Garcia v. Myllyla

• Decision Date: 04 October 2019
• Docket Number: B292322
• Citation: 254 Cal.Rptr.3d 36,40 Cal.App.5th 990
• Court: California Court of Appeals Court of Appeals
• Parties: William GARCIA et al., Plaintiffs and Respondents, v. Reijo K. MYLLYLA et al., Defendants and Appellants.

40 Cal.App.5th 990

254 Cal.Rptr.3d 36

William GARCIA et al., Plaintiffs and Respondents,

v.Reijo K. MYLLYLA et al., Defendants and Appellants.

B292322

Court of Appeal, Second District, Division 2, California.

Filed October 4, 2019

James G. Lewis, for Defendants and Appellants.

Musick, Peeler & Garrett, Dan Woods ; Inner City Law Center, Kimberly A. Miller, Los Angeles, Hannah Courtney; Alder Law, Los Angeles, Michael Alder and Alexis Gamliel, for Plaintiffs and Respondents.

LUI, P. J.

Nine individual tenants (collectively, Plaintiffs) prevailed in a jury trial on claims against the former owners of an illegally operated building stemming from uninhabitable conditions in the building. The former owners, Reijo Myllyla and the Estate of Hellen Terttu Hill (collectively, Myllyla), appeal from the judgment, arguing that: (1) the jury’s award of punitive damages was not supported by the evidence and was excessive; (2) the jury’s award of noneconomic damages was not supported by the evidence; (3) the trial court should have granted a set-off to the damage award based upon amounts paid by prior settling defendants; and (4) repeated references to Myllyla as a liar during trial resulted in unfair prejudice. We reject each of Myllyla’s arguments and affirm.

BACKGROUND

1. The Evidence

Until February 26, 2015, Myllyla owned a two-family residential building on Hartford Avenue in Los Angeles (the Building). Although it was zoned as a duplex, Myllyla illegally rented it as 12 separate units.

Only two units in the Building had kitchens, and there were only two community rest rooms. There was evidence that human waste had been thrown out of the Building and had collected on the back. There were openings that permitted rodents and vermin to enter. Steps to the Building were infected with dry rot and were close to collapsing. The Building contained illegal electrical work. An inspection by Plaintiffs’ expert revealed dead and live cockroaches throughout the Building and dirty bathrooms.

As discussed further below, each of the Plaintiffs testified about his or her experiences in the building, which included cockroaches, bed bugs and other vermin; mold; and filthy conditions in common areas. Tenants were forced to wash their dishes outside the Building. There were several months when the Building had no power or water and residents had to purchase buckets of water from Myllyla’s daughter. One tenant had a cockroach removed from her ear.¹

Records from the City of Los Angeles Housing Department (Department) showed that Myllyla repeatedly and falsely told the Department that the Building was occupied only by family members. The Department does not have jurisdiction to inspect or respond to complaints about such a building. Myllyla admitted that he lied to the Department about the Building’s occupancy to avoid inspection. He acknowledged that he operated the Building illegally for 13 years because he could not bring it up to code.

2. Proceedings Below

Plaintiffs’ first amended complaint (Complaint) named Myllyla along with the current owners who purchased the Building from Myllyla in February 2015. The current owners settled and were dismissed in January 2018.

The claims against Myllyla were tried to a jury in a bifurcated proceeding in April and May 2018. The jury returned a special verdict in favor of each of the Plaintiffs on each plaintiff’s claims for negligence; breach of implied warranty of habitability; premises liability; negligent failure to provide habitable premises; breach of implied covenant of quiet enjoyment; intentional infliction of emotional distress; and nuisance. The jury awarded economic damages in the form of rent abatement to each plaintiff in amounts ranging from $0 to $7,000, and awarded noneconomic damages for each plaintiff of either $10,000 or $15,000. The jury also found that Myllyla engaged in conduct amounting to malice, oppression or fraud.

Following the second phase of the bifurcated trial, the jury awarded each plaintiff $95,000 in punitive damages.

DISCUSSION

1. The Punitive Damage Awards Were Proper

A. Myllyla forfeited his argument that Plaintiffs failed to introduce evidence of his net worth

Myllyla argues that the punitive damage awards were improper because Plaintiffs did not prove Myllyla’s net worth. The record shows that Plaintiffs were excused from this requirement because Myllyla refused to produce evidence of his financial condition.

A plaintiff who seeks punitive damages ordinarily must introduce evidence of a defendant’s net worth. ( Adams v. Murakami (1991) 54 Cal.3d 105, 284 Cal.Rptr. 318, 813 P.2d 1348.) This rule is based on the fact that "[a] reviewing court cannot make a fully informed determination of whether an award of punitive damages is excessive unless the record contains evidence of the defendant’s financial condition." ( Id. at p. 110, 284 Cal.Rptr. 318, 813 P.2d 1348.) That is because whether a punitive damage award " ‘exceeds the level necessary to properly punish and deter’ " depends upon a particular defendant’s financial circumstances. ( Ibid. , quoting Neal v. Farmers Ins. Exchange (1978) 21 Cal.3d 910, 928, 148 Cal.Rptr. 389, 582 P.2d 980.)

However, a defendant who thwarts a plaintiff’s ability to meet this obligation may forfeit the right to complain about the lack of evidence of his or her financial condition. In Mike Davidov Co. v. Issod (2000) 78 Cal.App.4th 597, 92 Cal.Rptr.2d 897, the plaintiff prevailed on its claim for fraud following a court trial. The trial court then ordered the defendant to produce documents concerning his net worth for a hearing on punitive damages. The defendant did not comply with the order. ( Id. at pp. 603–604, 92 Cal.Rptr.2d 897.) The appellate court held that the defendant was therefore estopped from objecting to the absence of evidence of his financial condition. ( Id. at p. 600, 92 Cal.Rptr.2d 897.) The court concluded: "By his disobedience of a proper court order, defendant improperly deprived plaintiff of the opportunity to meet his burden of proof on the issue. Defendant may not now be heard to complain about the absence of such evidence." ( Id. at p. 609, 92 Cal.Rptr.2d 897.)

Similarly, in Corenbaum v. Lampkin (2013) 215 Cal.App.4th 1308, 156 Cal.Rptr.3d 347 ( Corenbaum ), the court held that a defendant was estopped from arguing that the evidence of his financial condition was insufficient to support a punitive damage award because he failed to comply with a subpoena requiring him to produce records of his financial condition at trial. ( Id. at pp. 1337–1338, 156 Cal.Rptr.3d 347.) The court explained that "for purposes of requiring attendance and the production of documents at trial, a subpoena is equivalent to a court order." ( Id. at p. 1338, 156 Cal.Rptr.3d 347.) In light of the defendant’s failure to comply with the subpoena, the court concluded that "he is estopped from challenging the punitive damage awards based on lack of evidence of his financial condition or insufficiency of the evidence to establish his ability to pay the amount awarded." ( Ibid. ; see Fernandes v. Singh (2017) 16 Cal.App.5th 932, 942, 224 Cal.Rptr.3d 751 ["A defendant is in the best position to know his or her financial condition, and cannot avoid a punitive damage award by failing to cooperate with discovery orders"].)²

The same rule applies here. Before trial, Plaintiffs served two notices on Myllyla pursuant to Code of Civil Procedure section 1987, which establishes a procedure to compel a party to attend trial and produce documents at trial in lieu of service of a subpoena.³ Notice under this section has "the same effect as service of a subpoena on the witness." ( § 1987, subd. (b).) The first notice, served on March 29, 2018, sought Myllyla’s presence to testify at trial on April 17, 2018. The second notice, served on April 13, 2018, sought Myllyla’s presence at trial along with production of a variety of documents relating to his financial condition.

After the jury returned its verdict on May 1, 2018, the trial court discussed with counsel their plans to proceed with the punitive damages phase of trial. Plaintiffs’ counsel advised the court that Plaintiffs had requested documents from Myllyla relating to punitive damages, but "defense counsel has indicated there won’t be any provided." Plaintiffs’ counsel also told the court that he understood Myllyla himself did not intend to appear, and that the proceeding therefore "will only be argument."

The next day, Plaintiffs’ counsel confirmed that Myllyla had not provided any documents, even though Plaintiffs had "served a notice to appear at trial with a request for documents in lieu of a subpoena." Myllyla’s counsel responded that "the notice she served did not ask for a single document that established net worth as of the present." At Myllyla’s request, the court reviewed the notice and noted that it designated a number of financial documents, including tax returns, financial statements and account statements. The court concluded that it "certainly asks for assets and liabilities."

Plaintiffs’ counsel also confirmed that Myllyla would not be appearing, stating that "there is no evidence because the defense has refused to provide it." Myllyla’s counsel responded by stating only that "[i]f she had the documents, there is no need to take testimony."

Thus, the record shows that Myllyla failed to comply with the notice to appear and Plaintiffs’ demand for documents, which was the equivalent of a court order. Nor did he object to the validity of the notice or the demand at trial. His refusal to produce documents or to appear to testify is the reason that Plaintiffs did not have evidence of his net worth. Myllyla is therefore estopped from challenging the punitive damage award on the ground that Plaintiffs failed to introduce such evidence.

Myllyla argues that Plaintiffs’ notice was invalid because it was served on April 13, only four days before trial, and it therefore did not provide the required 20-day notice...