Gonzales v. Falzone, E043848 (Cal. App. 2/9/2009)

• Decision Date: 09 February 2009
• Docket Number: E043848.
• Court: California Court of Appeals Court of Appeals
• Parties: JAMES A. GONZALES, Plaintiff and Appellant, v. THOMAS FALZONE, Defendant and Respondent.

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JAMES A. GONZALES, Plaintiff and Appellant, v. THOMAS FALZONE, Defendant and Respondent.

E043848.

Court of Appeals of California, Fourth Appellate District, Division Two

February 9, 2009

Not to be Published in Official Reports

Appeal from the Superior Court of Riverside County, No. RIC416157. Joan F. Burgess, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed.

Ackerman, Cowles & Lindsley, Richard D. Ackerman and Michael W. Sands, Jr., for Plaintiff and Appellant.

Ward & Ward and Alexandra S. Ward for Defendant and Respondent.

OPINION

RICHLI, J.

Plaintiff James Gonzales and defendant Thomas Falzone made a number of joint investments. After they had a falling out, they agreed to unwind their business relationship; at trial, however, they had differing views as to exactly how they had agreed to do so and as to whether the other party had abided by the agreement.

After a bench trial, the trial court largely accepted Falzone's version of events. Hence, it awarded Falzone all of the investment properties and other assets that he claimed Gonzales had agreed to transfer to him after the falling out. However, it also found that Falzone had not paid Gonzales for some of these assets; hence, it awarded Gonzales a money judgment against Falzone.

Only Gonzales appeals. He contends that:

1. The trial court erred by awarding the "Bonanza property" to Falzone, because:

a. Falzone had made a binding judicial admission that he owned only 45 percent of that property.

b. Falzone had never paid the consideration agreed upon for that property.

2. The trial court's award to Falzone of 25 percent of the "Murrieta property" violated the statute of frauds.

3. The trial court used the wrong measure of damages in calculating the money judgment.

4. The trial court erred by refusing to award Gonzales costs.

We will conclude that Gonzales has failed to show any reversible error. Accordingly, we will affirm.

I FACTUAL BACKGROUND

In accordance with the substantial evidence standard of review, which applies to findings of fact, we resolve all conflicting evidence and inferences in favor of the trial court's findings. (Bickel v. City of Piedmont (1997) 16 Cal.4th 1040, 1053.)

Gonzales and Falzone met through a mutual friend. They shared common interests in water skiing and skydiving. Together, they "got involved in buying several properties over a fairly short period of time . . . ." (The properties still at issue are discussed in more detail below.) Around March 23, 2001, however, they had a falling out.

A. The Murrieta Property and Nursery Business.

On January 31, 2001, Gonzales purchased a lot, including an existing nursery, at 30510 Murrieta Road in Menifee (the Murrieta property). The parties orally agreed that Falzone would pay Gonzales $60,000, and, in exchange, he would receive a 25 percent interest in the Murrieta property.

Falzone did pay the $60,000.¹ Accordingly, Gonzales executed a deed conveying 25 percent of the Murrieta property to Falzone. However, Gonzales kept the original deed. He told Falzone that he would record it, but for tax reasons, he could not do so immediately.²

Falzone was given a copy of the deed. On December 7, 2004 — i.e., after this action had already been filed — Falzone managed to record his copy of the deed, even though it was not an original.

Meanwhile, Gonzales and Falzone had also agreed to be co-owners of a nursery business, which Falzone was to operate on a specified 25 percent portion of the Murrieta property. Gonzales invested $21,400 in the nursery business.³

After the falling out, the parties agreed that Falzone would repay Gonzales's investment, and in return Falzone would become sole owner of the nursery business. However, Falzone never actually repaid Gonzales's $21,400.

B. The Bonanza Property.

On March 16, 2001, the parties purchased a house at 29611 Bonanza Place in Canyon Lake (the Bonanza property). Title was taken in Gonzales's name. However, they agreed that they would share the ownership, with Gonzales having 55 percent and Falzone having 45 percent. They each paid approximately $20,000 toward a total down payment of approximately $40,000.

After the falling out, the parties agreed that Falzone would repay Gonzales's $20,000 share of the down payment, and in return Falzone would become sole owner of the Bonanza property. However, because Gonzales had not yet recorded the deed to the Murrieta property, it was agreed that Falzone would not have to pay the $20,000 for the Bonanza property until he did.

Accordingly, on May 3, 2001, Gonzales deeded the Bonanza property to Falzone.⁴ Gonzales then removed his personal items from house and gave Falzone the keys. Falzone moved into the house and spent over $100,000 on improvements to it. Gonzales did not contribute to any of the subsequent mortgage, property tax, or insurance payments on the Bonanza property.⁵

After Falzone recorded his copy of the deed to the Murrieta property, he offered to pay Gonzales the $20,000 for the Bonanza property, but Gonzales just "laughed in [his] face."

II PROCEDURAL BACKGROUND

In July 2004, Gonzales filed this action against Falzone. The complaint, as subsequently amended, asserted four causes of action: (1) for breach of partnership agreement; (2) for partition of the Bonanza property; (3) to cancel the recorded deed to 25 percent of the Murrieta property; and (4) to quiet title to the Murrieta property. Falzone filed a cross-complaint.

After a seven-day bench trial, the trial court entered judgment. It refused to cancel the recorded deed conveying 25 percent of the Murrieta property to Falzone; it explained: "[A]lthough the Court does believe that a copy rather than the original deed was recorded, since the Court is also finding a 25/75% interest between the parties as reflected in the deed, it would be an idle act to cancel the deed simply to require the plaintiff to record the original . . . ." However, it did require Falzone to pay Gonzales $21,400 for his share of the nursery business. Similarly, it awarded 100 percent of the Bonanza property to Falzone, while requiring Falzone to pay Gonzales $20,000 for it. It found against Falzone on his cross-complaint. Finally, it ruled: "Pursuant to Code of Civil Procedure § 1032, neither party is the clear prevailing party. On that basis each party shall bear his own attorney's fees and costs."

III JUDICIAL ADMISSION

Gonzales contends that Falzone made a binding judicial admission that he owned only a 45 percent interest in the Bonanza property.

A. Additional Factual and Procedural Background.

1. The pleadings.

In the operative complaint, Gonzales alleged:

Paragraph 17: "Plaintiff . . . is the owner of an undivided fifty-five percent interest in [the Bonanza] property . . . ."

Paragraph 18: "Defendant . . . has an undivided forty-five percent interest in [the Bonanza] property . . . ."

Falzone filed a verified answer. In it, he admitted paragraphs 17 and 18. However, as an affirmative defense, he further alleged: "[A]fter the making of the agreement for the co-ownership of the [Bonanza] property . . ., a bona fide dispute arose between Plaintiff and Defendant . . . . An accord was entered into between Plaintiff and . . . Defendant whereby Plaintiff agreed to, and did, execute a Grant Deed conveying all right, title and interest in said real property to Defendant . . . ."

At the same time as he filed his answer, Falzone also filed an unverified cross-complaint alleging: "Cross-Defendant relinquished all right, title and interest in and to the Bonanza [p]roperty by virtue of that Grant Deed executed by Cross-Defendant on May 3, 2001 . . . ."

2. The trial court's rulings.

At the beginning of trial, Gonzales filed a "Brief Regarding Judicial Admissions." (Capitalization omitted.) In it, he argued that Falzone had made a binding judicial admission as to paragraphs 17 and 18. Falzone filed a written opposition, arguing that his admission was inadvertent, as well as inconsistent with other allegations in his answer and cross-complaint. The trial court ruled that the admission was not a binding judicial admission because it was not unequivocal.

On the last day of trial, Falzone filed a motion to amend his answer to conform to proof by changing his admission of paragraphs 17 and 18 to a denial. The trial court granted the motion, although it observed, ". . . I don't think it makes a difference . . . ." It stated, "[I]t's clear to me there was not an unequivocal admission . . . ."

B. Analysis.

"The admission of fact in a pleading is a `judicial admission.'" (Valerio v. Andrew Youngquist Construction (2002) 103 Cal.App.4th 1264, 1271.) "`"A judicial admission in a pleading . . . is not merely evidence of a fact; it is a conclusive concession of the truth of a matter which has the effect of removing it from the issues. . . ."' [Citation.]" (Addy v. Bliss & Glennon (1996) 44 Cal.App.4th 205, 218.) Hence, "`[w]hen allegations in a complaint are admitted by the answer (a) no evidence need be offered in their support; (b) evidence is not admissible to prove their untruth; (c) no finding thereon is necessary; (d) a finding contrary thereto is error.' [Citation.]" (Valerio, at p. 1271.)

However, "[a]n unclear or equivocal statement does not create a binding judicial admission. [Citations.]" (Stroud v. Tunzi (2008) 160 Cal.App.4th 377, 385; accord, National Union Fire Ins. Co. v. Miller (1987) 192 Cal.App.3d 866, 869-870.)

"The court must, at every stage of an action, disregard any defect in the pleadings that does not affect the substantial rights of the parties. Pleadings must be reasonably interpreted; they must be read as a whole and each part must be given the meaning that it derives from the context wherein it appears." (Fundin v. Chicago Pneumatic Tool Co. (1984) 152 Cal.App.3d 951, 955.) Falzone's admission that Gonzales owned 55 percent of the Bonanza property, while seemingly unequivocal standing alone,...