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Hansche v. Jepson

Jan 11, 2017
G052328 (Cal. Ct. App. Jan. 11, 2017)




TY HANSCHE, Plaintiff and Appellant, v. DANIEL JEFFREY JEPSON et al., Defendants and Respondents.

Day Law Offices and Montie S. Day for Plaintiff and Appellant. Haight Brown & Bonesteel, Vangi M. Johnson and Sarah A. Marsey; Law Offices of Andrew W. MaCrae and John C. Wallace for Defendants and Respondents.


California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2013-00655339) OPINION Appeal from a judgment of the Superior Court of Orange County, Linda S. Marks, Judge. Affirmed. Day Law Offices and Montie S. Day for Plaintiff and Appellant. Haight Brown & Bonesteel, Vangi M. Johnson and Sarah A. Marsey; Law Offices of Andrew W. MaCrae and John C. Wallace for Defendants and Respondents.

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This appeal asks the following question: If a leased vehicle is damaged in an accident, repaired to its original condition, and returned to the lessor with no charges assessed to the lessee as a result of the accident, is the lessee able to seek damages for the "diminished value" of the vehicle? We conclude the answer is a resounding "no." The lessee neither has standing to seek such damages, nor does the lessee have any damages to seek. Accordingly, we affirm the judgment.

We note the unnecessarily disrespectful nature of statements in the plaintiff's briefs, including: "There is 'reality' which should be considered but there appears to be a decision from 'Fantasyland' coming from the Trial Court in Orange County. The decision makes no real sense or logical reason" (original bolding omitted), and "If one is going to cause damage to another citizen's vehicle . . . make sure the vehicle which is being damaged is a 'leased vehicle' and/or is located in Orange County." We expect more professionalism from counsel.



In October 2011, plaintiff Ty Hansche entered into a lease agreement with BMW Financial Services (BFS) to lease a 2012 model vehicle valued at $58,813.34 for 36 months. The lease included a 36,000 mileage allowance. The lease also required Hansche to maintain insurance coverage, and to return the vehicle to its "pre-damage condition" in the event of an accident.

In February 2012, Hansche and defendant Jeffrey Jepson were involved in an accident. Hansche was driving the leased vehicle. The leased vehicle was repaired, as required by the lease, at a certified BMW repair facility. Jepson's insurance carrier paid approximately $24,000 for the repairs. After the vehicle was repaired, Hansche continued to drive it.

The exact amount is somewhat inconsistent in the record, but it exceeds $24,000.

In June 2013, Hansche filed the instant complaint against Jepson and his wife (the Jepsons). He alleged personal injury and property damage. The complaint noted that the Jepsons' insurer had paid for the repairs to the vehicle, and those amounts were not claimed as damages unless the costs of repair were, somehow, to be more than the insurer had paid. The complaint specifically alleges diminishment in value of more than $33,000, stating "the Plaintiff's Vehicle cannot be advertized (sic) and/or sold by a licensed automobile dealer . . . as 'certified'" or sold with the implied warranty of merchantability. Discovery made it clear that Hansche was not suing for loss of use of the vehicle, but for its diminished value.

The opening brief states: "This case is and has been prosecuted by plaintiff's counsel for the benefit of not only Mr. Hansche, but for the benefit of the citizens in California under the Private Attorney General Act . . . ." The complaint includes no such allegation, and accordingly, we ignore this unsupported statement.

Ultimately, the personal injury claims sought economic damages of less than $5,000. Hansche also claimed damages for pain and suffering.

Trial was initially set for September 22, 2014. Shortly before that date, the Jepsons filed several motions in limine. One of those requested an order from the trial court precluding Hansche from introducing evidence relating to or arguing diminished value. They argued Hansche had no standing to pursue such damages because he did not own the vehicle, the vehicle had been returned to its pre-accident condition, and Hansche was not liable to BFS for any damages or diminished value. The docket does not reflect, and the record does not include, any opposition Hansche filed to this motion, though he did address the issue in his trial brief.

Trial was continued from September 2014 to March 2015. In October 2014, at the end of the lease period, Hansche chose to return the vehicle to a BMW dealership under the terms of the lease. According to his own declaration under penalty of perjury, he was charged only for normal wear and tear and excess mileage. He was not required to pay anything additional due to the accident.

On the first day of trial in March 2015, Hansche filed a document called "Memorandum re: Standing to Recovery [sic] Property Damages for Leased Vehicle." The trial court decided to have a hearing pursuant to Evidence Code section 402 (402 hearing) to decide this issue. The Jepsons had already issued a subpoena to BMW of Irvine for a "Person Most Knowledgeable" about several topics relating to the leased vehicle to appear at trial. Oscar Nava appeared and testified at the 402 hearing. Hansche has chosen to proceed without a reporter's transcript, and accordingly we do not have the benefit of the actual testimony. The same day, the court ordered the Jepsons to file a response to Hansche's memorandum. The Jepsons complied.

Two days later, the court continued the 402 hearing. At its conclusion, the court ruled that Hansche did not have standing to pursue recovery for diminished value. The court then granted the Jepsons' motion in limine on this subject. Apparently the court discussed its reasoning for this on the record, but without a reporter's transcript, we do not have the benefit of reviewing it. The court also made several other rulings on pending motions, and denied a request by Hansche to stay proceedings and continue the trial.

Shortly thereafter, Hansche filed a stipulation stating the parties had reached a settlement on the personal injury portion of the complaint, and retained his right to appeal on the diminished value issue. Judgment was entered accordingly, and Hansche now appeals.

Although the notice of appeal purported to appeal from "Orders and Rulings re Motions [in] Limine and Exclusion of Evidence" we deem the appeal as one from the judgment. We also conclude the judgment is appealable. (Harrington-Wisely v. State of California (2007) 156 Cal.App.4th 1488, 1495 [although a stipulated judgment generally is not appealable, an appeal is permitted "'"[i]f consent was merely given to facilitate an appeal following adverse determination of a critical issue"'"].)



Despite Hansche's compelling citations to 19th century case law, "Maxims of Jurisprudence," "Common Sense," and canards such as "[p]ossession is 9/10 of the law," we conclude the trial court did not err when deciding to exclude evidence related to the vehicle's diminished value because Hansche had no standing to pursue such damages.

Among other things, Hansche informs us that the maxims of jurisprudence come to us from "Medieval times," and are "essentially the same as proverbs for Christianity or other religions, all to assist in the understanding and as guidance through the issues one may be faced with in life." --------

Standard of Review

The parties disagree on the standard of review. Hansche argues the issue of standing is a pure legal issue that should be decided de novo, but we bear in mind this issue was decided in the context of an evidentiary ruling, as the Jepsons point out. The question was decided on the testimony presented at the 402 hearing, and is more of an evidentiary decision than a pure question of law. Ultimately, this makes no difference, as Hansche cannot prevail under any standard of review, as we discuss below.

Inadequate Record

As the Jepsons correctly argue, because this is a ruling on an evidentiary matter, by failing to include the reporter's transcript from the 402 hearing, Hansche has provided an inadequate record. Although this was raised by the Jepsons' brief, Hansche did not address this issue at all in his reply brief.

"In numerous situations, appellate courts have refused to reach the merits of an appellant's claims because no reporter's transcript of a pertinent proceeding or a suitable substitute was provided. [Citations.] [¶] The reason for this follows from the cardinal rule of appellate review that a judgment or order of the trial court is presumed correct and prejudicial error must be affirmatively shown. [Citation.] 'In the absence of a contrary showing in the record, all presumptions in favor of the trial court's action will be made by the appellate court. "[I]f any matters could have been presented to the court below which would have authorized the order complained of, it will be presumed that such matters were presented."' [Citation.] This general principle of appellate practice is an aspect of the constitutional doctrine of reversible error. [Citation.]" (Foust v. San Jose Construction Co., Inc. (2011) 198 Cal.App.4th 181, 186-187.)

The 402 hearing was the key proceeding in this matter. Without it, we are left with both gaps in the evidence and no hint as to the trial court's reasoning, which the minute order states was set forth in the hearing. Accordingly, we would be fully justified in declining to reach the merits of Hansche's appeal. At our own discretion, however, and in the interests of justice, we address the merits to the extent we are able to do so without the benefit of anything that happened at the 402 hearing.

Standing and Damages

Hansche's key argument is that he suffered damages due to the vehicle's diminished value and was therefore entitled to sue the Jepsons to recover. He is wrong on both points - he neither has standing to sue as a mere lessee, nor did he suffer any damages.

An owner, under the Vehicle Code, is one who has "all the incidents of ownership, including the legal title of the vehicle." (Veh. Code, § 460.) As lessee, it is undisputed that Hansche never owned the title. His use of the vehicle was governed by the terms of the lease. Among those provisions were mileage limitations, limits on who was allowed to operate the vehicle, and a prohibition on selling or subleasing. The lease also governed responsibility in the event of an accident. Hansche agreed to return the vehicle to its pre-damage condition. This is precisely what happened here - the damages caused by the accident were paid for by the Jepsons' insurance. At the conclusion of the lease term, Hansche returned the vehicle pursuant to the lease's terms. All of these are indications of his status as lessee, not owner. His other contentions on this point, including the notion that a lease is equivalent to a conditional sales contract, are squarely rejected. Any argument that Hansche was ever anything more than a lessee is simply misplaced.

So too are Hansche's discussions of a number of readily distinguishable cases. Most of these involve a defendant committing the tort of conversion against the holder of a limited interest in the converted property. In those cases, the plaintiffs were permitted to recover because they were liable to the owners of the property. (See, e.g., Everfresh, Inc. v. Goodman (1955) 131 Cal.App.2d 818, 820 ["ownership, either general or special, or the right to immediate possession, is all that is required to maintain an action for conversion, and it is not essential that plaintiff be the absolute owner"]; Camp v. Ortega (1962) 209 Cal.App.2d 275, 286-287 ["In an action for damages for conversion, it is the rule that the plaintiff, although owning but a limited or qualified interest in the property may, as against a stranger who has no ownership therein, recover the full value of the property converted. [Citations.] The rationale of the above rule permitting recovery of the full value is that the owner of the limited or qualified interest is still liable over to the person owning the superior or remainder interest"]; Goldberg v. List (1938) 11 Cal.2d 389, 393-394 [conversion against holder of limited interest]; Treadwell v. Davis (1868) 34 Cal. 601, 606 ["in an action by the pledgee against a stranger for the conversion of goods, the plaintiff is entitled to recover the full value of the goods, because he is answerable over to the pledgor for the surplus"], overruled in part by Reed v. Bernal (1871) 40 Cal. 628.)

Such is not the case here, because when BMW took the vehicle back, Hansche had no further liability for any diminished value. He never had any legal interest, even a limited one, in the ownership of the vehicle. He is strictly the lessee, and this is not an action for conversion.

The main non-conversion case Hansche relies upon is Abramowitz v. Bank of America (1955) 131 Cal.App.2d.Supp. 892. In that case, the defendant wrongfully dishonored a check for payment on a financed vehicle, which was repossessed and sold. The plaintiff was entitled to the difference between the sale price and the amount owed, because, again, he owned an interest in the vehicle and was liable to the financer. (Id. at p. 898.)

For the first time in his reply brief, Hansche argues the trial court had no power to determine the ownership of the vehicle, because that is generally a fact for the jury to determine. The court correctly determined ownership in the context of the 402 hearing. Indeed, the evidentiary issue of whether to allow diminished value damages could not be determined without reaching a decision on this point. The issue was thoroughly briefed on both sides, and Hansche's own documents provided unqualified proof of his status as a lessee. To the extent anything contradictory was offered in the 402 hearing, Hansche has waived that issue by failing to provide a reporter's transcript.

Finally, even if we were to determine that Hansche was the legal owner of the vehicle, he suffered no cognizable damages. He argues that he could have kept the vehicle after the lease terminated (by paying a significant additional amount), and if he had, he would have suffered diminished value because the vehicle could not be sold as "certified" or with an implied warranty of merchantability. But he chose not to purchase the vehicle. He cannot assert damages based on what might have happened had he made different choices. He used the vehicle after it was repaired, and then returned it, and was not required to pay anything to BFS as a result of the accident. He cannot recover for purely speculative harm. (See, e.g., Civ. Code, § 3333 [plaintiffs are entitled to proximately caused damages].) Hansche never moved beyond his status as a lessee of the vehicle, and allowing a lessee to recover for the diminished value of a vehicle in which he had no ownership interest would be plainly absurd.



The judgment is affirmed. The Jepsons are entitled to their costs on appeal.


Summaries of

Hansche v. Jepson

Jan 11, 2017
G052328 (Cal. Ct. App. Jan. 11, 2017)
Case details for

Hansche v. Jepson

Case Details

Full title:TY HANSCHE, Plaintiff and Appellant, v. DANIEL JEFFREY JEPSON et al.…


Date published: Jan 11, 2017


G052328 (Cal. Ct. App. Jan. 11, 2017)