defendants contend the trial court committed reversible error by (1) overruling an objection that Davidson's counsel was leading his witness, and (2) ordering defense counsel to limit his evidentiary objections to one basis. We reject both of these arguments.
The leading objection occurred when Davidson's counsel was questioning her. He asked her if she filed the Pike Action "to get the escrow to close to meet [her] time-sensitive deadline." Defense counsel objected, and the court ruled: "He is leading, but she's an elderly witness, so overruled." Defense counsel responded that "[t]he rules don't change for her . . . ." The court again stated it was overruling the objection. Defendants contend the court's ruling "telegraphed to the jury that Davidson was subject to special rules," and based on this incorrect ruling, her counsel was able to "walk" her through "all" of her testimony. Defendants assert this was "per se" highly prejudicial.
Assuming for the sake of argument that the court incorrectly overruled the objection, defendants have failed to carry their burden of showing prejudice. (Christ v. Schwartz (2016) 2 Cal.App.5th 440, 455 ["Prejudice is not presumed. [Citation.] Rather, appellant has the burden of affirmatively demonstrating prejudice."].) They must show it was reasonably probable the jury would have reached a result more favorable to them, absent the error. (Tudor Ranches, Inc. v. State Comp. Ins. Fund (1998) 65 Cal.App.4th 1422, 1431-1432.) They must also support their argument with citation to facts in the record. (Multani v. Witkin & Neal (2013) 215 Cal.App.4th 1428, 1457.) It is not our job to search the record and make the argument for them. (Green v. City of Los Angeles (1974) 40 Cal.App.3d 819, 835.) A conclusory assertion of prejudice is insufficient. (Adams v. MHC Colony Park, L.P. (2014) 224 Cal.App.4th 601, 615.) Here, all we have are conclusory assertions that Davidson's counsel walked her through "all" of her testimony and that this was highly prejudicial. There are no citations to the purportedly leading questions, other than the single one described above. There is no attempt to show defense counsel lodged objections to other leading questions to preserve the issue for appeal. Nor is there an attempt to explain how the exclusion of the objectionable testimony would have led to a more favorable result. We decline to reverse in light of such deficiencies.
Defendants' second argument suffers from the same deficiencies. It is true that, at one point, the court admonished defense counsel to stop making "speaking objections" and "editorial comments" after the court rendered its evidentiary rulings, and ordered defense counsel to object on his "best basis" rather than stringing three or four objections together. Defense counsel replied: "I understand the order, but I can tell the Court I cannot do that, because I'm required to state all grounds, or I will waive them on appeal." Even assuming the court erred, defendants do not support their conclusory assertion that this order was "highly prejudicial." Defense counsel continued to lodge objections on more than one ground after this order. Moreover, defendants do not cite to even one time when defense counsel objected on a single ground but could have made other meritorious objections. As such, they do not explain what evidence the court should have excluded but did not because they were prohibited from making additional objections. Defendants have not met their burden of showing prejudice on this argument either. B. Davidson's Appeal
We move now to Davidson's appeal. She argues: (1) the court erred in denying her motion for JNOV on breach of contract and her motion for new trial on the same cause of action; and (2) the court erred in denying her attorney fees and costs and granting defendants a small portion of the attorney fees they sought.
1. The Court Did Not Err in Denying Davidson's Motion for JNOV and New Trial Motion
Davidson contends the court should have granted her JNOV motion because she produced substantial evidence of breach of contract, and no evidence supported the jury's verdict against her on this cause of action. We disagree the court erred on this motion and the new trial motion, which she based on the same grounds.
(a) Relevant Procedural Background
Davidson filed a JNOV motion and argued there was substantial evidence supporting a judgment in her favor on breach of contract. In addition, she argued, the language of the special verdict form ("Did all the conditions that were required for Defendants' performance occur or were they excused?") confused the jurors, and their confusion was the only reason they did not find in her favor. She filed declarations from two jurors asserting that (1) they and the other jurors "all felt" defendants breached the contract in several ways, (2) the language of the verdict form confused the jurors, and (3) they intended to find defendants liable for breach of contract. She asserted the jury's findings on the other causes of action "clearly indicate[d]" they found facts that would also constitute breach of contract.
The court denied the motion "without prejudice." It ruled the two juror declarations were hearsay to the extent they declared how the other jurors intended to vote. But it noted that it would "take another look at it" if at least nine of the 12 jurors were "willing to come out and say something." It noted that the jury did not speak to the contract issues "because of a drafting error in the special verdict," but it was not going step into the jury's shoes and weigh the evidence at that point. The court indicated it would, however, consider a new trial motion as to breach of contract.
Davidson later filed a motion for new trial on the breach of contract cause of action. Again, she argued the evidence supported liability for breach of contract, and the jurors did not render such a verdict only because the language of the special verdict form confused them. With her reply brief, she submitted the declarations of the two jurors filed with her motion for JNOV, plus the declarations of two more jurors along the same lines. The court denied the new trial motion. It ruled that any error in preparing the special verdict form constituted invited error on Davidson's part, and the hearsay declarations of the jurors were insufficient to overturn the verdict.
(b) Analysis
"A trial court must render [JNOV] whenever a motion for a directed verdict for the aggrieved party should have been granted. (Code Civ. Proc., § 629.) A motion for [JNOV] may be granted only if it appears from the evidence, viewed in the light most favorable to the party securing the verdict, that there is no substantial evidence in support." (Sweatman v. Department of Veterans Affairs (2001) 25 Cal.4th 62, 68.) "The trial judge cannot weigh the evidence [citation], or judge the credibility of witnesses. [Citation.] If the evidence is conflicting or if several reasonable inferences may be drawn, the motion for [JNOV] should be denied." (Hauter v. Zogarts (1975) 14 Cal.3d 104, 110.)
"On appeal from the denial of a motion for [JNOV], we determine whether there is any substantial evidence, contradicted or uncontradicted, supporting the jury's verdict. [Citation.] If there is, we must affirm the denial of the motion. [Citation.] If the appeal challenging the denial of the motion for [JNOV] raises purely legal questions, however, our review is de novo." (Wolf v. Walt Disney Pictures and Television (2008) 162 Cal.App.4th 1107, 1138.)
Here, we cannot say there was no substantial evidence to support a finding against Davidson on breach of contract. The parties offered conflicting evidence on many issues in this case. Even if defendants breached some obligations under the retainer agreement—for instance, to keep her informed of developments or send her regular billing invoices—liability truly came down to causation of damages, an essential element of this cause of action also. (US Ecology, Inc. v. State of California (2005) 129 Cal.App.4th 887, 909.) As we have discussed, to the extent the law firm withdrew fees it was not entitled to, this was the only evidence of damages caused by Southwick's conduct. And whether the law firm was entitled to the fees was an area of dispute. For instance, while Davidson said it owed her a $3,994 credit for the seminar, Southwick denied any such agreement and said he and Biondi attended only because Davidson asked them to do so. He also proffered an explanation for the billing entries that showed summary judgment work long after the case had settled—they had misdated the entries, and defendants had actually performed the work at an earlier date. In other words, there are reasonable inferences and substantial evidence that would have supported a verdict going either way.
Davidson's challenge is better characterized as a challenge to a defect in the special verdict form. "'We analyze the special verdict form de novo' as a matter of law." (Taylor, supra, 222 Cal.App.4th at p. 1242.) Davidson suggests the jury could not have possibly found defendants liable for breach of fiduciary duty, fraud, and professional negligence, but not breach of contract, and the finding against her on breach of contract occurred only because the language of the verdict form confused the jurors. The language of the verdict form was, indeed, confusing, but it was a defect that could have easily been avoided. The court instructed the jury that, to recover for breach of contract, Davidson had to prove "all conditions required by the contract for [defendants'] performance had occurred or were excused." This language refers to a "condition precedent" in contract law, or "an act of a party that must be performed or an uncertain event that must happen before the contractual right accrues or the contractual duty arises." (Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 313.) The contractual duty does not arise unless the condition precedent occurs or is excused for a legally recognized reason. (Id. at pp. 313-314.)
In this case, the verdict form confusingly asked a compound question in the disjunctive: "Did all the conditions that were required for Defendants' performance occur or were they excused?" (Italics added.) The jury responded, "No," and the form directed the jury to skip the remaining questions on breach of contract, including the questions about breach, causation, and damages. These were the correct directions if the answer to both parts of the compound question was "no," the conditions precedent did not occur, and "no," they were not excused. These were not the correct directions, however, if the answer to the first part of the compound question was "no," the conditions precedent did not occur, but the answer to the second part was "yes," the conditions were nevertheless excused. Because the question was compound and phrased in the disjunctive, it is unclear which question the jurors were answering with their negative response. Regardless, the form directed them to stop if the answer to the compound question was "no."
It is clear that a drafting error led to the ambiguity in the special verdict form. To arrive at a clear, correct verdict, the form should have separated the compound question into two questions, as the CACI model verdict form does—one asking whether the conditions precedent occurred, and one asking whether the conditions that did not occur were nevertheless excused. (CACI VF-300.)
Of course, Davidson could have left these questions off the verdict form altogether, if conditions precedent were not at issue. (CACI VF-300, Directions for Use [describing as optional the questions about conditions precedent to a defendant's performance].)
Davidson must bear the responsibility for this drafting error. Much like defendants forfeited their challenges to the special verdict form, Davidson has waived or forfeited this challenge. This defect was apparent on the face of the verdict form, and yet she failed to object, request clarification, or request further deliberation before the court discharged the jury. (Taylor, supra, 222 Cal.App.4th at p. 1242, 1244 [the trial court correctly determined the appellant waived the error in the verdict form where both parties and the court had agreed on the form, the error was an inadvertent but apparent typo, and the appellant did not object to the form or ask for clarification before the court discharged the jury]; see also Myers Building Industries Ltd. v. Interface Technology, Inc. (1993) 13 Cal.App.4th 949, 960, fn. 8 ["It is incumbent upon counsel to propose a special verdict that does not mislead a jury into bringing in an improper special verdict. [Citation.] [The plaintiff's] failure to propose an appropriate special verdict was responsible for the erroneous special verdict, and its good faith in this respect is immaterial."].) The court even polled the jurors at defendants' request, read the confusing question aloud, and asked each of the jurors if their answer was "no." Eleven of the jurors replied that it was their answer. "The polling process is designed to reveal mistakes in the written verdict . . . ." (Keener v. Jeld-Wen, Inc. (2009) 46 Cal.4th 247, 256.) This would have been an opportune time to request that the jurors return to the jury room and answer clarifying questions. "The requirement of an objection is premised upon the idea that a party should not sit on his or her hands, but instead must speak up and provide the court with an opportunity to address the alleged error at a time when it might be fixed." (Id. at p. 266.) "Although most counsel would resist that temptation" to sit idly by, "neither parties nor counsel should be given that incentive in the first instance." (Id. at p. 267.) For these reasons, the trial court did not err in determining Davidson had invited the error in the verdict form (even if we would more accurately characterize it as waiver or forfeiture) and denying the JNOV and new trial motions.
Further, the court did not err in refusing to rely on the declarations of the four jurors, which Davidson proffered to show the jurors intended to find liability for breach of contract. We review the court's decision to admit or exclude the evidence in these declarations for abuse of discretion. (Barboni v. Tuomi (2012) 210 Cal.App.4th 340, 345.) Generally, evidence of the jurors' deliberations may not impeach their verdict. (Johns v. City of Los Angeles (1978) 78 Cal.App.3d 983, 989; see also Assem. Com. on Judiciary com., 29B pt. 3B West's Ann. Evid. Code (2009 ed.) foll. § 1150, p. 426 ["[A] juror is incompetent to give evidence as to matters that might impeach his verdict."].) An exception exists to show one or more jurors resorted to chance to determine the verdict, or to show other misconduct, such as juror bias. (Code Civ. Proc., § 657, cl. (2); Evid. Code, § 1150; Johns v. City of Los Angeles, supra, at p. 989.) Davidson did not proffer the jurors' declarations to show misconduct. She merely wanted to impeach the verdict by attempting to show the jurors were confused. The declarations were inadmissible for this purpose.
Lastly, with respect to the new trial motion, Davidson argues that the court said it would "consider" granting such a motion, but when presented with the motion, the court did not recall saying that and then denied the motion. There was no error here. The court did consider the new trial motion when Davidson filed it, true to its word. She has cited no authority that the court was bound to grant the motion merely because it said it would consider the motion, nor are we aware of any authority that would support this proposition.
2. The Court Did Not Err in Ruling on the Attorney Fees Motions
Davidson next contends the court erred in denying her attorney fees. She argues that, irrespective of whether she prevailed on the breach of contract cause of action, she was the prevailing party under the attorney fees provision of the retainer agreement. Relatedly, she asserts the court erred in awarding $10,000 in attorney fees to defendants because they were not the prevailing parties on the noncontract causes of action. We reject both arguments.
(a) Relevant Procedural Background
Davidson sought attorney fees of $124,540.16 based on the retainer agreement's attorney fee provision. The attorney fee provision states: "The prevailing party in any action or proceeding to enforce any provision of this Agreement will be awarded reasonable attorney's fees and costs incurred in that action or proceeding or in efforts to negotiate a settlement of the matter."
The court declined to award Davidson attorney fees. It ruled the attorney fee provision limited recovery to proceedings to enforce the contract and did not apply to Davidson's tort causes of action. And, because she did not prevail on the breach of contract cause of action, she was not entitled to attorney fees.
Defendants also filed a motion for attorney fees seeking their total fees of $77,800. They argued that they prevailed on the breach of contract cause of action and were thus entitled to fees under the attorney fee provision and Civil Code section 1717. Moreover, they argued, the court should not apportion their fees between the contract and noncontract causes of action because the causes of action were inextricably intertwined and arose from a common core of operative facts. The court declined to award defendants $77,800 in fees and awarded them $10,000 instead, ruling they were entitled to fees only for the breach of contract cause of action.
(b) Analysis
Under Civil Code section 1717, the prevailing party in any action on a contract "shall be entitled to reasonable attorney's fees in addition to other costs," when the contract specifically provides for an award of attorney fees and costs to the party prevailing on the contract. (Civ. Code, § 1717, subd. (a).) "[T]he party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract." (Id., subd. (b)(1).) Defendants who obtain a simple, unqualified verdict in their favor on the only contract claim in the action are the prevailing parties on the contract as a matter of law. (Hsu v. Abbara (1995) 9 Cal.4th 863, 865-866, 876.) The court has no discretion to deny such defendants their attorney fees. (Id. at p. 876.) If the cause of action on the contract is joined with other causes of action beyond the contract, "the prevailing party may recover attorney's fees under [Civil Code] section 1717 only as they relate to the contract action." (Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 129.)
"It is true that, unlike ordinary negligence, professional negligence breaches a duty that exists only because the parties have a contractual agreement . . . ." (Loube v. Loube (1998) 64 Cal.App.4th 421, 429.) Nevertheless, a suit for legal malpractice is a tort claim and not an action "'on the contract.'" (Ibid.) "It also is well-settled that '. . . an action for fraud seeking damages sounds in tort, and is not "on a contract" for purposes of [Civil Code section 1717], even though the underlying transaction in which the fraud occurred involved a contract containing an attorney fee clause.'" (Id. at p. 430.) Accordingly, a narrowly drawn attorney fee provision that applies only to actions to enforce the terms of the parties' agreement does not apply to tort causes of action. (Ibid.)
Under a different section, Code of Civil Procedure section 1021, parties may validly agree that the prevailing party in any litigation between them will be awarded attorney fees, whether the action sounds in tort or contract. (GoTek Energy, Inc. v. SoCal IP Law Group, LLP (2016) 3 Cal.App.5th 1240, 1250; Loube v. Loube, supra, at p. 430.) Thus, a broadly worded attorney fee provision that applies to any dispute between the parties "relating to," "under," or "arising out of" the agreement may apply to tort actions. (Santisas v. Goodin (1998) 17 Cal.4th 599, 608; GoTek Energy, Inc. v. SoCal IP Law Group, LLP, supra, at p. 1249; Thompson v. Miller (2003) 112 Cal.App.4th 327, 336.)
"Where, as here, there is no conflicting extrinsic evidence, we independently review the trial court's interpretation of the attorney fees clause." (GoTek Energy, Inc. v. SoCal IP Law Group, LLP, supra, 3 Cal.App.5th at p. 1249.) Applying this standard, we conclude the trial court did not err. The court's power to award attorney fees on noncontract versus contract causes of action depends on the wording of the attorney fees provision. The parties here agreed to a narrowly drafted attorney fees provision that applies only to "any action or proceeding to enforce any provision of this Agreement." (Italics added.) This language applies to contract causes of action but not tort causes of action. (Loube v. Loube, supra, 64 Cal.App.4th at p. 429.) Defendants obtained an unqualified verdict in their favor on breach of contract. They were, therefore, the prevailing parties on the contract and entitled to attorney fees for that cause of action.
3. The Court Erred in Denying Davidson Costs
Davidson last contends the court erred when it denied her costs. We agree.
(a) Relevant Procedural Background
In July 2014, approximately one month after the jury rendered its special verdict, Davidson filed and served a memorandum of costs seeking $7,531.54. The court did not enter judgment on the verdict until October 2014.
In September 2014, Davidson sought costs of $7,531.54, plus $3,000 in expert witness fees, in connection with her attorney fee motion. The court declined to award these costs. The court believed she had failed to file the memorandum of costs and had only included it as an exhibit to her attorney fee motion. It directed Davidson to separately file her memorandum of costs, explaining it would consider her costs then.
After this hearing, Davidson filed a declaration from her counsel attaching the conformed copy of her previously filed memorandum of costs from July 2014. Defendants argued Davidson could not recover these costs because she had originally filed the memorandum before the court entered judgment, rendering the memorandum "moot," and she did not file a new memorandum after the judgment (only counsel's declaration attaching the old one). Defendants further argued that her time to file the memorandum of costs had expired and she had thus lost the right to claim costs. The court again denied Davidson her costs but directed her to file a motion so the court could determine whether she had timely filed the memorandum of costs. After this ruling, Davidson filed her memorandum of costs again, but the record contains no points and authorities by Davidson arguing that she timely filed the memorandum
(b) Analysis
"Where, as here, the determination of whether costs should be awarded is an issue of law on undisputed facts, we exercise de novo review." (City of Long Beach v. Stevedoring Services of America (2007) 157 Cal.App.4th 672, 678.) Under Code of Civil Procedure section 1032, "a prevailing party is entitled as a matter of right to recover costs in any action or proceeding." (Code Civ. Proc., § 1032, subd. (b).) As pertinent here, the law defines the "prevailing party" as "the party with a net monetary recovery." (Id., subd. (a)(4).) Absent some other statutory authority, the court has no discretion to refuse the prevailing party costs. (Vons Cos., Inc. v. Lyle Parks, Jr., Inc. (2009) 177 Cal.App.4th 823, 832.)
A prevailing party seeking costs must file and serve a memorandum of costs within 15 days after the notice of entry of judgment is served, or within 180 days after entry of judgment, whichever is first. (Cal. Rules of Court, rule 3.1700(a)(1).) The opposing party must file any notice of motion to strike or tax costs within 15 days of service of the cost memorandum. (Id., rule 3.1700(b)(1).) After the time to strike or tax costs has passed, the clerk must immediately enter the costs on the judgment. (Id., rule 3.1700(b)(4).)
"[T]ime limitations pertaining to a memorandum of costs are not jurisdictional [citation], and the premature filing of a memorandum of costs is treated as 'a mere irregularity at best' that does not constitute reversible error absent a showing of prejudice. [Citations.] Rather, courts treat prematurely filed cost bills as being timely filed." (Haley v. Casa Del Rey Homeowners Assn. (2007) 153 Cal.App.4th 863, 880.)
Here, the court should have awarded Davidson costs. She was the prevailing party as the party with a net monetary recovery on her causes of action (and she remains so after this appeal). The court denied her costs because it believed she had not filed a memorandum of costs, but this belief was wrong. Even if she prematurely filed the memorandum of costs before the court entered judgment, defendants have not shown any prejudice from the premature filing. This was a mere procedural irregularity, and the trial court should have treated the memorandum as timely filed. We will thus reverse the court's order denying Davidson costs and direct the court to enter an order awarding her costs of $7,531.54. She is not entitled to the extra $3,000 in expert witness fees she sought in connection with her attorney fees motion. A prevailing party may not recover expert witness fees as costs, unless the court ordered the expert witness. (Code Civ. Proc., § 1033.5, subds. (a)(8), (b)(1).)
IV. DISPOSITION
The judgment against Biondi is reversed. The judgment against Southwick and the law firm is modified to reduce Davidson's total recovery from $48,382.93 to $4,804, but is otherwise affirmed. In addition, the court's orders denying Davidson attorney fees and granting attorney fees to defendants are affirmed, but the order denying Davidson costs is reversed. The court is directed to enter an order awarding Davidson her costs of $7,531.54. The parties shall bear their own costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
FIELDS
J. We concur: McKINSTER
Acting P. J. MILLER
J.