Goto v. Soto

• Decision Date: 28 November 2017
• Docket Number: G053961
• Parties: CHERYLL GOTO, as Trustee, etc., Plaintiff and Appellant, v. WILLIAM SOTO, Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

CHERYLL GOTO, as Trustee, etc., Plaintiff and Appellant, v. WILLIAM SOTO, Defendant and Respondent.

G053961

COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION THREE

November 28, 2017

ORDER MODIFYING OPINION AND DENYING REHEARING; NO CHANGE IN JUDGMENT

It hereby is ordered that the opinion filed in the above-entitled matter on November 28, 2017, is MODIFIED as follows:

1. On page 8, the second sentence of the third paragraph, beginning with "For this reason, a trial court's failure," delete the entire sentence.

2. On page 8, at the end of the third paragraph, after the case citations, add the following sentence and case citation:

Nonetheless, "a trial court's error in failing to issue a requested statement of decision is not reversible per se, but is subject to harmless error review." (F.P. v. Monier (Nov. 27, 2017, S216566) ___ Cal.4th ___, ___ [2017 Cal. Lexis 8923, *16.)

3. On page 11, the sixth and seventh sentences of the second paragraph, beginning with "On these facts" and "We therefore reverse," delete both sentences so that the paragraph ends after the fifth sentence, beginning with "Nonetheless, she later filed."

4. On page 11, insert the following new paragraph as the third paragraph on the page between the paragraphs beginning with "Goto, unlike the appellant" and "The trial judge who presided":

On these facts, we conclude Goto did not waive her right to a statement of decision and the trial court committed prejudicial error by failing to provide one. Indeed, the court's error in preventing the parties from making closing arguments and requesting a statement of decision hardly can be considered harmless because the court not only prevented the parties from identifying the issues they wanted it to decide, but the trial court also prevented this court from determining the basis for the judgment. We therefore reverse and remand for the court to hear the parties' closing arguments and issue a statement of decision based on any request the parties make before the court submits the case for decision.

5. On page 12, at the end of the final sentence of the partial paragraph at the top of the page, beginning with "Accordingly, if the trial judgment who heard this matter," add the following footnote number 1:

¹ Soto filed a rehearing petition arguing we must grant rehearing under Government Code section 68081 (section 68081) because he "was never afforded the opportunity to brief the issues regarding the statement of decision." He is mistaken. Section 68081 requires rehearing when an appellate court "renders a decision in a proceeding . . . based upon an issue which was not proposed or briefed by any party to the proceeding." The parties do not "have a right under section 68081 to submit supplemental briefs or be granted a rehearing each time an appellate court relies upon authority or employs a mode of analysis that was not briefed by the parties. The parties need only have been given an opportunity to brief the issue decided by the court, and the fact that a party does not address an issue, mode of analysis, or authority that is raised or fairly included withinthe issues raised does not implicate the protections of section 68081." (People v. Alice (2007) 41 Cal.4th 668, 679; see Mark v. Spencer (2008) 166 Cal.App.4th 219, 228, fn. 4; Plumas County Dept. of Child Support Services v. Rodriquez (2008) 161 Cal.App.4th 1021, 1029, fn. 1.)

Although Goto did not cite the authorities we discuss, the final section of her opening brief is entitled "The Court Was Unable To Articulate Any Reasoning Upon Goto's Request." In response to this section, Soto's brief argued that Goto waived her right to a statement of decision and therefore we must imply findings to support the judgment. Accordingly, the trial court's obligation to provide a statement of decision and the consequences of its failure to do so are fairly included within the statement of decision issues the parties raised and section 68081 does not apply.

These modifications do not change the judgment.

The rehearing petition filed by respondent William Soto is DENIED.

ARONSON, J.

WE CONCUR:

O'LEARY, P. J.

MOORE, J.

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.

(Super. Ct. No. 30-2013-00692098)

OPINION

Appeal from a judgment of the Superior Court of Orange County, Richard Luesebrink, Judge. (Retired judge of the Orange Super. Ct. assigned by the Chief Justice pursuant to Cal. Const., art. VI, § 21.) Reversed and remanded. Motion for sanctions. Denied.

Law Offices of John A. Belcher, John A. Belcher and Nicholas W. Song for Plaintiff and Appellant.

Baker & Baker, William E. Baker, Jr., and Brook John Changala for Defendant and Respondent.

* * * Plaintiff Cheryll Goto, as Trustee of the Robert K. Garren Revocable Trust (Trust), sued defendants William Soto for breach of an unsecured promissory note. The trial court conducted a bench trial on Goto's claim and announced at the close of evidence a tentative decision in Soto's favor. The court stated Goto failed to meet her burden, but provided no other explanation for its decision.

The trial court, however, announced its tentative decision without allowing the parties to make their closing arguments. When Goto attempted to make her argument, the court interrupted her and stated she had the court's tentative decision. The court further stated it assumed the parties would request a statement of decision and ordered Soto's counsel to prepare a proposed statement of decision. Soto's counsel promptly did so, but the court entered judgment without acknowledging or taking any action on the proposed statement.

We conclude the trial court erred in failing to provide a statement of decision and remand for the trial court to hear the parties' closing argument and then provide a statement of decision based any requests the parties make before the court submits the matter. If the trial judge who heard this matter no longer is sitting by assignment or otherwise is legally unavailable to hear this matter and issue a statement of decision, we remand for a new trial. As we explain, the court may not defeat a party's right to a statement of decision by announcing its tentative decision and submitting the matter before the parties have an opportunity to present closing argument and request a statement of decision.

Soto filed a motion for sanctions, arguing this appeal is frivolous and Goto unreasonably violated the rules of appellate practice. We deny the motion because the appeal is not frivolous as demonstrated by our decision. Although Goto's brief improperly relies on evidence she failed to present to the trial court, her conduct does not warrant sanctions.

IFACTS AND PROCEDURAL HISTORY

In the fall of 2006, Soto agreed to pay $1 million to purchase a commercial property from Robert Garren by making a $250,000 down payment and giving Garren an unsecured promissory note for the $750,000 balance. During the sales negotiations, Soto prepared three different payment schedules for the $750,000 balance. Soto and Garren signed two of the schedules to show they were acceptable. In December 2006, Soto deposited into escrow a $250,000 down payment and a signed and notarized promissory note for the balance. The note was an unsecured, installment note; no trust deed or other security was provided. None of the payment schedules Soto and Garren discussed were attached to the note that Soto signed and deposited into escrow. When escrow closed, Garren received the original note and Soto received title to the property.

After taking possession, Soto discovered many undisclosed problems that prevented him from renting much of the property, including broken sewers, a leaking roof, mold, and an unusable electrical system. In earlier 2007, Soto took out a loan on the property to pay Garren an additional $250,000 toward the purchase and to make about $200,000 in repairs so he could rent the property. Soto eventually rented all of the property's suites, except one suite that Garren used to store his personal property. Garren had not removed his property despite Soto's repeated requests. Consequently, Soto lost between $1,800 and $2,000 in monthly rent.

A downturn in the economy and the lost rent from the suite Garren used for storage eventually caused Soto to fall behind on the loan he took out on the property. In December 2008, the lender recorded a notice of default after Soto fell nearly $16,000 behind in his payments. Soto contacted the lender, but it was unwilling to work with him to bring the loan current. In March 2009, Soto spoke to Garren about his difficulties with the property, and sent Garren a copy of the loan statement showing the amount of arrears.

A few days later, Soto met with Garren and asked him to take the property back because Garren could not bring the loan current. Soto asked an escrow company to prepare a deed reconveying the property to Garren, and the company prepared two deeds—one conveying the property to both Garren and Soto as joint tenants and one conveying the property solely to Garren. Soto signed both deeds, but only notarized the joint tenancy deed. Garren agreed to accept the property back and said he would see what he could do to bring the loan current. Soto gave Garren both deeds and Garren returned the original promissory note to Soto. Soto and Garren did not enter into any written agreement regarding this exchange, but afterward Soto heard nothing from Garren about the property for nearly five years.

In December 2013, Garren filed this lawsuit against Soto alleging claims for fraud, constructive fraud, breach of fiduciary duty, elder abuse, and breach of contract for failing to pay off the promissory note. After...