Opinion
A141852
01-12-2017
CONRAD CARL WEISSENSEE, JR. ET AL., Plaintiffs and Appellants, v. RON OZNOWICZ ET AL., Defendants, Cross-complainants and Appellants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Marin County Super. Ct. No. CV1103416)
This is an appeal and a cross-appeal. The appellants are defendants and cross-complainants Ron Oznowicz (Oznowicz) and Carol Argentos (Argentos). The respondents are plaintiffs and cross-defendants Conrad Carl Weissensee, Jr. (Weissensee), his wife, Candice Curtis, and Mariner Homes, Inc. (Mariner), a California corporation run by Weissensee (when referred to collectively, plaintiffs). Mariner is also a cross-appellant.
Oznowicz and Weissensee had a long relationship that began in 1980 or 1981, and for many years they worked successfully in numerous joint ventures in real estate development. The joint ventures were informally structured, with no written agreements, and generally Oznowicz would provide the funding for the projects and Weissensee would contribute his expertise. Oznowicz had some relationship with Argentos since the 1990s. Weissensee did not, and he first met her in 2006, when she entered the picture in connection with a project that had been underway for some time—the development of four lots on property in Tiburon. Argentos became involved as the purchaser of two of the lots, an involvement the trial court would come to hold was not as was represented, that Argentos was in fact a straw purchaser.
In 2008 Oznowicz and Weissensee had a falling out, leading to the litigation here. Plaintiffs sued Oznowicz and Argentos, seeking money damages for breaches of various obligations in connection with the joint venture, for money owed for construction of two homes, and for partition. Argentos and Oznowicz filed a cross-complaint that alleged 21 causes of action. Nineteen of the causes of action were on behalf of Argentos only, including, as pertinent here, a claim for disgorgement of money paid to Mariner based on Business and Professions Code section 7031, alleging that Mariner was not licensed at the time it engaged in what Argentos contended was construction activity.
The cross-actions proceeded to a court trial before an experienced trial judge, the Honorable Paul M. Haakenson, who heard 13 days of testimony, during which the parties introduced over 500 exhibits comprising more than 13,000 pages. Judge Haakenson heard oral closing argument, and after that allowed post-trial written argument as well. Following all that, Judge Haakenson filed a 73-page statement of decision that, with a minor exception not pertinent here, ruled for plaintiffs and against Argentos and Oznowicz. Judge Haakenson's decision rejected Argentos's claim for disgorgement on several bases, including that "Argentos has failed to meet her burden of proof as to this cause of action." Judge Haakenson went on to a six-page analysis, both factual and legal, demonstrating why there was no violation of the licensing law, no construction done without a license.
Virtually ignoring Judge Haakenson's factual analysis, utterly ignoring Judge Haakenson's conclusion that she failed to meet her burden of proof, and treating the record in a way that violates settled rules of appellate procedure, Argentos makes one argument on appeal—that Judge Haakenson erred in rejecting her disgorgement claim, an argument she claims, that presents a question of law on supposedly undisputed facts. Oznowicz also makes one argument on appeal—that there was no evidence supporting Judge Haakenson's conclusion that Oznowicz had agreed to an indemnity agreement in favor of Weissensee. We reject both contentions, and affirm.
Mariner sought prejudgment interest on the damages awarded it. Judge Haakenson denied it, on the basis that the amount sought was not liquidated. Mariner appeals that aspect of the judgment. We affirm that ruling as well.
BACKGROUND
The General Setting
Weissensee and Oznowicz met in 1980 or 1981, and thereafter worked together in numerous joint ventures in real estate development, joint ventures that were informally structured, without any writing. Generally, Weissensee would find the land, locate and retain a general contractor to build the houses, manage the construction process pursuant to construction management agreements, and handle the regulatory and entitlement process. Oznowicz would provide the funding, with the money typically coming from the pension fund of his brother, Frank Oz. Oznowicz serves as the trustee of the pension fund, and thus was a fiduciary.
Frank Oz is the co-director of the Muppets.
Over many years, the relationship worked well and all prospered. Without exception, the parties worked on a basis of trust and never had a written agreement. Weissensee and Oznowicz were not only joint venturers, they had a close relationship, until 2008, when they had a falling out over a project in Tiburon called Round Hill—a project, as will be seen, that had been in the works for many years, and on which Weissensee had expended much time and money.
This lawsuit followed.
The Proceedings Below
Weissensee, along with his wife, Candice Curtis, as individuals and co-trustees of a trust, and Mariner, a corporation owned by Weissensee, filed a complaint, and then an amended complaint, naming Oznowicz and Argentos. Plaintiffs alleged nine causes of action, most of which are not germane to the two issues on appeal. One is, the third cause of action for breach of contract, for Oznowicz's failure to pay a 10 percent construction management fee and the failure to grant indemnity for third party claims against Weissensee.
Argentos and Oznowicz filed an answer and, as pertinent to the other issue on appeal, a cross-complaint. That cross-complaint alleged 21 causes of action, 19 of them on behalf of Argentos only, two on behalf of Oznowicz only. A 22nd cause of action was added at trial. As pertinent to the other issue on appeal, the 21st cause of action in the cross-complaint sought disgorgement, on the claimed basis that construction work was done while Mariner was unlicensed, and thus in violation of Business and Professions Code section 7031.
The two causes of action on behalf of Oznowicz were the 19th and 20th, respectively for negligent and intentional interference with prospective economic advantage.
Trial
The court trial before Judge Haakenson began on September 4, 2013, and lasted 13 days, during which Judge Haakenson heard extensive testimony from Weissensee and Oznowicz. Argentos, too, testified, as did several witnesses on behalf of both sides, including experts. Numerous exhibits, comprising over 13,000 pages, were introduced. The evidence concluded on September 24, following which Judge Haakenson heard oral closing arguments, with the understanding that the parties would also be filing written post-trial briefs. Those briefs were filed on October 15, 43 pages for plaintiffs and 91 pages for Argentos and Oznowicz.
The Statement of Decision
In December, Judge Haakenson issued his tentative decision, and thereafter a proposed statement of decision. Argentos and Oznowicz filed objections, and plaintiffs a brief reply. And on March 17, 2014 Judge Haakenson issued his statement of decision. And what a statement it was—73 pages of detailed and comprehensive analysis. Specifically:
After brief introduction, the statement of decision began with 27 pages of "Factual Findings," an exhaustive discussion of the 27-year relationship between Weissensee and Oznowicz—factual findings essentially ignored by appellants' briefs here. Following that, Judge Haakenson set forth his "Legal Conclusions and Findings." In a painstakingly thorough analysis, he analyzed each of the 31 separate causes of action, the claimed factual or legal basis for it, and why, in the case of Weissensee and Mariner, the cause of action succeeded, and why, in the case of Argentos and Oznowicz, the cause of action failed.
Many of Judge Haakenson's conclusions are not germane to the two issues before us. Suffice to say that, with two minor exceptions, the statement of decision was an overwhelming victory for plaintiffs and an outright defeat for Argentos and Oznowicz. Plaintiffs prevailed on seven of their nine causes of action in their complaint; as to the 22 causes of action in the cross-complaint, Argentos and Oznowicz failed in all of them (though as to one claim, for breach of fiduciary duty, Judge Haakenson found that while Argentos had not proven any breach, to "balance[e] the equities" he would award Argentos some $134,000).
Nevertheless, the parties' contentions cannot be understood without an appreciation of the whole story involving the parties and the Tiburon project. And because we cannot set forth the facts here any better than Judge Haakenson did, we quote extensively from his statement of decision to tell that story. Thus: "Relationship of the Parties
"Carl Weissensee (Weissensee) and Ron Oznowicz (Oznowicz) met in 1980 or 1981. Weissensee, working under his father, was commencing a career in property development. Oznowicz was an investor, among other professions, with experience in real estate development and construction. The two would work successfully together in various joint ventures in real estate development. Their joint ventures were informally structured; never would they sign any written agreement. Generally, Oznowicz would supply the funding (borrowed from the O.Z. Inc., Defined Benefit Pension Plan (pension plan), while Weissensee would contribute his work and expertise. They would develop property through construction and sale and would equally split the profits. Between 1981 and 1986, Oznowicz and Weissensee would develop approximately 15 properties as joint ventures. Weissensee became highly proficient and experienced in the development of raw land into parcels with homes ultimately sold for a profit.
"Carol Argentos befriended Oznowicz in the 1990's and has since been considered a member of the Oznowicz' extended family. Argentos resides in Oznowicz' homes, and in fact has her own room in each of his several homes. Argentos had not met, and had no relationship with Weissensee until 2006 . . . . "Initial Joint Venture and Efforts to Develop the Round Hill Property
"In 1983-1984 Weissensee's father found undeveloped property for sale in Tiburon, California. Known at the time as the Reed Park property, this property would ultimately become the Round Hill property, at issue in this litigation. . . . Weissensee and his father approached Oznowicz to propose developing the property. Oznowicz agreed to work collaboratively with Weissensee on this new project. This collaboration would become another joint venture between the parties.
"In 1984 the pension plan (through Oznowicz as trustee) purchased the Round Hill parcel for approximately $572,000 for the purpose of developing the property (through the stage of having 'builder packages'). Weissensee and Oznowicz informally formed another joint venture to pursue this development.
"Shortly after the pension plan purchased the property, Weissensee commenced efforts to develop the land. . . . Weissensee encountered various obstacles" that "resulted in delays in the development of the project. As Weissensee wrestled with these early development obstacles, the town of Tiburon enacted a building moratorium, which would prevent development of the property. Weissensee diligently, but unsuccessfully, pursued exception from the moratorium until 1988 or 1989. At that time, Weissensee's efforts would prove fruitless, as the town of Tiburon imposed a separate moratorium (a water moratorium), which would halt the project without hope of exception. . . . In light of the water moratorium, the project came to an indefinite halt. The project at that time (sometime in 1989) was abandoned. Accordingly, the joint venture also came to a halt (albeit temporarily). The pension plan continued to hold title to the property. "Revival of the Project
"Between 1990 and 2001 Weissensee and Oznowicz would have occasional conversations about the property. By the end of 2001, the water moratorium was lifted. The previously approved tentative map had also expired. The property description ultimately reverted to the single plot of land containing four separate parcels or lots.
"In December 2001, Weissensee wrote to Oznowicz, proposing to proceed with the Round Hill project. Weissensee proposed commencing in particular with a 'lot-line adjustment' which would define four separate lots upon the property. In January 2002, Oznowicz wrote to Weissensee, agreeing that Weissensee should move forward with the initial development, and that Oznowicz will 'make it good.' Based on the emails between the parties, their history of working on joint ventures in developing property, their occasional discussions about the property over the years, their initial joint venture to develop the Round Hill property, and their conduct moving forward, the court concludes that Oznowicz and Weissensee revived their joint venture to develop Round Hill. . . . "Early Development and lot line adjustments pursuant to the renewed joint venture
"For several months after being given the 'go ahead,' Weissensee invested time, effort and expertise in developing lot-line adjustments and directing other entitlement work. Weissensee routinely informed Oznowicz of the work and progress. Weissensee's work extended beyond the completion of the lot-line adjustments . . . . Weissensee continuously informed Oznowicz of his efforts. Oznowicz unquestionably intended for Weissensee to proceed with the development project, design the lot lines, and make other design decisions. Oznowicz was well aware of Weissensee's efforts. He both implicitly and explicitly granted Weissensee discretion in this process.
"By mid-2002, Weissensee understood that he and Oznowicz were again involved in a joint venture to develop the Round Hill property. Oznowicz' conduct evidences that he understood the same. . . . The fine details or precise manner in which they would profit had yet to develop. At the very least, they planned to develop the property without commencing actual building, and sell the 'builder packages' (Oznowicz' term) for mutual profit. The parties were moving forward with another of their informally structured joint ventures, with the end result yet to be defined. This was the intent and expectation of both Weissensee and Oznowicz.
"Weissensee contributed the work and expertise toward the end of making a profit to be split between himself and Oznowicz. He also contributed his own funds toward this end. Oznowicz allowed Weissensee great discretion in these development efforts. The design of the driveways, fire truck turn around and lot-lines were all left to Weissensee. Weissensee informed Oznowicz of the process and progress. . . .
"Weissensee worked with the town, the neighbors, the surveyor, and the architect in these initial efforts. This work continued into 2003.
"The lot line locations went through many machinations. While only the final composition was recorded, the development process included several variations of the lot lines and parcel dimensions. Weissensee, at the time, did not have any special interest in any of the lots. It cannot be said that he adjusted the lot lines to benefit any particular lot. He diligently worked to develop four lots, equal in value and functionality. Of particular importance in this endeavor, was the need to have lots of equal size, each greater than 20,000 square feet. This result was vital to allowing each parcel to accommodate a sizeable home for maximum value. . . . The desired result was in fact achieved, for the benefit of all four lots (particularly for the benefit of lot 81) by virtue of Weissensee's design of the lot lines. Of particular importance here was his placement of the lot line between lots 81 and 83. The placement of this line served as a benefit to lot 81, by maximizing its size, but served as a detriment to lot 83. . . . In addition to giving Weissensee design and development discretion, Oznowicz also gave Weissensee written authority to act on his behalf in dealings with the town of Tiburon, in connection with all matters regarding the property. In reliance on the discretion given him, Weissensee reasonably and fairly designed the parcels, with the need and expectation that he would finalize the equities by way of incorporating a landscape easement providing view and space behind the lot 83 master bedroom.
"The final lot-line adjustment was recorded in April 2003. By this time, Weissensee and Oznowicz had further developed their expectations regarding the outcome of their joint venture. They decided that Weissensee would acquire lot 83 and Oznowicz would acquire lot 79. Other details were still undetermined. As evidenced by a general agreement they entered into on March 21, 2003, they intended to continue to pursue joint development of the property . . . . Clearly they intended to mutually profit and would further discuss the strategies to achieve the best results.
"By as early as 2004, Oznowicz was considering not only acquiring lot 79, but building his personal residence there, as evidenced by his July 2004 email sent to Weissensee stating as much. . . . "The project is delayed, though building on lot 83 commenced
"By March 2004, the joint venture ordinarily could have come to a successful conclusion. . . . However, any viable successful conclusion to the venture at this point was derailed by virtue of a conflict facing Oznowicz in his role as trustee of the O.Z., Inc., pension plan. This conflict was brought to light by the pending divorce of Oznowicz' brother Frank, a beneficiary of the pension plan. Oznowicz, the trustee of the pension plan, announced that he could not move forward with any sale or transfer of the property while Frank's divorce was pending. It appears to the court that Oznowicz may have run afoul of his obligations as trustee of the pension plan by engaging in the infrastructure development of the property while it was owned by the pension plan. . . . In order to avoid drawing attention to the activities of the pension plan with regard to the property, Oznowicz opted to quietly hold the property in the pension plan pending the finality of Frank's divorce. Regardless of whether Oznowicz' motives were nefarious or otherwise, the result was that, at Oznowicz' insistence, title to the property would remain with the pension plan until the divorce was final The joint venture could not be concluded at that time.
"During this delay, Weissensee understood that the parties would be pressed to timely submit for building permits on the property to avoid expiration of the design review approval. As noted, by this time it was agreed that Weissensee would acquire lot 83 as part of the ultimate disposition of the property. . . . Oznowicz permitted Weissensee to pull the permit for lot 83. The permit was pulled for lot 83 by November 1, 2004. Work commenced immediately, with digging a 'keyway' and 'scrubbing' the lot. Weissensee had obtained his contractor's license by this time as well (August, 2004).
"Oznowicz now complains that this active building upon lot 83 put the pension plan at risk. However, Oznowicz was aware of this construction progress at the time. Oznowicz visited the site in early November 2004 at a time significant work was ongoing on lot 83. It was plainly evident to Oznowicz by virtue of his visiting the site and communicating with Weissensee (by email and otherwise) that work had commenced on lot 83. This work was not a surprise to Oznowicz. While he may have had heightened concerns about the prohibitions relating to the development while the pension plan held title to the property, the court concludes that he did not seek to prohibit such construction.
"The building upon lot 83 was for Weissensee's benefit, and at Weissensee's expense. He would build his family home thereon.
"In January 2005, the joint venture structure as to the remaining two lots was not yet finalized. The parties had agreed that Weissensee would build his home on lot 83 and Oznowicz would have a personal home on lot 79. On several occasions Weissensee and Oznowicz discussed the fact they would be neighbors. The property at this time remained held by the pension plan, pending the conclusion of Frank's divorce.
"The delay ends with the finality of the divorce; the joint venture details are further defined
"On January 14, 2005, Oznowicz reported to Weissensee that Frank's divorce was final and that they could finally finalize the Round Hill issues. . . . With the divorce obstacle out of the way, Weissensee pursued finalizing a profit structure on the joint venture.
"January through June 2005, Weissensee continued to work on the joint venture, pursuing infrastructure and common development of the property, expecting the profit structure details would soon develop. In June 2005, development efforts for all four lots were ongoing: Lot 83 was under construction; design approvals had been secured for lots 79 and 81; design review was progressing for lot 77. . . . By this point in time Weissensee had contributed his personal funds toward subdivision and infrastructure work with the expectation that his expenditures would be accounted for in the final deal structure of the joint venture. Weissensee continued to apprise and inform Oznowicz of the status of his work on the property.
"By June 2005 Oznowicz and Weissensee further defined the substance of their venture together: Weissensee would acquire lots 77 and 83 from the pension plan and Oznowicz would acquire lots 79 and 81. This division of the property would allow the parties to each build upon and live in one of their respective lots, and further profit from the other. The parties would not split the individual profits realized from any subsequent sale of their individual lots, but they would split, in essence, the venture's earned profits by virtue of their dividing the property and each acquiring one-half. The pension plan would transfer the lots to the respective parties (Oznowicz and Weissensee), and would earn a nominal or modest profit. Weissensee would be given credit toward the purchase of his two lots for roughly $820,000 he spent or earned (without pay) on the common development. Argentos was not part of the plan. "The convoluted sale of the property, preventing smooth conclusion to the joint venture
"With the joint venture profit structure further defined as described above, the venture was poised to come to a successful conclusion. However, such conclusion was again derailed by virtue of Oznowicz' conflict.
"Rather than consummate the deal as contemplated (with the pension plan selling the joint venturers their respective lots as defined and recorded in the 2003 lot-line adjustment) Oznowicz insisted upon a convoluted transfer scheme to accomplish this desired division. In this regard, Oznowicz insisted upon the pension plan selling the property as a single lot, with the legal description being exactly as it was when the property was purchased by the pension plan many years earlier. This method of transfer would ignore the lot-line adjustment that had been recorded in 2003 and any other change in the description or composition of the property. In essence, Oznowicz insisted that the property be transferred from the pension plan as if it had sat dormant, with no legal or physical change since purchased. To accommodate Oznowicz, Weissensee agreed to the convoluted transfer scheme. It was pursuant to this plan that Argentos first entered the equation."
"Oznowicz also desired that the property be transferred first to Weissensee, then divided into separate lots as detailed in the 2003 lot line adjustment, with two such lots (Oznowicz' lots) then transferred to Carol Argentos. The insertion of Ms. Argentos into the division here was born out of Oznowicz' duties as trustee of the pension plan. That is, as trustee, Oznowicz was prohibited from transferring the property to himself as contemplated. He engaged Argentos to take title to the property in his stead. The property would remain Oznowicz' in the real or beneficial sense. The court concludes that Argentos was indeed his 'nominee' or 'straw person' in this transaction. Argentos would take title only, thereby protecting Oznowicz while accomplishing his desired result.
"The court does not accept Defendants' contention that Argentos, previously absent from any participation in the venture, would acquire all of Oznowicz' gains pursuant to the joint venture, while Weissensee would acquire his 50% benefit, and Oznowicz would acquire nothing but minimal interest on a short term loan. The court concludes that Oznowicz in fact never abandoned the benefit he sought from the long lasting venture with Weissensee, but rather sought to accrue his benefit while protecting the pension plan and avoiding being seen as running afoul of his duties as pension plan trustee.
"Notwithstanding Argentos' involvement at this point, Weissensee understood that half of the property was to be his, and the other half Oznowicz'. The transfer of property to Argentos was part of the convoluted means of transfer aimed at accomplishing the parties' goals of dividing the property between Weissensee and Oznowicz.
"On June 30, 2005 Weissensee and Oznowicz executed a memorandum of understanding and letter of intent to accomplish the transfer described above, under the conditions required by Oznowicz. . . .
"Recognizing that Weissensee may not have been able to purchase the entirety of the property to then be divided (as desired by Oznowicz), Oznowicz developed an alternative plan to accomplish the same. The alternative plan, (the plan that was eventually carried out), involved the pension plan selling the property in its original description to Weissensee/Curtis (as trustees of the family trust) and Argentos as tenants-in-common. The tenants-in-common would then, in theory, divide the lots as contemplated, with lots 77 and 83 to go to Weissensee and lots 79 and 81 to Argentos.
Footnote 5 reads as follows: "While the court refers to Argentos as being the intended recipient of lots 79 and 81, the court concludes that the property would be transferred to her in name only, but that both Weissensee and Oznowicz understood that Oznowicz would be the true beneficial owner."
"In the court's view, Oznowicz always intended to accrue his benefit from the joint venture. This venture, commencing initially in 1984, was a profit-making venture for both Oznowicz and Weissensee, just as the prior ventures between them. Oznowicz sought to benefit from years of effort and stress endured in this joint venture. The court is not persuaded by Oznowicz' suggestion that in 2005 he simply sought to sell the property to Weissensee without the further condition or expectation that Weissensee would transfer two lots back to Oznowicz. In the court's view, sale of the entirety of the property by the pension plan to Weissensee for a modest or even nominal profit to the pension plan was certainly not the grand benefit Oznowicz sought from the start. It belies logic to conclude that Oznowicz simply intended to finalize the years of collaboration by simply selling the property to Weissensee at a bargain price. To the contrary, Oznowicz sought to acquire half of the property. In order to accomplish his desired acquisition of half of the Round Hill property, Oznowicz faced legal and ethical obstacles. While it would have been simpler, not to mention transparent, to allow the pension plan to divide the property and sell the four defined lots to the respective joint venturers, Oznowicz risked running afoul of his duties as trustee and fiduciary to the pension plan if such a route were followed. Arguably, all of the development efforts, lot-line adjustments, improvements, and infrastructure work accomplished upon the property may have violated the pension plan business/trade prohibition. Oznowicz was no doubt aware of this potential.
"In order to avoid risking the pension plan tax status or otherwise drawing attention to his activities with regard to the property, Oznowicz insisted on transferring the property in the manner described above—in its original form, and through Argentos ultimately for Oznowicz' benefit. There simply exists no other reasonable explanation for Oznowicz' insistence on engaging in such a convoluted method of transfer.
"While ultimately Argentos acquired legal/paper title to the property, the court is convinced, by clear and convincing evidence, that Ms. Argentos was acquiring legal title to hold for the benefit of Oznowicz, who remained the real party with the beneficial ownership interest in the property.
"Ultimately the sale proceeded as Oznowicz desired. On June 30, 2006, the pension plan sold the property in its original form to Weissensee/Curtis as trustees for their family trust and Argentos, as tenants-in-common. Weissensee/Curtis paid the pension plan $660,000. Further, all of Weissensee's contributions to date (an additional $620,000, plus $200,000 in development fees Weissensee had earned) were to be considered part of his contribution for the purchase. The Weissensee/Curtis total contribution was $1,480,000 for the trust's share of the property.
"For a peculiar and extreme discount, Argentos would pay a total of $660,000 for her (Oznowicz) 50% share. At the time of the sale, Weissensee was concerned about Argentos' involvement. Anticipating that he may be involved in the development of the homes on the property, Weissensee did not wish to work for the 'public' but preferred to work along with Oznowicz as they had done before. Oznowicz assured Weissensee that Argentos was simply his 'nominee' and that Weissensee would work with Oznowicz on the development.
"June 2006 meeting and ultimate preparation of deeds
"In June 2006, Weissensee, Oznowicz and Argentos met at the FATCO office to accomplish the sale and transfers described above. At that time, Weissensee and Argentos executed an interim joint ownership agreement. This agreement was made necessary by virtue of Oznowicz' desire to transfer the property in the 2-step process as described herein. This interim joint ownership agreement outlined Weissensee and Argentos' intent to purchase the property as tenants-in-common, and to execute separate grant or quit claim deeds granting the other his/her respective lots, free and clear of any and all claims by the other. The agreement specified that the deeds would be held until they mutually agreed in writing as to the 'disposition' of the deeds. This agreement was ultimately extended on two occasions. [¶] . . . [¶]
"The purported loans were not true loans
"The court concludes that the loans described above were not bona fide loans to Argentos. Rather, the funds were Oznowicz' funds, simply used to purchase the land and build homes for Oznowicz himself. Argentos, a close family friend, honorary family member, and member of Oznowicz' many households, would certainly enjoy use of the intended luxury home planned for the lot 79 property. She would participate in several of the design decisions and would undoubtedly live within the home on lot 79. The property was purchased, and the homes were built, however, for Oznowicz himself. The loan was not legitimate. The court cannot envision any scenario as urged by Defendants wherein Oznowicz was simply a lender and Argentos a borrower and investor. Such a conclusion is belied by clear and convincing evidence, including the overwhelming evidence that Oznowicz intended to build the home on lot 79 for himself and his family, pursuant to his own detailed specifications.
"At least as early as June 2006 it was clear that Oznowicz planned to build his personal custom home on lot 79. Weissensee had provided Oznowicz the plans and the opportunity to customize the home to his requirements. Unlike the building of the home on lot 81, which was truly a 'spec' home with all decisions made by Weissensee, every last detail of the home on lot 79 was decided or approved by Oznowicz. While Argentos was also involved in some of the decisions relative to lot 79, it is evident to the court that her involvement in this process was not as the owner and investor. The court concludes that Argentos' involvement was as a 'family' member. The decisions were driven by Oznowicz.
"The record is replete with evidence of Oznowicz' intention to build the lot 79 home for his personal use, including evidence of his desire to install his personal urinal, a wall for his painting 'Matilda,' a garden specific to his liking and bearing his name in design, and countless other fine details from window selections, to door locations, outlet placements, television wall specifications, light and other fixture details and more. The home was even furnished for a time, in part, with his cherished table and other furniture. Beyond the personalization of the lot 79 home for Oznowicz, his constant and active involvement in the development of the property after the June 30, 2006 sale evidences his ownership interest in the property beyond that of a simple lender. During the development of the homes on lots 79 and 81, Oznowicz was intimately involved. He visited the property often, and took thousands of photographs. He, not Argentos, was the developer. In addition to the circumstantial evidence on this subject, his testimony at trial revealed as much. He often spoke of his decisions, his desires, his orders, only occasionally catching his mistake and correcting and rephrasing 'Carol's' decision, desire or directive.
"It is not reasonable to conclude that Argentos, of modest means in comparison to the cost of this venture, simply borrowed millions of dollars from Oznowicz to then forego her personal profit, build Oznowicz a luxury home to add to his riches, and agree to repay Oznowicz with 6% annual interest within four years. It is equally unreasonable to conclude that Oznowicz (and Sassa Oznowicz) simply dedicated hundreds of hours serving as Argentos' free/volunteer agents assisting her in the construction of her investment home. The evidence profoundly belies such conclusion.
"Throughout trial, Ron and Sassa Oznowicz emphatically proclaimed that they never intended to live in the custom home they were building. The court perceives this insistence as being necessitated by their realization that to admit such a thing might have greater implications in relationship to Oznowicz duties and prohibitions vis -a-vis the pension plan. Nevertheless, their insistence in light of the profound evidence establishing their intent to move into the home strains credulity and casts doubt on their credibility in other respects. The court concludes the home was to be theirs, the property theirs and the profits realized from the joint venture theirs as well.
"Ultimately, Oznowicz abandoned this intention to live in the home on lot 79. Nevertheless, the court concludes that the house was long intended to be his residence.
"Based on the totality of the evidence, the court finds that there was no legitimate loan between Oznowicz and Argentos; that Argentos was the title holder in name only, serving as Oznowicz' nominee to hold in title for Oznowicz' beneficial interest; and that Oznowicz is the true real, beneficial owner of the property pursuant to his joint venture with Weissensee. This is shown by clear and convincing evidence. [¶] . . . [¶]
"Construction management agreement
"After the June 2006 meeting, construction on lots 79 and 81 was anticipated. Although the joint venture did not contemplate jointly building the homes on the respective lots, or other joint participation after June of 2006, the parties (Oznowicz and Weissensee) did ultimately agree to work together in the construction of the lot 79 and 81 homes, independent from the joint venture. Oznowicz certainly planned to utilize Weissensee in this regard. They did not, however, specifically enter into a 'construction' contract.
"Sometime after June 2006, Weissensee and Oznowicz orally agreed that Oznowicz would pay Weissensee 10% of the hard costs incurred in building the lot 79 home, plus Oznowicz would indemnify Weissensee for any future liability based on Weissensee's efforts, in exchange for Weissensee managing the construction. The precise date of this agreement is not clear. A construction management agreement was prepared much later (October, 2007) but was never signed. . . . Oznowicz admits to the oral agreement, though disputes that the fee was for 'management.' The court concludes, nevertheless, that Oznowicz promised to pay Weissensee the 10% fee for his construction management efforts. The court further concludes that Oznowicz did promise to indemnify Weissensee as part of the agreement. Whether Oznowicz also agreed to indemnify Tom Raskowsky (the general contractor discussed below) is immaterial here, as Raskowsky is not herein seeking to enforce such indemnity and was not a part of the agreement. The construction management agreement was between Oznowicz and Weissensee. . . . The terms of the construction management agreement were not detailed in writing, but were understood by the parties to include managing, not constructing, the homes. Weissensee's understanding of the agreement, and his responsibilities thereunder, are evidenced by his conduct in managing the construction. The court rejects Oznowicz' and Argentos' contention that Argentos entered a construction agreement with Weissensee/Mariner Homes, Inc., wherein Mariner Homes, Inc., would build the homes.
"As construction manager, Weissensee wore many 'hats' as he put it. He hired and organized the sub-contractors, coordinated activities of workers, maintained and organized records, reviewed time cards, reviewed and paid invoices, applied for permits, reviewed plans, acted as liaison between the owner (Oznowicz), the contractor and sub-contractors, kept Oznowicz informed of the progress, remained on the site much of the time, and responded to on-site issues as they arose, all providing great benefit to Oznowicz. . . .
"Oznowicz and Weissensee did not speak specifically about duplicating the 10% fee for the building of the home on lot 81. They both assumed, however, that the fee agreement (with the indemnity) would be duplicated on the next project if such project in fact materialized. Neither disputes that the promise to pay the 10% fee was expected to apply to the lot 81 project once that project was planned. The court finds that the parties did agree to the 10% management fees as to the lot 81 construction, and indemnity of Weissensee, as well.
"The management agreement was entered into between Oznowicz and Weissensee. However, Weissensee entered into the agreement in his capacity as president of Mariner, Homes, Inc. All of the work he did on the projects was done under the veil of his corporation. Carl Weissensee and Mariner Homes, Inc., are essentially indistinguishable for purposes of this litigation. Weissensee testified that he considered himself and Mariner Homes, Inc., one-and-the-same as related to his development work. He personally did not distinguish between the two. Much of what Weissensee did, in terms of development work, was run through the corporation as he put it. Payments were often made with the corporate account, bills and invoices were often sent to him through the corporation. The court finds that Oznowicz and Mariner Homes, Inc., entered into the construction management agreements described above. [¶] . . . [¶]
"Lot 79 construction
"The construction upon lot 79 did not commence immediately after the sale of the property in 2006. Actual work on the property commenced in August 2007. The delay, however, was caused by Oznowicz who made all of the decision [sic] regarding the commencement of the construction. Oznowicz made the decision to begin building on lot 79, noting that it was a business decision and an emotional one. Ultimately, it was his decision (not Argentos' or Weissensee's) to build on lot 79. Oznowicz stated in various emails that the decision to build upon 79 was delayed due to various factors including emotions, as noted, and various cost figures. Lack of security for his purported loan to Argentos was not the focus of the delay at the time. In regard to the delay, Oznowicz noted that he has not been 'on top of things' in a July 10, 2007 email to Weissensee. . . . Once Oznowicz authorized construction, excavation work commenced reasonably well. Weissensee in fact expedited rather than delayed the project. Prior to Oznowicz' decision, little was done toward the lot 79 house construction, solely due to Oznowicz.
"After Oznowicz authorized the construction, Weissensee began to manage the efforts. He, on July 8, 2007, wrote an email to Oznowicz outlining the tasks that needed to be conducted before the permit could be pulled. . . . Also in July 2007, Weissensee hired Tom Raskowsky as the general contractor for the lot 79 construction. The building permit was issued in July 2007, with Raskowsky as the general contractor. Nothing done by Weissensee before Raskowsky was hired extended beyond organizational tasks. Defendants have pointed to nothing in the year between June 30, 2006 and July 2007 that suggests that Weissensee/Mariner Homes, Inc., was engaged as a contractor as opposed to a manager. . . . [¶] Raskowsky testified that he was the general contractor for the building of the home on lot 79, without limitation. . . . He was the general contractor for this building. . . . Raskowsky was the general contractor and credibly testified so. Raskowsky, the licensed general contractor identified in the permit, and in the sign posted on the property, was the responsible licensed contractor for the construction of the home.
"After the general contractor was hired, through October 2007, Weissensee fully engaged in the management efforts. [¶] . . . [¶]
"Mariner Homes, Inc., obtained its contractor's license on October 17, 2007. Thereafter, Weissensee/Mariner Homes, Inc., continued as before, with the management tasks described above. [¶] . . . [¶]
"The lot 79 construction continued without unnecessary or unwarranted delay, beyond occasional delays ordinary to the industry. Weissensee and Oznowicz had few disagreements, but were cordial and friendly with each other much of the time. [¶] . . . [¶]
"Amongst his duties, Weissensee did hire the subcontractors for the 79 construction. He indicated that while Raskowsky was the responsible contractor, his hiring the subcontractors as construction manager saved Oznowicz any contractor mark-up. This hiring of the sub-contractors, on this project, occurred at a time Mariner Homes, Inc., was licensed. Weissensee/Mariner Homes, Inc., paid the vendors and subcontractors with funds from the account Oznowicz set up for the lot 79 construction.
"The building of the home on lot 79 operated completely independently from the building of the home on 81. [¶]. . . [¶] "2008 deeds
"In or near September 2007 Oznowicz learned that the 2007 deeds and deeds of trust had not been recorded. The parties ultimately discussed the need to again prepare deeds accomplishing the division of the property. In January 2008 Weissensee again had deeds for the property prepared. . . .
"Ultimately, the deeds were executed, but not recorded. Argentos stated that she agreed to sign the documents but not to record them until the easement dispute was resolved.
"Oznowicz, in an August 19, 2008 email agreed that the deeds could be recorded and that Weissensee could explain them later. Nevertheless, Oznowicz ultimately objected to the inclusion of the landscape and hardscape easements in the 2008 deeds. This litigation in fact was born out of this dispute. "Lot 81 construction
"As of February 7, 2008, Oznowicz was not yet prepared to authorize construction on lot 81. He noted that he needed time to digest the costs and timing. He did not note any concern about the lack of security on his purported loan. Weissensee attempted to expedite Oznowicz' decision and stressed the necessity of starting expeditiously.
"Oznowicz vacillated on the decision whether to build on lot 81. Meanwhile, the design review for lot 81 would expire near May 19, 2008 unless the permit was pulled by that time. Oznowicz eventually made the decision to build, and authorized Weissensee to pull the permit in May 2008. Weissensee worked diligently to get the permit in hand by May 19, 2008. The decision to build upon lot 81 was made independently from the lot 79 project. All of the decisions relating to the two homes were made independently from the other.
"Weissensee engaged Mariner Homes as the contractor for the lot 81 project. . . . Mariner Homes, Inc., had obtained its contractors license long before this point in time and opted to serve as general contractor due to the need to expedite the construction. It was at this time that Oznowicz set up an account for funding the 81 construction. Mariner Homes, Inc., was identified as the general contractor in the permit for the lot 81 construction.
"Mariner Homes, Inc., served as general contractor as well as construction manager. The construction proceeded in a timely manner. The only delay stemmed from Oznowicz' delay of the commencement of the construction, at no fault of Weissensee. [¶] . . . [¶]
"The court concludes that Mariner Homes, Inc., did not perform any acts or services in connection with the lot 81 construction prior to October 17, 2007, when it obtained its license. In reviewing the testimony and the records here, the court could find no evidence establishing Weissensee/Mariner Homes, Inc., engaged the lot 81 project prior to that October date. The court located only a single July 2007 check written to Thayer Architecture with the numbers '79 and 81' written in the memo line of the check. This is not sufficient to conclude that Weissensee or Mariner Homes, Inc., performed some act in connection with the lot 81 construction project prior to Mariner Homes Inc., being licensed."
Based on those findings, followed by 37 pages of conclusions, Judge Haakenson made numerous orders, including: (1) dissolving the joint venture between Weissensee and Oznowicz; (2) ordering appointment of a referee to prepare deeds to the four lots consistent with his decision (with detailed instructions as to boundaries and easements); (3) ordering Argentos and Weissensee to execute the deeds; and (4) ordering Oznowicz to grant Weissensee and Mariner indemnity for any third party claims against them in any action relating to their conduct in connection with the lot 79 and 81 homes. Judge Haakenson also ordered that: (1) Oznowicz pay Mariner $383,869.60 for breach of contract; and (2) Weissensee and Curtis, as trustees, pay Argentos a total of $134,076.39, comprised of $60,000 for the benefit of the easements conferred upon lot 83, $66,000 for the funds utilized from the lot 79 account for the benefit of lot 77, and $8,076.39 for the use of funds from the lot 81 account for the benefit of lot 83.
Oznowicz and Argentos moved for a new trial. Judge Haakenson denied it. Meanwhile, judgment was entered, from which Argentos and Oznowicz filed an appeal.
Plaintiffs' Request for Prejudgment Interest
In the course of the post-trial briefing, plaintiffs argued that they were entitled to prejudgment interest. Judge Haakenson denied it in his statement of decision, in this one paragraph holding: "The hard costs incurred in the construction of the lot 79 home were proven to be $2,101,440. The hard costs incurred in the construction of the lot 81 home were proven to be $1,737,256. In their proposed statement of decision, Plaintiffs sought prejudgment interest on these amounts. This issue was not raised during trial. Whether these amounts were liquidated at the time of the invoices, as urged by Plaintiff, as opposed to the time of the division of the property was not proven. Therefore, Plaintiff has not proven an entitlement to prejudgment interest." Mariner appealed that aspect of the judgment.
DISCUSSION
Introduction to the Argument, and the Standard of Review
The first argument in appellants' brief is that Judge Haakenson erred in denying Argentos's claim for disgorgement. The argument in the opening brief is 30 pages long, and has four subparts, all of them contending in one way or another that Judge Haakenson failed to consider some evidence apparently favorable to Argentos. The argument proceeds on the basis that we review the issue de novo, because Argentos asserts, the facts that bear on the issue are "undisputed." So, the argument asserts: "the trial court instead of looking at the construction of each home as an integrated whole, improperly broke Mariner's work on the Project down into three 'separate and distinct projects which were independent of each other': (1) the construction of infrastructure improvements from 1984 through June 30, 2006, (2) 'managing' the construction of the home on Lot 79 and (3) 'managing' the construction of the home on Lot 81." Or, as put in appellants' reply brief: "The facts pertinent to the dispositive issue in this appeal—to wit, what tasks Mariner Homes performed with regard to construction of the homes in Lots 79 and 81—are not in dispute. What is in dispute is the trial court's application of California's contractor licensing laws in light of its findings regarding the scope of Mariner Homes' work. That is a legal issue of interpretation and application of law, and thus, this Court's review of the trial court's judgment in that regard is subject to de novo review." "Notably, many of the purported factual disputes upon which the Respondents focus—such as whether and when a joint venture between the parties might have terminated; whether Oznowicz might have violated purported fiduciary obligations as a trustee; and which of Oznowicz or Argentos was the true owner of one of the lots—are of no consequence . . . ."
We could not disagree more.
Before turning to a demonstration of why, we begin by observing that appellants' brief violates settled principles of appellate review, essentially by setting forth a version of facts favorable to it. We said in In re Marriage of Davenport (2011) 194 Cal.App.4th 1507, 1530-1531 that such conduct is "not to be condoned," going on to explain why:
"California Rules of Court, rule 8.204(a)(2)(C) provides that an appellant's opening brief shall '[p]rovide a summary of the significant facts . . . .' And the leading California appellate practice guide instructs about this: 'Before addressing the legal issues, your brief should accurately and fairly state the critical facts (including the evidence), free of bias; and likewise as to the applicable law. [¶] Misstatements, misrepresentations and/or material omissions of the relevant facts or law can instantly "undo" an otherwise effective brief, waiving issues and arguments; it will certainly cast doubt on your credibility, may draw sanctions [citation], and may well cause you to lose the case!' (Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2010) ¶ 9:27, p. 9-8, (rev. # 1 2010), italics omitted.) [Appellants'] brief does ignore such instruction.
"[Appellants'] brief also ignores the precept that all evidence must be viewed most favorably to [plaintiffs] and in support of the order. (Nestle v. City of Santa Monica (1972) 6 Cal.3d 920, 925-926; Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881.) This precept is equally applicable here, where Judge [Haakenson] issued a statement of decision: 'Where statement of decision sets forth the factual and legal basis for the decision, any conflict in the evidence or reasonable inferences to be drawn from the facts will be resolved in support of the determination of the trial court decision.' (In re Marriage of Hoffmeister (1987) 191 Cal.App.3d 351, 358.)"
In short, Argentos's argument is based on a treatment of the record that is contrary to all principles of appellate review—not to mention that it ignores Judge Haakenson's findings, which included the following:
One passage from appellants' brief will illustrate the point. The introduction to the opening brief says that "[l]ots 79 and 81 were intended to be exclusively owned by Argentos." And the first page of appellants' claimed statement of facts, describing the four lots involved in the project, says that "[a]s discussed in more detail below, Lots 77 and 83 were and are intended to be owned by Respondents, and Lots 79 and 81 were and are intended to be owned by Argentos." The brief goes on to assert the "facts" as to Argentos's claimed involvement, and ends with this: "on June 30, 2006, Argentos and Weissensee also entered into an Interim Joint Ownership Agreement, which contemplated . . . Argentos eventually owning Lot 79 and Lot 81 outright." In sum, one reading appellants' brief would surmise that Argentos's involvement here was as a run-of-the-mill purchaser, one who took out real loans, to engage in a real arm's length transaction, to live in one of the houses.
This is hardly the fact, as made clear by Judge Haakenson's findings here, findings and conclusions quoted above, including that "Argentos' purported loan from Oznowicz was not a bona fide loan, but rather was a means to an end for Oznowicz. As articulated by the court, the court concludes by clear and convincing evidence . . . that Oznowicz bought the property for himself"; "The purported loan was indeed documented to appear as a legitimate loan, but that is was not. . . . But this was not her investment, and the loan was not real."
Moreover, on no fewer than nine separate occasions Judge Haakenson found that Oznowicz's testimony was not credible.
"Defendants argue that the Round Hill development was a single project and thus any services rendered by Mariner Homes, Inc., at any time on the single project, were a part of the performance of Plaintiff's services at issue. Defendants argue that Mariner Homes, Inc., performed acts relating to the construction of the lot 79 and 81 homes as early as 2002, long before Mariner Homes, Inc., was licensed, thus violating Section 7031 license requirement. The court disagrees.
"The court finds that Weissensee and Mariner Homes, Inc., performed services on three separate and distinct projects, which were independent of each other. The first, involved the infrastructure work performed from 1984 through 2006. The second involved managing the construction of the home on lot 79. The third involved managing the construction of the home on lot 81.
Judge Haakenson analyzed for several paragraphs the infrastructure project, in the course of which he noted that "[d]efendants' assertion that this was a single project is also profoundly inconsistent with their own contention made in connection with Oznowicz' assertion that the pension plan did not engage in any trade or business." Judge Haakenson then turned to the factually separate—the independent—lot 79 construction project and agreements, and, following his analysis, said this: "The question here, thus, is whether Mariner Homes, Inc., was required to be licensed to perform the work it performed in connection with the construction of the lot 79 home." And he concluded no, that, "Mariner Homes, Inc., did not engage in the services of contractor here. Rather, Mariner Homes, Inc., served as the construction manager . . . ."
Referring to the "construction manager" conclusion, Argentos asserts that Judge Haakenson "incorrectly interpreted and applied the case of The Fifth Day, LLC v. Bolotin (2009) 172 Cal.App.4th 939, 941 to find Mariner Homes to be a 'construction manager' and not a contractor . . . ." By no means.
There, plaintiff The Fifth Day, LLC (Fifth Day) entered into an agreement with Industrial Real Estate Development Company (Owner) to provide certain " 'industrial real estate development and construction project management' " services. Fifth Day sued Owner and its principals, Pacific Allied Industrial Corporation and James P. Bolotin (defendants), for monies alleged to be due for services rendered by Fifth Day. The trial court granted summary judgment for defendants on the ground that Fifth Day was acting as a general building contractor and therefore was required to hold a license pursuant to Business and Professions Code section 7026. The Court of Appeal reversed, determining that Fifth Day was not a contractor within the meaning of the licensing statute. That holding was properly applied here.
The facts in Fifth Day included that its contract specified that Fifth Day "was to perform the following duties 'as Owner may specifically and expertly direct,' " going on to list 23 specific duties. These duties included that Fifth Day would " 'coordinate and direct' the activities of design professionals hired by Plaintiff"; "assist the general contractor in 'developing bidders' interest in the Project, establish bidding schedules and assist the Owner in preparing construction contract document"; and "assist the general contractor in the subcontracting bidding process and to ensure that the general contractor performs its duties with respect to bids from subcontractors and material suppliers." Moreover, the agreement between Owner and the general contractor designated Fifth Day as the owner's representative, authorized to represent the owner in " 'all aspects of [that agreement] and the execution and performance of the Work including . . . authority to execute Prime Contract Change Orders less than [$25,000] and provide directions to [the General] Contractor." (The Fifth Day, LLC v. Bolotin, supra, 172 Cal.App.4th at pp. 943945) Despite all that, the Court of Appeal held that the Fifth Day did not contract to perform construction services or contract to assume responsibility for construction services. In the court's words, "In no way did the [contract] contemplate that Plaintiff was to perform construction services, or assume the general . . . contract." (The Fifth Day, LLC v. Bolotin, supra, 172 Cal.App.4th at p. 948.) Fifth Day supports Judge Haakenson's findings here.
Similarly, Judge Haakenson addressed the home on lot 81, and found and concluded that: "This construction was a separate project from the others. The decision to build upon lot 81 was independent from the lot 79 project and the infrastructure work. In fact, Oznowicz acknowledged as much in articulating the pains he went through in deciding whether to move forward with this project. [¶] The court finds that Mariner Homes, Inc., did not engage in any acts relating to this project, prior to October 17, 2007. All acts of Mariner Homes, Inc., in connection with the building of the lot 81 home, came after October 17, 2007. Accordingly, Mariner Homes, Inc., was properly licensed."
As indicated from the above, distilled from Judge Haakenson's decision are several conclusions pertinent here, including these:
(1) The construction of each house was not, as appellants' brief describes it, "an integrated whole." Rather, there were "three separate and distinct projects, which were independent of each other," including one for the construction of the 79 property and a separate one for construction of the 81 property.
(2) Raskowsky Construction, the company that pulled the permit and did the work on the 79 project, was the general contractor and responsible for the construction. Weissensee was the construction manager pursuant to an construction management agreement.
(3) Mariner was fully licensed long before the parties ever agreed to build the house on the 81 lot, and the construction agreement to construct the lot 81 property was independent of the lot 79 project and agreement.
Those were Judge Haakenson's findings and conclusions, conclusions devastating to Argentos's argument here. As plaintiffs' brief puts it: "In its decision, the trial court very carefully reviewed the evidence relating to whether the Round Hill 'project' consisted of three independent parts and agreements, or instead consisted of one seamless and integrated project and one agreement, as Oz now contends on appeal. This 'one integrated project and agreement' premise is absolutely central to the Oz position on appeal; it is subsumed in each of their arguments; if they are wrong on this, they are simply wrong. [¶] And wrong they are." Indeed.
Argentos's Argument Ignores the Governing Rule on Appeal
Judge Haakenson's ruling against Argentos included this: "Argentos seeks disgorgement of any compensation paid to Mariner Homes, Inc., in connection with the work Mariner Homes, Inc,. performed on lots 79 and 81." Following three paragraphs of analysis, Judge Haakenson concluded that "Argentos has failed to meet her burden of proof as to this cause of action."
Failed to meet her burden! In light of this, Argentos has a heavy burden on appeal, as set forth, for example, in Sonic Manufacturing Technologies, Inc. v. AAE Systems, Inc. (2011) 196 Cal.App.4th 456, 466: " 'Thus, where the issue on appeal turns on a failure of proof at trial, the question for a reviewing court becomes whether the evidence compels a finding in favor of the appellant as a matter of law. [Citations.] Specifically, the question becomes whether the appellant's evidence was (1) "uncontradicted and unimpeached" and (2) "of such a character and weight as to leave no room for a judicial determination that it was insufficient to support a finding." ' (In re I.W. (2009) 180 Cal.App.4th 1517, 1527-1528].)" (Accord, Los Angeles County Dept. of Children & Family Services v. Superior Court (2013) 215 Cal.App.4th 962, 967.)
The Supreme Court described the same principle over 70 years ago, in Roesch v. De Mota (1944) 24 Cal.2d 563, observing as follows: "In substance the trial court found and concluded that the plaintiffs and those equally charged with them in sustaining the burden had not proved payment by a preponderance of evidence. The problem here is not whether the appellants on the issue of payment failed to prove their case by a preponderance of the evidence. That was a question for the trial court and it was resolved against them. The question for this court to determine is whether the evidence compelled the trial court to find in their favor on that issue." (Id. at pp. 570-571.)
Argentos has not even attempted such showing here. And as demonstrated above, any attempt would necessarily fail. Argentos's claim for disgorgement was properly rejected. Likewise Oznowicz's position as to the indemnity agreement.
Substantial Evidence Supports the Order as to the Indemnity Agreement
In analyzing plaintiffs' third cause of action, Judge Haakenson found that "Sometime after June 2006, Weissensee and Oznowicz orally agreed that Oznowicz would pay Weissensee 10% of the hard costs incurred in building the lot 79 home, plus Oznowicz would indemnify Weissensee for any future liability based on Weissensee's efforts, in exchange for Weissensee managing the construction. The precise date of this agreement is not clear. A construction management agreement was prepared much later (October, 2007) but was never signed. Oznowicz admits to the oral agreement, though disputes that the fee was for 'management.' The court concludes, nevertheless, that Oznowicz promised to pay Weissensee the 10% fee for his construction management efforts. The court further concludes that Oznowicz did promise to indemnify Weissensee as part of the agreement."
Paying lip service to Judge Haakenson's findings and conclusion, Oznowicz contends that "the record contains insufficient evidence to support the trial court's legal conclusion that Oznowicz entered into a contract to provide indemnity." This is how Oznowicz puts it:
"The trial court's conclusion of law therefore rests, on its face, on the finding that Oznowicz admitted to an oral agreement, which the court defines as including an indemnity clause. Although the trial court correctly concludes that Oznowicz agreed to pay 10 percent of the hard costs associated with construction of Lot 79, and later, Lot 81, to Mariner Homes, at no point during the trial did Oznowicz suggest, directly or indirectly, that he ever agreed to indemnify Mariner Homes or Weissensee, nor do any trial exhibits contain such a suggestion.
"Oznowicz was not directly asked at trial if he agreed to indemnify Mariner Homes or Weissensee. . . . He also states his understanding of the arrangement for lot 79 rather definitively in a January 2008 email, responding negatively to Weissensee's request that he sign the Draft CMA, 'As for the contract, I have had no problem with the handshake that says simply that you are building the home for Carol for a 10% markup of all 'hard costs' as this was our agreement.' It is difficult to see how this evidence could be construed as an agreement to indemnify.
"Although Weissensee did claim at trial that Oznowicz entered into an indemnity agreement with him, that claim is submerged in a tide of evidence to the contrary."
And the argument concludes as follows: "A review of the record as a whole fails to uncover substantial evidence that the parties entered into a contract whereby Oznowicz agreed to indemnify Mariner Homes (or Weissensee). It is the most basic element of contract law that a contract is formed with the mutual consent of the parties. (Civil Code sections 1550(2), 1565.) Here, the trial court cites no substantial evidence—only the unsupported and erroneous statement that Oznowicz had admitted to the agreement—that Oznowicz agreed to indemnify Mariner Homes. Review of testimony and trial exhibits confirms that there was no substantial evidence before the trial court to support the court's conclusion."
The argument is frivolous.
As Oznowicz acknowledges, we review Judge Haakenson's ruling for substantial evidence. We find plenty, beginning with Oznowicz's express acknowledgement noted above, that Weissensee claimed "at trial that Oznowicz entered into an indemnity agreement with him." In addition, there was specific evidence from Weissensee and Tom Raskowsky, the general contractor. Thus, Weissensee was referred to a document and asked "there's a reference here to indemnification. What was that?" He answered "[a]s part of our agreement for me to manage the construction, we had agreed that I would do it for the reduced fee and Tom would do it for virtually no profit, assuming that we had indemnification."
And here is the colloquy with Raskowsky:
"Q: Okay. Did you have an understanding with Mr. Oznowicz that you would get indemnity on 81 Round Hill?
"A: Yes.
"Q: And did that matter to you in going forward as general contractor?
"A: It—yes, it did.
"Q: Why?
"A: Well, because I was taking all the risks there as a general contractor. And after the second two, I was getting a little bit nervous.
"Q: Okay. Because you didn't get the indemnity?
"A: Excuse me?
"Q: You didn't get the indemnity?
"A: No."
Finally, numerous exhibits from counsel confirmed that Oznowicz would provide indemnity.
Oznowicz now argues that his failure to sign the agreement means there was no agreement. To the contrary, it just means that Oznowicz did not honor his word.
Oznowicz also challenges Judge Haakenson's order that "[t]he parties and the referee will draft a written indemnity provision." But there is certainly precedent for this sort of relief, where courts have found a party entitled to relief and either ordered the parties to negotiate an agreement putting that relief into effect, giving the parties an opportunity to do so before the court awarded the relief on its own terms. (See, e.g., Paice LLC v. Toyota Motor Corp.(Fed. Cir. 2007) 504 F.3d 1293, 1315, cert. den. 553 U.S. 1032 (2008) ["In most cases, where the district court determines that a permanent injunction is not warranted, the district court may wish to allow the parties to negotiate a license amongst themselves regarding future use of a patented invention before imposing an ongoing royalty. Should the parties fail to come to an agreement, the district court could step in to assess a reasonable royalty in light of the ongoing infringement."] Paice, at p. 1315.)
Here, after concluding that Oznowicz must provide indemnity, Judge Haakenson gave him the opportunity to shape the language of the writing embodying that obligation, in the form of negotiations with plaintiffs (assisted by the referee) to craft the precise indemnity language and if the parties could not agree, Judge Haakenson would do it himself. There was no error.
MARINER'S CROSS-APPEAL
As indicated, Judge Haakenson found that Oznowicz breached his duty to pay Mariner its 10% management fee for the services provided on the lots 79 and 81 homes, and awarded Mariner $383,869,60. Mariner claims it was entitled to prejudgment interest on that amount. Judge Haakenson denied it, and Mariner appeals from that denial.
Civil Code section 3287, subdivision (a) provides: "A person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in the person upon a particular day, is entitled also to recover interest thereon from that day, except when the debtor is prevented by law, or by the act of the creditor from paying the debt." So, persons entitled to recover "damages certain, or capable of being made certain by calculation" are entitled to interest from the time the right to recover arises. (see Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 174-175; Lucky United Properties Investment, Inc. v. Lee (2013) 213 Cal.App.4th 635, 653.) The test for determining "certainty" is whether defendant actually knows the amount owed or could have computed the amount from reasonably available information. (Howard v. American National Fire Ins. Co. (2010) 187 Cal.App.4th 498, 535; Children's Hospital & Medical Center. v. Bonta (2002) 97 Cal.App.4th 740, 774; Wisper Corp. v. California Commerce Bank (1996) 49 Cal.App.4th 948, 960.)
Where the amount of damages cannot be resolved except by verdict or judgment, prejudgment interest is not appropriate. (Wisper Corp. v. California Commerce Bank, supra, 49 Cal.App.4th at 960; see Lineman v. Schmid (1948) 32 Cal.2d 204, 212.) The rationale is that if a defendant is unable to determine the amount owed, he or she cannot be in default for not paying it. (Conderback, Inc. v. Standard Oil Co. (1966) 239 Cal.App.2d 664, 689-690.)
There is no indication in plaintiffs' brief that the subject of prejudgment interest was urged at any time before plaintiffs submitted their proposed statement of decision. Plaintiffs' issue conference statement makes no reference to prejudgment interest being an issue; and plaintiffs' post-trial brief does not raise it. Rather, it was apparently in its proposed statement of decision that plaintiffs first sought prejudgment interest, which proposed this: the court finds that Oznowicz agreed to pay 10% of the "hard costs" incurred in connection with "construction of the homes on lots 79 and 81;" and the proposed statement goes on: "The hard costs incurred in the construction of the lot 79 home were proven to be $2,101,440. The hard costs incurred on the construction of the lot 81 home were proven to be $1,737,256. The court finds that Weissensee submitted invoices showing the hard cost expenditures in these amounts on November 12, 2010, and that prejudgment interest should run at the statutory rate from this date forward on the sum of the two, or $383,869.69."
As noted, Judge Haakenson rejected the claim, in this one paragraph holding: "The hard costs incurred in the construction of the lot 79 home were proven to be $2,101,440. The hard costs incurred in the construction of the lot 81 home were proven to be $1,737,256. In their proposed statement of decision, Plaintiffs sought prejudgment interest on these amounts. This issue was not raised during trial. Whether these amounts were liquidated at the time of the invoices, as urged by Plaintiff, as opposed to the time of the division of the property was not proven. Therefore, Plaintiff has not proven an entitlement to prejudgment interest."
Our role was well set forth in Collins v. City of Los Angeles (2012) 205 Cal.App.4th 140, 151: "On appeal, we independently determine whether damages were ascertainable for purposes of the statute, absent a factual dispute as to what information was known or available to the defendant at the time." Mariner does not demonstrate that there was not a factual dispute here, especially given the numerous exhibits introduced at trial. Put otherwise, Mariner does not demonstrate that Judge Haakenson's ruling was error.
DISPOSITION
The judgment is affirmed. Each side shall bear its own costs on appeal.
/s/_________
Richman, J. We concur: /s/_________
Kline, P.J. /s/_________
Stewart, J.