North Brand Owner’s Corp. v. Fireman’s Fund Ins. Co.

Filed 10/24/06 550 North Brand Owner’s Corp. v. Fireman’s Fund Ins. Co. CA2/4

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 977.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

APPEAL from a judgment of the Superior Court of Los Angeles County, Rodney E. Nelson and Joseph R. Kalin, Judges. Affirmed.

Jerome M. Jackson for Defendant and Appellant.

Case, Knowlson, Jordan & Wright and J. Patrick Fleming, Jr., for Plaintiff and Respondent.

Plaintiff 55O North Brand Owner’s Corporation (“North Brand”) sued defendant Fireman’s Fund Insurance Company (“Fireman’s”) for breach of written lease, account stated, and open book account. A jury found in favor of North Brand, and awarded it $49,040.49 in unpaid rent and related charges, plus prejudgment interest of $21,568.07, and late fees of $2,452.07.[1] Fireman’s moved for judgment notwithstanding the verdict, or in the alternative for a new trial. The trial court denied the motion. Fireman’s now appeals from the order denying its motion for judgment notwithstanding the verdict. Fireman’s contends that the testimony of the sole witness at trial, Weston Munselle, was so inconsistent with his prior declarations and testimony that it cannot constitute substantial evidence to support the verdict. We disagree, and affirm the order.

BACKGROUND

North Brand’s operative pleading was its second amended complaint. It alleged that Fireman’s entered a written lease in July 1989 (later amended) to rent space in a building owned by North Brand in Glendale, California. According to the complaint, Fireman’s failed to pay $50,977.06 in rent and related charges. North Brand alleged claims for breach of the written lease (and amendments), account stated, and open book account.

Called by North Brand, Weston Munselle was the sole witness at trial. Since 1988, Munselle had worked for a real estate management and development firm bearing his name. He had a graduate degree in finance, and extensive experience in real estate finance and management. Since 1988, he had managed the office building in question.

Fireman’s was a tenant in the building for approximately 10 years and 5 months, from January 1, 1990 to May 31, 2000.[2] In July 1989, Munselle personally negotiated Fireman’s initial lease for the 17th floor of the building. The lease provided that Fireman’s would pay a base rent, plus “escalation” charges for miscellaneous services that might be requested, and a percentage of operating expenses. In October 1994, Munselle and Fireman’s negotiated an amendment to the lease by which Fireman’s rented additional space on the 6th floor, with a new lease termination date of May 31, 2000.

In June 1998, Fireman’s representative, Don Dole, informed Munselle that Fireman’s wished to reduce its space on the 6th floor, and eventually leave the building entirely. Munselle and Dole negotiated a plan whereby Fireman’s would pre-pay estimated early termination fees of $207,000, and gradually reduce its occupancy by blocks of space. Then, as space was actually vacated, North Brand would calculate the rent and the early termination fees due, and bill Fireman’s accordingly. During the period Fireman’s was vacating, it was sent monthly billing statements showing the amount owed for rent, escalations, and fees. Fireman’s move was complete at the end of May 2000.

North Brand used a computer accounting program common in the real estate industry, called “Skyline.” The Skyline ledger, which accounted for all amounts billed to Fireman’s and all amounts paid, showed that upon vacating the premises, and upon inclusion of an escalation charge due as of April 2004, Fireman’s owed North Brand $49,040.49. Using the same data that was inputted into the Skyline program, Munselle recalculated the history of Fireman’s account, and came up with the same amount owing. Munselle determined that over the course of the account, Fireman’s never paid the entire amount it was billed each month for rent, escalations, and fees.

North Brand’s lease permitted the charging of late fees and interest on amounts overdue. Munselle calculated the interest due under the lease as of March 2005 to be $21,568.07, and the late fees to be $2,452.07. Hence, the total amount North Brand claimed was $73,060.58.

Fireman’s called no witnesses. Rather, through cross-examination it sought to impeach Munselle’s testimony by introducing prior inconsistent statements. In particular, Munselle had never before testified that the amount owed was $49,040.49, and had not testified to his personal calculations. Rather, in a June 2003 deposition, Munselle had testified that for April 2000, Fireman’s owed $32,711.91 in base rent. In separate declarations in April and June of 2003, Munselle repeated this claim, and also stated that the entire amount Fireman’s owed was $50,977.06. In prior testimony approximately a year before trial, Munselle testified that he did not know for which month Fireman’s failed to pay base rent.

Munselle explained these inconsistencies. He had not undertaken his personal reconciliation of Fireman’s account until March 2005, after his prior declarations and testimony. His current testimony was based largely on that reconciliation. As to the prior claim that Fireman’s owed $50,977.06, Munselle did not discover until shortly before trial that Fireman’s was entitled to a credit of $1,936.57 for its share of a property tax refund that occurred in May 2002. Upon giving the credit, the actual amount Fireman’s owed decreased from $50,977.06 to $49,040.49.

The jury returned a verdict for North Brand on each of its claims, and awarded damages consistent with the amounts identified in Munselle’s trial testimony: $49,040.49 as the principal amount due under the lease, plus interest of $21,568.07 and late charges of $2,452.07. After the court entered judgment on the verdict, Fireman’s moved for judgment notwithstanding the verdict, or in the alternative for a new trial. Fireman’s contended that Munselle’s testimony at trial was fatally inconsistent with his prior declarations and testimony, and hence did not constitute sufficient evidence to support the verdict. The trial court denied the motion.[3] Fireman’s appeals from the order insofar as it denied judgment notwithstanding the verdict.

DISCUSSION

Fireman’s contends that the trial court erred in denying its motion for judgment notwithstanding the verdict. As it did in the trial court, Fireman’s argues that Munselle’s testimony was so riddled with inconsistencies compared to prior declarations and testimony that it does not constitute substantial evidence to support the verdict. We disagree.

“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.” (Sweatman v. Department of Veterans Affairs (2001) 25 Cal.4th 62, 68.) On appeal, “[a]s in the trial court, the standard of review is whether any substantial evidence -- contradicted or uncontradicted -- supports the jury’s conclusion.” (Ibid.) Substantial evidence is frequently defined as evidence that is “‘of ponderable legal significance,’” evidence that is “‘reasonable, credible and of solid value,’” evidence that constitutes “substantial proof” of legal requirements. (See, e.g., Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 651 (Roddenberry); Toyota Motor Sales U.S.A., Inc. v. Superior Court (1990) 220 Cal.App.3d 864, 871; Estate of Teed (1952) 112 Cal.App.2d 638, 644.) Such formulations seek to describe a state of the evidence that is more practically expressed as follows: the evidence is substantial if, on the whole record, it was reasonable for the trier of fact to make the finding in question. (Buckley v. California Coastal Com. (1998) 68 Cal.App.4th 178, 192; Roddenberry, supra, 44 Cal.App.4th at p. 652.) In the instant case, it was reasonable for the jury to conclude that Fireman’s owed North Brand $49,040.49 in principal, plus interest of $21,568.07 and late charges of $2,452.07.

Munselle’s testimony at trial, bolstered by exhibits illustrating the calculations, supported the jury’s findings on these amounts. Munselle had extensive experience in real estate finance, was personally familiar with Fireman’s lease obligations, and was personally familiar with the accounting methodology used to calculate the amounts. Indeed, he personally reviewed the relevant financial data, made calculations, and based his trial testimony largely on that review along with the computer generated ledger. Fireman’s produced no affirmative evidence to dispute that it owed money to North Brand, or to show that it had paid all that was due under the lease.

Making arguments more appropriate in the trial court than on appeal, Fireman’s makes much of the prior inconsistencies in Munselle’s testimony. However, such inconsistencies are best resolved by the trier of fact. Indeed, in ruling on a motion for nonsuit, the court cannot judge witness credibility. (Garretson v. Harold I. Miller (2002) 99 Cal.App.4th 563, 568.) Fireman’s attack on Munselle does no more than present conflicts in the evidence -- Munselle’s prior statements and testimony versus his trial testimony -- that the jury resolved in North Brand’s favor.

Further, the testimony of one witness, including a party to the action, can be sufficient to support a verdict (See 9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, § 363, p. 413), and Munselle’s prior inconsistencies are not so striking as to compel an inference of “[t]ransparent prevarication” or “testimony tailored by financial expediency rather than by truth.” (Roddenberry, supra, 44 Cal.App.4th at p. 654.) Indeed, Munselle offered a rational explanation for the inconsistencies: his prior statements and testimony were made before his March 2005 recalculation of Fireman’s account on which he based his trial testimony; and his prior overstatement of the amount due ($50,977.06 as compared to $49,040.49) was caused by inadvertently overlooking a small property tax credit Fireman’s was due from May 2002. Such innocent explanations may reasonably be accepted by a trier of fact. (See Roddenberry, supra, 44 Cal.App.4th at p. 653.)

Fireman’s asserts that although the trial court denied judgment notwithstanding the verdict, the court found that Munselle’s testimony did not constitute substantial evidence. Fireman’s relies on an obvious misstatement in the trial court’s minute order denying the motion. After noting that it had reviewed the moving and opposing papers and the trial transcript, the court wrote in relevant part: “Defendant moving party agrees with the Court that Munselle’s testimony has been inconsistent and contradictory both in court and in deposition and this does not constitute substantial evidence to uphold the judgment.” (Italics added.) Fireman’s apparently construes this odd statement as a “finding” that substantial evidence did not support the verdict. However, the court next wrote that the jury found in favor of the plaintiff, that Fireman’s produced no witness to dispute that it owed money, and that the jury is the judge of credibility. The court concluded: “The court’s review of the evidence and the trial testimony by Munselle finds there was substantial evidence to justify the verdict reached by the jury. It can be argued that the application of rent money to a specific month may have been confusing due to the computer software and accounting methods, however, the jury determined from the evidence that the sum of $73,060.50 was owed for lease payments, interest and late charges.” (Italics added.)

Obviously, the statement in the minute order on which Fireman’s relies -- “defendant . . . agrees with the Court” that Munselle’s testimony was not substantial evidence -- was a mistake, most probably a transposition in the minute order of “defendant . . . argues to the Court.” This mistake does not show that the court misunderstood or misapplied the appropriate standard of review.

For the first time in its reply brief, Fireman’s makes specific attacks on the sufficiency of the evidence to support the claims for open book account and account stated. Besides being made for the first time in the reply brief, these claims were also not made in the trial court. We therefore decline to consider them. (See Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 764 [court has discretion to disregard argument raised for first time in reply brief]; Hansen v. Sunnyside Products, Inc. (1997) 55 Cal.App.4th 1497, 1511 [procedural deficiencies, including failure to argue specific ground in trial court, resulted in waiver of ground for JNOV].)

DISPOSITION

The order denying judgment notwithstanding the verdict is affirmed.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

WILLHITE, J.

We concur:

EPSTEIN, P. J.

MANELLA, J.

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[1] The verdict resulted from the second trial in the action. In the first trial, the trial court directed a verdict for Fireman’s, but later reversed itself and granted North Brand’s motion for a new trial. The second trial is the proceeding relevant to this appeal.

[2] North Brand was actually the successor in interest to Fireman’s first landlord, 550 Brand Partnership. For ease of reference, we shall refer throughout to North Brand as Fireman’s landlord.

[3] Because the original trial judge was incapacitated, a different judge ruled on the motion.