Gullwing International Motors, Ltd. v. Ostermeier, B206441 (Cal. App. 9/17/2009)
| Decision Date | 17 September 2009 |
| Docket Number | B206441 |
| Parties | GULLWING INTERNATIONAL MOTORS, LTD., Plaintiff and Respondent, v. ANTON OSTERMEIER et al., Defendants and Appellants. |
| Court | California Court of Appeals Court of Appeals |
Appeal from a judgment of the Superior Court of Los Angeles County, No. BC296709, Robert L. Hess, Judge, and Murray Gross, Commissioner. Affirmed in part and reversed in part.
John L. Dodd & Associates and John L. Dodd for Defendants and Appellants.
Baker & Hostetler, Michael R. Matthias and Thomas D. Warren for Plaintiff and Respondent.
Defendants and appellants Anton Ostermeier, Anton Ostermeier doing business as O.P. Rental Co., Tony's Auto Painting, and Gullwing Cars, Inc. (collectively Ostermeier) appeal from a trial court judgment in favor of plaintiff and respondent Gullwing International Motors, Ltd. (Gullwing). Ostermeier argues: (1) Ostermeier was entitled to judgment because Gullwing's action was time-barred; (2) the damage award was excessive and improper; (3) the trial court erroneously allowed the testimony of expert Brian Davidoff (Davidoff); (4) the trial court erroneously allowed Gullwing to recover certain costs, including prejudgment interest; (5) the trial court erroneously allowed Gullwing to recover attorney fees incurred by George Rosenstock (Rosenstock) and his "respective law firms" and DeCastro, West, Chodorow Inc. (DeCastro); and (6) the trial court erred is granting Gullwing's postjudgment motion for an assignment and in denying Ostermeier's subsequent motion for reconsideration of that order.
We reverse the trial court's order awarding Gullwing attorney fees incurred by Rosenstock and DeCastro. Gullwing did not provide adequate authentication and foundation for those legal bills. Thus, they must be stricken from Gullwing's attorney fee award.
In all other respects, the judgment is affirmed.
In accord with the usual rules of appellate review, we state the facts in the light most favorable to the judgment. (People v. Ochoa (1993) 6 Cal.4th 1199, 1206.)
In 1977 or 1978, Ostermeier began building replicas of the Mercedes Benz Gullwing vehicle originally produced in the 1950's. By 1991, he was regularly manufacturing and selling them, including selling 36 cars in one year and 125 cars over a six-year period. In the later part of 1996, Ostermeier contacted Joseph R. Edington (Edington) to ask if he had any interest in purchasing the business. Ostermeier claimed that he wanted to sell the business so that he could spend more time flying his airplanes and visiting his children.
Edington was interested, and had a number of meetings with Ostermeier to better understand the business and the implementation of a growth plan for the business. Edington spent a significant amount of time with Ostermeier, reviewing the accounting as well as the costs involved in producing a replica car.
Ostermeier assured Edington that the business was profitable. He also assured Edington that the strategic business plan, which projected $7 million in profits for the third year alone, was achievable. Ostermeier's exact words to Edington were:
Based upon these assurances and others, Edington decided to purchase the business. On April 1, 1997, Ostermeier and Gullwing, a company of Edington that was not an operating entity, executed an agreement for the purchase of the business assets for $3.3 million. Under the asset purchase agreement, Gullwing paid Ostermeier $1.5 million in cash at the time of sale and executed a promissory note in the amount of $1.8 million, payable in installments, to Ostermeier. In addition, Ostermeier signed an employment agreement, pursuant to which he agreed to be responsible for the day-to-day management of the business and provide his technical expertise. The plan was for a two-year transition period in which Ostermeier would pass his experience to a group of employees who could run the business after Ostermeier's departure.
Following the purchase, Gullwing deposited $400,000 into an operating account for the ongoing operation of the business. However, the business appeared to operate at a significant loss, requiring Edington to fund Ostermeier's "very regular" distress calls for additional operating capital. In total, over the next three years, Gullwing deposited over $1.3 million into the operating accounts of the business.
In view of the business's losses, Edington could no longer afford to make payments on the promissory note that Gullwing had given for the balance of the purchase price of the business. Starting in the latter half of 1998 and continuing through 1999, Ostermeier issued default notices and attempted to foreclose on a security agreement covering the business assets.
Thereafter, Edington paid $400,000 down on the promissory note and infused the company with $200,000 in additional capital. In exchange, Ostermeier rescinded the notice of foreclosure and reinstated Gullwing's ownership of the business as if the default had never occurred. In addition, Ostermeier agreed to provide Gullwing with an accounting of the financial activity of the company during the default period.
Edington made repeated requests for the financial accounting from Ostermeier. In April 2000, an accountant for both the replica business and Ostermeier's other ventures, Sarah Chavez (Chavez), informed Edington that she had concerns about the manner in which Ostermeier was operating the business. Edington decided to review the additional accounting from Ostermeier before arriving at any conclusions.
Finally, on or about June 1, 2000, Ostermeier produced a financial summary prepared by his accountant, Benson Wohl (Wohl), regarding the activity of the business during the "default" period.
Because Edington was suspicious of the report's conclusions, he asked Chavez to review Wohl's summary. In the middle of June 2000, Chavez submitted a report to Edington on Wohl's summary that revealed "that there was a lot of money missing, a lot of misrepresentations." Edington was "in shock." Among other things, Ostermeier was paying for labor and materials for his other businesses out of Gullwing's business account. He also was creating fraudulent invoices for Gullwing cars so that he could secretly pocket the proceeds for the sale of Gullwing cars. It became clear to Edington "why we had these hundreds of thousands of dollars in losses."
On November 9, 2000, Gullwing filed a complaint against Ostermeier in federal court. The federal litigation concluded on January 14, 2003, when the district court dismissed the matter for lack of jurisdiction.
Gullwing filed the instant state court action on June 2, 2003. It later filed a first amended complaint. Ostermeier's demurrer was overruled on June 9, 2004, and Ostermeier filed an answer.
A jury trial commenced in November 2007. Ultimately, the jury found in favor of Gullwing, awarding it compensatory damages in the amount of $17,178,000 and punitive damages in the amount of $1 million. Judgment was entered on January 2, 2008.
On January 22, 2008, Gullwing filed a memorandum of costs. In response, Ostermeier filed a motion to tax costs, which the trial court granted in part and denied in part.
Ostermeier's motions for a new trial and for judgment notwithstanding the verdict were denied.
On February 29, 2008, the trial court granted Gullwing's ex parte request for an order directing Ostermeier to turn over to the Orange County Sheriff's Department the original note secured by deed of trust executed by Calvary Church in South Bay in favor of Ostermeier and his wife. One month later, Gullwing sought and obtained an ex parte order preventing Ostermeier from assigning or disposing of any rights he had purchased to a note secured by deed of trust. Then, on May 9, 2008, the trial court ordered Ostermeier to assign the note secured by the deed of trust to Gullwing.
On April 18, 2008, the trial court granted Gullwing's motion for attorney fees in part, awarding Gullwing $457,615.25 in attorney fees.
Ostermeier timely appealed from the judgment, the orders on Ostermeier's motion to tax costs and Gullwing's motion for attorney fees, and the May 9, 2008, assignment order.
Ostermeier contends that the judgment must be reversed because Gullwing's action was time-barred. He assigns three errors: (1) The trial court erred in overruling his demurrer to Gullwing's first amended complaint; (2) the trial court erred in refusing to dismiss the complaint after trial; and (3) the trial court erred in refusing to give jury instructions on the issue of the statute of limitations.
In their unnecessarily lengthy appellate briefs, both parties blur their analyses of the statute of limitations issue.1 They do not set forth distinct discussions of the challenged orders, and they neglect to provide us with appropriate legal authority, including the standard of review. As a result, they left us with what amounts to an academic debate regarding the two competing interpretations of the federal tolling statute (28 U.S.C. § 1367(d)), requiring us to sort through the issues to present them properly.
[¶] . . . (Casterson v. Superior Court (2002) 101 Cal.App.4th 177, 182.)
(E-Fab, Inc. v. Accountants, Inc. Services, supra, 153 Cal.App.4th at p. 1315.) In other words, "...
To continue reading
Request your trial