Jensen v. Charon Sols.
| Decision Date | 26 January 2023 |
| Docket Number | B320268 |
| Parties | PEACHES NONG JENSEN, Plaintiff and Respondent, v. CHARON SOLUTIONS, INC. et al., Defendants and Appellants. |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED
Order Filed Date 2/9/23
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC469884 Robert S. Draper, Judge. Affirmed.
Henry J. Josefsberg for Defendants and Appellants.
Law Offices of Yvonne M. Renfrew and Yvonne M. Renfrew for Plaintiff and Respondent.
It is ordered that the opinion filed herein on January 26, 2023, be modified as follows:
1. In the last sentence on page 13, insert the word "preclusive" between "jury's" and "special verdict," so that the full sentence reads:
Defendants argue that this was error because, without the special verdict form, Jensen was able to testify to facts contrary to that jury's preclusive special verdict findings.
* * *
There is no change in the judgment.
Appellant's petition for rehearing is denied.
This is the fourth appeal between one or more parties to a real estate deal that dates back to 2000, that spawned two lawsuits in 2008 as well as a malicious prosecution lawsuit in 2011, and that has been ping-ponging between the trial court and this court for over a decade. The last time around we affirmed the finding of liability in favor of the malicious prosecution plaintiff, reversed the compensatory damages award due to a prejudicial evidentiary error in the plaintiff's proof of out-of pocket litigation costs, and conditionally affirmed the punitive damages award. The retrial netted a smaller award of plaintiff's out-of-pocket litigation costs. This time around, the malicious prosecution defendants raise a panoply of challenges to the new damages award, none of which has merit. We accordingly affirm.
Peaches Nong Jensen (Jensen) and Perry Segal (Segal) used to be close friends.
In 2000, they agreed to develop a luxury home for sale, drawing upon Jensen's expertise as a real estate broker and Segal's expertise in construction. Jensen already owned a parcel of land in Woodland Hills (the property), and resided in a house on one portion of the property. Jensen and Segal agreed they would sever the property into two smaller parcels, and develop a new luxury home for sale on the as-yet-undeveloped parcel. To effectuate their agreement, they formed P&P Holdings, LLC (the LLC). The LLC had two members-namely, (1) Peachtree Financial Corporation (Peachtree), which was owned by Jensen; and (2) Charon Solutions, Inc. (Charon),[1] which was owned by Segal. Each member contributed $21,000 in starting capital to the LLC.
Jensen moved out of the house in 2004 and allowed Segal to rent her home at a discounted rate while he attended law school.
The project never got off the ground and, by 2005, Jensen and Segal's relationship soured.
In March 2004, Jensen suspected that the prior owner who sold her the property, Scott Silver, had not disclosed defects in the property. Jensen considered suing Silver; Segal advised against it, fearing that any litigation would impede the lot-split project they had envisioned for the property. Ignoring Segal's advice, Jensen forged ahead anyway and sued Silver; Silver then cross-claimed against Jensen. Combined, we refer to these actions as the Silver action.
In December 2005, Charon withdrew from the LLC, citing Jensen's failure to consult Segal regarding the Silver action and her unilateral decision to borrow against the property to fund that litigation. Segal then attempted to intervene in the Silver action, but his motion was denied.
Jensen ultimately settled the Silver action.
In December 2008, Segal and Charon sued Jensen and Peachtree for (1) fraud, based on (a) intentional misrepresentation and (b) suppression of facts, (2) breach of fiduciary duty, (3) conversion, (4) unjust enrichment, and (5) declaratory relief (the underlying lawsuit).[2] In support of the unjust enrichment claim, Segal and Charon alleged that it was "inequitable" for Jensen and Peachtree "to receive and retain the funds they have received, accepted and retained," and requested that Segal and Charon's "interest in the Property" be "return[ed]." In support of their declaratory relief claim, Segal and Charon alleged that the LLC obtained title to that portion of the property containing Jensen's home "by way of fraud," and requested that the court declare that Jensen and Peachtree own only the vacant portion of the property.
Jensen and Peachtree filed a cross-complaint against Segal and Charon for (1) breach of contract, (2) negligence, and (3) fraud.
In April 2009, the trial court dismissed on demurrer Segal and Charon's unjust enrichment and declaratory relief claims, reasoning that "[t]here is no unjust enrichment and nothing to declare." The trial court also dismissed on demurrer Jensen and Peachtree's negligence and fraud claims. In their amended complaint, Segal and Charon dropped Peachtree as a defendant. And they later voluntarily abandoned the conversion claim.
The former friends' dueling complaints proceeded to a jury trial on three claims-namely, (1) Segal and Charon's fraud claim, (2) their breach of fiduciary duty claim, and (3) Jensen and Peachtree's remaining claim for breach of contract.
Both sets of litigants lost, as the jury rejected all claims and awarded nothing.
In September 2011, Jensen sued Segal and Charon (collectively, defendants) for malicious prosecution of the underlying lawsuit.[3] She sought (1) compensatory damages reflecting her out-of-pocket litigation expenses in defending against the underlying lawsuit, (2) emotional distress damages, (3) damages for injury to her professional reputation, and (4) punitive damages.
The malicious prosecution case proceeded to a jury trial in 2016. The jury returned a verdict finding defendants liable and awarding Jensen (1) a general verdict of $1 million in compensatory damages; and (2) $500,000 in punitive damages, comprised of $250,000 against Charon and $250,000 against Segal.
Defendants appealed.[4] We affirmed the jury's finding of liability, but "reversed and remanded for a new trial on compensatory damages" because only two of defendants' claims in the underlying lawsuit were brought without probable cause (namely, the unjust enrichment and declaratory relief claims), yet the trial court permitted Jensen to introduce heavily redacted attorney fee bills that made it nigh impossible to break down Jensen's $400,163.51 attorney fees bills into fees for the claims brought with probable cause (for which malicious prosecution damages were unrecoverable) and fees for the claims brought without probable cause (for which malicious prosecution damages were recoverable); we concluded that the heavy redactions effectively precluded defendants from "conducting any meaningful cross-examination," and thereby denied them due process. (Jensen v. Charon Solutions, Inc. (Dec. 20, 2017, B276050) [nonpub. opn.].) We conditionally left the $500,000 punitive damages award intact, in the event the remanded proceedings resulted in a compensatory damages award in excess of $25,000.
In September 2021, the parties proceeded to a six-day jury trial on the issue of compensatory damages.
The trial court carefully defined the "[s]ole" issues before the jury in the retrial-namely, (1) whether Jensen had been damaged by defendants' "act in maliciously prosecuting the causes of action for declaratory relief and unjust enrichment" and, if so, (2) "the amount of [Jensen's] damages and whether those damages can be apportioned among the acts of [d]efendants in filing the declaratory relief and unjust enrichment causes of action and other causes."
Jensen took the stand. She testified that (1) the possibility, arising out of the relief Charon and Segal sought in the underlying lawsuit, that she might lose her house (or some portion of the property she owned) had caused her "tremendous" distress because of her experience as a child refugee forced from her home in Vietnam; (2) defendants' filing of the unjust enrichment claim against her in the underlying lawsuit "trigger[ed] . . . distress" she had previously experienced from defendants' conduct in the Silver action; and (3) the allegations against her in the underlying lawsuit could ruin her career.[5]
Throughout the trial, the court consistently enforced the limits it had imposed upon the scope of the retrial-through vigilant regulation of what was admitted into evidence and through pinpointed jury instructions. Whenever questions put to Jensen by her attorney arguably transgressed the court's limits, the court cut off examination of Jensen and provided supplemental instructions to the jury reinforcing the narrower scope of the retrial. The court also prohibited Jensen from testifying that she could recover emotional distress damages for the claims in the underlying lawsuit that were brought with probable cause, rejecting her contention that those nonactionable claims had somehow been "incorporated by reference" into the actionable unjust enrichment and declaratory relief claims; the court concomitantly instructed the jury to disregard this "incorporation by reference" argument. Throughout the trial, the...
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