Batterton v. Campana

Filed 9/24/07 Batterton v. Campana CA3

NOT TO BE PUBLISHED

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

(San Joaquin)

----

In this case alleging breach of a contract for the sale of a commercial ground lease, the seller--plaintiff/cross-defendant Carl Batterton--appeals from a judgment and post-judgment orders in favor of defendants/cross-complainants Victor J. Campana and Anthony Campos, following a trial and special jury verdict finding that plaintiff and defendants entered a contract, but plaintiff as the seller did not perform, and therefore defendants were not required to perform. Plaintiff contends the jury was erroneously asked to make a finding of law by interpreting the contract, and their legal conclusion was wrong. We shall affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff claims he was the lessee in a lease of a lot on East Hammer Lane in Stockton, upon which he operated a used car business, Stockton Used Auto Center. Plaintiff claims he sold the lease to defendants, who then operated their own car business (Stockton Thrift Auto) on the property. Plaintiff claims defendants failed to perform their contractual obligation to pay plaintiff $3,000 per month for 36 months. Defendants claim plaintiff agreed to sell the lease to them, but he failed to deliver possession of the premises under the terms of the lease and under the terms of the agreement. The parties sued each other for breach of contract and common counts for money lent or paid. The cross-complaint also alleged promise made without intention to perform, but the jury found plaintiff intended to perform when he made his promise, and no issue about this count is presented on appeal.

Evidence adduced at trial included the following:

Plaintiff testified he started out as an employee of Stockton Used Auto Center, which was owned by Rick and Nina Jensen and Gary Almond. In early 2000, plaintiff bought the Jensens interest in the business and began paying the rent. Plaintiff asked to have his name added to the lease. One of the landlords, Willard Eisner, said he could not release the Jensens but would add plaintiff. In July 2001, Eisners property manager sent a letter to Stockton Used Car Center stating: This letter is to confirm that Rick Jensen, Nina Jensen, Gary Almond and Carl Batterton [plaintiff] are collectively lessees of the real property located at 804 E. Hammer Lane, Stockton, California. On September 28, 2001, plaintiff wrote a letter to the landlord, asking to be added to the lease agreement. A letter from the landlord on the same date repeated the confirmation of collective lessees. On October 5, 2001, the landlords lawyer sent a letter to plaintiff, stating, you asked the Landlord to consent to add you to the Lease for DMV purposes. We enclose herewith the form that you must have circulated and signed by you, the Jensens and Gary Almond. The form ATTACHMENT to LEASE in the record was not signed by the Jensens or the landlord. Plaintiff testified he was told it was sent to the Jensens and then to the landlord. In March 2002, the property manager sent to plaintiff a reminder that the property taxes were due.

On April 26, 2002, Almond sent a note to the landlord to inform you that I Gary G. Almond want to be released from the lease agreement . . . . There was no evidence that plaintiff ever acquired Almonds interest.

Also around April 2002, plaintiff sold the lease to defendants, who had their own used car business nearby and wanted to relocate to the more desirable Hammer Lane location. It appears the Hammer Lane lease at that time was due to expire on February 28, 2006.^[1]

According to plaintiff, he considered the lease to be his lease even though he was not the sole lessee, because he bought the Jensens interest (they remained on the lease as a formality), and Almond was nowhere to be found. Plaintiff said defendants were aware of all this. During his trial testimony, plaintiff variably said he sold defendants the lease, his interest in the lease, the rights to the lease, and the lease value, which meant the rights to negotiate their own lease, the opportunity to meet with the landlord.

The undated, handwritten contract which is the subject of this lawsuit, which apparently was signed around April 2002, stated in its entirety:

Seller: Carl L. Batterton * I have sold my lease at 804 E Hammer Lane Stockton to

Buyers: Victor J. Campana & Anthony A. Campos.

Buyer to payoff [wholesaler] John Fariola: $20750

" BOE [Board of Equalization]: $22360

" Cash or trade: $30,000

$3000 x 36 months.

When Buyer signs new lease agreement with landlord (Willard Eisner) Buyer to release check to BOE $22___[page cut off in appellate record].

When Seller has moved all vehicles & personal property off of 804 E Hammer Lane Buyer will release check for $30,000 to Seller. (Date not to exceed [sic] 5-10-02)

Payments to Seller will begin on 6-10-02.

[Signatures.]

Buyer has made $10.00 cash deposit.

[Initials].

Defendants testified they were buying the existing lease with its existing terms. Defendant Campana testified he handwrote the contract in the presence of plaintiff and Campos. Although it referred to a new lease, Campana testified the intention of that second line there was to make sure that myself and my partner were on a lease solely by ourselves without [plaintiff]. Thats why it was called a new lease. That was the intent. Defendants were assuming plaintiffs lease but insisted on signing a new lease with the landlord because defendants are not lawyers and did not know whether a mere addendum would have given them the same protection.

Campos testified defendants understood plaintiff was selling his lease under the existing terms of $4,500 monthly rent, with three years remaining on the lease. Campos asked plaintiff for a copy of the lease but was never given one. The total purchase price to buy the lease was about $180,000. New lease in the contract did not mean new terms. Defendants expected the terms to be the same.

Before meeting with the landlord, defendants made an early payment under the contract for the BOE matter, before the payment was due under the contract, because plaintiffs assistant made a frantic call saying the BOE was going to shut down plaintiffs business unless the BOE received its money, and defendants trusted plaintiff and wanted to avoid any complications.

At the meeting with the landlord, defendants were surprised to learn they would not be assuming the lease but would have to accept new lease terms at a higher rent ($6,000 per month rather than $4,500).^[2] The landlord also declined to give an option to purchase (which defendants thought was a term of the old lease but which they never verified). The landlord did give defendants a right of first refusal in the event the landlord decided to sell. Defendants lease with the landlord gave defendants about 62 percent more land than plaintiffs lease. Defendants testified it was just an empty field in back, not usable display space. The landlord testified this extra land was the reason for the jump in rent. The landlord agreed to make improvements, but that was separate from the increase in rent, and defendants had to sign a promissory note for the improvements. The landlord postponed the effective date of the new lease until after May 28, because he had to give to the other existing lessees (Almond and the Jensens) an opportunity to cure the existing default on the old lease.

Despite having to agree to the higher rent and not getting the purchase option they anticipated, defendants decided to go forward with the lease anyway, because they had already paid $22,000 for the BOE and committed to the wholesaler that they were going to pay plaintiffs debt of around $20,000. They would never get their money back from plaintiff, because he was already in default in his rent and was behind in paying the BOE. Defendants decided to sign the new lease and continue to perform on their contract with plaintiff, except for the $3,000 x 36 months. Campos testified: We realized then we werent getting the $4500 a month. We werent getting [plaintiffs] lease. So therefore, we felt this contract was basically voided. We had already paid 22,000 to him, we had already committed $22,000 to [the wholesaler] that we gave a [sic] word that wed pay on him --.

After meeting with the landlord, defendants made the payment to the wholesaler, because defendants had committed to the wholesaler that they would pay him, and they wanted to maintain a good relationship with the wholesaler, with whom they continued to do business regarding their own used car business.

Defendants also made payments to plaintiff to get him off the property. Defendants decided it was in their best interest to get plaintiff off the lot, and they therefore gave him the $30,000 to walk away (though they also gave him some money after he left). Defendants opened for business at their new location on June 22, 2002.

Defendants said it was never their understanding that they were buying from plaintiff a mere opportunity to negotiate with the landlord. They thought they were buying plaintiffs lease. They would not have agreed to so much money for a mere opportunity to negotiate a new lease. In September 2002, defendants decided they had paid enough and would not pay any more money to plaintiff, and they told him so.

Landlord Willard Eisner testified he accepted rent payments from plaintiff, but plaintiff was never added as a lessee on the old lease (due to his failure to obtain the necessary signatures), and the landlord never released Almond or the Jensens from the lease at any time before he negotiated the new lease with defendants. The lease stated that in the event of an assignment, the original lessees would remain on the lease. The landlord testified that plaintiff said the used car business was being sold to defendants, who wanted to meet with the landlord. At the meeting, there was never any discussion about defendants assuming the existing lease. The increase in rent was due to an increase in the leased space. The old lease was in default, and the landlord had to notify Almond and the Jensens and give them time to cure the default.

Before closing argument, the trial court denied plaintiffs motion for a directed verdict.

The jury returned a special verdict, as follows:

1. Did [plaintiff] and [defendants] enter into a contract? The jury answered yes, by a vote of nine to three.

2. Did [plaintiff] do all, or substantially all, of the significant things that the contract required him to do? The jury unanimously answered no.

3. Did all the conditions occur that were required for [defendants] performance? The jury unanimously answered no, and were instructed not to answer further questions on the contract claim.^[3]

As to the count for false promise, the special verdict asked:

1. Did [plaintiff] make a promise to [defendants] that was important to the transaction? The jury answered yes, unanimously.

2. Did [plaintiff] intend to perform this promise when he made it? The jury answered yes, by a vote of nine to three. The jury was instructed not to answer further questions.

The trial court denied plaintiffs various motions for new trial, judgment notwithstanding the verdict, and motion to vacate judgment and enter a new judgment.

Plaintiff appeals.

DISCUSSION

I. Standard of Review

Plaintiff invokes the de novo standard of review for questions of law or mixed questions of law and fact where legal questions predominate. (20th Century Ins. Co. v. Garamendi (1994) 8 Cal.4th 216, 271.) Plaintiff claims the jury made a legal conclusion when it determined that [plaintiff] did not fulfill his obligations under the contract. In essence, in order to determine whether Defendants had breached the contract they made with [plaintiff], the jury was asked to determine whether [plaintiff] had a legal interest in the Hammer Lane property lease. This is not a determination that can be made based on human experience, rather, it is a question of legal principles and their underlying values. Accordingly, [plaintiffs] appeal of the jurys verdict is a predominantly legal question that should be reviewed independently.

As we shall explain, plaintiffs tortured view of this case is unsubstantiated. He presents no viable legal claim and has forfeited any substantial evidence claim.

We shall address each of plaintiffs arguments in turn.

II. Legal Interest in Property

Plaintiff first argues he had a legal interest in the Hammer Lane property, as lessee. He says that, even though he did not have an executed lease assignment, the assignment was valid as a matter of law because he paid the rent and the landlord accepted it. He argues the determination of whether there was an assignment from the Jensens or Almond should have been made by the court, not the jury.

However, there was no evidence of any assignment from Almond to plaintiff. Thus, plaintiff cannot show he was the only lessee as a matter of law. Insofar as plaintiff thinks the court should have instructed the jury that he had a valid interest in the lease pursuant to an assignment of the Jensens 50 percent interest, we shall assume for purposes of this appeal that plaintiff had a legal interest in the property as lessee. However, plaintiff fails to show any possible prejudice from the circumstance that the trial court did not direct the jury to accept as a matter of law that plaintiff had an interest in the lease. We reject, post, plaintiffs unsubstantiated claim that the jury verdict against him is based on the jurys erroneous finding of law that plaintiff did not have an interest in the lease.

III. Contract Formation

Plaintiff next argues he entered into a valid contact with defendants for his interest in the Hammer Lane property lease. After citing authority for basic legal principles for contract formation, plaintiff says, Defendants in essence argued that [plaintiff] did not give sufficient consideration in exchange for Defendants monetary promise. However, [plaintiffs] interest in the lease of the Hammer Lane property is a benefit that he conferred upon Defendants. Defendants would not have been able to step into [plaintiffs] shoes and take possession of the Hammer Lane property nor assume a new lease with lessor Willard Eisner if not for [plaintiffs] accordance [sic] of his interest. [Plaintiff] and Defendants bargained for [plaintiffs] interest in the lease and made an agreement for money (Defendants consideration) in exchange for [plaintiffs] lease interest ([plaintiffs] consideration). Therefore, the contract that [plaintiff] and Defendants entered into was valid.

The point of this argument by plaintiff is unclear, because the jury expressly answered yes to the question, Did [plaintiff] and [defendants] enter into a contract?

For purposes of this appeal, we assume plaintiff entered into a valid contract with defendants.

IV. Alleged Breach of Contract

Plaintiff next contends defendants breached the contract. He argues, the jurys determination [that plaintiff, but not defendants, breached the contract] was based on a legal interpretation of the original Hammer Lane property lease and [plaintiffs] interest in that lease. Not only was it erroneous to let the jury make a finding of law, but the jurys legal conclusion was wrong. However, plaintiff fails to show the jury was erroneously allowed to make a legal conclusion and fails to show any basis for reversal of the judgment.

As to plaintiffs contention that the jury was improperly asked to decide a question of law, the contention fails because plaintiff fails to cite any statute, case law, treatise, or other legal authority supporting his position. The only authority cited in his opening brief under this heading is a Witkin treatise for the proposition that the unjustified or unexcused failure to perform a contract, or a material condition or covenant of an unseverable contract, is a breach.

Thus, plaintiff has failed to meet his burden as appellant to present legal authority supporting his position. (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785; In re Marriage of Nichols (1994) 27 Cal.App.4th 661, 672-673, fn. 3 [reviewing court may disregard contentions unsupported by legal authority].)

We note a special verdict asks a jury to make conclusions of fact and leaves it to the trial court to draw conclusions of law from those facts. (Code of Civ. Proc., 624.) Plaintiff presents no legal analysis or authority to show that any of the questions submitted to the jury improperly asked for conclusions of law rather than fact.

Though we need not go further, we note that, even if we were to ignore these defects in plaintiffs presentation, he fails to show grounds for reversal. Thus, he argues as follows:

[T]he jury was asked to decide whether or not [plaintiff] had an interest in the lease, performed his obligations under the contract, and they decided that he had not [citation to record]. Although this jury finding is vague, it can be assumed that the jury meant that [plaintiff] did not perform his contract obligations because he did not sign the original lease and therefore lacked the consideration necessary to enter into the contract with Defendants.

Plaintiffs assumption is pure speculation with no citation of anything to support it. Perhaps the jury found plaintiff did have an interest in the lease but failed to accomplish a transfer of that lease under the existing terms, which is what defendants bargained for. Although defense counsel argued to the jury in closing argument that plaintiff was not on the lease, defense counsel also argued as an alternative position that, even if plaintiff was on the lease, he was merely one of several lessees, and it was not his lease alone. Almond and the Jensens were still on the lease, as evidenced by the fact that the landlord sent a default notice to them before entering the new lease with defendants. Defense counsel argued that, since the lease was not in plaintiffs name alone, he had no right to sell the lease. However, since the jury answered the first question in plaintiffs favor (i.e., that plaintiff and defendants entered into a contract), the jury may have rejected defendants position that plaintiff had no interest in the lease.

Where the jury found against plaintiff was regarding performance. Plaintiff claims the only evidence that he did not perform his obligations was defendants legal argument that plaintiff did not have an interest in the lease. This is wrong. There was evidence, as the defense argued to the jury, that plaintiff did not perform because his promise was to sell the existing lease, yet defendants did not get the existing lease, they got a new lease with a higher rent. Thus, plaintiffs assumption that the jury must have found he had no lease interest is unsupported speculation.

Plaintiff also argues, the jurys determination is factually defective as well, as [plaintiff] did in fact deliver his interest in the lease to Defendants. Defendants received what they bargained for--interest in the Hammer Lane property lease--and it was Defendants who breached the agreement by failing to fully compensate [plaintiff] according to the contract. This argument implicitly raises an underhanded substantial evidence claim. We agree with defendants that any substantial evidence claim is forfeited because plaintiff fails to set forth evidence favorable to the judgment. (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881.) For example, the recitation of fact in plaintiffs opening brief says defendants entered into a lease with the landlord, but it fails to mention that the terms of the lease were not the same as plaintiffs lease with the landlord and that defendants rent ($6,000 per month) was higher than the $4,500 per month under the existing lease. Moreover, plaintiff in his reply brief disavows any substantial evidence claim, stating [Defendants] argument is strange as it addresses the substantial evidence standard of review rather than to address the issues set forth by [plaintiff]. Plaintiffs reply brief adds, For argument sake, [plaintiff] contends that the verdict by the jury was not supported by substantial evidence. He again repeats the same defect, acknowledging only the evidence he views as favorable to his position.

We conclude any substantial evidence claim is forfeited.

As defendants note, the judgment is presumed to be correct, and the burden is on the appellant affirmatively to demonstrate error. (Interinsurance Exchange v. Collins (1994) 30 Cal.App.4th 1445, 1448.)

Plaintiff has failed to meet his burden as appellant to demonstrate reversible error with respect to the jurys verdict.

V. Directed Verdict

Plaintiff next argues the trial court erred in denying his motion for a directed verdict. We shall conclude plaintiff fails to show reversible error.

A motion for directed verdict is in the nature of a demurrer to the evidence. (Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 629.) In determining such a motion, the trial court has no power to weigh the evidence, and may not consider the credibility of witnesses. It may not grant a directed verdict where there is any substantial conflict in the evidence. [Citation.] A directed verdict may be granted only when, disregarding conflicting evidence, giving the evidence of the party against whom the motion is directed [defendants in our case] all the value to which it is legally entitled, and indulging every legitimate inference from such evidence in favor of that party, the court nonetheless determines there is no evidence of sufficient substantiality to support the claim or defense of the party opposing the motion, or a verdict in favor of that party. [Citations.] (Id. at p. 629, italics omitted.) [T]he test is not the presence or absence of a substantial conflict in the evidence. Rather, it is simply whether there is substantial evidence in favor of the respondent. If this substantial evidence is present, no matter how slight it may appear in comparison with the contradictory evidence, the judgment must be upheld. As a general rule, therefore, we will look only at the evidence and reasonable inferences supporting the successful party, and disregard the contrary showing. [Citations.] In short, even if the judgment of the trial court is against the weight of the evidence, we are bound to uphold it so long as the record is free from prejudicial error and the judgment is supported by evidence which is substantial, that is, of ponderable legal significance, reasonable in nature, credible, and of solid value . . . . [Citations.] (Ibid.) Where, as here, a jury finds against the plaintiff following trial, the plaintiffs assertion that he was unfairly denied a directed verdict is functionally equivalent to contending there was insufficient evidence to support the jury verdict against him. Only if there was no substantial evidence in support of the verdict could it have been error for the trial court earlier to have denied [plaintiffs] motion for directed verdict. [Citation.] (Id. at p. 630.)

Here, plaintiffs presentation on this issue fails to meet his burden on appeal.

Plaintiffs motion for directed verdict argued there was no false promise (a moot point in light of the jury verdict in plaintiffs favor on this count) and there was a valid assignment of the lease from the Jensens to plaintiff. Plaintiff argued he performed the contract, defendants did not perform the contract, and therefore there was nothing for the jury to decide. Defense counsel responded in part that plaintiffs argument that he performed was based on his claim that all the contract required him to do was introduce defendants to the landlord, whereas the contract was for the sale of the existing lease terms, which did not happen.

The trial court denied the motion for directed verdict, stating, theres a factual question that the jury has to decide as to both issues as to whether [plaintiff] had an assignable interest. Theres one question that the jury has to decide. And the other question is and if he didnt have an assignable interest, then it would be false representation that would justify the cross-complaint. So its a question of fact for the jury as to whether or not he had an assignable interest.

Thus, the trial court did not expressly speak to the question of performance, though the court immediately thereafter stated it was perplexing that defendants paid plaintiff so much money after the meeting with the landlord when they found out they did not have a lease.

On appeal plaintiff complains the trial court should have granted directed verdict because (1) plaintiff had a valid interest in the lease, and (2) defendants paid part of the amount due under the contract and then stopped paying, which constitutes a breach.

Plaintiff fails to show entitlement to directed verdict on either issue.

As we have indicated, plaintiffs appeal fails even if he had a valid interest in the lease. This means he cannot show he was prejudiced by the trial courts denial of his motion on this issue. Thus, even assuming error on this point, plaintiff fails to show error causing prejudice so as to warrant reversal of the judgment. (Cal. Const., art. VI, 13 [No judgment shall be set aside . . . unless, after an examination of the entire cause, including the evidence, the court shall be of the opinion that the error complained of has resulted in a miscarriage of justice]; Code Civ. Proc., 475.^[4])

As to breach of contract, plaintiff fails to meet his burden on appeal. His total recitation of the evidence on this point under this heading is defendants paid about one half of the amount due under the contract and then quit paying, therefore a breach of contract [occurred] with $108,000 owing to [plaintiff]. He notes the trial court wondered why defendants paid money on the contract after meeting with the landlord and learning they would not be taking over the same lease. However, plaintiff fails to acknowledge evidence favorable to defendants. Thus, defendants paid some money before meeting the landlord -- to cover plaintiffs BOE debt -- because plaintiffs secretary called them, frantic, saying the BOE was going to shut the business down. Defendants were unsure how that would affect their own business, if at all, but they feared it would complicate things. Defendants also testified they paid another amount due under the contract to the wholesaler because they had already promised the wholesaler they would pay it, and they needed to stay in his good graces because of their own ongoing relationship with the wholesaler in defendants own used car business.

Plaintiff fails to show reversible error in the trial courts denial of his motion for directed verdict.

VI. Other Motions

Finally, plaintiff says he also appeals from the denial of various motions -- for new trial, for judgment notwithstanding the verdict, and to vacate judgment and enter a different judgment. Again, plaintiff has failed to meet his burden on appeal. His appellate brief, under this heading, provides no information as to the substance of his motions. (In re Marriage of Nichols, supra, 27 Cal.App.4th at pp. 672-673, fn. 3 [reviewing court may disregard contentions unsupported by factual analysis].) He merely regurgitates several pages worth of statutes and case law describing the legal standards for the various motions and legal principles for contract law, with no factual analysis connecting those authorities to the facts and circumstances of this case. He then says, The trial court should have entered a new judgment in favor of plaintiff based on error of law by the court and the jury or in the alternative granted a new trial. The plaintiff had privity of estate, had an interest to sell, sold his interest to the defendants who handwrote the agreement and when the defendants failed to make the remaining payments, suffered damages in the amount of $108,000. This presentation is bereft of substance and again ignores evidence favorable to defendants.

We conclude plaintiff fails to meet his burden as appellant to demonstrate reversible error.

We note defendants in the CONCLUSION of their brief ask us to award costs and fees on appeal due to the frivolous nature of the appeal . . . . We will award costs under California Rules of Court, rule 8.276, but we reject the request for sanctions for a frivolous appeal.

DISPOSITION

The judgment is affirmed. Defendants shall recover their costs on appeal. (Cal. Rules of Court, rule 8.276(a)(1)-(2).)

SIMS , Acting P.J.

We concur:

ROBIE , J.

CANTIL-SAKAUYE , J.

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^[1]The record on appeal contains only page 1 of the two-page extension, and therefore lacks the signature page.

^[2]At the time of trial, defendants were paying less than $6,000 in rent, but that was because part of the property was taken in eminent domain and so a new rent was negotiated.

^[3]No specific questions were submitted to the jury regarding defendants cross-complaint for breach of contract damages. No one makes an issue of this on appeal.

^[4]Code of Civil Procedure section 475 provides: No judgment . . . shall be reversed or affected by reason of any error, ruling, instruction, or defect, unless it shall appear from the record that such error, ruling, instruction, or defect was prejudicial, and also that by reason of such error, ruling, instruction, or defect, the said party complaining or appealing sustained and suffered substantial injury, and that a different result would have been probable if such error, ruling, instruction, or defect had not occurred or existed. There shall be no presumption that error is prejudicial, or that injury was done if error is shown.