Foust v. San Jose Constr. Co.

Citation129 Cal.Rptr.3d 421,11 Cal. Daily Op. Serv. 10133,198 Cal.App.4th 181,2011 Daily Journal D.A.R. 12039
Decision Date10 August 2011
Docket NumberNo. H036190.,H036190.
CourtCalifornia Court of Appeals
PartiesRichard FOUST, Plaintiff and Appellant, v. SAN JOSE CONSTRUCTION COMPANY, INC., Defendant and Respondent.


Law Offices of Robert E. Dunne, Robert E. Dunne, for Plaintiff/Appellant Richard Foust.

McPharlin Sprinkles & Thomas, San Jose, Linda Hendrix McPharlin, Paul S. Avilla, Anne C. Stromberg, for Defendant/Respondent San Jose Construction, Inc.


Richard Foust appeals from a judgment entered in favor of San Jose Construction Company Inc. (San Jose Construction) following a three day court trial on his claim that San Jose Construction breached a written employment contract. Foust argues that the trial court erred in finding that his written employment contract was subsequently modified. In preparing the record on appeal, Foust elected to proceed without a reporters transcript and designated only a partial clerks transcript.

San Jose Construction, in addition to arguing the merits of the case, has brought a separate motion for sanctions against Foust on the basis that the appeal is frivolous. (Cal. Rules of Court, rule 8.276(a).)

Foust's showing on appeal is insufficient and we shall affirm the judgment. We also find that the appeal is frivolous and award sanctions against Foust.

I. Factual and Procedural Background

We take our recitation of the facts from the trial court's statement of decision.

In 1999, San Jose Construction hired Foust as a project manager pursuant to a written employment agreement (the letter agreement). The letter agreement provided for a base salary of $130,000 per year, a signing bonus, an annual bonus of $26,000 to be paid quarterly, as well as certain other benefits including car and cell phone allowances. It also provided for a performance bonus of 20 percent of all gross profits over $780,000 generated by Foust's projects.

On his first day of employment, Foust signed a copy of San Jose Construction's policies and procedures handbook, which specified that his employment was “at will” and that San Jose Construction reserved the right to adjust salaries “on a selective merit basis.”

In 1999, San Jose Construction paid Foust his salary and annual bonus as set forth in the letter agreement. No performance bonus was earned or paid. In the first half of 2000, Foust was paid his salary and two quarterly bonus payments of $6,500. After he received his second quarterly bonus payment, Foust's salary was increased from $130,000 to $160,000, but no further quarterly bonus payments were made that year.

In September and December of 2000, Foust prepared written outlines of his compensation for that year. Both outlines noted the increase in his salary, and reflected a different performance bonus formula from that set forth in the letter agreement. Foust testified that he prepared these outlines at the request of San Jose Construction's president, Pat DiManto,1 and was told he would not receive a bonus if he did not do so. Foust testified that he did not know why his compensation had been changed, but “indicated that DiManto told him that he was going to make good on this' every couple of months so he was ‘not concerned.’ Foust made no written complaint about his compensation and continued working at San Jose Construction.

In February 2001, Foust's salary was increased to $175,000 and his car and cell phone allowances were also increased. In the spring of 2001, DiManto had a lunch meeting with all of the San Jose Construction project managers. All of the witnesses agreed that performance bonuses were discussed at this meeting and DiManto indicated that all such bonuses would be paid on a 10 percent calculation going forward. According to Foust, he never accepted this change from the letter agreement, but just listened to what was said at the meeting.

In 2001 Foust received his $175,000 salary, no quarterly bonus payments and a 10 percent performance bonus at year end. In December 2002, Foust prepared a written summary of his compensation for 2001 and 2002. This summary reflected Foust's $175,000 salary and the 10 percent performance bonus for both years. In addition, it showed Foust had been overpaid $17,000 in 2001, but that he was due a net bonus of $42,269 for 2002. Again, Foust testified that he was told that he should “write it up this way or he would get no bonus at all,” and he was “not happy.” Foust did not recall what DiManto said about his written summary of compensation for 2001 and 2002, but testified that DiManto had said he would find a way to pay me.”

In 2003, Foust's salary was reduced from $175,000 to $150,000. Foust testified he had “no idea” why it was done as no one had a discussion with him about his salary. “As to all of the changes in his compensation, Foust testified that he ‘understood that this was the deal’ but he didn't agree with it. He never put anything in writing objecting to the manner he was paid while working for [San Jose Construction] and did not make any claim for unpaid compensation until this lawsuit and after DiManto's death.”

After first noting that “Foust's claim [of breach of contract] rests largely on his credibility,” the trial court's statement of decision lists several examples of how Foust's trial testimony was not credible. The court found that the letter agreement was modified when Foust signed the policies and procedures manual that made him an at-will employee. Thereafter, San Jose Construction “unilaterally changed the terms of Foust's compensation, as it had the right to do for an at-will employee, first in 2000 and then in subsequent years and paid Foust consistent with those changes. Foust knew of these changes and accepted them by continuing to work at [San Jose Construction]. Therefore, there was no breach of his employment contract.”

After judgment was entered in favor of San Jose Construction, Foust timely appealed.

II. DiscussionA. The incomplete record is fatal to the appeal

Foust argues that the letter agreement was never modified by a writing, there was no mutual assent given to any modification of the terms of that agreement and no consideration was ever given to him in exchange for changing the terms of the agreement. According to Foust, his trial testimony was clear that he never agreed to any change in the terms of his compensation and he was repeatedly assured by DiManto that the letter agreement was valid. Foust contends that the trial court erred in finding that the letter agreement was modified when he signed San Jose Construction's policy and procedure manual.2

The fatal problem with this appeal is that Foust fails to provide us with a reporter's transcript from his court trial or any other adequate statement of the evidence. The record consists solely of a partial clerk's transcript which includes the following documents: Foust's initial complaint; his amended complaint; the statement of decision; the judgment; and two of the exhibits 3 introduced at trial. Generally, appellants in ordinary civil appeals must provide a reporter's transcript at their own expense. ( City of Rohnert Park v. Superior Court (1983) 146 Cal.App.3d 420, 430–431, 193 Cal.Rptr. 33.) In lieu of a reporter's transcript, an appellant may submit an agreed or settled statement. ( Leslie v. Roe (1974) 41 Cal.App.3d 104, 116 Cal.Rptr. 386; Cal. Rules of Court, rules 8.134 & 8.137.)

In numerous situations, appellate courts have refused to reach the merits of an appellant's claims because no reporter's transcript of a pertinent proceeding or a suitable substitute was provided. ( Maria P. v. Riles (1987) 43 Cal.3d 1281, 1295–1296, 240 Cal.Rptr. 872, 743 P.2d 932 [attorney fee motion hearing]; Ballard v. Uribe (1986) 41 Cal.3d 564, 574–575, 224 Cal.Rptr. 664, 715 P.2d 624 (lead opn. of Grodin, J.) [new trial motion hearing]; In re Kathy P. (1979) 25 Cal.3d 91, 102, 157 Cal.Rptr. 874, 599 P.2d 65 [hearing to determine whether counsel was waived and the minor consented to informal adjudication]; Vo v. Las Virgenes Municipal Water Dist. (2000) 79 Cal.App.4th 440, 447, 94 Cal.Rptr.2d 143 [trial transcript when attorney fees sought]; Estate of Fain (1999) 75 Cal.App.4th 973, 992, 89 Cal.Rptr.2d 618 [surcharge hearing]; Hodges v. Mark (1996) 49 Cal.App.4th 651, 657, 56 Cal.Rptr.2d 700 [nonsuit motion where trial transcript not provided]; Null v. City of Los Angeles (1988) 206 Cal.App.3d 1528, 1532, 254 Cal.Rptr. 492 [reporter's transcript fails to reflect content of special instructions]; Buckhart v. San Francisco Residential Rent etc., Bd. (1988) 197 Cal.App.3d 1032, 1036, 243 Cal.Rptr. 298 [hearing on Code Civ. Proc., § 1094.5 petition]; Sui v. Landi (1985) 163 Cal.App.3d 383, 385–386, 209 Cal.Rptr. 449 [motion to dissolve preliminary injunction hearing]; Rossiter v. Benoit (1979) 88 Cal.App.3d 706, 713–714, 152 Cal.Rptr. 65 [demurrer hearing]; Calhoun v. Hildebrandt (1964) 230 Cal.App.2d 70, 71–73, 40 Cal.Rptr. 690 [transcript of argument to the jury]; Ehman v. Moore (1963) 221 Cal.App.2d 460, 462, 34 Cal.Rptr. 540 [failure to secure reporter's transcript of settled statement].)

The reason for this follows from the cardinal rule of appellate review that a judgment or order of the trial court is presumed correct and prejudicial error must be affirmatively shown. ( Denham v. Superior Court (1970) 2 Cal.3d 557, 564, 86 Cal.Rptr. 65, 468 P.2d 193.) “In the absence of a contrary showing in the record, all presumptions in favor of the trial court's action will be made by the appellate court. [I]f any matters could have been presented to the court below which would have authorized the order complained of, it will be presumed that such matters were presented.’ ( Bennett v. McCall (1993) 19 Cal.App.4th 122, 127, 23 Cal.Rptr.2d 268.) This general principle of appellate practice is an aspect of the constitutional doctrine of reversible error. ( State Farm Fire & Casualty...

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