Danilovic v. WITI Unlimited

Filed 10/16/06 Danilovic v. WITI Unlimited CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

APPEAL from a judgment of the Superior Court of Los Angeles County. Joseph S. Biderman, Judge. Affirmed.

Manibog & Manibog and Darren A. Manibog, for Defendant and Appellant.

Law Offices of Martin S. Friedlander and Martin S. Friedlander for Plaintiff and Respondent.

____________

Respondent Maria Danilovic sued WITI Unlimited, Inc., WITI Foundation, WITI Professional Association and Carolyn Leighton for breach of contract and fraud; defendants cross-complained on various theories. A jury having been waived, the trial court awarded judgment for Danilovic in the amount of $65,000 plus prejudgment interest of $13,000 and, with the exception of an award of $5,700 for reimbursement for a computer in their favor, found against defendants on their cross-complaint. Appellant WITI Unlimited, Inc., appeals from the judgment. We affirm.

FACTS

In its amended statement of decision, the trial court found that on November 1, 2001, Danilovic entered into an oral agreement with WITI Unlimited to serve as the latter’s chief executive officer. WITI, or Women In Technology International, was a name that attached to several separate but related companies. Appellant WITI Unlimited, Inc., (hereafter WITI) was a business that arranged business development and continuing education conferences for female professionals working in the technology field; other companies with the WITI name engaged in job search and placement.^[1] Danilovic’s initial contact with WITI was David Leighton, the son of WITI’s founder, Carolyn Leighton. According to Danilovic, Carolyn Leighton wanted Danilovic to manage WITI, obtain further funding for it, and handle the potential sale of the company.

The trial court found that Danilovic is a “sophisticated business person^[[2]] and had been engaged in developing companies for a percentage equity interest. [Danilovic] agreed to accept deferred payment for services rendered under the [oral agreement with WITI] because she had a pending personal injury lawsuit and worker’s compensation claim from a prior elevator accident (‘Elevator Cases’)^[[3]] and did not want to be receiving wages or payment for services while those matters were pending. [Danilovic] testified in deposition in the Elevator Cases that she was physically and emotionally unable to work. At the very same time, [Danilovic] was negotiating some of the terms of a prospective employment agreement with [WITI] (the ‘Employment Agreement’) and representing herself as capable of working 60-80 hours per week as a high level executive. The terms of the Employment Agreement were never finalized and [Danilovic] refused to execute it. [Danilovic’s] refusal to execute the Employment Agreement or receive a salary as therein referenced was motivated by her desire to maximize the anticipated settlement of her Elevator Cases.” In fact, Danilovic settled the Elevator Cases for over $1 million in December 2002.

Danilovic went to work for WITI in November 2001. The trial court found that although Danilovic was “held out” as the chief executive officer of WITI, she never worked full time but “performed regular services until June 2002.”

How much time Danilovic spent working at WITI was a disputed fact. Danilovic claimed she worked upwards of 80 to 100 hours per week, but there was substantial evidence to the contrary. WITI’s director of marketing, Christina Weiss, testified that Danilovic was in the office approximately five hours per week. David Leighton rarely saw Danilovic in the office. Carolyn Leighton testified that Danilovic was frequently not in the office and that office staff often told her that Danilovic was not in.

The trial court found that, at the same time that Danilovic claimed she was working 60 hours per week,^[4] “in the Elevator Cases she testified, under oath, that she was not able to hold a professional position and was only looking to be an aerobics instructor at a gym. [Danilovic’s] conflicting testimony casts doubt on the credibility of all her testimony. This lack of credibility affects all of [Danilovic’s] claims: her testimony regarding her performance was not substantially corroborated by any witness or documentary evidence.” (Bolding in original.) The trial court concluded that the weight of the testimony was that Danilovic worked five to 10 hours per week and “failed to perform key duties of the CEO -- attending important business meetings, being present in the office, and increasing capital investment.” However, the trial court concluded that Danilovic “did perform duties such as attending conferences, handling administrative tasks, and making some attempts to raise capital. For these efforts she is entitled to compensation.” All the same, the trial court found that Danilovic had not proven “that she ever worked even a 40-hour week.”

Although the evidence was that Danilovic did not perform the duties of a chief executive officer and worked only five to10 hours a week, the trial court found that WITI “never complained orally or in writing to [Danilovic]. [WITI] never attempted to terminate or otherwise place [Danilovic] on notice that her services were other than satisfactory.”

The evidence about Danilovic’s compensation was conflicting. The draft Employment Agreement that was never executed provided for an annual compensation of $100,000 with a bonus for business brought in. Danilovic demanded compensation at $150,000 per year, plus bonuses and benefits. WITI contended that Danilovic was a “volunteer” who, in the trial court’s words, “would receive a ‘percentage equity interest’ at some unknown time based upon some unknown formula.” The trial court did not find WITI’s position to be credible.^[5] On the other side of the ledger, the trial court found that Danilovic’s “failure to request payment for her contractual services until nearly a year after she ceased performing them is telling.” The court found that, at a minimum, there was a “good-faith [sic] dispute as to whether any compensation was ever due.”

As far as WITI’s performance was concerned, David Leighton testified that its earnings dropped from $1.5 million in 2001 to $817,821 in 2002 and to $621,810 in 2003. According to David Leighton, Danilovic did not bring in any investments to WITI.

As noted, the trial court resolved these conflicts by awarding $65,000 to Danilovic on a quantum meruit basis.

DISCUSSION

1. The Trial Court Found That WITI Benefited from Danilovic’s Services

WITI notes that there are two necessary elements to a quantum meruit recovery. They are that the plaintiff acted pursuant to an express or implied request for services by the defendant and that the services rendered benefited the defendant. (Day v. Alta Bates Medical Center (2002) 98 Cal.App.4th 243, 248.) Appellant contends that the trial court failed to find that the second element was satisfied in this case.

Appellant has overlooked the finding in the statement of decision that “[w]hile the Employment Agreement contemplated [Danilovic] performing certain duties, [Danilovic] did not substantially perform them. [Danilovic] did perform duties such as attending conferences, handling administrative tasks, and making some attempts to raise capital. For these efforts she is entitled to compensation.” (Italics added.) The court also found that Danilovic provided “occasional consulting services to [WITI] at some irregular frequency at the location of her choosing.” Performing these services conferred a benefit on WITI, however limited those benefits were.

WITI focuses on those parts of the statement of decision wherein the trial court found that Danilovic did not perform the services that, as a chief executive officer, she was expected to perform. Appellant misses the point that this does not exclude the possibility that Danilovic did perform some services, as the trial court found. In fact, she did so for eight months without any complaints by WITI, which means that those services were of some use, i.e., conferred some benefit, on WITI.

Even if the trial court had not found that Danilovic performed some services that benefited WITI, we could reasonably infer such a finding. “Where [a] 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.) Given that even WITI’s evidence conceded that Danilovic did work a few hours per week, and that WITI accepted those services without a single complaint for eight months, it can be reasonably inferred that those services were of some benefit to WITI.

We disagree with appellant’s observation that the trial court’s statement of decision “is hardly a model of clarity“ because it reflects contradictory testimony. The trial court was presented with sharply conflicting testimony and conduct by both Danilovic and WITI, which was somewhat out of the ordinary. It is not the statement of decision that is not “clear,” but rather why sophisticated actors behaved as they did, i.e., why a supposed chief executive officer worked part time when full-time work was expected, and did so without objection by the employer, and without even a memorandum stating her duties, responsibilities and compensation. The statement of decision cogently depicts the parties’ unusual conduct, and resolves the conflicts in the evidence that had to be resolved. That there were conflicts in the evidence, and that the statement of decision recognizes those conflicts, adds to and does not detract from the statement of decision; and, of course, the conflicts in the evidence were caused by the parties and not the court.

2. The Award of $65,000 Is Supported by the Evidence

Appellant contends that there is no explanation whatever “as to how the trial court arrived at the amount of $65,000.” We think that there is evidence that supports this award.

The trial court was presented with a range of annual compensation between $100,000 and $150,000, which appeared respectively in the draft Employment Agreement and in Danilovic’s claim for compensation. In addition, it appeared that Danilovic worked for WITI for eight months, and that she did so at the rate of five to 10 hours per week. Given that the salary range was between $100,000 and $150,000 and that Danilovic worked less than half time, the finding of $65,000 makes sense and is reasonable. Contrary to appellant’s assertion that this figure was pulled out of thin air, it is based on the evidence that was presented.

The circumstance that the trial court had to resort to inferences and deductions does not invalidate the award. Indeed, that the trial court had to resort to inferences and deductions is primarily the result of unorthodox conduct by both Danilovic and WITI: it is just as unusual for a “CEO” of a business generating over $1 million to work without an agreement on her compensation as it is for that business to allow this to happen in the first place.

3. The Trial Court Was Empowered To Grant a Quantum Meruit Recovery

Both parties question the power of the court to grant a quantum meruit recovery, when such a theory was not pursued either by Danilovic or WITI.

The trial court’s responsibility was to enter a judgment that conformed to the evidence. This basic proposition requires no citation of authority to support it. The circumstance that the parties did not pursue a quantum meruit theory did not divest the trial court from its power and responsibility to find facts, and to conclude what the legal consequences of those facts are.

We think the trial court was correct in awarding a quantum meruit recovery. Both sides agree that no written agreement was ever concluded. The weight of the evidence was that Danilovic performed some services and that WITI accepted those services for a period of eight months without complaint or objection. This makes out the essential elements of a quantum meruit recovery. (Day v. Alta Bates Medical Center, supra, 98 Cal.App.4th at p. 248.) The alternative was to award nothing at all, which would have unjustly enriched WITI by the value of Danilovic’s services. Given the evidence, the only correct conclusion was to award Danilovic a quantum meruit recovery.

4. Respondent’s Contentions Are Without Merit

Danilovic contends that the trial court erred in concluding that Danilovic was not an employee entitled to wages.

At the outset, we note that where, as here, the respondent has failed to file a cross-appeal, the appellate court will normally not consider the respondent’s contention that error was committed in the trial of the case. “A respondent who fails to file a cross-appeal cannot urge error on appeal.” (Kardly v. State Farm Mut. Auto. Ins. Co. (1995) 31 Cal.App.4th 1746, 1749, fn. 1.) However, as Witkin notes, this rule is not inflexible. (9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, § 325, p. 365.) Here, we deem it appropriate to demonstrate that the trial court’s rulings were not infected by the errors the respondent claims were committed.

As far as Danilovic’s employment status with WITI was concerned, there was no evidence that Danilovic was hired at any point to work for wages or a salary. It is undisputed that the draft Employment Agreement was never executed by either party and that Danilovic was never paid a salary or wages by WITI while she worked there between November 2001 and June 2002. As noted by the trial court, it was a year after she terminated her relationship with WITI that Danilovic first claimed that she was entitled to a salary. Given these facts, the trial court’s express finding that Danilovic was not an employee of WITI, but rather performed “occasional services on an oral contract” is not only supported by substantial evidence, it is the only conclusion that the record supports. Danilovic’s contrary contention is not supported by any facts. (See text, post, p. 10.) Colorful rhetoric by Danilovic’s counsel^[6] is not a substitute for facts of record.

Nor is there any support for the novel claim that “performance” somehow breathed life into the proposed employment contract that was never executed. A party cannot unilaterally impose the contract that has been explicitly rejected on the other party by “performing.” The fact is that the parties never agreed on an employment contract. It flies in the face of basic contract law that requires the intent by the contracting parties to be bound to impose the terms of the rejected contract on the other party by unilaterally “performing.” Moreover, as the trial court found, Danilovic’s “performance” was nowhere near what had been contemplated under the proposed employment contract. Respondent’s contention comes down to the claim that she was entitled to be paid under a contract that was never concluded at 100 percent of the salary provided for in that “contract” in return for “performing” less than 20 percent of the work^[7] spelled out in that “contract.” There is simply no support in law, logic or experience for such a result.

Danilovic contends that “[f]or the trial court to find that [Danilovic] worked less than 40 hours a week is ‘incredulous’ [sic] and wrong.” Danilovic contends that she worked 60 to 80 hours per week, “but not always at the office.”

We agree with the trial court that Danilovic’s credibility is undermined by the fact that she testified under oath in the Elevator Cases that she was physically and emotionally unable to work, even though, at the same time, she accepted the chief executive officer position at WITI where she was expected to work full time. Indeed, she does not appear to have had any difficulty performing the services for WITI that she did perform. Be that as it may, giving false testimony deliberately and apparently with calculation is no small matter. The claim, advanced in respondent’s brief, that this testimony was irrelevant in this case is without merit. A witness may be impeached by a showing that he or she testified falsely in another matter. The matter of credibility is consigned to the trial court, which we think was exercised with discretion and good judgment. Given that Danilovic was not credible, the weight of the evidence supports the trial court’s conclusion that Danilovic worked no more than five to 10 hours per week.

In order to strongly discourage a repetition of this conduct in future cases, we note that Danilovic’s counsel’s characterizations of the trial court and appellant in the respondent’s brief are inappropriate and out of order.^[8] “Statements that are scandalous, abusive, or disrespectful to the court, counsel, or litigants may cause the court to castigate the writer or strike the brief from the files.” (9 Witkin, Cal. Procedure, supra, Appeal, § 599, p. 633 [citing authorities].) Paraphrasing the court in Pilch v. Milikin (1962) 200 Cal.App.2d 212, 216, footnote 1, counsel’s characterizations of the trial court and appellant have no place in the lexicon of an attorney in this or any other court.

Counsel’s mischaracterization of the trial court is particularly egregious when it is flatly, and prominently, contradicted by the record. Counsel states that Danilovic was “entitled to prejudgment interest. The court awarded her nothing. This is reversible error.” The court awarded prejudgment interest of $13,000 by a minute order entered on September 1, 2004.

We also find that counsel’s repeated references to “facts” without any citation to the record violates rule 14(a)(1)(C) of the California Rules of Court. A particularly egregious instance is the claim that Danilovic “proved” by a “preponderance of the evidence” that she is entitled to her wages of $12,500 per month. There is no citation to the record, either here or elsewhere in the brief where this claim is made, that supports this assertion. “Statements of facts not supported by references to the record may be disregarded as a violation of rule 14(a)(1)(C) of the California Rules of Court.” (Yeboah v. Progeny Ventures, Inc. (2005) 128 Cal.App.4th 443, 451.)

While in the appellate briefs the claim is that Danilovic “proved” by a “preponderance of the evidence” that she was entitled to $12,500 per month, during oral argument counsel explained that this figure was based on the “contract” that was never entered into by the parties. We have already explained why this assertion is without merit. (See text, ante, pp. 8-9.)

Respondent’s intemperate remarks in her appellate brief; her serial violations of California Rules of Court, rule 14; and the fact that respondent did not prevail with her unfounded argument that she was a salaried employee earning $12,500 per month all prompt us to conclude, in the interests of justice (Cal. Rules of Court, rule 27(a)(4)), that each side should bear its own costs.

DISPOSITION

The judgment is affirmed. The parties are to bear their own costs in this appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

FLIER, J.

We concur:

COOPER, P. J.

BOLAND, J.

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^[1] There were also two nonprofit WITI entities, the WITI Foundation and the WITI Professional Association.

^[2] Danilovic has an undergraduate degree from UC San Diego and received an MBA degree from the Anderson School of Business at UCLA. After receiving her MBA, she worked for Sony Entertainment and then for KPMG as senior consultant in the information, communications and entertainment practice.

^[3] The accident involving the elevators occurred while Danilovic was working at KPMG. Danilovic left KPMG in February 2000 and started her own company.

^[4] The trial court adopted the lower figure given by Danilovic in her case-in-chief; in her rebuttal testimony, Danilovic claimed she worked 80 to 100 per week.

^[5] “It is not credible that a company would retain an individual to perform duties of a CEO, expect that individual to bring in over one million dollars in capital, attend meetings throughout the United States, perform administrative and managerial duties, and be in its offices on a more than full-time basis and yet have no certain compensation formula.”

^[6] “The Trial Court rolled back the clock to the 19th Century, when ‘sweat shops’ ‘child and slave labor’ were in vogue.” “The Court abused its discretion by not following the 20th Century Labor Law that it was mandated to follow.”

^[7] These figures are based on the number of hours the court found Danilovic worked compared to 60 hours per week.

^[8] E.g., “[t]he trial court ignored the law, and contrived findings to deny plaintiff” all relief (italics added); the trial court’s finding that Danilovic was not an employee is “totally ‘off the wall‘ “; “[d]efense counsel ‘sandbagged’ the court into disbelieving Plaintiff “(underscoring omitted); the trial court “fell for the ‘pejorative’ trial tactics” to “put the ‘victim’ on trial, and ‘trash’ her”; Carolyn Leighton “commingled and cheated”; WITI is a “shameless employer” with a “shameful defense.”