Filed 8/15/22 Goldie v. Reynolds CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from a judgment of the Superior Court of Orange County, Robert J. Moss, Judge. Affirmed in part and reversed in part. Request for Judicial Notice. Denied.

The Bailey Law Firm and Jonas Bailey for Plaintiffs and Appellants.

Law Offices of Peter F. Musielski and Peter F. Musielski for Defendants and Respondents.

* * *

INTRODUCTION

Chris Goldie, Steven Goldie, and Shasta Tekaat (collectively Plaintiffs) purchased, from third parties, memberships in a recreational vehicle camping resort in Avila Beach, California. They all enjoyed camping and bought the memberships with the hope and expectation of using the resort throughout their retirements. Their hopes and expectations were frustrated when nonmembers were allowed to use the resort in increasing numbers, which made it difficult to reserve space at the resort, and ultimately were dashed when their memberships were terminated.

To regain their resort memberships, or at least to obtain recompense for losing them, Plaintiffs brought this lawsuit against Reynolds Resorts—Avila Beach, LLC, Reynolds Resorts Partners, LLC,[1] Thomas Reynolds, and Michele Reynolds (collectively Defendants). Plaintiffs asserted causes of action for breach of contract, fraud, violation of the Membership Camping Contracts law (Civ. Code, § 1812.300) violations of the California Unfair Competition Law (Bus. & Prof. Code, § 17200: UCL), and violation of the Consumer Legal Remedies Act (Civ. Code, § 1750; CLRA). At trial, Plaintiffs presented the theory that Defendants had surreptitiously and fraudulently gone about converting the resort from a members-only resort to a public campground, and, to do so, misrepresented that only a few sites would be available to nonmembers, pushed out existing members, and used a contrived and false justification for terminating Plaintiffs’ memberships.

Once Plaintiffs had rested, Defendants moved for a nonsuit on all causes of action for an assortment of reasons. The trial court granted the motion.

With three exceptions, we affirm the judgment. We conclude nonsuit should not have been granted on Plaintiffs’ causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of the CLRA. We shall remand for further proceedings on those causes of action. In all other respects, we conclude either the trial court did not err by granting the motion for nonsuit or Plaintiffs failed to meet their burden, as appellants, of demonstrating error.

FACTS

As directed by the standard of review, we accept as true the evidence most favorable to Plaintiffs. (Nally v. Grace Community Church (1988) 47 Cal.3d 278, 291 (Nally).)

“Reynolds Resorts” is a business enterprise that owns and operates what it touts as “California’s Premier Network of Camping Resorts.” Reynolds Resorts consists of about 13 business entities all bearing similarly‑formatted names, for example, defendant Reynolds Resorts—Avila Beach, LLC (RRAB). Thomas and Michele Reynolds formed Reynolds Resorts. Michele Reynolds handles the day‑to‑day operations while Thomas Reynolds is responsible for researching, locating, and purchasing resort properties.

RRAB operates Ocean Canyon Resort (the Resort), which is a camping resort in Avila Beach that provides accommodations for recreational vehicle hookup sites, cabin rentals, a pool, and other amenities for its guests. The Resort operated for years as a campground for members and their guests. Members-only campgrounds typically do not charge daily occupancy rates but may be used only by those who purchase a membership and pay dues. In contrast, organizations such as Kampgrounds of America (KOA) and Good Sam offer discount membership programs by which members are given discounted nightly rates at participating campgrounds that are open to the public.

In August 2011, the Goldies purchased a lifetime camping membership to the Resort from a third party for $3,500. The Goldies paid a one‑time $700 transfer fee by check payable to “Reynolds Resorts” and thereafter paid annual dues of $499 to “Ocean Canyon Resort.”

In October 2008, Tekaat purchased a lifetime camping membership contract to the Resort from a third party for $3,000. Tekaat paid a one-time transfer fee of $599.75 and thereafter paid annual dues of $499. The transfer to Tekaat was approved by RRAB and a “Statement of Transfer” was signed by a representative of RRAB. No evidence was presented that any of the defendants solicited or advertised the sale of a membership to any plaintiff.

Plaintiffs enjoyed camping and intended to use their lifetime memberships at the Resort throughout retirement. The Plaintiffs’ memberships, like all memberships for the Resort, were subject to certain limitations, including a “two weeks in, two weeks out” system of reservations by which a member is permitted to stay for at most two weeks. After two weeks, the member must leave the Resort for a minimum of two weeks before returning. A few campsites at the Resort were available to the public on a trial basis for marketing purposes.

In 2010, RRAB entered into a 60‑month agreement with KOA for its on‑line reservation system and marketing programs. In a letter to RRAB’s members dated February 10, 2010, Thomas Reynolds explained: “What this will mean is that some spaces (those that had been used for marketing purposes when we were actively selling memberships) will now be available to your guests and other nonmembers for a nightly fee. . . . Our goal in opening up these marketing sites to your guests and non‑members is to replace the dues revenue we are losing and to avoid dues increases that would be needed to meet our operating cash shortfall.” (Boldface omitted.) RRAB subsequently assured its members that only “a few sites” would be made available to KOA members and the relationship with KOA “in no way affects members[’] ability to make reservations.”

However, from 2012 through 2018, the number of KOA reservations at the Resort steadily increased. In 2012, of the 15,700 total nights reserved at the Resort, 6,888 (43.8 percent) were KOA reservations. In 2018, of the 16,863 total nights reserved at the Resort, 12,829 (76.1 percent) were KOA reservations.

Starting in 2015, the Goldies began having difficulty making reservations at the Resort. Steven Goldie believed the difficulty in making reservations was due to the increasing number of KOA guests who were staying at the Resort. Goldie also noticed a significant change in the Resort’s culture, more trash, more noise, and a degradation of the facilities due to increasing number of KOA reservations. Tekaat also noticed, starting in 2015, an increasing number of nonmembers staying at the Resort.

In May 2016, the Goldies’ Resort membership was terminated on the ground the Goldies had violated the continuous use restrictions. Michele Reynolds sent the Goldies a letter stating: “The contracts all have maximums and in a high use property we cannot accommodate continual use or RV residential use. RV residential use at any length of time is prohibited in the membership.” The Goldies’ dues were refunded with a check drawn on an account owned by RRAB. Steven Goldie was shocked when he received the termination letter. The Goldies had never stayed at the Resort for more than 14 consecutive days and never used the Resort as a residence.

In June 2016, a park manager sent the Goldies an e‑mail message stating that Michele Reynolds wanted to discourage members from staying at the Resort and “the membership was to be eliminated” in order to make sites available for nonmembers. This e‑mail stated that Michele Reynolds “made it very clear that she did not want any interaction between park management and the members, that the members were to be referred to Reynolds[’s] office in Laguna Beach.”

In August 2016 the Resort manager told Tekaat that Michele Reynolds would not allow her to make a reservation. In September 2016, Tekaat’s Resort membership was terminated on the ground that Tekaat was residing in her recreational vehicle at the Resort. Michele Reynolds sent Tekaat a letter stating, “Although the company did not sell you your membership the seller should have disclosed that the contract is a vacation discount camping program and not for continuous or residential use.” Tekaat received a refund check for her dues signed by Thomas Reynolds and drawn on an account owned by RRAB. Tekaat had not, however, established residency at the Resort and sent Michele Reynolds documentation to clear up the misunderstanding.

PROCEDURAL HISTORY

Plaintiffs’ complaint alleged causes of action for unlawful business practices in violation of the UCL (Bus. & Prof. Code, § 17200), unfair business practices (ibid.), fraudulent business practices (ibid.), fraud, breach of contract, breach of the implied covenant of good faith and fair dealing, violation of the Membership Camping Contracts law (Civ. Code, § 1812.300 et seq.), and violation of the CLRA (Civ. Code, §1750). The complaint alleged Thomas and Michele Reynolds were the alter egos of RRAB and Reynolds Resorts.[2]

The complaint alleged that in 2010, 2011, and 2012, Defendants fraudulently represented only a few sites at the Resort would be made available for KOA reservations and those reservations would not affect members’ ability to make reservations at the Resort. The complaint alleged Defendants breached the membership contracts and their implied covenants of good faith and fair dealing by failing to provide exclusive use of the Resort to members and by falsely claiming the Goldies and Tekaat had violated Resort rules and had established residency there.

The matter was tried to a jury on all causes of action. Plaintiffs presented their case under several theories: (1) By entering into a franchise agreement with KOA, Defendants substantially interfered with Plaintiffs’ membership contracts; (2) Defendants breached the membership contracts with Plaintiffs by failing to provide exclusive use of the Resort to members; (3) Defendants made material representations to Resort members, including plaintiffs, that only a few sites would be unavailable to members and the KOA reservation would have no effect on existing memberships; (4) Defendants fraudulently converted the Resort from a members-only resort to a public campground; (5) Defendants pushed out existing Resort members in order to open more campsites to lucrative KOA reservations, and used a contrived excuse that Plaintiffs had violated the continuous use policy to terminate their memberships.

After Plaintiffs rested, Defendants made an oral motion for a judgment of nonsuit. Counsel specified the following as the grounds for the motion: (1) No evidence was presented to show Thomas and Michele Reynolds were the alter egos of RRAB and/or Reynolds Resorts Partners; (2) Plaintiffs did not submit written contracts and therefore did not meet their burden of proof on the breach of contract and breach of the implied covenant of good faith and fair dealing causes of action; (3) no evidence was presented to show any defendant engaged in an unfair business practice; (4) the statute of limitations;[3] (5) the statute of frauds barred the breach of contract and breach of the implied covenant of good faith and fair dealing causes of action; (6) remedies under the Membership Camping Contracts law are limited to rescission and refund; (7) no evidence was presented to show Defendants solicited the transfer of the membership agreements or were involved in the sale of the membership agreements or induced the transfer of memberships; (8) no evidence was presented to show that from 2008 to 2016 RRAB sold membership agreements that would make RRAB subject to the Membership Camping Contracts law; (9) no evidence of a written membership camping contract was presented; and (10) no evidence was presented of fraudulent (“evil”) intent.

The trial court granted the motion for nonsuit on the following grounds:

1. No evidence was presented of who owned and operated the Resort. Relief could not be granted under the Membership Camping Contracts law “because there’s no evidence of who’s owning and operating that park and who is the [membership camping operator] of that park.”

2. Plaintiffs did not produce the membership contracts and therefore “failed to establish the precise terms of the contract.” The court could not determine whether the Resort was a member‑only club or was open to the public.

3. The only remedies available under the Membership Campground Contracts Law are rescission and refund. (Civ. Code, § 1812.306.) The contracts had been terminated so there was nothing to rescind, and Plaintiffs had received a refund of annual dues for one year. Plaintiffs were not entitled to restitution of the amounts paid for the membership contracts because the Plaintiffs paid third parties, not Defendants.

4. There was no evidence of fraud except for comments in a newsletter about spaces for KOA members. No evidence was presented of who made those comments or that Plaintiffs justifiably relied on those representations. There was no evidence the statements made in the newsletters were untrue when made.

5. Membership contracts are not goods or services subject to the CLRA.

6. Violation of the Membership Camping Contracts law was the predicate for the causes of action under the UCL. Plaintiffs could not recover under the Membership Camping Contracts law because there was no evidence of who was the membership camping operator and, therefore, Plaintiffs could not recover under the UCL.[4]

In August 2021, Plaintiffs filed a notice of appeal from a non‑appealable, unsigned minute order granting the motion for nonsuit. Judgment on nonsuit was entered in September 2021. We denied Defendants’ motion to dismiss the appeal and elected to treat the notice of appeal as taken from the judgment.

REQUEST FOR JUDICIAL NOTICE

Plaintiffs filed a request for judicial notice of 13 corporate records of various Reynolds enterprises, the notice of ruling on a motion for attorney fees brought by Defendants, and the notice of appeal of the order granting Defendants’ motion for attorney fees. The corporate records bear file stamps indicating each had been filed with the California Secretary of State.

Plaintiffs argue we may take judicial notice of the corporate records as official acts of the State of California. (Evid. Code, § 452, subd. (c).) But reviewing courts generally do not take judicial notice of evidence that was not presented to the trial court (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444, fn. 3), and judicial notice of the corporate records is being requested precisely for their evidentiary value. Plaintiffs did not move for a new trial or to reopen evidence in order to present the corporate records to the trial court. In the their opening brief, Plaintiffs argue the corporate records “remed[y]” any confusion over whether RRAB owned the Resort and, in their reply brief, cite the corporate records as evidence in support of the factual assertion that “[Thomas] and Michele [Reynolds] run the Reynolds Resorts enterprise with no regard to corporate formalities for Avila Beach, LLC . . . .”

The request for judicial notice of the corporate records amounts to a motion to take additional evidence on appeal. Although Code of Civil Procedure section 909 grants the Court of Appeal authority to take additional evidence, that authority must be used sparingly, only in exceptional circumstances and only to affirm. (Diaz v. Professional Community Management, Inc. (2017) 16 Cal.App.5th 1190, 1213; City of Petaluma v. Cohen (2015) 238 Cal.App.4th 1430, 1438 fn. 7.) The request to take additional evidence in this case does not meet this standard. The corporate records of which Plaintiffs seek judicial notice could have been offered into evidence at trial. Plaintiffs are asking us to take judicial notice of the records in order to reverse, not to affirm, the judgment of nonsuit.

The notice of ruling on the attorney fees motion and the notice of appeal were filed in this case in the superior court. We therefore treat the request for judicial notice of those two documents as a motion to augment the record. (Cal. Rules of Court, rule 8.155(a).) We deny the motion. Attorney fees are not a subject of the present appeal. We are aware of the ruling on the motion for attorney fees and the notice of appeal from that ruling because we granted the parties’ stipulated motion to stay the attorney fees appeal pending resolution of this appeal.

DISCUSSION

I. Standard of Review

“A trial court may grant a motion for nonsuit if the plaintiff’s evidence would not support a jury verdict in the plaintiff’s favor.” (Crouch v. Trinity Christian Center of Santa Ana, Inc. (2019) 39 Cal.App.5th 995, 1013.) We review an order granting nonsuit de novo, using the same standard as used by the trial court. (Nally, supra, 47 Cal.3d at p. 291.)

“A defendant is entitled to a nonsuit if the trial court determines that, as a matter of law, the evidence presented by plaintiff is insufficient to permit a jury to find in [the plaintiff’s] favor.” (Nally, supra, 47 Cal.3d at p. 291.) Evidence is legally insufficient when no substantial evidence exists tending to prove each element of the plaintiff’s claim. (Adams v. City of Fremont (1998) 68 Cal.App.4th 243, 263, disapproved on another ground in Brown v. USA Taekwondo (2021) 11 Cal.5th 204, 219, 221; Fountain Valley Chateau Blanc Homeowner’s Assn. v. Department of Veterans Affairs (1998) 67 Cal.App.4th 743, 750-751.) “A mere ‘scintilla of evidence’ does not create a conflict for the jury’s resolution; ‘there must be substantial evidence to create the necessary conflict.’” (Nally, at p. 291.) In determining whether the plaintiff’s evidence is sufficient, the court may not weigh the evidence or consider witness credibility but must accept as true the evidence most favorable to the plaintiff and disregard conflicting evidence. (Ibid.) The court must interpret the evidence most favorably to the plaintiff and draw every reasonable inference, and resolve all presumptions, conflicts, and doubts, in the plaintiff’s favor. (Ibid.; see Castaneda v. Olsher (2007) 41 Cal.4th 1205, 1214.)

A nonsuit may be affirmed on any ground specified in the motion, whether or not the trial court granted the motion on that ground. (Lawless v. Calaway (1944) 24 Cal.2d 81, 92-94; Saunders v. Taylor (1996) 42 Cal.App.4th 1538, 1542.)[5] A nonsuit may be affirmed on a ground not specified by the motion for nonsuit only if it is clear the defect is one which could not have been remedied had the motion called the defect to the plaintiff’s attention. (Wilson v. Century 21 Great Western Realty (1993) 15 Cal.App.4th 298, 305-306.)

II. Grounds Were Stated for a Nonsuit in Favor of RRAB

Plaintiffs contend the court erred by granting the motion for nonsuit as to RRAB because the motion failed to specify any grounds for granting a nonsuit in RRAB’s favor.

The record shows that, with one exception, Defendants’ counsel recited grounds for nonsuit in favor of RRAB. After Plaintiffs rested, and the jury was excused, defendants’ counsel orally announced, “Defendants are bringing a motion for nonsuit under [Code of Civil Procedure, section] 581[, subdivision] (c).” Counsel stated he would specify the grounds for nonsuit for each defendant. Counsel started by arguing there had been no communications of any kind between Thomas Reynolds and any plaintiff and no evidence had been presented to prove Thomas Reynolds was the alter ego of any other defendant. The trial court interjected, “We’re not going to do them one by one.” In response, Defendants’ counsel stated, “The same goes for Michele Reynolds and the same goes for Reynolds Resorts Partners, LLC, as to that argument.” (Italics added.) Defendants’ counsel then specified the grounds for nonsuit as to all defendants and as to each cause of action. Thus, the only ground for nonsuit that did not apply to RRAB was lack of communication with Plaintiffs.

III. Breach of Contract Cause of Action

Plaintiffs alleged Defendants breached the membership contracts (including their implied covenants of good faith and fair dealing) in two ways: (1) by terminating their memberships based on the false accusation they had violated park rules; and (2) by failing to provide exclusive use of the Resort. As to the second form of breach, the theory presented at trial was Defendants breached the Resort membership contracts by slowly and surreptitiously converting the Resort from being members only to being a public KOA campground.

Defendants moved for nonsuit on breach of contract cause of action on the grounds Plaintiffs never produced written membership contracts and the statute of frauds barred enforcement of any oral agreements.[6] Defendants also generally asserted the statute of limitations. Defendants did not assert lack of evidence of breach or of damages as a ground for nonsuit.

We conclude Plaintiffs produced sufficient evidence to establish 1) the terms of their contract; 2) the parties to their Resort membership contracts; 3) the statute of frauds does not apply to them; and 4) the statute of limitations was not stated with sufficient specificity to serve as a ground for a nonsuit. The same conclusions pertain to the cause of action for breach of the implied covenant of good faith and fair dealing.

A. Lack of Written Contract

1. Secondary Evidence

Although Plaintiffs did not produce their written Resort membership contracts, they proved the terms of those contracts through testimony and other secondary evidence. Evidence Code section 1521, known as the “Secondary Evidence Rule,” reads: “(a) The content of a writing may be proved by otherwise admissible secondary evidence. The court shall exclude secondary evidence of the content of writing if the court determines either of the following: [¶] (1) A genuine dispute exists concerning material terms of the writing and justice requires the exclusion. [¶] (2) Admission of the secondary evidence would be unfair. [¶] (b) Nothing in this section makes admissible oral testimony to prove the content of a writing if the testimony is inadmissible under Section 1523 (oral testimony of the content of a writing). [¶] (c) Nothing in this section excuses compliance with Section 1401 (authentication).”

Evidence Code section 1523, subdivision (a) reads: “Except as otherwise provided by statute, oral testimony is not admissible to prove the content of a writing.” But oral testimony is admissible to prove the content of a writing if the proponent does not have possession or control of a copy of the document and the original has been lost or destroyed (id., subd. (b)), or if the proponent does not have possession or control of the original or a copy of the document and neither the original nor the copy was reasonably procurable by court process or made available by other means (id., subd. (c)(1)).

Steven Goldie testified he purchased a membership contract for a preferred-plus membership from a third party and the contract allowed a length of a stay of up to “14 days in, 14 days out.” Tekaat testified she purchased a membership contract from a third party. RRAB accepted and approved documents transferring the memberships. For the transfer to Tekaat, a representative of RRAB signed a “Statement of Transfer.”

Exhibit No. 140 is a document titled “Privileges of Plus Membership” which sets forth the rights and privileges of preferred-plus resort members. This document was admissible to prove the terms of Tekaat’s contract and the Goldies’ contract. (Rogers v. Prudential Ins. Co. (1990) 218 Cal.App.3d 1132, 1137 [contents of insurance policy may be proved by copies of other policies sold at the same time].)

In addition, the Goldies and Tekaat paid the transfer fee and paid their annual dues for years. RRAB accepted the transfer fee and the annual dues. Payment of the dues was evidence of the terms of the written contract.

The secondary evidence established RRAB was a party to the Resort membership contracts with the Goldies and Tekaat.[7] Although they purchased their memberships contracts from third parties, RRAB approved the transfers. The statement of transfer for Tekaat’s membership was approved and signed by a representative of “Reynolds Resorts—Avila Beach, LLC [doing business as] Ocean Canyon Resort.” The membership transfer for the Goldies’ membership was on a form with the name “Reynolds Resorts—Ocean Canyon Resort” at the top. Ocean Canyon Resort is a doing business as for RRAB. A membership roll for “Reynolds Ocean Canyon Resort—Avila” from October 2015 includes the Goldies and Tekaat. After the Plaintiffs’ memberships were terminated, they were refunded their annual dues with checks drawn on an account owned by RRAB.

It is arguable Plaintiffs did not satisfy the requirements of Evidence Code section 1523 for presenting oral testimony of the terms of their Resort membership contracts. But Defendants never made a best evidence/secondary evidence objection to any of the evidence of the Resort membership contracts.

The secondary evidence need not prove the contents of lost documents verbatim. (Dart Industries, Inc. v. Commercial Union Ins. Co. (2002) 28 Cal.4th 1059, 1069.) The secondary evidence presented in the present case was sufficient to prove enough of the terms of Plaintiffs’ Resort membership contracts for the breach of contract cause of action to survive the motion for nonsuit. Defendants did not move for nonsuit on the ground of lack of evidence of breach or damages.

2. Statute of Frauds

Defendants argue the membership contracts were subject to the statute of frauds because, as lifetime contracts, they could not be performed within a year. Civil Code section 1624 renders unenforceable “[an] agreement that by its terms is not to be performed within a year from the making thereof” (id., subd. (a)(1)) unless the contract “or some note or memorandum thereof, [is] in writing and subscribed by the party to be charged or by the party’s agent” (id., subd. (a)). This portion of the statute of frauds “‘applies only to those contracts which, by their terms, cannot possibly be performed within one year.’” (Foley v. Interactive Data Corp. (1988) 47 Cal.3d 671, italics added.) The statute of frauds does not apply to a contract of infinite duration “unless its terms foreclose the [party]’s completion of the performance of the contract within one year.” (White Lighting Co. v. Wolfson (1968) 68 Cal.2d 336, 341.)

Plaintiffs’ membership contracts were not subject to the statute of frauds because the contracts could, by their terms, be performed within a year if the Goldies or Tekaat died. (Leonard v. Rose (1967) 65 Cal.2d 589, 592 [oral contract calling for lifetime payments does not come within statute of frauds because it is possible for the contract to be performed if the payee dies within a year].)

B. Statute of Limitations

In moving for a nonsuit based on the statute of limitations, Defendants’ counsel said only, “There’s a statute of limitations problem.” Counsel did not direct the “statute of limitations problem” to any particular cause of action or provide any explanation or argument.

Stating only “[t]here’s a statute of limitations problem” is not specific enough to serve as a ground for a nonsuit motion. “[D]efects not specifically pointed out by the moving party cannot be considered by the trial court, or by us, in determining the merits of the motion [for nonsuit].” (Consolidated World Investments, Inc. v. Lido Preferred Ltd. (1992) 9 Cal.App.4th 373, 378; see Mercantile Trust Co. v. Sunset Road Oil Co. (1917) 176 Cal. 461, 466 [“the grounds of [the nonsuit] motion were not sufficiently specific to direct the attention of the court or of opposing counsel to the precise point now made”].) Different statutes of limitation, as well as accrual and delayed discovery rules, apply to the various cases of action asserted by Plaintiffs.[8]

IV. Fraud Cause of Action

The trial court granted the motion for nonsuit on the fraud cause of action on the grounds (1) the only evidence of fraud were statements in newsletters about spaces for KOA members; (2) no evidence was presented of who made those comments; (3) no evidence was presented that Plaintiffs justifiably relied on those representations; and (4) no evidence was presented the statements made in the newsletters were untrue when made. We conclude the third ground supported a nonsuit.

According to the Plaintiffs, as expressed in their opening brief, the fraud cause of action was based on following false representations:

1. A 2010 Membership Update publication states: “This year we have made a few spaces available for your guests, foreign visitors, and other members of the public through the KOA reservation system. These are only a few spaces that were previously held for our marketing team. Therefore, it in no way affects members[’] ability to make reservations.”

2. A 2011 Membership Update publication states: “The few public camping guests (KOA) allowed at Ocean Canyon allows us to make this decision [not to increase dues].”

3. An annual newsletter sent to members sometime in late 2012 states: “This past year we have received a few questions about KOA and available reservations. We need to clear up some confusion. First, there are only a few sites available to KOA guests. The KOA guests are mostly in the park for a very short stay, and usually are in a rental RV that fits into the smaller, less desirable sites.”

4. The letter from Thomas Reynolds dated February 10, 2010, informed Resort members that the only spaces that were to be made available to KOA reservations were some spaces that had been used for marketing purposes.

Justifiable reliance is an essential element of a fraud cause of action. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 173-174.) “‘Besides actual reliance, [a] plaintiff must also show “justifiable” reliance, i.e., circumstances were such to make it reasonable for [the] plaintiff to accept [the] defendant’s statements without an independent inquiry or investigation.’” (OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 864.)

Plaintiffs fail to cite to any evidence in the record to show they justifiably relied on any of the alleged misrepresentations. Plaintiffs do not even cite to evidence showing any of them had ever seen any of the alleged misrepresentations. In their opening brief, Plaintiffs cite to their own testimony of having planned their retirements around the ability and desire to camp at the Resort and, in the their reply brief, they cite to testimony regarding the difficulty in making reservations at the Resort. None of this testimony concerns reliance on the representations made in the membership updates or Thomas Reynolds’s letter.

Plaintiffs assert they “acted on the good faith belief that the representations made by Tom, Michele, and Avila Beach, LLC were true and continued paying their annual dues until they experienced otherwise.” They provide no record citations to support this assertion, which is contrary to Plaintiffs’ position, taken throughout this litigation, that Plaintiffs wanted to keep their Resort memberships, not lose them.

V. Membership Camping Contracts Law Cause of Action

Defendants moved for nonsuit on the Membership Camping Contracts law cause of action on the grounds that (1) remedies under Membership Camping Contracts law are limited to rescission and refund; (2) there was no evidence Defendants solicited the transfer of the memberships or induced the transfer of the memberships; (3) no written contract was produced to prove Plaintiffs owned membership agreements; and (4) there was no evidence that from 2008 through 2016 RRAB sold membership agreements that would make it subject to the Membership Camping Contracts law. We conclude the first and fourth grounds supported a nonsuit.

Title 2.8 of division 3 of the Civil Code imposes various disclosures and other obligations on operators of membership campgrounds. (Civ. Code, § 1812.300 et seq.) A membership camping operator is defined as an enterprise which (1) “has as one of its purposes the ownership of operation of campgrounds which include or may include use of camping sites,” (2) “solicits membership paid for by a fee or periodic payments, such as annual dues,” and (3) has contractual members as “the primary intended users.” (Id., subd. (a).) Among other things, a membership camping operator must provide a purchaser the written disclosure identified in Civil Code section 1812.302 and update the information in the disclosure once a year. (Ibid.)

Remedies for error in or omissions from the disclosure requirements under Civil Code sections 1812.302 through 1812.306 are limited to rescission and refund. (Civ. Code, § 1812.306, subd. (a).) Plaintiffs did not seek or want rescission or refund. They wanted the opposite: They wanted their Resort memberships restored.[9]

Plaintiffs argue the Membership Camping Contracts law provided them a remedy in the form of attorney fees. Civil Code section 1812.306, subdivision (a) includes an attorney fees provision stating, “Reasonable attorney’s fees shall be awarded to the prevailing party in any action under this title.” Attorney fees under section 1812.306, subdivision (a) are costs of suit, not damages. (See Code Civ. Proc., § 1033.5, subd. (a)(10)(C) [costs of suit include attorney fees when authorized by statute].) Attorney fees have been recognized to be recoverable as damages only by an insured in a tort action for the bad faith denial of policy benefits. (See Essex Ins. Co. v. Five Star Dye House, Inc. (2006) 38 Cal.4th 1252, 1258.)

Plaintiffs have not addressed the ground for nonsuit that none of the Defendants solicited membership contracts and, therefore, none could be a membership camping operator under the Membership Camping Contract law. (See Civ. Code, § 1812.300, subd. (a).) Because a nonsuit may be affirmed on any ground specified in the motion (Lawless v. Calaway, supra, 24 Cal.2d at pp. 92‑94) it was incumbent upon Plaintiffs to address whether there was evidence of Defendants soliciting membership contracts. While it might seem self‑evident that at least one of the defendants solicited membership contracts and thereby is deemed to be a membership camping operator within the meaning of Civil Code section 1812.300, we must have actual evidence to uphold such a finding. Plaintiffs have failed to meet their burden as appellants of demonstrating error by not citing to evidence in the record to support their claim the Defendants were membership camping operators. (United Grand Corp. v. Malibu Hillbillies, LLC, supra, 36 Cal.App.5th at p. 146; In re S.C., supra, 138 Cal.App.4th at p. 408; Niko v. Foreman, supra, 144 Cal.App.4th at p. 368). In the alternative, we deem the point to be forfeited. (WFG National Title Ins. Co. v. Wells Fargo Bank, N.A. (2020) 51 Cal.App.5th 881, 894 [“Rather than scour the record unguided, we may decide that the appellant has forfeited a point urged on appeal when it is not supported by accurate citations to the record”].)

VI. UCL Causes of Action

Defendants moved for nonsuit on the UCL cause of action on the ground Plaintiffs presented no evidence of any defendant engaging in an unfair business practice. The UCL prohibits any “unlawful, unfair or fraudulent business act or practice.” (Bus. & Prof. Code, § 17200.) “The UCL is a law enforcement tool designed to protect consumers and deter and punish wrongdoing.” (People ex rel. Harris v. Aguayo (2017) 11 Cal.App.5th 1150, 1159.)

Plaintiffs argue the trial court erred by granting nonsuit on the UCL cause of action for two reasons. First, Plaintiffs argue, “The [Membership Camping Contracts law] violation is the predicate for the UCL violation.” However, as we have explained, Plaintiffs have not met their burden as appellants of proving the trial court erred by granting a nonsuit on the Membership Camping Contracts law cause of action.

Second, Plaintiffs argue they presented evidence “sufficient to permit the jury to find [Defendants] engaged in unlawful, unfair, and fraudulent business practices by using membership dues to renovate the Park to become a KOA franchise location while misrepresenting to the lifetime members how many KOA sites were being made available for KOA reservations and creating barriers for members to make reservations.” In Plaintiffs’ appellate opening brief they support this argument with only one record citation and no citation to authority. It is particularly important for Plaintiffs to have provided legal analysis supported by citation to authority with respect to the UCL causes of action because each of the three types of wrongful conduct identified in the UCL is distinct from the others. “‘“[A] practice is prohibited as ‘unfair’ or ‘deceptive’ even if it is not ‘unlawful’ or vice versa.”’” (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.)

Plaintiffs therefore failed to meet their burden as appellants of demonstrating error justifying reversal of the judgment on the UCL cause of action. (E.g., United Grand Corp. v. Malibu Hillbillies, LLC, supra, 36 Cal.App.5th at p. 146; Department of Alcoholic Beverage Control v. Alcoholic Beverage Control Appeals Bd. (2002) 100 Cal.App.4th 1066, 1078 [“suggestions of error without supporting argument or authority other than general abstract principles do not properly present grounds for appellate review”].) In the alternative, we deem the point to be forfeited. (Blizzard Energy, Inc. v. Schaefers (2021) 71 Cal.App.5th 832, 854, 856; WFG National Title Ins. Co. v. Wells Fargo Bank, N.A., supra, 51 Cal.App.5th at p. 894; Holden v. City of San Diego (2019) 43 Cal.App.5th 404, 418‑419; Nelson v. Avondale Homeowners Assn. (2009) 172 Cal.App.4th 857, 862.)

Plaintiffs’ reply brief belatedly supplies some citations to the record. However, “[p]oints raised for the first time in a reply brief will ordinarily not be considered, because such consideration would deprive the respondent of an opportunity to counter the argument.” (American Drug Stores, Inc. v. Stroh (1992) 10 Cal.App.4th 1446, 1453.)

VII. CLRA Cause of Action.

The trial court granted nonsuit on Plaintiffs’ causes of action under the CLRA for the following reason: “[The CLRA] cause of action only applies to contracts for goods or services. Goods are tangible chattel. There’s no tangible chattel at issue here. And this is not a contract for services. This is a contract for membership.”[10] Defendants did not move for a nonsuit on the CLRA cause of action. In reciting the grounds on which the motion for nonsuit was based, Defendants’ counsel never mentioned the CLRA.

Had Defendant moved for a nonsuit on the CLRA cause of action on the ground the Resort membership contracts were goods or services under the CLRA, it is not clear Plaintiffs would not have been able to defeat the motion. (See Nordberg v. Trilegiant Corp. (N.D.Cal. 2006) 445 F.Supp.2d 1082, 1087 [membership program is a good or service subject to the CLRA]; Kissling v. Wyndham Vacation Resorts, Inc. (N.D.Cal. Nov. 18, 2015, No. 15‑cv‑04004‑EMC 2015) U.S.Dist. Lexis 156802 [timeshare points were not goods or services under the CLRA].) We therefore reverse the judgment on the CLRA cause of action.

VIII. Alter Ego Allegations

Defendants moved for nonsuit, and the trial court granted one, in favor of Thomas and Michele Reynolds on the ground Plaintiffs did not present evidence to support their allegations that Thomas Reynolds and/or Michele Reynolds were the alter egos of RRAB. We reach the same conclusion.

“‘Ordinarily, a corporation is regarded as a legal entity, separate and distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations. [Citations.] A corporate identity may be disregarded—the “corporate veil” pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation. [Citation.] Under the alter ego doctrine, then, when the corporate form is used to perpetrate a fraud, circumvent a statute, or accomplish some other wrongful or inequitable purpose, the courts will ignore the corporate entity and deem the corporation’s acts to be those of the persons or organizations actually controlling the corporation, in most instances the equitable owners.’” (Turman v. Superior Court (2017) 17 Cal.App.5th 969, 980.)

“Two requirements must be met to invoke the alter ego doctrine: (1) ‘[T]here must be such a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist’; and (2) ‘there must be an inequitable result if the acts in question are treated as those of the corporation alone.’” (Turman v. Superior Court, supra, 17 Cal.App.5th at pp. 980-981.)

Among the factors to be considered in applying the alter ego doctrine are (1) commingling of funds and other assets, (2) personal use of corporate assets, (3) one entity holding itself out as being liable for the debts of the other, (4) identical equitable ownership in the two entities, (5) use of the same offices and employees, (6) use of one entity as a mere shell or conduit for the affairs of the other, (7) inadequate capitalization, (8) disregard of corporate formalities, (9) failure to segregate corporate records, (10) identical directors and officers, and (11) lack of employees, offices, or operating capital. (CADC/RADC Venture 2011‑1 LLC v. Bradley (2015) 235 Cal.App.4th 775, 789; Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538–539.) “No one characteristic governs, but the courts must look at all the circumstances to determine whether the doctrine should be applied.” (Sonora Diamond Corp., at p. 539.)

Plaintiffs have not identified any evidence in the record to support any of those alter ego factors. Plaintiffs’ have not so much as identified evidence to establish that Thomas or Michele Reynolds had any kind of an ownership interest in RRAB. Plaintiffs point to evidence that RRAB used marketing brochures, flyers, maps, publications (such as membership newsletters and updates) with the brand “Reynolds Resorts” “‘California’s Premier Network of Camping Resorts.’” The Resort’s member services used the e-mail address “member@reynoldsresorts.com for communications with members, the Resort used stationary with the letterhead “Reynolds Resorts Ocean Canyon Resort” to communicate with members and directed members to the Web site www.reynoldsresorts.com as the Resort’s Web site. But none of this evidence shows commingling of assets, inadequate capitalization, disregard of corporate formalities or any factor relevant to the issue of whether Thomas or Michele Reynolds is an alter ego of RRAB.

Plaintiffs also point to evidence that they communicated with a “corporate office” regarding the transfers of memberships, obtaining their membership contracts, and registering complaints about difficulties in making reservations. This evidence, at best, shows a single office was used by all of the Reynolds’ resort enterprises. That fact alone would not, as a matter of law, make Thomas Reynolds and/or Michele Reynolds, the alter egos of RRAB.

DISPOSITION

The judgment is reversed with respect to the causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of the CLRA. In all other respects the judgment is affirmed. The matter is remanded for further proceedings. Because each side prevailed in part, no party shall recover costs on appeal.

SANCHEZ, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

GOETHALS, J.

[1] Plaintiffs are not pursuing the appeal against Reynolds Resorts Partners, LLC.

[2] The causes of action for unfair business practices, fraudulent business practices, and violation of the CLRA were asserted against all Defendants. The causes of action for unlawful business practices, fraud, and violation of the Membership Camping Contracts law were asserted against Thomas Reynolds, Michele Reynolds, and RRAB. The causes of action for breach of contract and breach of the implied covenant of good faith and fair dealing asserted against RRAB only.

[3] Counsel’s only explanation was, “[t]here’s a statute of limitations problem.”

[4] The court stated: “If you had established who the [membership camping operator] was, I suppose I could leave the [UCL] case pending because the violation of the Membership Camping [Contracts law] could be a predicate for 17200 violation. But, again, I don’t know who the [membership camping operator] is because you haven’t produced evidence of that.”

[5] Several Court of Appeal opinions hold that appellate review is limited to those grounds relied upon by the trial court because the appellate court should only examine those grounds which a plaintiff might have been able to correct had they been called to the plaintiff’s attention. (E.g., DeVaughn Peace, M.D., Inc. v. St. Francis Medical Center (1994) 28 Cal.App.4th 454, 459; see Alpert v. Villa Romano Homeowners Assn. (2000) 81 Cal.App.4th 1320, 1328, fn. 8 [noting split of authority over whether review of grant of nonsuit is limited to grounds raised by defendant and ruled on by trial court].) Those opinions are based on an erroneous interpretation of Lawless v. Calaway, supra, 24 Cal.2d 81. The rule pronounced in Lawless was that “grounds not specified in a motion for nonsuit will be considered by an appellate court only if it is clear that the defect is one which could not have been remedied had it been called to the attention of plaintiff by the motion.” (Id. at p. 94.)

[6] In arguing lack of malice in the fraud cause of action, Defendants’ counsel argued: “It was presented in the evidence that continuous use and residency were the reasons that the contracts were terminated and that it was not for an evil intent.” That statement was not made as a ground for nonsuit on the breach of contract cause of action. Defendants apparently agree as they do not mention the continuous use restriction in their respondents’ brief.

[7] One ground cited by the trial court for granting nonsuit was Plaintiffs did not prove who or what was the membership camping operator under the Membership Camping Contracts law. For purposes of the breach of contract cause of action, the relevant issue is who were the parties to the Resort membership contracts, not who or what was the membership camping operator.

[8] As an example, the delayed discovery rule for fraud is the cause of action is not deemed to have accrued “‘until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.’” (Britton v. Girardi (2015) 235 Cal.App.4th 721, 733.) For breach of contract, the delayed discovery rule is limited to situations in which the breaches of contract “can be, and are, committed in secret and, moreover, where the harm flowing from those breaches will not be reasonably discoverable by plaintiffs until a future time.” (April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805, 832.) The delayed discovery rule applies to a cause of action for breach of contract if the breach was “difficult for the plaintiff to detect,” the defendant was in “a far superior position to comprehend the act and the injury,” and the defendant “had reason to believe the plaintiff remained ignorant he had been wronged.” (Id. at p. 831; see Eleanor Licensing LLC v. Classic Recreations LLC (2018) 21 Cal.App.5th 599, 611, fn. 10; Gryczman v. 4550 Pico Partners, Ltd. (2003) 107 Cal.App.4th 1, 5.)

[9] Civil Code section 1812.306, subdivision (a) states the limitation of remedies “does not apply to errors or omissions from the contract, or disclosures or other requirements of this title, which are a part of a scheme to willfully misstate or omit the information required, or other requirements imposed by this title.” (Italics added.) Although it appears Plaintiffs alleged Defendants did engage in such a scheme, Plaintiffs do not argue that this exception applies to their claims and that they could recover damages under the Membership Camping Contracts law.

[10] Civil Code section 1770, subdivision (a), which is part of the CLRA, makes unlawful certain “unfair methods of competition and unfair or deceptive acts or practices . . . undertaken by any person in a transaction intended to result or that results in the sale or lease of goods or services to any consumer . . . .” (Italics added.)