Opinion
NOT TO BE PUBLISHED
Super. Ct. No. S-CV-14388
HULL, J.Plaintiff Victor A. Gonsalves, an attorney appearing in pro per, appeals from a summary judgment entered in favor of defendants North American Company for Life and Health Insurance (North American) and Sammons Financial Group, Inc. (Sammons), on plaintiff’s complaint and North American’s cross-complaint. The parties’ claims arise from an alleged breach of an agreement between plaintiff and North American whereby plaintiff became an agent in the sale of North American’s insurance products. Defendants assert, and plaintiff disputes, that plaintiff was obligated under the agreement to repay commissions received by plaintiff on the sale of two annuity policies that were canceled prematurely. Plaintiff contends the trial court erred in denying his motion to compel discovery designed to prove North American had not been harmed by premature cancellation of the policies. He further contends issues of fact remain on the various claims asserted by the parties. We disagree with both contentions and affirm the judgment.
Facts and Proceedings
On review of an order granting summary judgment, we view the evidence in the light most favorable to the opposing party. (Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107.)
On January 23, 2002, plaintiff entered into an agreement with North American whereby plaintiff became an agent for the sale of North American’s insurance products (the Agency Contract). The Agency Contract incorporated a commission schedule setting forth the rates at which plaintiff would be compensated for the sale of various products. This schedule also provided for return, or charge back, of commissions in the event of early termination of the product sold. This charge back provision read: “During the first year, commission will be charged back upon death, full and partial surrenders and cancellation.” It further provided: “The charge back percentage is as follows: first 6 months--100%; 6-12 months--50%; after first year--no charge back.”
In his application for appointment as an agent, plaintiff authorized North American to release information about any negative balance in his account with North American to “Vector One, its successors, or any organization designated to replace Vector One.”
On January 25, 2002, and March 11, 2002, plaintiff sold two North American annuity policies to Yan N. Gow for $200,000 each (the Annuity Policies), for which plaintiff was paid total commissions of $64,000.
Yan N. Gow died on June 24, 2002, less than six months after the policies were issued. However, because of litigation among the annuitant’s heirs, no claim was made on the Annuity Policies until May 24, 2004. North American instructed the owners of the policies to surrender them, and they did so on July 8, 2004. On July 16, 2004, North American canceled the Annuity Policies and paid the beneficiaries $213,061.41 and $212,648.69.
North American charged back the $64,000 commissions paid on the Annuity Policies against plaintiff’s account with the company. However, by November 2004, it was clear plaintiff did not intend to repay the commissions, and North American notified Vector One of a negative balance in plaintiff’s account.
Plaintiff initiated this action against defendants and others. The operative complaint alleges three causes of action against defendants: intentional infliction of emotional distress, defamation, and declaratory relief. Plaintiff alleged, in general, that defendants were not entitled to charge back the commissions because the Agency Contract was unconscionable, the Annuity Policies had not been surrendered and canceled within one year of issuance, and defendants had not been harmed by cancellation of the Annuity Policies. Plaintiff further alleged defendants’ notification to Vector One of the negative balance in his account was defamatory and caused him loss of income and emotional distress. Finally, plaintiff sought a declaration that defendants are not entitled to repayment of the commissions.
North American filed a cross-complaint against plaintiff containing two causes of action: breach of contract and declaratory relief. North American sought repayment of the commissions and a declaration of its rights under the Agency Contract.
North American filed a motion for summary judgment or, in the alternative, summary adjudication of all claims in the complaint against it and all claims in the cross-complaint.
Plaintiff filed a motion to compel discovery. In particular, plaintiff sought responses to discovery intended to establish the profits North American earned from use of the premiums paid on the Annuity Policies from the time the policies were issued until they were canceled.
The trial court denied plaintiff’s motion to compel discovery, concluding the information sought by plaintiff was irrelevant to the dispute. The court also imposed a $2,500 sanction against plaintiff for a frivolous motion.
Plaintiff filed a cross-motion for summary adjudication. Both North American and Sammons filed a motion for summary adjudication of plaintiff’s defamation claim.
The trial court granted North American’s motion for summary judgment. On the declaratory relief claims, the court concluded the Agency Contract was not unconscionable and, therefore, may be enforced by North American according to its terms. On plaintiff’s claim for intentional infliction of emotional distress, the court concluded there was no evidence of extreme and outrageous conduct. On North American’s breach of contract claim, the court concluded North American was entitled to charge back the full commissions because death of the annuitant occurred within six months. On the defamation claim, the court concluded truth of the report to Vector One was a complete defense. Finally, the court concluded Sammons was entitled to summary judgment as well, because the claims against Sammons were the same as those against North American.
The trial court thereafter entered judgment for North American on its cross-complaint in the amount of $88,804.08, which included the $64,000 commissions and interest.
Discussion
I
Motion to Compel Discovery
Plaintiff contends the trial court erred in denying his motion to compel discovery and imposing sanctions. He argues the evidence sought was relevant to the issue of whether North American was entitled to charge back the commissions, which is central to the various causes of action in the complaint and cross-complaint. We disagree.
The discovery requests to which plaintiff sought responses concerned the profits earned by North American on its investments during the period it had dominion over the premiums paid on the Annuity Policies. For example, plaintiff requested “all documents stating the TOTAL RETURN received on YOUR BOND PORTFOLIO for the period starting January 1, 2002 and ending December 31, 2002.” This request was repeated for the years 2003 and 2004. Plaintiff also requested documents on returns from cash, short term investments and loans for the years 2002, 2003 and 2004. In each instance, North American interposed a relevance objection.
Plaintiff contends the evidence sought in his discovery requests was relevant to the issue of whether North American was seeking an unreasonable measure of damages within the meaning of Civil Code section 3359. Plaintiff argues he “was seeking discovery to prove his information and belief that [defendants] seek to enjoy an unfair windfall through an inappropriate application of the chargeback provisions of the instant contract.” According to plaintiff, charge back provisions are inserted in insurance agency agreements to protect the insurer in case a policy is canceled before the insurer has an opportunity to recoup the commission paid to the agent. Plaintiff argues the evidence he sought would have proven North American more than recouped the commissions paid.
Plaintiff’s reliance on Civil Code section 3359 is misplaced. It reads: “Damages must, in all cases, be reasonable, and where an obligation of any kind appears to create a right to unconscionable and grossly oppressive damages, contrary to substantial justice, no more than reasonable damages can be recovered.”
Plaintiff’s argument for relevance of the information sought in his discovery boils down to this: Because North American earned substantially more from use of the Annuity Policy premiums than it ultimately paid the beneficiaries of those policies, any additional recovery of the commissions paid to plaintiff amounts to unconscionable and grossly oppressive damages.
However, this argument conflates the various contracts to which North American was a party. North American entered into one contract with plaintiff, the Agency Contract, and two others with the annuitant, the Annuity Policies. The Agency Contract provided for payment of a commission upon the sale of an annuity policy, but return of that commission, or a part thereof, if the policy is canceled prematurely. In this litigation, North American asserts plaintiff breached the Agency Contract by refusing to repay the commissions paid on the Annuity Policies. To the extent North American is entitled to such repayment, an issue we address later, its measure of damages would most likely be the amount of the commissions together with the loss of use of the commissions from the time they should have been repaid.
Although we do not have them before us, the Annuity Policies apparently required that, upon premature cancellation, the policy owners would receive a certain return. After canceling the policies, North American paid the beneficiaries $213,061.41 and $212,648.69. To the extent North American was able to earn a greater return from use of the premiums paid on those policies than it was ultimately required to pay the policy owners, this was North American’s profit on the Annuity Policies. In the event this amounted to a windfall profit, as alleged by plaintiff, this was a matter between North American and the policyholders.
Through his discovery requests, plaintiff attempted to prove North American suffered no damages from breach of the Agency Contract because it earned more on the Annuity Policies than the commissions plaintiff refused to repay. This he cannot do. Rather, the question for purposes of Civil Code section 3359 is whether North American was seeking unconscionable or grossly oppressive damages for breach of the Agency Contract alone.
In its cross-complaint, North American sought return of the commissions paid on the Annuity Policies plus interest from the date the commissions should have been repaid. In our view, there is nothing unconscionable or grossly oppressive within the meaning of Civil Code section 3359 about plaintiff being required to return to North American the commissions he was paid for annuity policies that were canceled prematurely. In effect, plaintiff was being asked to return only what he had not earned. The discovery plaintiff sought had nothing to do with the proper measure of damages suffered by North American on plaintiff’s breach of the Agency Contract.
Plaintiff contends the evidence sought was nevertheless relevant to his claim that various terms of the Agency Contract are unconscionable within the meaning of Civil Code section 1670.5, subdivision (a). That subdivision reads: “If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.”
However, plaintiff acknowledges North American did not rely on any of the allegedly unconscionable provisions of the Agency Contract to support its claim for repayment of the commissions, thereby rendering plaintiff’s argument moot. We are therefore at a loss as to why plaintiff nevertheless spends three pages of his opening brief arguing the evidence he sought was relevant to a moot point. At any rate, as explained above, the evidence sought related to North American’s profit on the Annuity Policies, not the Agency Contract. Furthermore, the fact that North American may ultimately have recovered more from use of the annuity premiums than the commissions paid, under the unique circumstances of this case, has no bearing on whether the Agency Contract was unconscionable “at the time it was made.” (Civ. Code, § 1670.5, subd. (a).)
The trial court correctly concluded the discovery sought by plaintiff was not relevant to this dispute.
Plaintiff contends the trial court erred in imposing a $2,500 sanction on him for pursuing his motion to compel discovery. In fact, plaintiff argues defendants should have been sanctioned for pursuing evasive discovery practices. However, plaintiff’s argument is based solely on his assertion that his motion to compel was meritorious and the evidence sought was relevant to this dispute. As we have explained, it was not.
II
Plaintiff’s Summary Adjudication Motion
Plaintiff contends the trial court erred in denying his motion for summary adjudication of the claims asserted in North American’s cross-complaint and the declaratory relief cause of action of plaintiff’s complaint. Although the record before us does not contain an express ruling by the trial court on that motion, it may be assumed the motion was denied in light of the court’s ruling on defendants’ competing motions.
Plaintiff argues he was entitled to summary adjudication on the parties’ opposing declaratory relief causes of action, because he established his right to summary adjudication by producing evidence that North American was not harmed but instead received a financial benefit from cancellation of the Annuity Policies. Plaintiff further argues North American presented no evidence to refute his showing. We are not persuaded.
As in the preceding section, plaintiff’s argument is based on his improper conflation of the Agency Contract and the Annuity Policies. The fact that North American may have received a benefit on the Annuity Policies has no bearing on whether plaintiff was required by the Agency Contract to repay the commissions. The issue presented on the dueling declaratory relief claims is whether the Agency Contract permitted charge back of the commissions under the unique circumstances of this case. This depends on the terms of that contract, not what came to pass under the Annuity Policies.
Plaintiff argues the trial court erred in denying his request for judicial notice of certain financial documents. However, plaintiff provides no further argument in this regard. A point merely raised but not argued or supported by citation to authority is forfeited. (Kim v. Sumitomo Bank (1993) 17 Cal.App.4th 974, 979.)
III
Damages
Plaintiff contends defendants suffered no detriment as a result of cancellation of the Annuity Policies and, therefore, are not entitled to recover damages in this action. He cites as support Avery v. Fredericksen & Westbrook (1944) 67 Cal.App.2d 334 (Avery), in which the plaintiff entered into a contract with the defendant for removal of granite sand from the plaintiff’s property in exchange for a payment of $25 per acre. The defendant also agreed to remove one foot of top soil from the property, level off the property after removal of the sand, and replace the top soil. However, after removing the sand, the defendant failed to level off the property or replace the top soil. The plaintiff sued for $10,400, the alleged cost of leveling the property and restoring the top soil. The trial court instead awarded the plaintiff $87, which represented the value of the three and one-half acres used by the defendant at $25 per acre.
This court affirmed, concluding an award of damages greater than the total value of the land would be excessive and unreasonable. We explained: “[T]hough, according to the evidence in the case, plaintiff’s land, if restored to its original condition, would have no greater value than the amount awarded as damages, appellant contends for the right to recover from defendants $10,400, as the cost of filling the pit left by defendants, the leveling of the three and one-half acres, and the replacement of the top soil thereon. [¶] We agree with the finding of the trial court that an amount greater than the total value of the land would be excessive and unreasonable, and are of the opinion that the amount awarded fully compensates plaintiff for the detriment suffered by him by reason of the acts of defendants.” (Avery, supra, 67 Cal.App.2d at p. 336.)
The foregoing case does not assist plaintiff. It merely recognizes that damages must be assessed according to the amount that would put the non-breaching party in the same position as if the contract had been fully performed. In that case, the plaintiff was fully compensated by payment of the full value of the property. We indicated the value of the property had not been reduced by the mining activities and common sense compels the conclusion that the plaintiff would not have spent the $10,400 sought in the litigation to restore the land to its original condition if its market value would not have been enhanced thereby. (Avery, supra, 67 Cal.App.2d at p. 341.) In effect, the plaintiff would have retained the property, which was worth the same as before, and pocketed the $10,400 restoration expenses.
In any event, plaintiff’s argument is premised on his unfounded assertion that North American suffered no damages from breach of the Agency Contract because it earned profits on the Annuity Policies. Assuming North American was entitled to repayment of the commissions, such repayment, with interest, is necessary to put North American in the same position as if the Agency Contract had been fully performed.
IV
Estoppel
Plaintiff contends that, because defendants refused to produce evidence of the profits earned from use of the annuity premiums, they should be estopped from objecting to the evidence presented by plaintiff on that subject. In the alternative, plaintiff argues summary judgment should not have been entered for defendants, because evidence essential to plaintiff’s opposition may exist but could not be produced by plaintiff because of defendants’ discovery objections.
We cannot tell from plaintiff’s argument whether he is contending defendants should have been estopped below from challenging his evidence on profits earned by North American or defendants should be estopped on appeal from challenging the evidence. If the former, plaintiff cites no ruling by the trial court excluding such evidence. If the latter, it is not the function of this court to decide in the first instance what evidence may be considered by the trial court.
At any rate, as explained previously, the evidence plaintiff sought in discovery was not relevant to the issues presented in this matter. Nor did the evidence presented by plaintiff have any bearing on this dispute. The profit North American may have earned on the Annuity Policies has no impact on the parties’ rights under the Agency Contract. Hence, any challenge to that evidence on the basis of relevance would have been proper.
V
Interpretation of the Charge Back Provision
Plaintiff contends the trial court misread the charge back provision of the Agency Contract in concluding North American is entitled to repayment of the commissions paid on the Annuity Policies. Plaintiff argues the provision, properly read, requires that death of the annuitant, surrender of the policy, and cancellation of the policy all occur within one year. Here, surrender and cancellation did not occur until more than two years after the policies were issued.
“When a dispute arises over the meaning of contract language, the first question to be decided is whether the language is ‘reasonably susceptible’ to the interpretation urged by the party. If it is not, the case is over. [Citation.] If the court decides the language is reasonably susceptible to the interpretation urged, the court moves on to the second question: what did the parties intend the language to mean?” (Southern Cal. Edison Co. v. Superior Court (1995) 37 Cal.App.4th 839, 847.) The overriding goal of contract interpretation is to give effect to the mutual intention of the parties at the time of contracting. (Civ. Code, § 1636; Ticor Title Ins. Co. v. Employers Ins. of Wausau (1995) 40 Cal.App.4th 1699, 1707.)
Where contract language is clear and explicit and does not lead to absurd results, we normally determine intent from the written terms alone. (Civ. Code, § 1638.) Those terms are to be understood in their ordinary and popular sense, unless used by the parties in a technical sense, or unless a special meaning is given to them by usage. (Id., § 1644.) The language of a contract “must receive such an interpretation as will make it lawful, operative, definite, reasonable, and capable of being carried into effect, if it can be done without violating the intention of the parties.” (Id., § 1643.)
The present dispute involves the following language from the Agency Contract: “During the first year, commission will be charged back upon death, full and partial surrenders and cancellation.” Plaintiff contends the only way this provision can be made “lawful, operative, definite, reasonable, and capable of being carried into effect” (Civ. Code, § 1643), in light of Civil Code section 3359, is to interpret it to require that death, surrender and cancellation all occur within the first year. Otherwise, plaintiff argues, the insurer would receive a windfall profit while the agent is assessed “excessive and unreasonable damages.”
We have already addressed plaintiff’s arguments regarding windfall profits and unreasonable damages under Civil Code section 3359. To the extent North American received windfall profits on the Annuity Policies, those profits have no bearing on plaintiff’s obligations under the Agency Contract.
Plaintiff argues the contract language suggests charge back is permitted only if “death, surrender, and cancellation” all occur within one year. According to plaintiff, use of the conjunctive “and” means that all three are required.
However, this argument is belied by the actual language of the contract. As noted above, that language reads: “During the first year, commission will be charged back upon death, full and partial surrenders and cancellation.” It does not say “surrender” but “full and partial surrenders.” If, as plaintiff suggests, the “and” in this provision means all of the items must occur, then, under the actual language of the provision, death, full surrender, partial surrender and cancellation must all occur in the first year. However, there can never be both full and partial surrender. Furthermore, plaintiff’s argument means that a charge back can occur only in the case of death of the annuitant. However, the rest of the Agency Contract illustrates that charge back may occur where an annuity policy is canceled for other reasons.
At any rate, we fail to see how requiring death, surrender and cancellation all to occur within one year of issuance of a policy would make the charge back provision any fairer to plaintiff and, hence, not unconscionable. In this instance, the delay in surrender and cancellation of the Annuity Policies impacted the financial position of North American vis-à-vis the policyholders. Delay in settlement meant that North American was able to hold onto the premiums for an extended period and, according to plaintiff, use that money to earn a profit. By the same token, the policyholders were deprived of the money and thereby deprived of the opportunity to make a profit. In other words, North American profited at the expense of the policyholders.
However, this had no adverse impact on plaintiff. Whether the Annuity Policies were canceled in the first year or two and one-half years later, plaintiff was required to return no more than the commissions paid. In fact, like North American, plaintiff benefited from the delay by being able to hold onto the commissions for an extended period, thereby affording him an opportunity to earn a profit on that money at the expense of North American.
Plaintiff argues the parties’ actions should govern interpretation of the Agency Contract. He points to the fact that by May 24, 2004, North American knew that the annuitant had died within six months of issuance of the Annuity Contracts yet waited until after the annuity certificates had been surrendered and canceled before notifying plaintiff of the charge back of commissions. According to plaintiff, this demonstrates North American knew that death, surrender and cancellation all had to occur within the first year.
This argument is self-defeating. Because surrender and cancellation occurred more than a year after the policies were issued, the same action by North American--waiting for surrender and cancellation before invoking the charge back provision--demonstrates North American’s belief that charge back is permitted even though surrender and cancellation occur after the first year.
VI
Procedural Defects
Plaintiff contends the trial court erred in granting North American’s motion for summary judgment or summary adjudication, because the moving papers failed to set forth the causes of action or affirmative defenses North American sought to have adjudicated or identify the facts supporting summary adjudication on each claim or defense. Plaintiff cites California Rules of Court, former rule 342, which read in relevant part: “If summary adjudication is sought, whether separately or as an alternative to the motion for summary judgment, the specific cause of action, affirmative defense, claims for damages, or issues of duty must be stated specifically in the notice of motion and be repeated, verbatim, in the separate statement of undisputed material facts.”
Plaintiff is correct that North American’s notice of motion failed to state specifically all of the causes of action sought to be adjudicated. Rather, the notice requested summary adjudication of plaintiff’s “claims against North American, and North American’s cross-claims for breach of contract and declaratory relief.” Nor did North American’s separate statement repeat the specific causes of action sought to be adjudicated.
However, this is much ado about nothing. The trial court granted summary judgment to defendants, not summary adjudication. Although the court also indicated in its tentative ruling that it was granting summary adjudication on certain causes of action, this was merely by way of explaining why North American was entitled to judgment on all of the claims asserted in the complaint and cross-complaint. Therefore, any defect in the summary adjudication prong of North American’s motion is moot.
Plaintiff next contends he was led to believe North American’s motion was one for judgment on the pleadings and responded accordingly. Plaintiff argues he was therefor denied an opportunity to respond to North American’s motion as one for summary judgment or summary adjudication. Plaintiff further argues that, because he was misled, he offered no evidence in his separate statement on the intentional infliction and declaratory relief causes of action. According to plaintiff, “detrimental unfairness occurred when [he] was lead [sic] to challenge [North American’s] motion for summary judgment and/or summary adjudication as a motion for judgment on the pleadings . . . .”
Plaintiff’s argument is manufactured out of whole cloth. North American’s motion was entitled one for summary judgment or, alternatively, summary adjudication. It was plaintiff alone who chose to treat it as one for judgment on the pleadings. In his memorandum in opposition to summary judgment, plaintiff argued several items in North American’s statement of undisputed facts “appear related to testing the sufficiency of” the pleadings. Plaintiff then quoted from Hejmadi v. AMFAC, Inc. (1988) 202 Cal.App.3d 525, 535-536, where the court said a motion for summary judgment may effectively operate as a motion for judgment on the pleadings. However, plaintiff makes no attempt to explain how North American’s motion was in fact one for judgment on the pleadings. Rather, he attempts to bootstrap his argument by asserting that, because he informed the trial court the motion was one for judgment on the pleadings and he submitted a response to the motion as such, the court could not thereafter treat it as one for summary judgment. Plaintiff has only himself to blame if he failed to provide an adequate response to North American’s motion.
VII
The Individual Claims
Plaintiff contends defendants were not entitled to summary judgment on the declaratory relief and breach of contract causes of action, because the Agency Contract violated Civil Code section 3359 and North American suffered no damages from plaintiff’s failure to repay the commissions. However, as explained earlier, this contention is premised on plaintiff’s incorrect assertion that North American suffered no damage for breach of the Agency Contract because it made a profit on the Annuity Policies. Defendants established their right to summary judgment on these claims by virtue of undisputed evidence that the Agency Contract required plaintiff to repay the commissions.
Plaintiff contends defendants were not entitled to summary judgment on his intentional infliction of emotional distress claim, because they “utterly fail[ed] to produce any evidence ‘demonstrating that one or more elements of [plaintiff’s claim] ‘cannot be established,’ or that ‘there is a complete defense’ thereto.” However, beyond this bare assertion, plaintiff makes no attempt to refute the trial court’s conclusion that plaintiff presented “no evidence that Defendant North American’s collection attempts and reporting of Plaintiff’s debt to Vector One amounted to extreme and outrageous conduct.” Nor does plaintiff analyze the evidence presented by defendants to demonstrate its inadequacy. A point raised but not argued or supported by citation to authority is forfeited. (Kim v. Sumitomo Bank, supra, 17 Cal.App.4th at p. 979.)
Plaintiff contends the trial court erred in granting summary judgment on his defamation claim. He argues such claim was one for defamation per se, which required no proof of special damages. Plaintiff further contends, in any event, he produced evidence of special damages. However, plaintiff’s argument overlooks the basic requirement that a claim for defamation be based on a false statement. (See Civ. Code, §§ 45, 46.) As we have explained, North American made no false statement to Vector One when it reported that plaintiff had a balance owing.
Each of the claims asserted against defendants in the operative complaint and against plaintiff in the cross-complaint depends on the central issue of whether plaintiff was obligated by the Agency Contract to repay commissions received for sale of the Annuity Policies. Plaintiff asserts he was not, because the Agency Contract was unconscionable, inasmuch as it permitted North American to recover the commissions notwithstanding that it profited from the canceled Annuity Policies. However, as we have explained, the plain language of the Agency Contract requires repayment of commissions if, as here, death of the annuitant occurs within one year of issuance of the policies.
Plaintiff asserts it is unfair to permit North American to obtain a windfall profit because of delay in surrender and cancellation of the Annuity Policies and yet require him to repay the commissions. However, any advantage gained by North American from delay in surrender and cancellation of the Annuity Policies is matched by a commensurate advantage gained by plaintiff in being permitted to hold onto and earn a profit from the commissions during the same delay in surrender and cancellation. While North American ultimately repaid the policy premiums, with interest, it is plaintiff who is seeking a windfall profit by being able to retain commissions that, according to the terms of the Agency Contract, were never earned. The trial court did not err in granting summary judgment to defendants.
Disposition
The judgment is affirmed.
We concur: SCOTLAND , P.J., DAVIS , J.