Channell v. Anthony

• Decision Date: 14 May 1976
• Citation: 58 Cal.App.3d 290,129 Cal.Rptr. 704
• Court: California Court of Appeals Court of Appeals
• Parties: Francis S. CHANNELL and Flora Mae Channell, Plaintiffs, Appellants and Respondents, v. Joseph ANTHONY and Claire Anthony, Defendants and Appellants, John B. Weber, Defendant and Respondent. Civ. 2323.

Page 704

129 Cal.Rptr. 704

58 Cal.App.3d 290

Francis S. CHANNELL and Flora Mae Channell, Plaintiffs, Appellants and Respondents, v. Joseph ANTHONY and Claire Anthony, Defendants and Appellants John B. Weber, Defendant and Respondent.

Civ. 2323.

Court of Appeal, Fifth District, California.

May 14, 1976.

Bernard S. Grossman, Joseph R. Bailey, Panorama City, Encino, for Joseph and Claire M. Anthony.

Donald H. Glasrud, Irwin & Thuesen, Fresno, for Francis and Flora Mae Channell.

CARKEET, Associate Justice. ^*

This case was tried before a jury on a cause of action against all defendants alleging a conspiracy to defraud plaintiffs, and actual fraud and oppression in the sale by plaintiffs of certain real property to Joseph and Claire Anthony, and John and Gustine Weber.

On November 2, 1973, the jury returned a verdict in favor of defendants Gustine L. Weber, and Sam and Joan Pizzillo. The jury awarded plaintiffs actual damages of $25,000, and punitive damages of $13,750 against defendant Joseph Anthony, $250 against defendant Claire Anthony, and $11,250 against defendant John B. Weber. Judgment was entered on November 5, 1973.

On November 8, 1973, defendants filed motions for a new trial and for judgment notwithstanding the verdict. The motions were heard on December 21, 1973. The court denied the motions for a new trial and for judgments notwithstanding the verdict as to defendants John and Claire Anthony, and granted judgment notwithstanding the verdict as to defendant John B. Weber. A minute order to that effect was entered December 31, 1973 and judgment was entered January 8, 1974.

Notice of appeal from the judgment entered November 5, 1973 was filed February 7, 1974 by defendants Joseph and Claire Anthony. A notice of appeal from the judgment entered January 8, 1974 in favor of defendant John Weber was filed February 25, 1974 by plaintiffs Francis and Flora Channell.

By stipulation filed with this court on April 1, 1975, the appeal of Francis and Flora Channell from the judgment in favor of John B. Weber was dismissed.

The evidence presented at the trial was in sharp conflict. Following established rules, this court will review the evidence in the light most favorable to the prevailing parties (plaintiffs-respondents), giving them the benefit of every reasonable inference, and resolving conflicts in support of the judgment. (6 Witkin, Cal. Procedure (2d ed. 1971) Appeal, § 245, p. 4236.)

In March of 1972, Mr. and Mrs. Channell owned a 51 acre ranch in the Del Rey area of Fresno County, consisting of approximately 10 1/2 acres of peaches, 4 acres of plums, 35 acres of Thompson vines, and an additional 1 1/2 acres on which was a farm house, barn, and additional citrus trees. A secured loan on the property was held by the Farmer's Home Administration.

During the middle and late 1960's because of financial difficulties the Channells were unable to pay property and water taxes, or meet their loan payments with the Farmer's Home Administration. They consulted with Mr. Therlow Leach of the Farmer's Home Administration who advised them to sell part of the ranch in order to meet their obligations, following which, on July 18, 1969, the Channells listed the property with a realtor for $85,000. The Channells were unable to affect a sale at that price and once again consulted Leach who recommended a sale price of $60,000. On December 9, 1971, the Channells entered into another listing with a different realtor for $60,000, but were again unable to find a buyer, and in late 1971 or early 1972 were told by Leach that they should hurry and sell the property since the Farmer's Home Administration was going to have to foreclose. Pressure was put on the Channells to 'clear out' by the Farmer's Home Administration, when Leach was tole in late 1971 that the water district was going to take the property because of delinquent taxes.

Concerned about listing the property again, the Channells attempted to sell it themselves, and at the same time they tried unsuccessfully to obtain new loans. They told neighbors in the area that they needed to sell the property. They received several offers, including one for approximately $40,000, but refused them after Leach advised them that he falt the $40,000 offer was too low.

Later, Mr. Pizzillo, a neighbor, asked if the property was still for sale and indicated that he had a nephew who would be interested in purchasing it. Mr. Channell told Pizzillo that he wanted to sell only the back forty acres, keeping the front ten acres.

The next day the nephew, defendant-appellant Joseph Anthony, came to the property, looked it over, and talked ot the Channells. The Channells told Anthony how broke they were, that they were unable to get a loan, and showed him their bills. In addition, they told him that Leach had said they should get $60,000 for the property but that they had been unable to get such an amount or borrow on the property. They also said they only wanted to sell the back forty acres, and wanted to keep the front ten acres to live on.

Anthony told the Channells he was a state commissioner in Los Angeles, and a licensed real estate broker. He showed them some sort of commissioner's badge, and said he would go down to the Farmer's Home Administration and find out what was happening. He returned to the ranch the next day and said the Farmer's Home Administration was trying to get the property for a quick sale to make a 'fast buck', that they (the Farmer's Home Administration) knew of buyers for the property but told such prospective buyers that Mr. Channell was emotionally disturbed, and thereafter the buyers would back off.

He said the Channells could sue the Farmer's Home Administration for enough to get a 100 acre ranch, that he had gathered proof and would supply it after the sale was in escrow, and that he had a lawyer. He also said he was buying land in the area and would give Mr. Channell a steady job. Anthony also said he would see to it that Mrs. Channell could go to Texas to visit her daughter who was having a baby, and that he would pay off all of the bills of the Channells totalling about $3,000. In addition, he said he would see to it that Mr. Channell's credit rating at a bank was in good standing.

Anthony said he would write up an agreement to get the property away from the Farmer's Home Administration. The Channells and Anthony wrote out an agreement in long hand dated Amrch 18, 1972. The agreement provided that the Anthonys would purchase the property by assuming the Channells' FHA loan of approximately $21,500, county property taxes of approximately $6,500, irrigation district taxes of approximately $4,000, and a packing house encumbrance of approximately $2,700. A second document, a management contract, provided that the Channells could live on the property ten years rent free in exchange for operating and maintaining the farm except for pruning and picking. It also provided that if the crops yielded over $15,000 annually the Channells would receive a bonus of five percent of the amount over $15,000. Mrs. Channell read the sale agreement and said if she signed it she would be giving away Mr. Channell's whole life. Anthony said she would not, Mrs. Pizzillo said she had to trust Mr. Anthony, and Mrs. Anthony said they were honest people who wouldn't do that to anybody. When Mr. Channell saw the document he said 'You're not supposed to trust nobody like that', but Mrs. Channell told him they had to trust somebody.

Anthony also tole the Channells the documents were just 'for show' to get the property away from the Farmer's Home Administration, and that they would be torn up after the property was in escrow. In addition, the Anthonys said they would only take the back forty acres with the Channells retaining the front ten, that the Channells' bills would be paid, that Mr. Anthony would send the Channells to Texas, and that Mr. Channell would work for him. Mrs. Anthony said the Channells shoudl sign the agreement or else they wouldn't have a shovel to dig themselves a hole with. The Channells signed the documents.

The following Monday (two days later) the Channells went to their son and daughter-in-law's for dinner and showed them the agreement. The son and daughter-in-law warned the Channells to be cautious, since the Anthonys might make them abide by the terms of the agreement and if so, the Channells 'wouldn't have anything left.'

The Channells next visited their bookkeeper, a Mrs. Roberts, to seek her advice regarding the agreement. After looking over the agreement, Mrs. Roberts also told the Channells to be careful and to get a lawyer, because the Anthonys could make them adhere to the terms of the agreement. In addition, Mrs. Roberts wrote out a letter for the Channells asking the Anthonys to give them 2 1/2 acres and their home as a life estate. Mrs. Channell later showed the letter to Mrs. Pizzillo and then sent it, along with a letter of her own, to Anthony, asking if he would 'be interested in making a deal with me such as this.' The Channells received no reply to the letter.

In the meantime, on March 20, a Monday, Mr. Anthony opened up an escrow and obtained escrow papers. Anthony later told Mr. Weber, who was a real estate salesman in Anthony's office at the time, about the Channell property and asked him if he wanted to help finance the sale. Mr. Weber was non-committal but said he would look at the place.

On March 22, Anthony received a phone call from Mrs. Pizzillo who informed him that the Channells wanted to change the agreement. The next day Anthony and Weber returned to the property with the escrow papers but both Mr. and Mrs. Channell refused to sign. Anthony learned of rumors that people were trying to undermine the agreement.

Weber and Anthony then went to an attorney's office in Fresno and Anthony filed a complaint for specific performance of the agreement against the Channells. When served with the lawsuit the Channells...