Opinion
NOT TO BE PUBLISHED
Super. Ct. No. CV019526
CANTIL-SAKAUYE , J.
Following a dispute over the ownership and share of profits in a series of real estate transactions, plaintiffs Charco Ventures and Stanton M. Charney (collectively Charco) sued Efren Sandoval for partition, declaratory relief, fraud, deceit, breach of fiduciary duty, dissolution of partnership and an accounting. The Sandovals cross-complained, seeking damages for breach of partnership contract, fraud and waste, and rescission of the conveyance to Charco of a 50 percent interest in the Holiday property. After a court trial in the consolidated actions, the court entered an amended judgment which awarded Charco damages totaling $190,500 for Sandoval’s breach of fiduciary duty, partitioned the Holiday property by sale and denied Sandoval recovery on the cross-complaints. The court included $21,640 in expert witness fees in its award of costs to Charco.
These transactions involved five commercial properties located in Sacramento and San Joaquin Counties which the parties refer to as “Manzanita,” “Sunrise,” “Hazel Ridge,” “Madison” and “Holiday.” We refer to the properties in the same manner.
Cynthia A. Sandoval is a party to these consolidated actions by virtue of joining her husband Efren in the cross-complaint against Charco for rescission and waste. For clarity we refer only to real estate broker Efren Sandoval as defendant in the remainder of this opinion.
Neither party challenges the court’s imposition of liability on Sandoval for breach of fiduciary duty or the partition of Holiday by sale. Sandoval and Charco each appeal, challenging only the amount of damages and costs. Sandoval contends in his appeal that the court erred in awarding Charco $136,500 (the prepayment penalty Charco paid on the sale of Madison), $54,000 (the amount of sales and loan broker commissions Sandoval received on the sale of Holiday), and $21,640 in expert witness fees pursuant to Code of Civil Procedure section 998, subdivision (d). Charco argues in its appeal that the court erred in failing to order Sandoval to disgorge all or part of the $125,000 Sandoval received from Charco on the sale of Sunrise. We shall affirm the judgment.
Charco filed two requests for judicial notice of documents relating to the post-judgment sale of the Sandovals’ interest in Holiday. We deny Charco’s requests for judicial notice because events that occurred after judgment are irrelevant to the specific issues raised in this appeal. Sandoval filed a motion to augment the record on April 11, 2007, and we deny that motion.
FACTUAL AND PROCEDURAL BACKGROUND
Because the parties do not dispute the evidence presented at trial, we take the factual summary from the statement of decision:
“Plaintiff, Dr. Charney, . . . has owned real estate investments for over 30 years but has never managed his properties. He held most of his interests as a limited partner. Plaintiff purchased the following Sacramento real estate investments: Sunrise – 1996; Madison - 1998; Manzanita – first acquired by Dr. Charney and resold in 1991, foreclosed and reacquired in 1994, and resold through Sandoval in 2001; Hazel Ridge – 2000.
“Plaintiff met Defendant [Efren Sandoval] in February 2000, while looking at real property. Thereafter, Defendant routinely contacted Plaintiff regarding potential new investment properties and potential purchasers or lessees for Plaintiff’s existing properties.”
The following evidence was produced at trial:
“1. Defendant is a licensed real estate broker.
“2. Defendant represented Plaintiff as a broker in a series of real estate transactions involving commercial real property over several years.
“3. Plaintiff and Defendant entered into an agreement to acquire title as 50/50 cotenants regarding a property in Stockton commonly referred to as the Holiday property.
“4. When serving clients as a real estate broker in real property transactions, it was not Defendant’s custom or practice to disclose which parties he represented unless he was asked to do so by his principal.
“5. Plaintiff was a record owner of the following Central Valley real property:
“(1) Manzanita
“(2) Sunrise
“(3) Hazel Ridge
“(4) Madison
“(5) Holiday (jointly ‘real properties’)
“6. Defendant represented Plaintiff as a dual agent when Plaintiff bought the Hazel Ridge property in approximately February 2000. Defendant received a 4% commission. Defendant continued to represent [sic] Plaintiff with investment opportunities on a regular basis and continued to serve as his agent in subsequent real estate transactions.
“7. Defendant typically wrote letters of intent or pre-offers for his clients who were interested in purchasing real property before negotiating a written purchase offer or agreement.
“8. In the late summer of 2000, Defendant discussed with Plaintiff joint business opportunities. Defendant’s attorney drafted a written agreement. This draft ‘participation agreement’ was mailed to Plaintiff in October 2000.
“a. The draft agreement contained provisions requiring Defendant to perform some property management activities;
“b. The draft participation agreement contained many terms never previously discussed by the parties and many ‘blank’ or incomplete provisions;
“c. The draft agreement set forth Defendant’s understanding of Plaintiff’s acquisition costs for all of the included real property except Manzanita;
“d. The real property that was the subject of the agreement was not independently appraised but Defendant gave Plaintiff his opinion regarding value.
“9. Plaintiff and Defendant discussed the draft participation agreement in November 2000 and agreed that it did not reflect their previous discussions.
“10. Defendant took over general property management, including the day to day management of Plaintiff’s real property in January 2001. There was no written property management agreement. Defendant charged between $500.00 - $700.00 per month for day to day management.
“11. Defendant has no written listing agreement with Plaintiff.
“12. Defendant claims that Plaintiff and Defendant entered into an oral partnership agreement on December 29, 2000 with the following terms: Defendant was to provide overall management of the partnership real property assets including overseeing the work of the day to day property manager. The partnership’s assets were any increase in equity (value of real property) over Plaintiffs [sic] original acquisition cost (of real property as determined by the ‘valuation’ method). Plaintiff could decide when and if to sell the real property. Plaintiff would pay all expenses and receive all rents on the real property. Defendant had a 50% interest in the assets. Plaintiff would pay Defendant for day to day management on the real property. If any real property was sold, Plaintiff and Defendant would share equally the ‘sale proceeds’ (sale price minus costs of sale and acquisition). Defendant describes his 50% share as ‘sweat equity’ not ‘profit.’
“13. Plaintiff signed a piece of paper (‘paper’) on January 9, 2001 that said he and Defendant were ‘going to’ be partners in Madison, Hazel and Sunrise (real property owned by Plaintiff) or that Defendant ‘will purchase’ Madison, Hazel or Sunrise ‘and’ Plaintiff and Defendant ‘will be partners in the other.’
“14. Prior to Plaintiff signing the paper, Plaintiff and Defendant did not discuss how, when or why the events described in the paper would occur. Defendant did not sign the paper in Plaintiffs [sic] presence but did take custody of the paper. Plaintiff claims the paper was a clarification of discussions regarding ‘deal terms’ subject to future agreement.
“15. Defendant never gave Plaintiff a fully executed copy of the paper prior to the litigation.
“16. Defendant did not tell his attorney the terms of the parties’ oral agreement but Defendant’s attorney did redraft the participation agreement early in 2001. The redrafted participation agreement may have been sent to Plaintiff in March 2001. The ‘fair market value’ figures in this document are inconsistent with the alleged oral agreement of December 29, 2000.
“17. In or about November/December 2000, Defendant advertised the Manzanita property for sale at his valuation price of $625,000.00. Defendant received a first offer on Manzanita in December and the property went into contract and the sale closed on January 19, 2001. Defendant never disclosed the receipt of a higher second offer to Plaintiff. Defendant received a real estate broker’s commission of $18,750.00 at the close of escrow.
“18. Defendant marketed the Sunrise property in December 2000 – January 2001. Defendant claims Sunrise was included in the December 29, 2000 oral partnership agreement. The Sunrise Real Property Purchase Agreement states that Defendant is Plaintiff’s agent and that the real estate brokers will share a 6% commission. The purchase offer was received within two weeks of when Defendant started day to day management of the Plaintiff’s commercial real properties. At the close of escrow, the buyers’ agent received a commission of $44,250.00. Defendant received $125,000.00 from Plaintiff as and for the payoff on a demand debt that never existed. There is no documentary evidence supporting Defendant’s claim that the $125,000.00 was Defendant’s payment pursuant to the oral December 29, 2000 agreement. If the terms of the alleged December 29, 2000 oral agreement are applied to the Sunrise sale, $125,000.00 is not the amount Defendant would have received. For income tax purposes, Defendant was required to treat the $125,000.00 as ordinary income, not income from a partnership.
“19. The alleged December 29, 2000 oral partnership never had a name, a tax identification number, a partnership tax return, or a statement of partnership. Defendant never listed Hazel Ridge, Sunrise, Madison or Manzanita on his Federal Income Tax return (schedule E).
“20. Defendant advertised the Madison property for sale using the name ‘Bishop Powers’ as broker. Defendant meant to sign the purchase contract on Madison as a partner but did not do so. The Purchase Agreement listed Bishop Powers as a broker. Bishop Powers, Inc. is the entity under which Defendant performs his licensed real estate activity. Plaintiff had a prepayment penalty due and payable to Wells Fargo Bank upon the sale of the property. The penalty was paid by Plaintiff outside of the sale escrow. Plaintiff provided the buyer in the sale with a nine month rent guarantee of $43,146.00 if Bishop Powers failed to find lessees for the property. Bishop Powers never found any lessees. Defendant received $181,112.00 from the Madison sale transaction, plus the undisclosed commissions discussed hereafter. The number comes from defendant’s own exhibit and testimony. . . . Plaintiff never saw the transaction documents Sandoval purportedly signed as a principal. The sale closed on July 13, 2001.
“21. From January/February 2001 forward, the real properties each had a Prudential Securities money market account in Plaintiff’s name with Defendant as an authorized agent/signatory on checks. These were the properties’ operating accounts. Defendant employed and supervised the bookkeeper who reconciled the accounts. Defendant was paid a monthly fee from each account.
“22. Defendant encountered the Holiday property in April of 2001 while looking for an ‘exchange’ property for himself. Defendant sent a letter of intent to purchase the property in June 2001. Defendant paid the $10,000.00 deposit from funds belonging to Charco from the Charco-Madison operating account. On June 21, 2001, Defendant, on his own behalf, entered into a purchase agreement to purchase the Holiday property for $1,600,000.00. Bishop Powers, Inc. was to receive a broker’s commission of $48,000.00 from the Seller of Holiday Property. Defendant identified himself as a broker/principal in the transaction documents. Defendant entered into a contract to purchase the property in June 2001. He did not tell Plaintiff about the property until July at or about the close of the sale on Madison. In addition, Defendant never executed a formal assignment of the Holiday purchase agreement to Plaintiff nor did he give Plaintiff a copy of either the letter of intent or of the Holiday purchase agreement. Plaintiff and Defendant were 50/50 co-tenants on title to the Holiday property when the purchase transaction closed on August 28, 2001. The Holiday purchase price was paid in cash by Plaintiff except for the $10,000.00 deposit which was paid by Defendant from funds belonging to Charco from the Charco-Madison operating account. Plaintiff and defendant agree that defendant would not take a broker fee on Madison or Holiday as a contribution toward his interest in Holiday. However, defendant, in fact, through Bishop Powers, Inc., received a $6,000 fee for arranging the Pacific Crest Bank loan and a $48,000.00 commission from the Seller for representing the buyers in the Holiday purchase, neither commission was disclosed to Dr. Charney and neither commission was contributed to the purchase of the Holiday Property. Bishop Powers, Inc. was paid a mortgage broker fee for the Holiday transaction, but the payment was not clearly disclosed in the escrow closing statements, nor was a mortgage loan disclosure statement given to Dr. Charney disclosing the broker commissions as required by Business & Professions Code § 10240. Defendant made the $10,000.00 down payment out of the Madison operating account before he told Plaintiff about the Holiday property.
“23. Sandoval’s total capital contribution toward the Holiday transaction was $181,112.00. Plaintiff’s unreimbursed capital contribution to the Holiday transaction was $296,957.00.
The court revised this figure downward to $228,707 in the amended judgment.
“24. Shortly thereafter, Plaintiff and Defendant took out a loan with Pacific Crest Bank secured by the Holiday property. On the loan application signed under penalty of perjury, Defendant claimed no interest in any of the real properties or in any partnership with Charney.
“25. Plaintiff wanted to sell Holiday in 2002. Two offers were received and a contract was signed. Defendant would not agree to the sale. Plaintiff first[] told Defendant he wanted to sell Holiday in September 2001, but Defendant was against selling until at least April 2002 when certain lender loan requirements expired.
“26. Plaintiff took over the day to day management of Holiday and Hazel in late 2002 and hired a property manager. Defendant believes the manager is incompetent.
“27. The relationship between Plaintiff and Defendant began to deteriorate in the fall of 2001 when Defendant stated he was Plaintiff’s partner on properties other than Holiday.”
The court found that Sandoval owed a fiduciary duty to Charco which “was not terminated at any time after the purchase of the Hazel Ridge property.” It ruled that Sandoval breached his fiduciary duty to Charco by “fail[ing] to obtain a written agreement setting forth the terms of the party’s [sic] relationship and the amount of [Sandoval’s] compensation.” As to Sandoval’s claims, the court found that there was “no all inclusive partnership agreement between the parties.” The court addressed the remedies of damages for breach of fiduciary duty and partition in separate sections of the statement of decision and amended judgment.
The court awarded Charco damages for breach of fiduciary duty to include the $136,500 prepayment penalty that Charco paid outside of escrow on Madison and the undisclosed $48,000 sales commission and $6,000 loan broker commission that Sandoval received on the purchase of Holiday.
On the claim for partition, the court determined that “[u]nder the circumstances, sale . . . and division of the proceeds would be more equitable than division of the Holiday property” and ordered sale, accounting and division of the proceeds in accordance with the priorities set forth in the amended judgment. For purposes of calculating the proceeds from the sale, the court set Charco’s unreimbursed capital contribution to the purchase of Holiday at $228,707 and Sandoval’s unreimbursed capital contribution at $181,112.
DISCUSSION
I.
Standard of Review and Measure of Damages
“A judgment . . . of the lower court is presumed correct. All intendments and presumptions are indulged to support it on matters as to which the record is silent, and error must be affirmatively shown.” (9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, § 349, p. 394; see also State Farm Fire & Cas. Co. v. Pietak (2001) 90 Cal.App.4th 600, 610.)
“The determination of damages is primarily a factual matter on which the inevitable wide differences of opinion do not call for the intervention of appellate courts. [Citation.]” (Niles v. City of San Rafael (1974) 42 Cal.App.3d 230, 241.) Where, as here, the parties challenge the sufficiency of the evidence to support the amount of damages awarded, our power “begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted, which will support the [finding]. When two or more inferences can be reasonably deduced from the facts, the reviewing court is without power to substitute its deductions for those of the trial court. [Citations.]” (Crawford v. Southern Pac. Co. (1935) 3 Cal.2d 427, 429.)
Sandoval also challenges the measure of damages applied by the court, which we review as a question of law. (Christiansen v. Roddy (1986) 186 Cal.App.3d 780, 789.) Breach of fiduciary duty by a real estate broker is a tort which gives rise to different measures of damages, depending on the circumstances of the breach. (See 2 Miller & Starr, Cal. Real Estate (3d ed. 2000) Agency, §§ 3:33 et seq.) The benefit-of-the-bargain measure of damages applies to fiduciary fraud (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1240-1241 (Alliance Mortgage)), and the out-of-pocket measure applies to a negligent breach of fiduciary duty (Timmsen v. Forest E. Olson, Inc. (1970) 6 Cal.App.3d 860, 871 (Timmsen)). However, where the breach of fiduciary duty involves a failure to disclose secret profits, courts require the fiduciary to disgorge to the principal all benefits and advantages received based on the theory the fiduciary was unjustly enriched at the expense of another. (Ward v. Taggart (1959) 51 Cal.2d 736, 741-742 (Ward); Crogan v. Metz (1956) 47 Cal.2d 398, 404-405 (Crogan).)
II.
Sandoval’s Appeal
A. The $136,500 Damage Award For Breach Of Fiduciary Duty:
On the Madison sale, Charco represented by Sandoval paid the $136,500 pre-payment penalty outside of escrow, thereby increasing the net profits from that sale. The net profits of the Madison sale were used towards the purchase of the Holiday property wherein Sandoval and Charco held title 50/50 as co-tenants. As to their respective contributions to the Holiday property, the evidence is undisputed that Charco paid for the Holiday property with the understanding that Sandoval would waive his commissions for the Madison sale and the Holiday purchase as his contribution to the Holiday property. Sandoval failed to live up to his end of the bargain.
Dr. Charney testified that he paid the $136,500 outside of escrow because Sandoval “said [they] needed as much money as possible in the escrow.” Sandoval denied making that statement to Charney .
As to the damage award for breach of fiduciary duty, the court ordered Sandoval to reimburse Charco for the entire $136,500 prepayment penalty that it paid outside of the Madison escrow.
Sandoval contends that the court made a “mathematical mistake” in calculating the amount of damages and erred in awarding Charco the entire $136,500 prepayment penalty. We conclude there was no error; the record supports the $136,500 damage award for breach of fiduciary duty.
Although the court did not state the measure of damages it used in awarding Charco $136,500 for breach of fiduciary duty, the evidence supports the award on at least two grounds: first, as out-of-pocket damages for negligent breach of fiduciary duty in failing to provide a written agreement setting forth the terms of the party’s relationship and the amount of Sandoval’s compensation (Timmsen, supra, 6 Cal.App.3d at p. 871); and second as disgorgement of a portion of the benefits he unjustly received in the plan to obtain secret profits (Ward, supra, 51 Cal.2d at pp. 741-742).
The record reflects that the Madison sale and the Holiday purchase were related transactions because the parties had agreed to share the profits of the Madison sale equally and to apply the profits toward the Holiday purchase. The court credited Charney’s testimony that he based his decision giving Sandoval half the profit in Madison to be applied toward a half interest in Holiday on his calculations that an equal division of profit on the Madison sale was about equal to Sandoval’s commissions from Madison and Holiday. Because the two transactions were related, the court discussed the Madison sale when it ordered the partition of Holiday. The court stated, in its partition order, that the prepayment penalty should have been deducted from the gross proceeds on the sale of Madison before applying the net profits to the purchase of Holiday. Charco’s payment of the $136,500 prepayment penalty outside of escrow, however, increased the net profits from the Madison sale which were then applied toward the Holiday purchase. This arrangement resulted in Charco’s out-of-pocket payment of $136,500 to the bank to close the Madison deal. There is nothing in the record to suggest how Charco was to recover those funds.
The arrangement also unjustly enriched Sandoval because it increased his share of the profit in and his capital contribution toward the Holiday purchase. In order to disgorge Sandoval of this benefit, it appears the court ordered Sandoval to pay Charco $136,500 in damages for breach of fiduciary duty, but avoided double recovery by crediting Sandoval in the partition portion of the judgment with half that amount ($68,250) as an unreimbursed capital contribution to the purchase of Holiday which we discuss post. On this record, we find no fault with the court’s award of damage under either measure.
B. The $54,000 Damage Award For Breach Of Fiduciary Duty:
The parties had agreed that Sandoval would take no broker fee on the sale of Madison or purchase of the Holiday property “as a contribution toward his interest in Holiday.” Sandoval rolled his share of the proceeds into the Holiday purchase in lieu of the commissions that he would otherwise earn as the broker in the sale of Madison and purchase of Holiday. In actuality, however, Sandoval collected the Holiday commissions without disclosing them to Charco.
The court ordered Sandoval to pay Charco the $48,000 sales commission and the $6,000 loan broker commission that Sandoval received on the purchase of Holiday. Sandoval raises three claims of error in connection with this part of the damage award. First, he characterizes the wrongdoing as a simple breach of the agreement to waive commissions and contends that Charco was entitled to only half the amount of the commissions under Civil Code section 3300. Second, Sandoval acknowledges that a principal may recover the commission paid to a broker in an action for breach of fiduciary duty, but argues, “that rule is inapplicable here to justify a recovery of the sales commission because [Charco] did not pay the sales commission. It was paid by the seller of Holiday Plaza.” Third, Sandoval challenges the sufficiency of the evidence to support the court’s finding that he received a $48,000 sales commission. We reject these contentions.
Civil Code section 3300 provides: “For the breach of an obligation arising from contract, the measure of damages, except where otherwise expressly provided by this code, is the amount which will compensate the party aggrieved for all the detriment proximately caused thereby, or which, in the ordinary course of things, would be likely to result therefrom.”
Charco sued Sandoval for breach of fiduciary duty, not breach of contract. The court based its damage award against Sandoval on the breach of fiduciary duty to disclose the sales commission and loan broker commission to Charco. Sandoval received nothing on his cross-complaint for breach of the alleged partnership agreement.
Neither the benefit-of-the-bargain measure of damages for fiduciary fraud (Alliance Mortgage, supra, 10 Cal.4that pp. 1240-1241) nor the out-of-pocket measure for negligent breach of fiduciary duty (Timmsen, supra, 6 Cal.App.3d at p. 871) applies to a fiduciary’s failure to disclose secret profits. The proper measure is full disgorgement to prevent unjust enrichment. (Ward, supra, 51 Cal.2d at pp. 741-742; Crogan, supra, 47 Cal.2d 398 at pp. 404-405.) This rule applies regardless of whether the principal suffers actual damage. (Ward, supra, 51 Cal.2d at pp. 741-742.) In this case, the court did not err in awarding the entire $54,000 in commissions to Charco based on Sandoval’s failure to disclose the secret profits.
The record shows that Sandoval was to receive one-half of the six percent real estate commission equaling $48,000 on the purchase of Holiday. Although Sandoval claims he received only $32,000 as his commission, the court resolved the factual conflict against him at trial and on motion for new trial. We will not disturb that finding on appeal. (Reichardt v. Hoffman (19997) 52 Cal.App.4th 754, 766; 9 Witkin, Cal. Procedure, supra, Appeal, § 359, at pp. 408-409.)
C. Partition And Unreimbursed Capital Contributions:
In the section on partition, the court addressed the Madison sale and its net proceeds in order to determine the amount of each party’s unreimbursed capital contributions in Holiday. In reaching the amount of each party’s unreimbursed capital contribution for partition purposes, the court relied on a letter from a Charco accountant, offered by Sandoval, which treated the prepayment penalty as a cost of the Madison sale in calculating that each party’s profit from the Madison sale was $112,862. The court adopted the $112,862 amount which was less than the amount originally designated as Sandoval’s half profit from the Madison sale. The court wasaware that it had already awarded Charco $136,500 as a damage award for Sandoval’s breach of fiduciary duty and that it had accepted the calculation of Sandoval’s unreimbursed capital contribution as $112,862. To avoid giving Charco a double recovery in the partition order, the court adjusted the parties’ unreimbursed capital contributions to the purchase of Holiday -- amounts to be subtracted from the gross sales amount -- to determine each party’s share of the proceeds from the sale and partition of Holiday. It added $68,250, or half of the $136,500, to its calculation of Sandoval’s contribution to the purchase of the Holiday property and having already ordered damages of $136,500 to Charco, subtracted $68,250 from Charco’s contribution to the Holiday property as if each had paid half of the prepayment penalty in escrow. Having made this adjustment, the court found that Sandoval’s unreimbursed capital contribution toward the Holiday purchase was $181,112, and Charco’s was $228,707. Sandoval acknowledged in his motion for new trial and to vacate the judgment that those figures were correct.
The $228,707 figure also includes $47,595 in excess capital contribution which the parties do not dispute on appeal.
D. The Code of Civil Procedure Section 998 Offer:
Charco filed a timely Code of Civil Procedure section 998 offer to compromise (section 998 offer). The offer provided for the disposition of the Hazel and Holiday properties and judgment in favor of Charco in the sum of $155,355.50. Sandoval did not respond. Following trial, the court awarded Charco $190,500 plus interest. Thereafter, Charco sought costs which included $21,640 in expert witness fees. The court denied the Sandoval’s challenge to the award of expert witness fees.
Code of Civil Procedure section 998 reads in part:
On appeal, Sandoval maintains that Charco’s section 998 offer was ineffective and the trial court abused its discretion in awarding Charco the expert witness fees. Specifically, Sandoval contends Charco’s offer was insufficiently clear and specific to allow them to respond. They also argue their acceptance of the offer would not have resulted in a final disposition of the action.
We conclude Sandoval forfeited consideration of these issues on appeal by failing to challenge the reasonableness of Charco’s section 998 offer in the trial court. (Jones v. Wagner (2001) 90 Cal.App.4th 466, 481-482; 9 Witkin, Cal. Procedure, supra, Appeal, § 394, pp. 444-446.) In their motion to tax costs, Sandoval disputed the calculation of the final figures set forth in the judgment and whether the judgment was more favorable than the section 998 offer. Contrary to their claim on appeal, they did not challenge the reasonableness or validity of the section 998 offer in the trial court.
Sandoval cites Gonzalez v. County of Los Angeles (2004) 122 Cal.App.4th 1124 (Gonzalez) for the proposition that an appellate court may consider pure questions of law for the first time on appeal. However, Gonzalez holds that the question of law exception does not apply where the appellate court is reviewing the trial court’s ruling for abuse of discretion. (Id. at pp. 1131-1132.) By awarding expert witness fees as costs under Code of Civil Procedure section 998, “the trial court impliedly determined that defendant’s offer was realistically reasonable under the circumstances and was not a token or nominal offer.” (People ex rel. Lockyer v. Fremont General Corp. (2001) 89 Cal.App.4th 1260, 1271.) We review that award for abuse of discretion, not as a question of law. (Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, 1262.) The challenge to the reasonableness of the section 998 offer is not properly before us and we do not address it.
III.
Charco’s Appeal
As an additional part of its damages for breach of fiduciary duty, Charco unsuccessfully sought recovery of $125,000 that Sandoval received on the sale of Sunrise. The court expressly found: “Plaintiff understood that Defendant would receive $125,000.00 at the close of the Sunrise escrow and acquiesced in that amount being paid. Plaintiff has insufficient evidence to establish that he was paying for an interest in Bishop-Powers. Defendant’s claim that he was being paid as a partner is not credible. Defendant was identified as the listing agent, exclusively representing the Plaintiff, on the Sunrise property and received a payment of $125,000.00. Neither party has provided the court with a ‘more likely than not’ explanation for why this amount was paid.”
Highlighting the “more likely than not” language from the statement of decision, Charco contends that the court used the wrong standard of proof in rejecting its claim for disgorgement of the $125,000 payment to Sandoval. We conclude there was no error.
To state a cause of action for breach of fiduciary duty against a defendant broker, the plaintiff must prove the existence of a fiduciary relationship, breach of that relationship by the broker, and damage. (Roberts v. Lomanto (2003) 112 Cal.App.4th 1553, 1562.) Once the plaintiff proves the existence of a fiduciary relationship and questions the acts of the broker, “the burden is cast upon the latter to prove that he acted with the utmost good faith toward the principal and that prior to the transaction he made a full disclosure of all the facts relating to the acts under attack.” (Batson v. Strehlow (1968) 68 Cal.2d 662, 675; see Timmsen, supra, 6 Cal.App.3d at p. 871.)
In this case, the court found that Charco proved the first two elements of its cause of action for breach of fiduciary duty. First, it found that a fiduciary relationship existed between Charco and Sandoval which “was not terminated at any time after the purchase of the Hazel Ridge property.” It is undisputed that Sandoval began marketing Sunrise during this period. Second, the court found that Sandoval breached his fiduciary duty by “fail[ing] to obtain a written agreement setting forth the terms of the party’s [sic] relationship and the amount of [Sandoval’s] compensation.” At that point, Charco was left to prove damages. It proved damages as to the sales commission, the loan broker commission and the prepayment penalty. However, the court impliedly found that Charco did not prove it was damaged in the sale of Sunrise as a consequence of Sandoval’s breach of fiduciary duty, that is, lack of written disclosure of the $125,000 payment. The record shows that Dr. Charney was aware of the payment. He signed the bogus $125,000 promissory notes and signed the escrow instructions approving the $125,000 payoff.
Thus, Charco’s claim that the court applied the wrong standard of proof for breach of fiduciary duty misses the mark. The issue was whether Charco suffered damage as a consequence of the breach and the evidence as to the Sunrise transaction shows he did not.
DISPOSITION
The judgment is affirmed. Each party shall bear its own costs on appeal. (Cal. Rules of Court, rule 8.276(a)(4).)
We concur: BLEASE , Acting P.J., SIMS , J.
“(a) The costs allowed under Sections 1031 and 1032 shall be withheld or augmented as provided in this section.
“(b) Not less than 10 days prior to commencement of trial or arbitration (as provided in Section 1281 or 1295) of a dispute to be resolved by arbitration, any party may serve an offer in writing upon any other party to the action to allow judgment to be taken or an award to be entered in accordance with the terms and conditions stated at that time. The written offer shall include a statement of the offer, containing the terms and conditions of the judgment or award, and a provision that allows the accepting party to indicate acceptance of the offer by signing a statement that the offer is accepted. Any acceptance of the offer, whether made on the document containing the offer or on a separate document of acceptance, shall be in writing and shall be signed by counsel for the accepting party or, if not represented by counsel, by the accepting party. [¶] . . . [¶]
“(d) If an offer made by a plaintiff is not accepted and the defendant fails to obtain a more favorable judgment or award in any action or proceeding other than an eminent domain action, the court or arbitrator, in its discretion, may require the defendant to pay a reasonable sum to cover postoffer costs of the services of expert witnesses, who are not regular employees of any party, actually incurred and reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the plaintiff, in addition to plaintiff’s costs.”