Opinion
NOT TO BE PUBLISHED
Santa Cruz County Super. Ct. No. CV147778
McAdams, J.
This appeal is taken from a judgment, which was entered following a jury trial on claims arising from construction defects in plaintiffs’ home. In its special verdict, the jury found against defendant Louis Chetaud on plaintiffs’ claims of negligent misrepresentation and breach of implied warranty, but it found that defendant Richard Forrest was not Chetaud’s partner in the development of plaintiffs’ home. Following post-trial motions, the court entered a judgment exonerating Forrest.
On appeal, plaintiffs contend that they are entitled to judgment against Forrest as a matter of law on several theories, including ostensible partnership and ostensible agency.
As explained below, plaintiffs’ new theories are not cognizable on appeal because they were not presented at trial. Moreover, plaintiffs have not established these claims as a matter of law. Plaintiffs’ other appellate challenges likewise are unavailing. We therefore affirm the judgment.
BACKGROUND
As pertinent to this decision, the parties to this appeal are plaintiffs Moira Hogan and Kenton Mitchell and defendant Richard Forrest. Defendant Louis Chetaud petitioned for bankruptcy protection and this court ordered the appeal stayed as to him. Based on developments in the bankruptcy case, plaintiffs recently requested a lifting of the stay, so that they may prosecute the appeal against Chetaud. That request is pending. This decision resolves plaintiffs’ appellate claims against Forrest only.
Plaintiffs’ Complaint
In November 2003, plaintiffs filed their complaint in this action. As reflected in the caption, the named defendants are Chetaud, Forrest, and Chetaud Forrest Builders.
According to later statements by plaintiffs’ counsel, Chetaud Forrest Builders was not a party to the complaint, despite its listing in the caption. As reflected in trial testimony and in later statements by defense counsel, Chetaud Forrest Builders is a fictitious business name for Chetaud & Genho, Inc.
Suing “individually and as representatives of persons similarly situated, ” plaintiffs alleged: “This action involves various parcels of real property, ” which defendants “acquired for the sole purpose of building homes on... to sell on the open market.” Plaintiffs purchased one of those properties, a residence on approximately four acres located at 40 Lions Field Drive, Santa Cruz.
According to the complaint, in July 2001, the new Lions Field home “was being marketed by LOUIS CHETAUD and RICH FORREST (who was represented to be a silent partner in the project) for a sale price of $1,350,000.00.” Plaintiffs first looked at the home that same month. At that time, “the SELLER and his representatives” made several representations to plaintiffs. One was that the seller (Chetaud) was a licensed general contractor. Another was that “while the SELLER himself was the only one whose name appeared on title to the PROPERTY, the SELLER had actually financed the construction of the residence with a business partner, RICH FORREST..., and that FORREST was intimately involved with (and held a large financial stake in) the sale of the home.”
The complaint also alleges: “In reliance on SELLER’s representations, BUYERS agreed to purchase the home from SELLER.” In August 2001, “Plaintiffs and SELLER entered into a written purchase agreement to purchase the PROPERTY for a purchase price of $1,150,000.00. As part of the sale, SELLER agreed in writing to finance a portion of the purchase price by carrying back a second Deed of Trust in the amount of $160,000.00.”
The complaint further alleges: “After escrow closed, the BUYERS began to discover significant, hidden construction defects in the residence” but “in spite of... demand, SELLER has failed and refused to completely repair all of the construction defects.” In addition, the complaint alleges the falsity of various representations by Chetaud, including that he was licensed and experienced as a general contractor, and that Forrest was licensed as a contractor and had “participated extensively in the construction” of the home.
The complaint asserts causes of action for breach of contract; violation of contractor licensing statutes; fraud (intentional and/or negligent misrepresentation, concealment, and promise without intent to perform); breach of implied warranties (merchantability and fitness); infliction of emotional distress (intentional and negligent); injunctive relief; declaratory relief; and unfair business practices.
Trial
In September 2008, the matter proceeded to a 12-day jury trial on the complaint and various cross-complaints. Plaintiffs tried their case against Forrest on the theory that he was responsible for their damages as Chetaud’s partner.
The record on appeal consists of reporters’ transcripts, an appellant’s appendix, and a respondent’s appendix. Neither appendix includes any cross-complaint, but the judgment refers to a cross-complaint by defendant Chetaud against plaintiffs, apparently for nonpayment of the $160,000 secured note, and at least two other cross-complaints are mentioned elsewhere in the record.
Opening Statements
After in limine motions and jury selection, opening statements were given by plaintiffs and by Chetaud. Forrest, who represented himself at trial, reserved his opening statement.
Concerning Forrest, plaintiffs’ counsel told the jury that “Mr. Chetaud is going to tell you that Mr. Forrest was my partner” and that “Mr. Forrest is equally responsible for the damages that the Plaintiffs have incurred because of his participation as a joint venturer and partner.”
Evidence
The trial evidence included testimony by a number of lay witnesses, including plaintiff s Hogan and Mitchell, defendants Chetaud and Forrest, and real estate agent Katie Kane, who represented both plaintiffs and Chetaud in the real estate transaction.
Forrest testified that he “did embark on a partnership with Mr. Chetaud to build spec homes” but that the Lions Field residence was not one of the partnership’s projects. Forrest acknowledged that he had held himself out as part of Chetaud Forrest Builders and that he was aware that Chetaud intended to use the name in marketing Lions Field. But Forrest was not involved in any “of the components of the construction” of the home there and “didn’t construct anything in that place.” Likewise, Forrest “did not sign any purchase agreement” or any “other documents related to the construction of the project, ” including escrow documents, loan papers, planning applications, or building permits. Forrest did not provide “any supervision” or “any financial funding” for the construction, nor did he “ever sign any checks or approve any invoices related to the construction” or any real estate listing for the property. Forrest testified that Chetaud did pay him $80,000 from the sale proceeds from Lions Field but the money was a partial repayment of a prior debt and not a split of the profits.
In addition to the lay witnesses, several experts testified on plaintiffs’ behalf, and all parties offered documentary evidence.
Jury Instruction
Following the presentation of evidence, and after conferring with the parties concerning jury instructions and verdict forms, the court instructed the jury on the substance of plaintiffs’ claims. Concerning plaintiffs’ claims against Chetaud, the court gave instructions on implied warranty, fraud, concealment, and negligent misrepresentation. Concerning plaintiffs’ claims against Forrest, the court instructed the jury on partnership and agency.
Argument
All parties made closing arguments to the jury. As relevant here, plaintiffs’ counsel argued that Forrest was a partner in the development of plaintiffs’ home and, as such, had “to be accountable for his own conduct and the profits.”
Jury Verdicts
The jury began its deliberations on September 16, 2008, and returned its special verdicts the following day. The special verdict form for “all claims asserted by” plaintiffs contains 27 questions. The jury answered all pertinent questions.
There were two special jury verdict forms. One covered plaintiffs’ claims; the other covered Chetaud’s “promissory fraud” cross-claim against plaintiff Hogan. Only the verdict on plaintiffs’ claim is pertinent to this appeal.
First, the jury answered the questions concerning plaintiffs’ claims against Chetaud, including their claims for breach of implied warranty (questions 1-5), intentional misrepresentation (questions 6-10), concealment (questions 11-14), and negligent misrepresentation (questions 15-19). The jury’s findings supported plaintiffs’ claims against Chetaud for breach of implied warranty and negligent misrepresentation, but not their fraud claims. Because the jury did not find fraud, it did not reach the question of malice (question (27).
Next, the jury turned to plaintiffs’ claim against Forrest, contained in question 20, which asked: “Was RICHARD FORREST a partner or joint venture with LOUIS CHETAUD in the development of the property at 40 Lions Field Drive?” The jury answered “no.”
Finally, the jury addressed the questions on the special verdict form concerning damages, answering questions about cost of repair (questions 21-25) and diminution in value (question 26). The jury determined the cost of repair to be $487,952, but it answered “no” to question 22, which asked: “Are the costs of repair reasonable given the damage to the proper and the value after the repair?” The jury assessed the diminution in value at $305,000.
After rendering its verdicts, the jury was polled, thanked, and excused.
Post-Trial Hearings
The parties brought a number of post-trial motions, which were heard in December 2008 and January 2009. The court also considered reserved issues at that time.
As pertinent to this appeal, plaintiffs moved for judgment notwithstanding the verdict as to defendant Forrest, or, in the alternative, a new trial. Among the grounds for the motion, plaintiffs asserted “that Richard Forrest was an actual or ostensible partner in the 40 Lions Field Drive project; that Richard Forrest conspired with Louis Chetaud to misrepresent material facts”; and “that the uncontradicted evidence received at trial, as a matter of law, required a judgment against” Forrest. Forrest opposed the motion. By written order filed in February 2009, the court denied the motion.
The court granted plaintiffs’ motion for judgment notwithstanding the verdict as to Chetaud, on the ground of excessive damages.
In addition to the parties’ post-trial motions, the court considered “a number of issues” that had been “bifurcated and reserved for decision by the Court.” Among them was the $160,000 note owed by plaintiffs to Chetaud. The court found that the obligation should be set off against the verdict and deemed fully satisfied.
Judgment
In February 2009, the court entered judgment. As against Chetaud, after set-offs and good faith settlements, plaintiffs recovered nothing. As against Forrest, the judgment orders that plaintiffs take nothing.
The judgment shows this calculation: starting with the principal award of $305,000, the sum of $160,000 is subtracted for the set-offs, leaving a subtotal of $145,000; the sum of $169,000 is then subtracted for the good faith settlements, leaving a net award of $0.
Appeal
In May 2009, plaintiffs brought this appeal from the judgment.
Before summarizing the contentions set forth in the parties’ appellate briefs, we first address two corollary issues raised by the briefs and the record: Forrest’s requests for judicial notice and both parties’ claims of appellate rules violations.
Requests for Judicial Notice
Forrest makes four requests for judicial notice, none in conventional form. One is contained in a footnote in his respondent’s brief. The other three appear as comments to items listed in the index to his respondent’s appendix. In their reply brief, plaintiffs “object to all of the items which have been included in Respondent’s Appendix that are not part of the record in the trial court.”
We deny Forrest’s requests for judicial notice. “Reviewing courts generally do not take judicial notice of evidence not presented to the trial court” absent exceptional circumstances. (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444, fn. 3; Termo Co. v. Luther (2008) 169 Cal.App.4th 394, 404.) No such circumstances are present here.
Violation of Appellate Rules
Each party accuses the other of violating the rules on appeal. Forrest asserts violations as to both the briefs and the record. Plaintiffs do likewise.
Concerning the opening brief, Forrest first points to plaintiffs’ failure to include a statement of appealability, as required by the rules. (See Cal. Rules of Court, rule 8.204(a)(2)(B).) Forrest also notes that the plaintiffs omitted “any discussion in [the] opening brief of the applicable standard of review.” Additionally, Forrest asserts that the opening brief “failed to provide a sufficiently fair and adequate record and statement of facts.” (See Cal. Rules of Court, rule 8.204(a)(2)(C).) Forrest proffers examples of various statements and omissions in the opening brief that he describes as unsupported, irrelevant, or misleading. According to Forrest, plaintiff Hogan “so unfairly ‘edited’ the record and facts that anyone reading her Opening Brief would be baffled as to why the jury and trial court did not decide in her favor.” (See Myers v. Trendwest Resorts, Inc. (2009) 178 Cal.App.4th 735, 744-745.)
Plaintiffs accuse Forrest of “bias and mudslinging advocacy” and distortion of the facts. They cite the focus on Hogan alone in Forrest’s brief, as reflected in its references to plaintiffs in the singular, as “she.” In plaintiffs’ view: “This purposeful distortion is an attempt to insert a bias into the proceedings based on the wife’s gender and her profession as an attorney.” According to plaintiffs, Forrest’s brief “is the one that is not in compliance with the Rules of Court.” Plaintiffs describe the introduction to that brief as “a biased, unsupportable and false statement of largely irrelevant evidentiary facts without citations to the record in order to portray one of the Appellants as a liar and defrauder.”
Among other rules on appeal, litigants are required to provide the court with a fair, complete, and accurate statement of the material evidence germane to the issues. (Cal. Rule of Court, rule 8.204 (a)(2)(C); Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881.) That requirement is particularly important in cases such as this, which depend on an assessment of the evidence. If “appellants fail to present us with all the relevant evidence, then the appellants cannot carry their burden of showing the evidence” compels a judgment in their favor. (State Water Resources Control Bd. Cases (2006) 136 Cal.App.4th 674, 749-750.)
In our view, plaintiffs have fallen short of that standard. (See Ajaxo Inc. v. E*Trade Group, Inc. (2005) 135 Cal.App.4th 21, 50 [appellant’s “slanted presentation of the facts reads more like argument”]. We are concerned by several statements in plaintiffs’ briefs that appear to be inaccurate.
For example, in discussing Forrest’s evidence in the opening brief, plaintiffs state that his “timeline” of individual and partnership projects “somehow skipped 40 Lions Field Drive, then included three or four additional properties.” In fact, the Lions Field project is mentioned both in Forrest’s testimony on this point and in his documentary evidence, Exhibit 300. And in their reply brief, in discussing the sufficiency of their allegations of conspiracy, plaintiffs state that in Forrest’s “Opposition to the Motion for Judgment Notwithstanding the Verdict, he argued only that the Plaintiffs failed to allege conspiracy.” In fact, both in his written opposition and at the hearing on the motion, Forrest also argued that plaintiffs waived their claims by failing to submit them to the jury, and that plaintiffs failed to present sufficient evidence to prove those claims.
Nevertheless, we will not exercise our discretion to dismiss the appeal, as Forrest requests. (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 237 [“drastic sanction” of dismissal for rules violations was not warranted].) However, we do admonish plaintiffs’ counsel to heed the rules. “Professional ethics and considerations of credibility in advocacy require that appellants support their arguments with fair and accurate representations of trial court proceedings. (Cal. Rules of Court, rule 8.204(a)(2); Rules of Prof. Conduct, rule 5-200.)” (Myers v. Trendwest Resorts, Inc., supra, 178 Cal.App.4th at p. 745.)
As for improper matter in the record, any documents in either appendix that were not before the trial court are deemed stricken. (Termo Co. v. Luther, supra, 169 Cal.App.4th at p. 404.)
Contentions
Plaintiffs’ principal contention on appeal is that “a judgment should have been entered against Forrest under the doctrines of ostensible partnership, ostensible agency, joint tortfeasor liability, and conspiracy.” In addition, plaintiffs challenge the effectiveness of the verdict to support the defense judgment for Forrest, and they argue for a new trial. Finally, plaintiffs assert error in the calculation of damages, a point that will become relevant if a reversal renders Forrest liable to plaintiffs.
Forrest disputes all of plaintiffs’ contentions. First, he asserts that plaintiffs are precluded from presenting their appellate theories of recovery, based on the doctrines of invited error, forfeiture, and judicial estoppel. On the merits, Forrest maintains that the evidence does not support plaintiffs’ bid for judgment against him. Finally, Forrest addresses plaintiffs’ arguments concerning damages.
DISCUSSION
The threshold question is whether plaintiffs’ appellate theories of recovery are cognizable. As explained below, they are not, because plaintiffs did not present them in the trial court. Furthermore, plaintiffs have not established entitlement to judgment on those claims as a matter of law, nor have they presented any other ground for reversal. To establish the proper framework for our discussion of those points, we begin by summarizing the legal principles that govern our decision.
I. General Principles
A. New Theories on Appeal
As a general rule, parties may not assert new theories on appeal. (Sea & Sage Audubon Society, Inc. v. Planning Com. (1983) 34 Cal.3d 412, 417.) “It is a firmly entrenched principle of appellate practice that litigants must adhere to the theory on which a case was tried. Stated otherwise, a litigant may not change his or her position on appeal and assert a new theory.” (Brown v. Boren (1999) 74 Cal.App.4th 1303, 1316; United States Golf Assn. v. Arroyo Software Corp. (1999) 69 Cal.App.4th 607, 623 [“appellant cannot challenge a judgment on the basis of a new cause of action it did not advance below”].)
“The general rule confining the parties upon appeal to the theory advanced below is based on the rationale that the opposing party should not be required to defend for the first time on appeal against a new theory that ‘contemplates a factual situation the consequences of which are open to controversy and were not put in issue or presented at the trial.’ ” (Ward v. Taggart (1959) 51 Cal.2d 736, 742.) Permitting a “change in strategy” on appeal thus “would be unfair to the trial court and the opposing litigant.” (Brown v. Boren, supra, 74 Cal.App.4th at p. 1316; Ernst v. Searle (1933) 218 Cal. 233, 241.)
There is an exception to the general rule, which derives from its underlying rationale. Under that exception, the reviewing court has “discretion to consider a new theory on appeal when it is purely a matter of applying the law to undisputed facts.” (Brown v. Boren, supra, 74 Cal.App.4th at p. 1316.) “This forgiving approach has been most frequently invoked when ‘important issues of public policy are at issue.’ ” (Sea & Sage Audubon Society, Inc. v. Planning Com., supra, 34 Cal.3d at p. 417; Stevens v. Owens-Corning Fiberglas Corp. (1996) 49 Cal.App.4th 1645, 1654.) But its application nevertheless “is largely a question of an appellate court’s discretion.” (Richmond v. Dart Industries, Inc. (1987) 196 Cal.App.3d 869, 874.) That discretion is properly invoked only “when the issue involves purely a legal question which rests on an uncontraverted record which could not have been altered by the presentation of additional evidence.” (In re Marriage of Broderick (1989) 209 Cal.App.3d 489, 501; see Ward v. Taggart, supra, 51 Cal.2d at p. 742 [new theory of recovery on appeal did “not contemplate any factual situation different from that established by the evidence in the trial court”].)
B. Forfeiture; Estoppel by Invited Error
Another pertinent general rule of appellate practice is that parties may not assert error resulting from their own acts or omissions in the trial court.
“Under the doctrine of waiver” – or more properly, forfeiture – “a party loses the right to appeal an issue caused by affirmative conduct or by failing to take the proper steps at trial to avoid or correct the error.” (Telles Transport, Inc. v. W.C.A.B. (2001) 92 Cal.App.4th 1159, 1167.) “The forfeiture rule generally applies in all civil and criminal proceedings.” (Keener v. Jeld-Wen, Inc. (2009) 46 Cal.4th 247, 264.) “The rule is designed to advance efficiency and deter gamesmanship.” (Ibid.)
“Over the years, cases have used the word [waiver] loosely to describe two related, but distinct, concepts: (1) losing a right by failing to assert it, more precisely called forfeiture; and (2) intentionally relinquishing a known right.” (Cowan v. Superior Court (1996) 14 Cal.4th 367, 371.) In this context, the correct legal term is forfeiture. (In re S.B. (2004) 32 Cal.4th 1287, 1293, fn. 2; Greer v. Buzgheia (2006) 141 Cal.App.4th 1150, 1158, fn. 4.)
“Similarly, under the doctrine of invited error, a party is estopped from asserting prejudicial error where his own conduct caused or induced the commission of the wrong.” (Telles Transport, Inc. v. W.C.A.B., supra, 92 Cal.App.4th at p. 1167; see also, e.g., Hasson v. Ford Motor Co. (1982) 32 Cal.3d 388, 420 [“plaintiffs are estopped to complain of the trial court’s error because they participated in its commission”].) “At bottom, the doctrine rests on the purpose of the principle, which is to prevent a party from misleading the trial court and then profiting therefrom in the appellate court.” (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 403.)
C. Appellate Review
Following denial of a motion for judgment notwithstanding the verdict, an appeal may be taken “from the judgment or from the order denying the motion for judgment notwithstanding the verdict, or both.” (Sweatman v. Department of Veterans Affairs (2001) 25 Cal.4th 62, 68.) Well-settled standards govern both the trial court’s decision on the motion and appellate review.
“A trial court must render judgment notwithstanding the verdict whenever a motion for a directed verdict for the aggrieved party should have been granted. (Code Civ. Proc., § 629.)” (Sweatman v. Department of Veterans Affairs, supra, 25 Cal.4th at p. 68.) “A motion for judgment notwithstanding the verdict 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.” (Ibid.)
On appeal from the denial of a motion for judgment notwithstanding the verdict, the standard of review depends on the grounds for the motion. “If the motion challenges the sufficiency of the evidence to support the verdict, we review the ruling under the substantial evidence standard.” (Gillan v. City of San Marino (2007) 147 Cal.App.4th 1033, 1043; Sweatman v. Department of Veterans Affairs, supra, 25 Cal.4th at p. 68.) “If the motion presents a legal question based on undisputed facts, however, we review the ruling de novo.” (Gillan v. City of San Marino, at pp. 1043-1044.) Thus, for example, where the jury “was not asked to resolve any factual questions bearing on” the issue on appeal, and where the parties do not “offer conflicting evidence” on the point, the reviewing court will “address the issue under a de novo standard of review.” (Sweatman v. Department of Veterans Affairs, at p. 68.)
II. Application
In this case, plaintiffs offer a number of theories in support of their bid for reversal of the defense judgment for Forrest. After first discussing the proper standard of appellate review, we consider each of plaintiffs’ arguments in turn.
A. Review Standard
As reflected in their notice of appeal, plaintiffs appealed only from the judgment, not from denial of their motion for judgment notwithstanding the verdict. Plaintiffs nevertheless urge de novo review, arguing that this case presents a strictly legal issue on undisputed facts. Forrest urges review under the deferential substantial evidence test.
To the extent that we reach plaintiffs’ contentions that the trial evidence entitles them to judgment against Forrest as a matter of law, we review the record in the light most favorable to Forrest. (See Nordquist v. McGraw-Hill Broadcasting Co. (1995) 32 Cal.App.4th 555, 561.)
B. Ostensible Partnership Theory
In their first argument on appeal, plaintiffs assert that Forrest was an ostensible partner as a matter of law. Forrest disagrees, arguing that plaintiffs forfeited the claim and that the record does not support it. We agree with Forrest on both points.
1. Plaintiffs forfeited their argument on this theory.
Plaintiffs did not submit this theory to the jury. As plaintiffs’ counsel stated during argument on post-trial motions: “I think we are guessing about what the jury did, because there was no instruction about this. And they were deciding, was he an actual partner? Not was he an ostensible partner?”
To the extent that plaintiffs were prosecuting this theory at trial, they were required to offer jury instruction on it. (See Willden v. Washington Nat’l Ins. Co. (1976)18 Cal.3d 631, 636 [every civil litigant “ ‘must propose complete and comprehensive instructions in accordance with his theory’ ”]; Phillips v. Noble (1958) 50 Cal.2d 163, 167 [“no instruction on res ipsa loquitur was requested or given, and the case is not one in which the doctrine may be applied as a matter of law on the basis of undisputed facts”].)
Here, however, plaintiffs maintain that they were not required to submit the issue to the jury, because they are entitled to judgment as a matter of law on the evidence presented. (See Stevens v. Owens-Corning Fiberglas Corp., supra, 49 Cal.App.4th at p. 1654 [in the trial court, challenges based on legal error “are not limited to those raised before the verdict or judgment”]; Brown v. Boren, supra, 74 Cal.App.4th at p. 1316 [on appeal, the reviewing court may “consider a new theory” where “it is purely a matter of applying the law to undisputed facts”].)
2. Plaintiffs have not demonstrated entitlement to judgment as a matter of law.
The doctrine of ostensible partnership, also called partnership by estoppel, permits the imposition of vicarious liability on an ostensible partner. It has been codified in Corporations Code section 16308, which reads in pertinent part as follows: “If a person, by words or conduct, purports to be a partner, or consents to being represented by another as a partner, in a partnership or with one or more persons not partners, the purported partner is liable to a person to whom the representation is made, if that person, relying on the representation, enters into a transaction with the actual or purported partnership.” (Corp. Code, § 16308, subd. (a).)
The full text of that provision reads as follows: “If a person, by words or conduct, purports to be a partner, or consents to being represented by another as a partner, in a partnership or with one or more persons not partners, the purported partner is liable to a person to whom the representation is made, if that person, relying on the representation, enters into a transaction with the actual or purported partnership. If the representation, either by the purported partner or by a person with the purported partner’s consent, is made in a public manner, the purported partner is liable to a person who relies upon the purported partnership even if the purported partner is not aware of being held out as a partner to the claimant. If partnership liability results, the purported partner is liable with respect to that liability as if the purported partner were a partner. If no partnership liability results, the purported partner is liable with respect to that liability jointly and severally with any other person consenting to the representation.” (Corp. Code, § 16308, subd. (a).)
“The rule of responsibility and liability declared in this section... is founded upon the doctrine of equitable estoppel.” (Moen v. Art’s Café (1950) 95 Cal.App.2d 577, 579, discussing predecessor provision.) The claim must be both pleaded and proved. (Ibid.; but see Foster v. Fisher (1941) 44 Cal.App.2d 33, 37 [defect in the pleading may be waived].) “When it is contended that a defendant is an ostensible partner, the question is whether his acts and conduct were sufficient to lead the creditor to believe that he was a copartner and that he assumed responsibility as such.” (J & J Builders Supply v. Caffin (1967) 248 Cal.App.2d 292, 297.) “This is an issue of fact for the trial court to determine from all of the evidence presented.” (Ibid.; see Connor v. Great Western Sav. & Loan Assn. (1968) 69 Cal.2d 850, 864 [on the record presented, the construction lender was “not vicariously liable as a joint venturer for the negligence” of the land developer].)
Plaintiffs identify three elements for the imposition of ostensible partner liability, and they contend that all three are satisfied here as a matter of law: first, Forrest allowed others to represent him as a partner; second, plaintiffs believed that Forrest was a partner; and third, based on that belief, they purchased the property. Plaintiffs contend that the trial court “used an erroneous ‘but for’ standard of reliance” in denying their motion for judgment notwithstanding the judgment.
We do not share plaintiffs’ view. As we read the statute, it requires these three elements: (a) action by the defendant, either his own “words or conduct” reflecting his status an ostensible partner, or his consent “to being represented by another” as such; (b) reliance by the plaintiff on that representation; and (c) specific action by the plaintiff as a result, i.e., entry “into a transaction with the actual or purported partnership.” (Corp. Code, § 16308, subd. (a).) As we now explain, with the possible exception of the first element, those requirements are not met here.
a. Defendant’s Conduct
According to plaintiffs, there is uncontroverted evidence on this point, including “Forrest’s admission that he authorized the use of the partnership name on Lion’s Field marketing materials, ” and “extensive evidence” from others. Forrest disputes the point; he maintains that plaintiffs failed to produce sufficient evidence that he held himself out as a partner of Chetaud Forrest Builders.
For purposes of our analysis here, we will assume (without deciding) that plaintiffs established this first statutory element, based on Forrest’s trial testimony. When plaintiffs’ counsel cross-examined Forrest, this exchange took place: “Q. And so you were holding yourself out as part of a company called Chetaud Forrest Executive Home Builders, and that was the company or the arrangement that you had with Mr. Chetaud, right? [¶] A. That’s correct. [¶] Q.... you were aware that Mr. Chetaud, when he was going to sell Lions Field, he was going to hold it out as being built by Chetaud Forrest Builders; you knew that, right? [¶] A. I knew that he was going to use my name, yes. I had no objection at the time because it was kind of innocently done.” At the very least, that evidence suggests that Forrest consented to the representations of ostensible partnership on which plaintiffs base their claims against him.
That said, we cannot agree that the other two statutory elements are satisfied. In the words of the statute, the plaintiff must be one who “relying on the representation, enters into a transaction with the actual or purported partnership.” (Corp. Code, § 16308, subd. (a), italics added.)
b. Reliance
Under the terms of the current statutory provision, the proponent of the claim of ostensible partnership must have relied on the representation that the other party was a partner in an actual or ostensible partnership. (Corp. Code, § 16308, subd. (a).) By contrast, as plaintiffs point out, the predecessor statute imposed liability in favor of those who extended credit to the actual or ostensible partnership in reliance on its existence. (Corp. Code, former § 15016(1).) Plaintiffs argue that the current statute does away with the credit extension requirement. In making that argument, plaintiffs rely both on changes in the statutory language and on case law preceding the statutory change.
The predecessor provision stated in pertinent part: “When a person, by words spoken or written or by conduct, represents himself... as a partner in an existing partnership or with one or more persons not actual partners, he is liable to any such person to whom such representation has been made, who has, on the faith of such representation, given credit to the... apparent partnership.” (Former Corp. Code, § 15016, subd. (1).)
The case cited by plaintiffs is Hunter v. Croysdill (1959) 169 Cal.App.2d 307. Whatever the statutory standard, that case does not assist plaintiffs. To the contrary, the factual distinctions between that case and this one highlight the weakness of plaintiffs’ argument that ostensible partnership was established as a matter of law. In contrast to this case, the facts in Hunter strongly support reliance. There, defendant Crawford first sent a letter to plaintiffs describing his association with defendant Croysdill. (Id. at p. 310.) Crawford and Croysdill then “flew to Detroit for five days and met with the plaintiffs there for a portion of each of the five days.” (Id. at p. 311.) Crawford represented that he would be the “financial backer” for the venture. (Ibid.) The trial court found that Crawford “represented himself to plaintiffs as a partner with Croysdill in Associated Tool Supply; that said representation was made for the purpose and with the intent that plaintiffs would rely thereon and to induce plaintiffs, in reliance thereon, to give credit to such apparent partnership; that plaintiffs did in fact rely on these representations and on the faith thereof extended credit... to such apparent partnership.” (Id. at p. 312.) On appeal, the reviewing court first rejected Crawford’s attack on the sufficiency of the evidence to show an ostensible partnership. (Id. at pp. 313-315.) The court next rejected Crawford’s argument that since “plaintiffs did not make exhaustive inquiries into his financial status, they could not have relied thereon.” (Id. at p. 315.) In the court’s words: “There is no requirement that credit be given in reliance upon the financial status of the apparent partner, but only that the party claiming the benefit of [the statute] relied on the existence of the partnership. Even assuming, arguendo, that plaintiffs had to show they relied not only upon the fact that defendant was a partner, but also upon the fact he was a ‘safe risk, ’ the evidence shows that they made inquiries-both in Detroit and Los Angeles-regarding defendant’s ability to meet his obligations. The trial court impliedly found this investigation evidence a sufficient showing of reliance and the evidence clearly supports such a finding.” (Ibid., citing predecessor provision.) No such evidence of reliance appears in this record.
For purposes of this case, we need not decide whether the current statute retains the credit extension requirement. As we now explain, plaintiffs failed to conclusively establish the required element of reliance under any applicable standard. Facts demonstrating reliance must be adequately pleaded and proved. (Moen v. Art’s Café, supra, 95 Cal.App.2d at p. 579.) In this case, plaintiffs failed to do either.
First, reliance was not adequately pleaded here. The complaint alleges: “In reliance on SELLER’s representations, BUYERS agreed to purchase the home from SELLER.” But the complaint does not identify any specific representation on which plaintiffs relied that was either made or authorized by Forrest. (See Moen v. Art’s Café, supra, 95 Cal.App.2d at p. 579 [no allegation that “the plaintiff’s assignors extended credit... by reason of any words, acts or conduct of” the asserted ostensible partners].)
Second, the trial evidence does not support plaintiffs’ contention that ostensible partnership was established as a matter of law. (See Armato v. Baden (1999) 71 Cal.App.4th 885, 898 [“insufficient evidence that Armato relied upon any alleged representation or gave credit to the apparent partnership”]; Rivett v. Nelson (1958) 158 Cal.App.2d 268, 276 [no error in granting nonsuit after plaintiffs’ opening statement, where “the facts which plaintiffs expected to prove point irresistibly to the conclusion that they did not deal with” other defendants “in reliance upon the Nelsons’ participation in a supposed joint venture”]; Nofsinger v. Goldman (1898) 122 Cal. 609, 614 [insufficient evidence that “plaintiff, upon the faith of any of defendant’s representations, ” extended credit to partnership]; cf., J & J Builders Supply v. Caffin, supra, 248 Cal.App.2d at p. 298 [sufficient evidence that plaintiffs extended “credit to the defendants in the fictitious name which each led the plaintiff to believe was the firm name of the copartnership”].)
As evidence of reliance, plaintiffs point to the trial testimony of plaintiff Hogan. Addressing the time period before plaintiffs made an offer on the property, Hogan testified: “We wanted to speak to [Chetaud] about the house.... And I wanted to have an understanding of who built the house, how it was built. [The realtor] had represented it to be high-quality construction. I was concerned about buying a very, very expensive house in Santa Cruz and taking on the expense and the commute. And having looked at a brand-new house, I wanted to be able to move in and not have to do anything to it, because I worked very long hours and our children were small. I wanted to be able to come home and just live in the house and not call contractors and get estimates and go through permit processes. So we wanted to speak to who had built it and understand that it was going to have everything done correctly so we won’t have to go through any of that.” Hogan then testified to a subsequent meeting with Chetaud, where plaintiffs had an opportunity “to talk about the house, and talk about him and Chetaud Forrest Builders, and the house, and ask questions about the construction of the house.” Hogan asked Chetaud “what specific work he did on the house versus what his other people in his company did on the house.” Chetaud responded that he had installed kitchen cabinets, done finish work, installed some doors, built the deck, and installed kitchen appliances. Hogan gained “an understanding with regard to the character of Chetaud Builders” that initially came from a marketing flyer, which said that the home was “built with pride by Chetaud Forrest Builders.” Hogan also talked to the realtor who told her “that the house had been built by Chetaud Forrest Builders. And that they were a team of builders who were in the business of developing new high-end custom homes.”
Notably lacking from the cited testimony is any proof that plaintiffs relied on the representation that Forrest was a member of the ostensible partnership in making their decision to purchase the Lions Field property. Under the statutory language, plaintiffs must rely on the representation that “a person” is “a partner, in a partnership” with others. (Corp. Code, § 16308, subd. (a).) The evidence in this case does not conclusively establish such reliance.
c. Resulting Transaction with Partnership
Plaintiffs likewise failed to adequately plead or prove the third statutory element, entry into a transaction with the partnership.
As alleged in plaintiffs’ complaint, representations were made to them that Chetaud “had actually financed the construction of the residence with a business partner” – Forrest – who “was intimately involved with (and held a large financial stake in) the sale of the home.” But plaintiffs did not allege that they entered into a transaction with Chetaud Forrest Builders, or with any other actual or ostensible partnership. To the contrary, as reflected in both the pleading and the proof, plaintiffs’ transaction was with defendant Chetaud alone. Undisputed evidence demonstrates that the only parties listed on the purchase contract were plaintiffs (as buyer) and Chetaud (as seller). Furthermore, as their counsel later urged in oral arguments on the post-trial motions: “There are no allegations anywhere in the complaint that Chetaud Forrest Builders did anything wrong at all.”
The record thus provides no proof that plaintiffs entered “into a transaction with theactual or purported partnership.” (Corp. Code, § 16308, subd. (a), italics added.)
In sum, plaintiffs failed to conclusively establish the necessary elements for imposition of liability on an ostensible partnership theory.
C. Ostensible Agency Theory
Plaintiffs next argue that the record establishes ostensible agency as a matter of law. Forrest disagrees, asserting both invited error and insufficient evidence. Again, Forrest is correct on both points.
1. Plaintiffs are estopped to argue this theory on appeal.
“The ‘doctrine of invited error’ is an ‘application of the estoppel principle’: ‘Where a party by his conduct induces the commission of error, he is estopped from asserting it as a ground for reversal’ on appeal.” (Norgart v. Upjohn Co., supra, 21 Cal.4th at p. 403.) “The invited error doctrine applies ‘with particular force in the area of jury instructions.’ ” (Stevens v. Owens-Corning Fiberglas Corp., supra, 49 Cal.App.4th at p. 1653.)
The doctrine applies here, because plaintiffs withdrew their proposed jury instruction on ostensible agency, CACI No. 3709. While arguing the motion for judgment notwithstanding the verdict as against Forrest, plaintiffs’ counsel stated that they “had two different theories that actually went to the jury. One, you can call it the ostensible agency theory.” Counsel then asserted that “the appropriate review is to look at... the jury instructions that the parties submitted.” But as counsel admitted thereafter, plaintiffs withdrew the standard jury instruction on ostensible agency that they had previously proposed. By doing so, plaintiffs invited any error in taking the question from the jury. (See Mesecher v. County of San Diego (1992) 9 Cal.App.4th 1677, 1686 [“appellate courts generally are unwilling to second guess the tactical choices made by counsel during trial”].)
That instruction reads: “[Name of plaintiff] claims that [name of defendant] is responsible for [name of agent]’s conduct because [he/she] was [name of defendant]’s apparent [employee/agent]. To establish this claim, [name of plaintiff] must prove all of the following: [¶] 1 That [name of defendant] intentionally or carelessly created the impression that [name of agent] was [name of defendant]’s [employee/agent]; [¶] 2 That [name of plaintiff] reasonably believed that [name of agent] was [name of defendant]’s [employee/agent]; and [¶] 3 That [name of plaintiff] was harmed because [he/she] reasonably relied on [his/her] belief.” (CACI No. 3709.)
Nor is this a purely legal claim, as we now explain.
2. Plaintiffs have not demonstrated entitlement to judgment as a matter of law.
“Ostensible authority rests upon the doctrine of estoppel, and its essential elements are representation by the principal, justifiable reliance thereon by the third party, and change of position or injury resulting from such reliance.” (Ernst v. Searle, supra, 218 Cal. at p. 237; see also, e.g., J.L. v. Children’s Institute, Inc. (2009) 177 Cal.App.4th 388, 403-404; Mejia v. Community Hospital of San Bernardino (2002) 99 Cal.App.4th 1448, 1456-1457; Civ. Code, §§ 2300, 2317, 2334.)
As a general rule, the existence of ostensible agency is a question of fact. (Yanchor v. Kagan (1971) 22 Cal.App.3d 544, 549-550; Ermoian v. Desert Hosp. (2007) 152 Cal.App.4th 475, 502.) Under proper circumstances, however, the relationship may be established as a matter of law. (Ermoian v. Desert Hosp., at pp. 506-507.) Such circumstances exist “when the facts are uncontroverted and only one deduction or inference may reasonably be drawn.” (Id. at p. 501.)
In this case, plaintiffs have not conclusively established the three elements required for ostensible agency, which are (a) conduct by the ostensible principal, (b) reasonable reliance by the party asserting the agency, and (c) resulting injury.
a. Principal’s Conduct
“Ostensible authority of an agent cannot be based on the agent’s conduct alone; there must be evidence of conduct by the principal which causes a third party reasonably to believe the agent has authority.” (Lindsay-Field v. Friendly (1995) 36 Cal.App.4th 1728, 1734.) Thus, to impose vicarious liability on Forrest for the conduct of Chetaud, who is claimed to be Forrest’s ostensible agent, plaintiffs were required to prove conduct by Forrest on which they relied. The evidence shows that Forrest held himself out as part of Chetaud Forrest Builders when Lions Field was being marketed. But plaintiffs cite no other conduct by Forrest that suggests Chetaud’s authority to act for him with respect to Lions Field. Hogan testified to her “understanding” that Forrest “held an interest in the house through the building business and partnership.” But that understanding was not gained from Forrest, who had no direct contact with plaintiffs prior to their purchase of Lions Field; in fact, as Hogan acknowledged in testimony, she never met Forrest until “after the lawsuit was filed.”
b. Reasonable Reliance
The next requirement for imposing vicarious liability is reasonable reliance by the party asserting the ostensible agency. (See Chartered Bank of London v. Chrysler Corp. (1981) 115 Cal.App.3d 755, 764 [to establish “liability under a theory of ostensible agency, ” plaintiff was required to prove that boat purchaser relied on dealer’s “ostensible authority in good faith and without want of ordinary care”].) “The person dealing with the agent must do so with belief in the agent’s authority and this belief must be a reasonable one; such belief must be generated by some act or neglect of the principal sought to be charged; and the third person in relying on the agent’s apparent authority must not be guilty of negligence.” (Hill v. Citizens Nat. Trust & Sav. Bk. of Los Angeles (1937) 9 Cal.2d 172, 176; see Ernst v. Searle, supra, 218 Cal. at p. 240 [“the injury never would have occurred had appellant properly performed the duty imposed upon it by law to investigate the authority of the agent with whom it was dealing”].) In the words of the statute, the party seeking to establish an ostensible agency must “have in good faith, and without want of ordinary care, incurred a liability or parted with value, upon the faith thereof.” (Civ. Code, § 2334.)
The record does not conclusively establish that plaintiffs reasonably relied on the representation that the Lions Field home was built by Chetaud Forrest Builders, ostensibly with Forrest’s participation. (See Guido v. Koopman (1991) 1 Cal.App.4th 837, 843 [“the reasonableness of the reliance is ordinarily a question of fact”]; Preis v. American Indemnity Co. (1990) 220 Cal.App.3d 752, 763 [reasonable belief in agent’s authority presented a disputed question of fact].) Hogan asked Chetaud about his personal participation in building Lions Field, i.e., “what specific work he did on the house versus what his other people in his company did on the house.” But there is no evidence that plaintiffs inquired about Forrest’s role in building the home. And Forrest’s name was not on the purchase agreement, loan papers, or escrow documents. Nor is there evidence that plaintiffs sought out information about Chetaud Forrest Builders or otherwise investigated its asserted reputation for “developing new high-end custom homes.” Hogan testified that she had been told of other Chetaud Forrest Builders projects, including one on Story Court in San Jose, which she “could have visited” but did not. Neither the foregoing evidence nor any other evidence cited by plaintiffs establishes reasonable reliance as a matter of law.
c. Injury
The third requirement for ostensible agency is injury resulting from reliance on the ostensible principal’s representation. (See Van Buren v. Green (1932) 120 Cal.App. 461, 466 [“appellant is in no position to rely on any ostensible agency of the bank since he incurred no liability and parted with nothing of value on the faith thereof”]; Herington v. Alta Planing Mill Co. (1914) 25 Cal.App. 620, 623 [“question of ostensible authority” was “wholly immaterial, as it did not appear that through reliance upon any such authority the respondent had suffered damages”].)
Plaintiffs did not testify either that they made their decision to purchase Lions Field in reliance on the representation that Lions Chetaud Forrest Builders had built it, or that they would not have purchased it otherwise. Although the jury found that plaintiffs were damaged by Chetaud’s breach of warranty and negligent misrepresentation, the record is devoid of evidence that plaintiffs suffered any injury resulting from reliance on Forrest’s participation in the Lions Field property.
By contrast, Hogan testified that she would not have purchased the home had she known that Chetaud was unlicensed.
In sum, plaintiffs have not conclusively established the required elements to impost vicarious liability on Forrest under an ostensible agency theory.
D. Other Theories of Recovery
Plaintiffs offer several other theories of recovery on appeal, arguing that (1) Forrest is liable as a joint tortfeasor because he “participated in the fraud directly”; (2) Forrest is liable as a co-conspirator on the negligent representation cause of action; (3) Forrest is liable for misrepresentations concerning licensure; and (4) plaintiffs are entitled to judgment on their unfair business practices claim.
Plaintiffs did not present these theories at trial, and we therefore decline to consider them here. (1) Concerning their joint tortfeasor claim, we observe that plaintiffs did not proffer jury instructions or a verdict form seeking a determination that Forrest committed fraud, even though they followed that course in presenting their fraud claims against Chetaud. Nor did plaintiffs argue the point to the jury. In closing arguments, plaintiffs argued only that Forrest was Chetaud’s partner, not that he independently committed any fraud. (2) With respect to plaintiffs’ conspiracy claim, it was neither specifically pleaded in their complaint nor presented at trial. Plaintiffs did not proffer jury instructions on conspiracy. (See CACI No. 3600.) And they made no argument to the jury concerning their conspiracy theory. (3) Plaintiffs argue that misrepresentations concerning licensure are “an indivisible part of the civil conspiracy and fraud.” Treating it as indivisible from theories that plaintiffs have forfeited, this claim likewise is precluded. (4) As for plaintiffs’ unfair business practices claim, it was pleaded as the 12th cause of action of their complaint. Though it earned a brief mention in plaintiffs’ opening statement, that claim was not placed before the jury. Instead, it was among the issues reserved for decision by the court. But as framed by plaintiffs here, it depends for its vitality on their other claims. It therefore falls with those claims.
For these reasons, we reject plaintiffs’ attempts to present these theories in this court. Subscribing to plaintiffs’ “theory of review would allow a party to withhold a theory from the jury, by failing to request instructions, and then to obtain appellate review of the evidence and reversal of the judgment on a theory never tendered (or tendered in a different form) to the jury.” (Null v. City of Los Angeles (1988) 206 Cal.App.3d 1528, 1535.) That is not the law.
E. Effectiveness of the Verdict
In addition to their theories of recovery, plaintiffs also challenge the effectiveness of the verdict to exonerate Forrest. Plaintiffs observe that the jury “failed to make any ultimate finding as to the liability of Forrest.” Plaintiffs posit this as “an incomplete verdict in that it fails to dispose of the liability of all of the parties defendant.” (Brokaw v. Black-Foxe Military Institute (1951) 37 Cal.2d 274, 279.)
Plaintiffs forfeited any challenge to the verdict itself. As noted above, plaintiffs submitted only one question about Forrest to the jury: whether he was Chetaud’s actual partner. They did not seek any other determination concerning Forrest, including an ultimate finding of liability. Where, as here, “a deliberate trial strategy results in an outcome disappointing to the advocate, the lawyer may not use that tactical decision as the basis to claim prejudicial error.” (Mesecher v. County of San Diego, supra, 9 Cal.App.4th at p. 1686; cf., Keener v. Jeld-Wen, Inc., supra, 46 Cal.4th at p. 265, fn. 23 [failure to object to defective verdict prior to jury’s discharge precludes later challenge to its validity].)
Furthermore, the verdict is not the sole basis for the judgment. As the judgment explicitly states, it is also based on the court’s rulings on post-trial motions and its decision on reserved issues. The jury effectively exonerated Forrest on the only theory submitted to it, actual partnership. Plaintiffs’ other theories of recovery against Forrest were raised by post-trial motion for judgment notwithstanding the verdict. That motion was decided against them. There is no basis for reversal.
F. Request for New Trial
In the alternative, plaintiffs argue for a new trial. They assert: “The weight of the evidence requires a finding that Forrest acted as both an actual and ostensible partner and that he conspired with Louis Chetaud to misrepresent the licensing status of Chetaud/Forrest Builders.”
Plaintiffs present this argument in a single paragraph, with no supporting legal authority beyond a bare citation to the statute. For that reason, we may deem the point forfeited. (Berger v. California Ins. Guarantee Assn. (2005) 128 Cal.App.4th 989, 1007 [issue forfeited for appellants’ failure “to make a coherent argument or cite any authority to support their contention”].)
In any event, as should be apparent from our discussions elsewhere in this opinion, we disagree with plaintiffs’ assessment of the evidence. In essence, plaintiffs’ entire case against Forrest rests on his admissions that he held himself out as part of Chetaud Forrest Builders when Lions Field was being marketed. His testimony on that point occupies 14 lines in a record that includes 14 volumes of transcripts, six containing witness testimony. The weight of the evidence does not support the grant of a new trial. (See Fergus v. Songer (2007) 150 Cal.App.4th 552, 567 [grant of new trial was improper where “substantial evidence supports the jury’s determination”].)
G. Remaining Issues
Given our conclusions in this case, it is unnecessary to reach the other issues raised by the parties. Having affirmed on different grounds, we need not reach Forrest’s judicial estoppel arguments. Having rejected plaintiffs’ bid for reversal, we need not reach their claims concerning damages.
DISPOSITION
The defense judgment for Forrest is affirmed. Forrest shall have costs on appeal.
WE CONCUR: Bamattre-Manoukian, Acting P.J.Mihara, J.
Concerning the record, Forrest first takes plaintiffs to task for including an improper copy of Exhibit 42A in the appellants’ appendix. The version that appears in the appendix is 39 pages long, while only the first page of that document was admitted at trial. Plaintiffs admit their error in including the additional pages, but they maintain that it is merely cumulative evidence. Forrest next asserts that the appellants’ appendix includes a “version of the jury verdict” form that “is not an accurate statement.” Additionally, Forrest observes that plaintiffs failed to include a complete copy of his opposition to the motion for judgment notwithstanding the judgment, as they omitted the exhibit to that pleading.
Concerning the record, plaintiffs take issue with Forrest’s inclusion of the verdict against Hogan on Chetaud’s cross-complaint for promissory fraud, given that it “was thrown out on a JNOV.” They also assert that the respondent’s appendix includes “an altered version of one of the jury verdict forms.”