Horn v. Hoffman

Filed 7/17/07 Horn v. Hoffman CA2/8

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

APPEAL from a judgment and postjudgment orders of the Superior Court of Los Angeles County. Stanley M. Weisberg, Judge. Affirmed in part, reversed in part and remanded with directions.

Mesisca, Riley & Kreitenberg, Patrick A. Mesisca, Jr., Dennis P. Riley and Rena E. Kreitenberg for Appellants and Cross-respondents.

Nemecek & Cole and Frank Nemecek, for Respondent and Cross-appellant.

_______________________

SUMMARY

An attorney filed a collection action against former clients. The clients asserted an affirmative defense and a cross-claim of fraud, alleging the attorney misrepresented his level of experience and expertise in real estate litigation involving property line disputes and engaged in fraudulent billing practices, which caused them substantial financial and emotional injury. A jury found the attorney committed fraud, but awarded no damages to the clients. The trial court denied the clients motion for a new trial on damages, as well as the attorneys motion for judgment notwithstanding the verdict on the contract claim. The court also denied the clients requests for attorney fees and costs on the ground neither party prevailed.

We conclude the clients are entitled to a limited retrial on damages and, as prevailing parties, to an award of reasonable attorney fees and costs. We also conclude the trial court did not err in excluding certain expert witness testimony, nor in denying the attorneys motion for judgment notwithstanding the verdict.

FACTUAL AND PROCEDURAL BACKGROUND

Evidence adduced at trial in this and a related action established the following: In mid-1999, appellants, cross-respondents and homeowners Henry and Jannelle Hoffman (Hoffmans) became embroiled in a property line dispute with their next-door neighbors, the Del Rivos. The Del Rivos claimed a fence the Hoffmans were building encroached on their property. Separate surveys later commissioned by the Hoffmans and Del Rivos revealed the contrary was true, and a portion of the Del Rivos driveway and detached garage actually encroached on the Hoffmans property. Informal attempts to resolve the dispute were unsuccessful.

In Fall 2000, the Hoffmans searched for an attorney to represent them in this property line dispute. They sent solicitation letters to numerous lawyers indicating they were looking for an attorney who has recent experience with land disputes, specializes in this type of law, and has tried similar cases successfully. They interviewed a number of attorneys before retaining respondent and cross-appellant Steven Horn. The other attorneys were not hired because, notwithstanding their experience in real estate law, none of them was experienced in litigation involving property line disputes.

Horn told the Hoffmans he specialized in property line dispute cases, was an expert in property line litigation, and had successfully tried a number of such cases. In fact, before representing the Hoffmans against the Del Rivos, Horn had only litigated unlawful detainer actions, which could be tried in approximately ten minutes. Horn had never litigated a property line dispute, and his annual malpractice insurance renewal applications from at least 1998 to August 2003 never indicated his practice encompassed real estate law. Rather, half of his practice was devoted to collection, while the remaining 50 percent was divided among personal injury and commercial litigation and general business and commercial law. Horn estimated the litigation against the Del Rivos would cost the Hoffmans $40,000 to $50,000, including fees and expenses. The Hoffmans told Horn they could not afford to spend over $50,000. Based on his representation of expertise and his cost estimate, the Hoffmans retained Horn to represent them.

On April 25, 2001, Horn filed a complaint on behalf of the Hoffmans against the Del Rivos for quite title, declaratory and injunctive relief, and damages (Del Rivos action). The Del Rivos filed a separate action against the Hoffmans for adverse possession, prescriptive easement, nuisance and trespass. The two actions were consolidated and tried in April 2002. The trial court concluded the Del Rivos garage and driveway did not encroach on the Hoffmans property, after finding that existing demarcations served as an agreed boundary between the parties parcels. Judgment was entered in favor of the Del Rivos. The ruling was subsequently reversed on appeal, and the Del Rivos action was remanded for a new trial. (Hoffman v. Del Rivo (Mar. 18, 2004, B165053) [nonpub. opn.].)

When the first trial in the Del Rivos action was concluded, the Hoffmans had become dissatisfied with Horns representation for a number of reasons. First, Horn refused to tender a claim to Farmers Insurance, the carrier for the Hoffmans homeowners insurance policy, until January 9, 2002, shortly before the Del Rivos action was first set for trial. The Hoffmans did not tender the claim themselves because Horn told them there was no chance the Del Rivos litigation would be covered under their homeowners policy. Farmers eventually agreed to defend the Hoffmans in the Del Rivos action, but refused to pay or reimburse the Hoffmans for any pre-tender fees or costs incurred.

At that point, Horn urged the Hoffmans to sue Farmers for bad faith, and offered to obtain an attorney to represent them in that action. When the Hoffmans met with a law firm interested in representing them in a bad faith action, it was revealed for the first time that Horn who had charged them for his time to solicit counsel, charged them to attend the meeting he arranged, and intended to charge them his standard rate of $300 per hour to monitor any bad faith litigation intended also to recover 20 percent of the bad faith firms 40 percent contingency fee. From that point on, the Hoffmans no longer believed Horn was acting in their best interest, and soon thereafter retained new counsel to handle the appeal in the Del Rivos action.

In April 2004, Horn filed this action against the Hoffmans for breach of contract and common counts, alleging they owed him $42,282.56 in unpaid legal fees and expenses for the Del Rivos litigation. The Hoffmans answered the complaint and filed a cross-complaint for fraud against Horn alleging he misrepresented his expertise and qualifications to represent them in the Del Rivos litigation. They also alleged that Horn engaged in fraudulent bulk billing practices designed to conceal his lack of knowledge and expertise in residential encroachment actions in order to educate himself in the area of law at the Hoffmans expense while disguising his conduct as legitimate legal representation, and that he fraudulently failed or refused timely to tender their defense to Farmers. The Hoffmans claimed they justifiably relied on Horns representations and, as a result of his fraud, incurred fees in excess of $215,000 in the Del Rivos action, approximately $100,000 of which were alleged pre-tender fees and costs Farmers refused to cover.

The matter was set for a jury trial. The court granted Horns motion in limine to preclude Stephen Webb, the Hoffmans legal expert witness, from testifying regarding issues or opinions about which he had not specifically testified at his deposition.

After both sides rested, Horn moved unsuccessfully for nonsuit on the cross-complaint arguing the Hoffmans had failed to prove any damages.

Following a day of deliberation, the jury returned a special verdict against Horn on his complaint and in favor of the Hoffmans on their cross-complaint.[1] Specifically, as to the claim for breach of contract, the jury found Horn misrepresented to the Hoffmans both his experience and the cost of handling the Del Rivos action, and concealed a material fact before entering into his retainer agreement with the Hoffmans. On the cross-complaint, the jury determined Horn knowingly or recklessly made false and material misrepresentations of fact. The jury determined the Hoffmans were damaged as a result of their unwitting but justifiable reliance on Horns false representations and omissions, and awarded $21,141.28 each to Henry and Janelle Hoffman.

The court determined the special verdict was defective because three questions were inadvertently left unanswered, and sent the jury back for further deliberation on those questions. The jury returned determining that Horn had knowingly made a false representation of a past or existing material fact to one or both of the Hoffmans, or had recklessly made such a representation without knowing its truth or falsity. The jurors were polled.

The court concluded the special verdict was unclear, and sent the jury back again to deliberate on the following question: Does your award of damages to the Hoffmans include any amount that you believe the Hoffmans owe Horn, yes or no? If your answer is yes, how much? The jury returned with a response of Yes . . .  $42,282.56.

After conferring with counsel, the court sent the jury back a final time with this question: Is it the intent of the jury and is it the verdict of the jury that at the end of this trial that Mr. Horn receive zero damages and the Hoffmans receive zero damages or is it the intent that one side or the other receive a money award? The jury returned to inform the court it had concluded there would be zero awards to either side. The jury was polled and discharged.

Both sides submitted proposed judgments and objections to the proposed judgments. On September 14, 2005, the court issued a minute order stating it had considered the objections and determined that Horns proposed judgment accurately reflected the jurys determination. The minute order further states [t]hat judgment is signed and entered this date, and directs the clerk to provide notice to each party.[2] The minute order reflects the clerks certification stating that, on September 14, 2005, the clerk served by mail Notice of Entry of the above minute order of September 14, 2005 upon each party or counsel . . . .

On October 11, 2005, the Hoffmans filed a notice of entry of judgment. The following day, they sought a new trial limited to the issue of damages on the cross-complaint. The motion was denied.

The Hoffmans filed a memorandum of costs and a motion seeking attorney fees. The court denied both requests on the ground the Hoffmans were not the prevailing parties. Horn moved for judgment notwithstanding the verdict, arguing the evidence was insufficient to support the verdict in the Hoffmans favor on his breach of contract claim. The court disagreed and denied the motion.

The Hoffmans filed a notice of appeal from the judgment. Horn cross-appeals from the ruling denying his motion for judgment notwithstanding the verdict.

DISCUSSION

The Hoffmans appeal:

The Hoffmans contend the trial court erred by (1) granting Horns motion in limine to limit the scope of their expert witness testimony on damages; (2) denying their motion for a new trial on damages; (3) denying their motion for attorney fees; and (4) failing to award them costs. We agree with the last three arguments, but not the first.

1. Limiting the scope of expert witness evidence was not an abuse of discretion.

Horn successfully moved in limine for an order precluding the admission of any expert witness evidence and/or testimony from Steven J. Webb at the trial . . . regarding matters to which he did not testify at his June 13, 2005 deposition. The Hoffmans insist that granting that motion was an abuse of discretion, because Webb testified in detail at his deposition regarding the bases for his opinions that Horn overbilled the Hoffmans and that the Hoffmans incurred financial costs due to Horns failure to immediately tender their claim to Farmers. The Hoffmans also argue that California law does not support Horns assertion that Webb was properly precluded from testifying about the dollar amounts of their damages because he was not prepared at his deposition to quantify those damages.

We review a courts ruling excluding expert evidence for abuse of discretion. (Britts v. Superior Court (2006) 145 Cal.App.4th 1112, 1123; Korsak v. Atlas Hotels, Inc. (1992) 2 Cal.App.4th 1516, 1523; Karlsson v. Ford Motor Co. (2006) 140 Cal.App.4th 1202, 1217.) The court is vested with broad discretion in ruling on the admissibility of evidence. The appropriate test for abuse of discretion is whether the court exceeded the bounds of reason. If two or more inferences can reasonably be deduced from the facts, we lack the authority to substitute our decision for the one made by the trial court. (Tudor Ranches, Inc. v. State Comp. Ins. Fund (1998) 65 Cal.App.4th 1422, 1431.) Moreover, even if we conclude that expert evidence was improperly excluded, the error is not reversible unless it is reasonably probable a more favorable result would have been reached in the absence of the error. (Id. at p. 1432.)

Former Code of Civil Procedure section 2034, subdivision (j) [now section 2034.300] provided that, under certain circumstances the trial court shall exclude from evidence the expert opinion of any witness that is offered by any party who has unreasonably failed to . . . . [] (4) Make that expert available for a deposition . . . . While not precisely the situation here, Horn implies it is analogous. Because Webb had not yet done the math before his deposition, Horn asserts Webb was, in effect, not made available for deposition as to the opinions or exhibits he intended to offer at trial on quantifying the Hoffmans damages. As a result, Horn insists the court acted within its discretion by refusing to permit the Hoffmans to ambush him at trial with new evidence from Webb quantifying those damages.

The Hoffmans argue the court overstepped its discretionary bounds because Horn had sufficient notice of the general substance of Webbs planned testimony. An expert witness declaration identified damages and the bases for the Hoffmans damages as matters within the scope of the Webbs anticipated testimony.[3] Moreover, when Webb was deposed approximately one month before trial, he elaborated on these areas. He testified that much of Horns billing was unnecessary and resulted from his inexperience in the law of property line disputes and repercussions flowing from that lack of experience, such as Horns gross underestimation of the amount it would cost the Hoffmans to litigate the matter, and his failure to urge his clients to try to mediate a potentially difficult, emotional and expensive dispute. Webb said the Hoffmans were harmed by Horns failure to tender claim to Farmers at the outset. Finally, Webb testified that Horns fees were unreasonable because Horn charged his client for: (a) time spent to educate himself on the pertinent law; (b) excessive or unnecessary correspondence and legal filings; (c) egregious photocopying and fax charges and for attending a status conference in which he could have participated by phone; and (d) too much upward rounding of time billed for services. At deposition, Webb also informed Horn he had not prepared his trial exhibits, and had not yet done the math to quantify the reasonableness of Horns fees. The Hoffmans did not offer to have Webb redeposed before trial. Horn made no further attempt to ascertain any additional evidence Webb expected to present at trial.

The purpose of former Code of Civil Procedure section 2034 is to give fair notice of an experts proposed trial testimony. (Bonds v. Roy (1999) 20 Cal.4th 140, 146.) It allows the opposing party to decide whether to take the experts deposition, fully explore relevant subject matter during a deposition, and choose its own expert to respond with a competing opinion in that subject area. (Id. at p. 147.) If an expert is permitted to testify at trial on a previously undisclosed subject area, the opposing party is deprived of an adequate opportunity to prepare its cross-examination or rebuttal. (Ibid.) To that end, a courts preclusion of expert evidence not disclosed before trial has been upheld where an expert testified at deposition as to certain opinions, said he had no more opinions, and offered to notify the opposing side if he formulated other opinions, but failed to do so. (See Jones v. Moore (2000) 80 Cal.App.4th 557, 564-565.)

Unlike the expert in Jones v. Moore, Webb did not expressly disavow formulating any opinions other than those to which he testified. Moreover, he specifically informed Horns counsel that because he had not completed his review of Horns billing sheets, his damages calculations were not performed, and he had not yet prepared any trial exhibits. Nevertheless, the record does not reflect that Webb was provided any new materials following his deposition that were not available to him beforehand.[4] Nor do the Hoffmans make any effort to explain why Webb, who was designated as an expert witness in January 2005, was not prepared for his deposition five months later.[5]

Under these circumstances, we conclude the Hoffmans fail to show that the court abused its discretion. It was not an arbitrary or unreasonable exercise of discretion for the court to refuse to permit Webb to testify about new subjects or beyond the scope of matters about which he testified at his deposition.

2. The motion for new trial was improperly denied.

The Hoffmans contend substantial evidence shows they suffered both economic and noneconomic damages as a result of Horns fraud and are entitled to a new trial limited to damages because the jurys net zero award is inadequate and contrary to law. (Code Civ. Proc., 657, subds. (5) and (6).)[6]

a. The standards for grant of the motion and review.

A new trial shall not be granted upon the ground of insufficiency of the evidence to justify the verdict . . . or inadequate damages, unless after weighing the evidence the court is convinced from the entire record, including reasonable inferences therefrom, that the . . . jury clearly should have reached a different verdict . . . . (Code Civ. Proc.,  657.) The standard for denial of a new trial motion is as follows : [A] trial judge is accorded a wide discretion in ruling on a motion for new trial and . . . the exercise of this discretion is given great deference on appeal. [Citations.] However, we are also mindful of the rule that on an appeal from the judgment it is our duty to review all rulings and proceedings involving the merits or affecting the judgment as substantially affecting the rights of a party [citation], including an order denying a new trial. In our review of such order denying a new trial, as distinguished from an order granting a new trial, we must fulfill our obligation of reviewing the entire record, including the evidence, so as to make an independent determination as to whether the error was prejudicial. (City of Los Angeles v. Decker (1977) 18 Cal.3d 860, 871-872, italics omitted.) A new trial may not be granted unless the trial court determines the error was prejudicial. (Ibid; People v. Ault (2004) 33 Cal.4th 1250, 1272, fn. 15.)

As for the standard of review on appeal, the Supreme Court has held that an order denying a new trial motion is subject to independent review of the entire record for prejudicial error. (City of Los Angeles v. Decker, supra, 18 Cal.3d at p. 872; Ajaxo, Inc. v. E*Trade Group, Inc. (2005) 135 Cal.App.4th 21, 46-47; 8 Witkin, Cal. Procedure (4th ed. 1997) Attack on Judgment in Trial Court, 146, p. 647.) However, it has also been held that any determination underlying any order is scrutinized under the test appropriate to such determination. [Citations.] (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 859.)

b. The Hoffmans are entitled to a limited retrial on damages.

The Hoffmans assert their motion for new trial should have been granted because Horns liability was clearly established by the jurys answers to the special verdict questions, and an award of zero damages was inadequate and contrary to California law. Without citation to authority, Horn argues the special verdict was abrogated by the general verdict and merged into the judgment which awarded neither party any affirmative relief. He is mistaken.

No general verdict issued in this case. A general verdict simply renders a decision on all issues submitted to the jury in favor of one party or the other. (Code Civ. Proc., 624; Textron Financial Corp. v. National Union Fire Ins. Co. (2004) 118 Cal.App.4th 1061, 1073.) A special verdict, such as the one submitted to this jury, enables  the jury [to] find the facts only, leaving the judgment to the Court.  (Ibid.) It presents conclusions of fact established by the evidence. Those ultimate facts must be presented so that nothing shall remain to the court but to draw from them conclusions of law. (Code Civ. Proc., 624; see Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 871 & fn. 6.) In contrast to a general verdict that implies findings in favor of the prevailing party, a special verdict requires the jury to determine every controverted fact issue. Only a special verdict form is at issue here.

The issue remains whether the court erred in denying the Hoffmans motion for a new trial, because the jurys zero damages award is inconsistent with its finding that the Hoffmans established every element of the fraud claim alleged in the cross-complaint. We conclude it is.

Fraud is not actionable unless it results in some injury. [P]ut in another way, . . . neither fraud without damage nor damage without fraud is sufficient to support an action. (Gaffney v. Graf (1925) 73 Cal.App. 622, 626; Star Pacific Investments, Inc. v. Oro Hills Ranch, Inc. (1981) 121 Cal.App.3d 447, 457 [damages are an essential element of a tort cause of action for fraud].) Thus, injury or damages is an essential element of the fraud cause of action, and proof of each element of actionable fraud is essential.[7] (See 5 Witkin, Cal. Procedure (4th ed. 1997) Pleading,  687, p. 147.) Here, as to the Hoffmans cross-action, the jury specifically found Horn knowingly or recklessly made false and material misrepresentations, intending that one or both of the Hoffmans would rely on his representations. The jury found the Hoffmans, who were not aware of the falsity of Horns statements, justifiably relied on his representations and, as a result, were injured. In its initial response to the special verdict, the jury determined the amount of damages due each of the Hoffmans was $21,141.28. Because the total amount of the Hoffmans damages was precisely the same as the damages Horn sought under the contract, the jury was asked to clarify whether its award included any amount it believed the Hoffmans owed Horn. The jury responded affirmatively, and said the amount was $42,282.56. After additional questioning, the jury said its intent was that there would be zero awards to either side. This final conclusion is inconsistent with the jurys nearly unanimous determination that the Hoffmans had established each essential element of an affirmative claim of fraud.

The jurys conclusion that the Hoffmans should receive zero damages is also inconsistent with the evidence. While we find no error in the courts decision to preclude the Hoffmans expert witness from testifying as to the precise amount of their damages, the record contains some evidence the Hoffmans were injured as a result of Horns misrepresentations. For example, Webb testified that Horns bills were excessive in that he performed a number of services and/or billed for more time than an attorney experienced in the law of property line disputes would have performed or billed in a similar case. The Hoffmans also offered evidence that, had Horn not tendered the claim to Farmers so late while falsely representing that no coverage existed for the litigation an unspecified amount of attorney fees and costs the Hoffmans paid to litigate the Del Rivos action would have been assumed by Farmers. Finally, a small but uncontroverted amount of evidence indicates the Hoffmans suffered anguish and emotional distress on account of Horns representations.

Accordingly, in the face of this evidence and the jurys findings in the special verdict, we conclude the Hoffmans are entitled to a limited retrial solely on the issue of damages on the cross-complaint. The award of zero damages is both inadequate (even if, on retrial, the jury finds only nominal damages are in order) and contrary to law. (See Liodas v. Sahadi (1977) 19 Cal.3d 278, 285 [a new trial limited to the damage issue may be ordered where it can be reasonably said that the liability issue has been determined by the jury].)

3. The prevailing party is entitled to attorney fees.

The Hoffmans seek to overturn the courts finding that neither side prevailed. Ordinarily, that issue would be moot where, as here, the appeal results in a reversal and remand for further proceedings. (See Presley of Southern California v. Whelan (1983) 146 Cal.App.3d 959, 961 [There must be a prevailing party before the fee provision applies, and no one has yet prevailed here].) But in this case, a remand for a limited retrial as to damages will not adversely effect the Hoffmans status or judgment on the breach of contract action, from which Horn did not appeal. On remand, the judgment in favor of the Hoffmans in this action will remain in effect even if they fail to recover more than nominal damages for fraud on their cross-action. Accordingly, because the Hoffmans have won a final judgment, the prevailing party issue is ripe for review despite our reversal and remand for further proceedings.

a. The standard of review.

Parties to a contract may validly agree that the prevailing party will be awarded attorney fees incurred in any litigation between themselves. (Xuereb v. Marcus & Millichap, Inc. (1992) 3 Cal.App.4th 1338, 1341.) The standard of review for the courts determination of the prevailing party normally is abuse of discretion. (Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1108; Sears v. Baccaglio (1998) 60 Cal.App.4th 1136, 1158.) However, de novo review is warranted where, as here, the determination of whether the criteria for an award of fees and costs in a given context has been satisfied amounts to statutory construction and a question of law. (Wilson v. Wal-Mart Stores, Inc. (1999) 72 Cal.App.4th 382, 389; Carver v. Chevron, U.S.A., Inc. (2002) 97 Cal.App.4th 132, 142.)

b. As prevailing parties, the Hoffmans are entitled to reasonable attorney fees and statutory costs.

Code of Civil Procedure sections 1032, subdivision (b) and 1033.5, subdivision (a)(10)(A), authorize the recovery of costs, including attorney fees, by the prevailing party when permitted by the parties contract. Ordinarily, the prevailing party in an action is the party with a net monetary recovery. (Code Civ. Proc., 1032, subd. (a)(4).) However, section 1032, subdivision (a)(4), provides in part,  Prevailing party includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant.

Under the terms of the retainer agreement, [t]he parties agree[d] that if collection action [was] taken to collect the fees or costs owed by [the Hoffmans] to [Horn] that the prevailing party shall be entitled to reasonable attorneys fees and court costs . . . . (Italics added.) By its plain meaning, this language applies only to an action on the contract and not to a tort action. The provision is not sufficiently broad to encompass tort as well as contract claims. (See Lerner v. Ward (1993) 13 Cal.App.4th 155, 160-161; Xuereb v. Marcus & Millichap, Inc., supra, 3 Cal.App.4th at pp. 1341-1343.) It is narrowly drawn to cover only contract claims. It is, in substance, the functional equivalent of the fee provision at issue in Exxess Electronixx v. Heger Realty Corp. (1998) 64 Cal.App.4th 698, 702-703 (where fees were recoverable in an action to enforce the terms hereof . . . .), in which the court concluded tort claims were not covered. (Id. at pp. 708-715; see also Santisas v. Goodin (1998) 17 Cal.4th 599, 622, fn. 9; Rosen v. Robert P. Warmington Co. (1988) 201 Cal.App.3d 939, 941, fn. 1.) The parties are bound by the language used. The Hoffmans are the prevailing parties on the contract claim and, as such, Civil Code section 1717 entitles them to recover attorney fees incurred defending this action. The same holds true for the Hoffmans other litigation costs. (See Michell v. Olick (1996) 49 Cal.App.4th 1194, 1998-1199 [if prevailing party requirements are met the trial court lacks the discretion to order each party to bear his or her own costs of suit]; Acosta v. SI Corp. (2005) 129 Cal.App.4th 1370, 1375 [same].)[8]

Horn asserts that, even if the Hoffmans are entitled to a portion of the approximately $400,000 they seek for attorney fees, the fees must be apportioned between their defense of the contract claim which sought only $42,000 in damages and the significant sums the Hoffmans spent prosecuting their cross-action for general and punitive damages. Ordinarily, we would agree. However, an importantdifference is that the Hoffmans prevailed on the contract based on an affirmative defense of fraud vitiating that agreement.[9] Apart from being relieved of the duty to show damages in order to prevail on the affirmative defense, the elements of the defense are identical to the elements of the fraud claim asserted in the cross-action on which, as we found above, the Hoffmans also prevailed.[10] Accordingly, while the language of the fee agreement would otherwise preclude the Hoffmans from recovering fees for prosecuting a cross-action in tort, the court might conclude otherwise on remand in this action, in which issues common to the contract and tort claims are closely, if not inextricably, intertwined. Under such circumstances, the court may deem it impracticable to apportion fees. (See Erickson v. R.E.M. Concepts, Inc. (2005) 126 Cal.App.4th 1073, 1085.)  Attorneys fees need not be apportioned when incurred for representation on an issue common to both a cause of action in which fees are proper and one in which they are not allowed.  (Id. at p. 1083; see also Akins v. Enterprise Rent-A-Car Co. (2000) 79 Cal.App.4th 1127, 1133.)

Horns cross-appeal:

1. The motion for judgment notwithstanding the verdict.

Horns cross-appeal is directed to his contention that the trial court erred in denying his motion for judgment notwithstanding the verdict because he proved his entitlement to contract damages and because the Hoffmans failed to prevail on their defense or affirmative claim of fraud. Horn is incorrect.

a. The standard of review.

A motion for judgment notwithstanding the verdict may be granted only if it appears from the evidence, viewed in the light most favorable to the party securing the verdict, that there is no substantial evidence in support. [Citation.] (Sweatman v. Department of Veterans Affairs (2001) 25 Cal.4th 62, 68.) The court must not reweigh the evidence or judge the credibility of witnesses, and must view the evidence in the light most favorable to the verdict. (Ibid.) We apply the same standard. In reviewing an order denying or granting a motion for judgment notwithstanding the verdict, this court views the evidence in the light most favorable to the jurys verdict and considers whether any substantial evidence, contradicted or not, supports it. (Trujillo v. North County Transit Dist. (1998) 63 Cal.App.4th 280, 284; Shapiro v. Prudential Property & Casualty Co. (1997) 52 Cal.App.4th 722, 730.)

b. The motion for judgment notwithstanding the verdict was

properly denied.

Denial of the motion for judgment notwithstanding the verdict was proper because substantial evidence supports the jurys determination that Horns fraud extinguished the contract that otherwise would have existed between him and the Hoffmans.

As set forth in the jury instructions, no contract was created if the jury found, as it did here, that the Hoffmans consent to the fee agreement was obtained by fraud. (See Judicial Council of Cal. Civ. Jury Instns. (Spring 2007) CACI No. 335.)

The evidence recited above constitutes substantial evidence to support the ultimate determination that no contract existed. The jury found that (1) Horn made a representation of an important fact to the Hoffmans; (2) the representation was not true; (3) Horn either knew the representation was untrue when he made it or made it recklessly without regard for the truth; (4) Horn made the representation in order to persuade the Hoffmans to enter into an agreement; (5) the Hoffmans reasonably relied on Horns representations; and (6) the Hoffmans would not have entered into the fee agreement had they known the representation was untrue. Specifically, the evidence showed Horn significantly misrepresented his ability, experience and qualifications to handle a property line dispute. Abundant evidence shows Horns representations to the Hoffmans were willfully false and made to induce the Hoffmans reliance on them so they would hire him to represent them. No valid contract is created under such circumstances. (See e.g., Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 415 [Fraud in the inducement occurs when the promisor knows what he is signing but his consent is induced by fraud, mutual assent is present and a contract is formed, which, by reason of the fraud, is voidable ].) The verdict in favor of the Hoffmans on the contract claim finds substantial evidentiary support, and Horn was not entitled to judgment notwithstanding the verdicton that cause of action. (See Shapiro v. Prudential Property & Casualty Co., supra, 52 Cal.App.4th at p. 730 [if substantial evidence supports the jury verdict appellate court must uphold the order denying judgment notwithstanding the verdict].)

DISPOSITION

The judgment is reversed in part. The matter is remanded for a limited retrial on the issues of the damages owed to the Hoffmans on the cross-complaint for fraud. The orders denying the Hoffmans motion for attorney fees and granting Horns motion to tax costs are reversed, and the matter remanded to the trial court with directions to enter a new order granting the Hoffmans motion and denying Horns motion to tax costs, and setting the reasonable amount of attorney fees and costs. The Hoffmans are entitled to recover their costs on appeal, including reasonable attorney fees, as determined by the trial court. (Cal. Rules of Court, rules 3.1702(a) and (c), 8.276(c)(2); Evans v. Unkow (1995) 38 Cal.App.4th 1490, 1499-1500.) In all other respects, the judgment is affirmed.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

BOLAND, J.

We concur:

COOPER, P. J.

FLIER, J.

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Analysis and review provided by Escondido Property line Lawyers.

[1] ^{During deliberations the jury sent the following question to the trial court: Do we need to stipulate that the Hoffmans do not need to pay Mr. Horn the $42,000 he is still owed or do we include the $42,000 in the amount of damages owed to the Hoffmans by Horn? After consulting the parties counsel, the trial court refused a substantive answer and told the jury only to follow the directions on the verdict form and instructions previously given.}

[2]The judgment was in fact signed that day, but the docket does not reflect its entry. The Hoffmans claim neither they nor their attorneys received a copy of the signed judgment.

[3] ^{The declaration states Mr. Webb will testify to . . . the legal and practical affect [sic] of [Horn] failing to tender the litigation to the [Hoffmans] homeowners insurance company at the inception of the litigation . . . . the reasonableness and necessity of the fees and costs charged by [Horn] to [the Hoffmans]; whether the form of the billing prepared by [Horn] conforms with the guidelines for attorneys set forth in the Rules of Professional Conduct and under the Business and Professions Code; how much the litigation should have cost had a knowledgeable person in the area of boundary dispute litigation handled the matter; whether the hourly rate charged by [Horn] was commensurate with his actual experience in the legal community; . . . whether the failure by an attorney to use a paralegal in an attorneys office for certain tasks at a significantly lower hourly rate when the fee agreement so provides falls below the standard of care in the legal community . . . .}

[4] ^{In this respect, this case is unlike the circumstances in Williams v. Volkswagenwerk Aktiengesellschaft (1986) 180 Cal.App.3d 1244, on which the Hoffmans rely. There, the appellate court found no error in the courts decision to admit previously undisclosed opinions about which the plaintiffs experts had not testified at deposition. That finding was based on an absence of prejudice to the defendant, which had adequate notice of the possible areas of the experts testimony through other discovery methods and, as importantly, on the fact that plaintiffs expert had been prevented from inspecting pivotal physical evidence until just before his deposition was taken and was unable to perform all his tests in time for his deposition. (Id. at p. 1259, fn. 6.) No similar showing was made here.}

[5] ^{Webb testified at deposition that he had geared up for this case at one point in time, but then put the matter aside for some time because the case was on sort of a hiatus for a while.}

[6]^{We reject Horns assertion the Hoffmans motion for new trial was untimely. Code of Civil Procedure section 659 mandates that the notice of intention to move for new trial be filed [w]ithin 15 days of the date of mailing notice of entry of judgment by the clerk of the court pursuant to Section 664.5, or service upon him by any party of written notice of entry of judgment . . . . (Code Civ. Proc., 659, subd. (2).) Horn claims the 15 day period was triggered when the clerk served on all parties a copy of the minute order from September 14, 2005, reflecting the court had signed and entered judgment on that date. Horn is mistaken. The unsigned minute order mailed by the clerk does not constitute a judgment (Code Civ. Proc., 664.5, subd. (c)), and the record does not reflect a certificate of mailing by the clerk for the September 14, 2005 minute order was filed that day. Rather, a Judgment (after jury trial) [was] filed by Attorney-Plaintiff was entered.}

^{Where, as here, parties to a contested action are represented by counsel, the party submitting the judgment for entry is required to notify all others judgment has been entered and to file with the court the original notice of entry of judgment, together with proof of service by mail. (Code Civ. Proc., 664.5, subd. (a).) According to the record, that event did not occur until October 11, 2005, when the Hoffmans filed notice of entry of judgment. The statutory period within which the motion for new trial had to be filed began to run then. The motion, filed on October 12, 2005, was timely.}

^{In addition, Horns assertion the Hoffmans motion was procedurally defective lacks merit. In contrast to a new trial motion brought under section 657 subdivisions (1)-(4) made on affidavits, a motion for new trial under section 657 subdivisions (5) or (6) must be made on the minutes of the court. (Code Civ. Proc., 658.) Horn asserts the Hoffmans motion is defective because it failed to attach or designate the courts minutes. No such designation is required. The purpose of the requirement that the grounds on which the motion is based are stated simply to give the adverse party a reasonable opportunity to oppose the merits. Mere recitation of this ground for the motion provides the opposing party the necessary information; an additional designation of specific minutes serves no useful purpose. (See 8 Witkin Cal. Procedure (4th ed. 1997) Attack on Judgment in Trial Court, 49, 50, p. 555.)}

[7]In contrast, the effect of finding in favor of the Hoffmans on the affirmative defense of fraud asserted in response to Horns contract claim simply extinguished the contract. (Civ. Code, 1566, 1688, 1689, subd. (b)(1); see Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 973-974 [no pecuniary element if fraud is asserted as a defense to contract to compel arbitration]; Reveles v. Toyota by the Bay (1997) 57 Cal.App.4th 1139, 1152, disapproved on other grounds by Snukal v. Flightways Manufacturing, Inc. (2000) 23 Cal.4th 754, 765-766.) It was not intended to provide the Hoffmans affirmative relief.

[8]We have considered and find no merit in Horns other contentions of error. First, Horns insistence that the cost bill was untimely is rejected for the same reasons we rejected his untimeliness argument with respect to the motion for new trial. Second, there is no merit to Horns contention that the Hoffmans right to recover costs is waived by their failure to include in the appellate record the cost memoranda filed in August and October. Only the third amended memorandum of costs filed in November 2005 remains at issue.

[9]It is of no moment that the affirmative defense of fraud was not asserted until the Hoffmans received leave to file an amended answer after trial. That answer was filed to conform to proof at trial.

[10]To that end, the court erred in denying fees on the ground the Hoffmans didnt win on [the] cross-action because of damages. The result is not equivocal; the Hoffmans prevailed across the board.