Keamy v. Hanson

Filed 8/29/06 Keamy v. Hanson CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 977.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

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from a judgment of the Superior Court of Orange County, Clay M. Smith, Judge. Affirmed.

Ruzicka, Snyder & Wallace, and Earl R. Wallace; Williams & Kilkowski, and James M. Kilkowski, for Defendant and Appellant.

John Keamy, in pro. per.; Marc Bresler for Plaintiff and Respondent.

Stanley E. Hanson appeals from a judgment for Jonn Keamy in this action for breach of contract. Hanson argues the evidence shows Keamy failed to perform his obligations under the contract, and as a result, Keamy was not entitled to enforce the agreement, and Hanson was entitled to rescind it. Hanson also contends Keamy’s claim is barred by collateral estoppel. We conclude there was no error and affirm.

* * *

Keamy, a debt collector, met Hanson sometime in 2001 when Keamy was pursuing Steven Rebeil, a former business partner of Hanson’s with whom Hanson also had disputes. Hanson owned a company that fabricated aerospace parts, and invested in various other business ventures as well.

In late 2001, Keamy began using an office in Hanson’s suite in Newport Beach. As Keamy understood matters, he and Hanson entered into three oral agreements under which Keamy would perform investigative and other services. One concerned development of a hotel called the Diegan, a second focused on efforts to prod the Internal Revenue Service to intensify its tax evasion investigation of Rebeil, and the third involved litigation between Hanson and the Ciram Corporation. Only the latter is directly involved in this appeal.

According to Keamy, the parties agreed he would do investigative work on the Ciram case, assist Hanson’s attorneys in preparing for trial, and assist at trial. In return, Keamy would receive five percent of any recovery. In October 2003, Hanson obtained a $1.65 million judgment in the matter, so Keamy believed he was entitled to $82,500. Hanson disagreed. In Keamy’s version of events, they settled on $41,000 for the Ciram work, consisting of Hanson’s forgiving prior loans of $17,000, a cash payment of $12,000, and 12 months free rent for the office in Hanson’s suite.

Hanson recalled the agreement differently. He believed it was a “global” settlement of disputes concerning all three projects (Diegan, Rebeil, and Ciram) and included Keamy’s promise not to sue on any of them. In December 2003, after the Diegan matter was resolved, Hanson refused to pay the fee Keamy believed they had agreed upon for that case. They had words, and Keamy said he intended to sue Hanson.

In early 2004, Hanson brought an unlawful detainer action against Keamy to recover possession of the leased office. Keamy raised prepayment of the rent as an affirmative defense, claiming Hanson had agreed Keamy could occupy the premises rent-free through November 30, 2004, as compensation for services rendered. The landlord-tenant dispute was tried, but no transcript appears in the record. Keamy’s posttrial brief argued he had offered evidence to show an oral lease, including testimony of Hanson’s accountant to that effect. In March 2004, judgment was entered awarding possession of the premises to Hanson. No explanation was given.

The instant action was commenced in July 2004. The operative pleading is a second amended complaint. In relevant part, it set out three causes of action for breach of contract, one each for the alleged Diegan, Rebeil, and Ciram agreements. The remedy sought for breach of the Ciram agreement was $8,000, representing the value of eight months free rent lost after Keamy was evicted. Hanson cross-complained for rescission based on fraud (false promise not to sue), money had and received (the $12,000 payment), and money lent (the forgiven loans).

The matter was tried by the court. In a statement of decision, the trial judge found there was an agreement on the Ciram matter, but not on Diegan or Rebeil. The statement of decision does not spell out the terms of the Ciram agreement: “[I]n connection with the so-called Ciram litigation . . . there is sufficient evidence of the existence of an agreement between the parties. In fact, Defendant concedes that this agreement existed and contends, persuasively, that it was intended to resolve all claims between the parties.” A footnote to the last quoted sentence cites to a portion of Hanson’s trial brief, where Hanson contends the agreement covered all three matters and included Keamy’s promise not to sue over any of them. Despite this, the judge found Keamy was entitled to $8,000 in damages, representing “additional consideration which [Keamy] has not received.” He reasoned that Keamy was receiving free use of office space, and while Keamy was not entitled to the reasonable value of that space following the eviction judgment, Keamy “was promised additional consideration under this agreement [and] [t]hat additional consideration has not been paid and it has a value of $8,000.”

The judge found Hanson failed to prove his cross-claims for rescission, money had and received, or money lent. He added that the record showed Hanson never expected Keamy to repay the loans, and “in any event, these claim[ed] debts were released by Defendant as part of the Ciram-related agreement.”

I

Hanson argues he did not breach the Ciram agreement because it settled all of Keamy’s claims, it included Keamy’s promise not to sue on any of them, and Keamy’s commencement of this action was a breach that excused Hanson’s performance. We disagree.

The flaw in the argument is Hanson’s assertion that the trial court found the agreement included Keamy’s promise not to sue. In fact, the statement of decision is ambiguous. It says the agreement was intended to resolve all of Keamy’s claims -- Hanson’s version of the deal -- and cites to a portion of Hanson’s trial brief that asserts the deal included Keamy’s alleged promise. Yet it also says Hanson breached the agreement and Keamy is entitled to damages. The problem is the trial court could not both believe Hanson’s entire version of the deal and award Keamy damages, since commencement of this action by Keamy would be a breach of the promise Hanson believed to be part of the agreement.

But Hanson did not bring this ambiguity to the attention of the trial judge, or object to the statement of decision,^[1] so we must assume the judge made all findings favorable to Keamy that are necessary to support the judgment. (Code Civ. Proc., § 634; Rees v. Department of Real Estate (1977) 76 Cal.App.3d 286, 291.) That means we must assume the judge found the Ciram agreement covered all three projects but did not include the disputed promise by Keamy, because that is the only way he could find both a “global” settlement and a breach by Hanson. In other words, the judge found there was a settlement of all three claims, as asserted by Hanson, but he did not believe it included the disputed promise not to sue, and Hanson’s eviction of Keamy violated the terms of the settlement. The net result is there was no breach by Keamy that relieved Hanson of his duty to perform.

II

Hanson argues he is entitled to rescind the agreement for failure of consideration, again based on Keamy’s breach of the alleged promise not to sue. But the trial judge impliedly found no such promise was made, so no basis for rescission is shown.

III

Finally, Hanson argues collateral estoppel bars Keamy’s claim for breach of the office lease, on the theory the issue was litigated and decided in the unlawful detainer action. We cannot agree.

“The party asserting collateral estoppel must prove the issue was raised, actually submitted for determination and determined and that contrary evidence on the issue was not restricted. [Citation.]” (Schaefer/Karpf Productions v. CNA Ins. Companies (1998) 64 Cal.App.4th 1306, 1314, fn. omitted.) In determining what was raised in a prior action, “the court in the subsequent action cannot rely exclusively on the findings in the underlying action but must ‘carefully scrutinize’ the pleadings and proof. [Citation.] This scrutiny includes looking behind the findings at the evidence presented to determine what was actually decided. [Citation.]” (Ibid.)

We cannot tell what was decided in the unlawful detainer action. The judgment contains no explanation, no statement of decision was issued, and there is no transcript of the proceedings. It is true that Keamy asserted as a defense an agreement for free rent in return for services rendered, and his trial brief alludes to testimony offered to that effect. But we do not know the details of Keamy’s evidence, Hanson’s response, or what contrary evidence Hanson offered. The record suggests Hanson did no more than assert Keamy had a month to month tenancy, terminable on 30 days’ notice by either party (Civ. Code, § 1946), since such a notice of termination appears in the record. Thus it is possible the unlawful detainer court decided there was an oral lease as claimed by Keamy, but it was a month-to-month tenancy that ended upon notice by Hanson. That would leave unresolved the issue whether Hanson was justified in terminating the tenancy in light of the Ciram agreement, as Keamy asserts. In any event, we need not speculate about what might have been decided. The fact remains that it was Hanson’s burden to establish what issues were submitted and decided, and he failed to do so.

Hanson cites several cases for the proposition that an unlawful detainer judgment may have preclusive effect, and that is true. But in each, the appellate court had before it a record that included pleadings and detailed findings of fact that identified what was in issue and decided, so that it could say “[a] careful examination of the pleadings and findings . . . convinces us that every essential issue of this case was determined by the judgment in th[e] unlawful detainer action.” (Seidell v. Anglo-California Trust Co. (1942) 55 Cal.App.2d 913, 916.) Such is not the case here.

Since the trial court impliedly found Keamy did not breach the Ciram agreement, and an action on that agreement is not barred by collateral estoppel, the judgment is affirmed. Keamy is entitled to costs on appeal.

BEDSWORTH, J.

WE CONCUR:

RYLAARSDAM, ACTING P. J.

IKOLA, J.

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^[1] The operative statement of decision is an “amended statement of decision” dated October 19, 2005. It was issued in response to Hanson’s objections to an initial statement of decision of October 6, 2005. Hanson did not object to the amended statement of decision.