De Jong v. Beach
| Decision Date | 13 September 2021 |
| Docket Number | C085462 |
| Court | California Court of Appeals Court of Appeals |
| Parties | CRAIG DE JONG, Plaintiff and Respondent, v. GEORGE BEACH et al., Defendants and Appellants. |
NOT TO BE PUBLISHED
In these consolidated appeals, George Beach, Susan Beach, Nicola Bellino, and Judith Bellino challenge the trial court's award of compensatory and punitive damages, as well as costs-of-proof, to Craig De Jong.[1] The compensatory damages were awarded after the trial court found that appellants conspired with the Bellinos' daughter, Kim Solario, to deprive De Jong of his 80 percent interest in a house located in Escalon California (the Escalon property). The trial court imposed punitive damages based on its findings that appellants and Solario engaged in conduct that was despicable and carried on in willful and conscious disregard for De Jong's right to the property. The trial court additionally found that appellants and Solario each subjected De Jong to cruel and unjust hardship in conscious disregard of his rights so that their conduct was oppressive under Civil Code section 3294, subdivision (c)(2). The trial court ordered appellants and Solario to jointly pay costs-of-proof to De Jong in amounts specified for each of them but not to exceed a collective total of $189, 532.50.
In case No. C086926, (1) the Beaches argue they owed no fiduciary duty to De Jong because this case involves a resulting trust for which California law does not create a fiduciary relationship, (2) appellants contend De Jong is barred from recovery for failure to mitigate his damages, (3) the Beaches argue that De Jong ratified their conduct through his acquiescence, (4) the Beaches argue that De Jong's negligence cause of action against them is barred by the statute of limitations, (5) the Bellinos assert that they are not liable for fraudulent transfer, money had and received or unjust enrichment because the evidence in the record did not support these claims, (6) appellants contend the trial court erred in holding them liable for causes of action not actually asserted against them by De Jong, (7) the Bellinos argue they were erroneously held liable for breach of fiduciary duty because they did not owe De Jong a fiduciary duty, (8) appellants contend insufficient evidence supported the trial court's finding that they conspired against and aided and abetted each other in depriving De Jong of his interest in the house, (9) appellants argue that the evidence was insufficient to show they acted with oppression or malice toward De Jong, (10) appellants argue that if compensatory damages are reduced based on their arguments, so too must the punitive damages be reduced to comport with constitutional due process guarantees, and (11) the trial court erred in giving De Jong a double recovery in the form of prejudgment interest and capital appreciation on a subsequent purchase by Solario of a residential property located in Ripon California (the Ripon property).
In case No. C085462, appellants contend (12) De Jong forfeited the right to recover costs-of-proof because he did not bring a motion to compel further responses, (13) they had good faith bases for denying De Jong's requests for admission, (14) appellants had “other good reasons for denying the requests” for admission, (15) the trial court erred in awarding costs-of-proof where no proof was made that De Jong forgave or excused payment owed to him or that the Bellinos requested that the Beaches transfer title to Solario, (16) the award of costs-of-proof must be reversed to the extent that it includes fees incurred after the close of the evidentiary phase of trial, (17) the trial court abused its discretion in awarding costs-of-proof for matters outside the scope of De Jong's requests for admission, (18) the trial court improperly awarded costs-of-proof for costs not actually incurred, and (19) the trial court erred in making appellants jointly and severally liable for the entire award of costs-of-proof.
We reach the following conclusions: (1) The Beaches had a fiduciary duty to De Jong under the resulting trust that they intentionally breached. (2) Appellants have forfeited the issue of mitigation of damages through deficient appellate briefing. (3) Appellants' assertion of posttransfer ratification is not supported by the record. (4) The Beaches do not address the trial court's alternate finding that accrual of the statute of limitations for the negligence claim was equitably tolled. We affirm on this unchallenged alternate basis. (5) The Bellinos' challenge to their liability for fraudulent transfer, money had and received, and unjust enrichment rests on an assertion of insufficient evidence that is refuted by the appellate record. (6) Even if the trial court erred in holding appellants liable for some causes of action not asserted against them in the operative complaint, any such error is harmless because the trial court found that each of the appellants was liable for additional causes of action that were properly alleged. (7) Likewise, the possibility that the trial court erroneously held the Bellinos liable for breach of fiduciary duty is harmless because the evidence supports the conclusion that the Bellinos were liable for fraudulent transfer, money had and received, and unjust enrichment. (8) Ample evidence supported the trial court's factual finding that appellants and Solario conspired and aided and abetted each other in depriving De Jong of his interest in the house for which he contributed 80 percent of the purchase price. (9) The evidence was also sufficient to show that appellants acted with oppression and malice toward De Jong. (10) Because we determine that appellants have not demonstrated error requiring reduction of compensatory damages, we reject their contention that a reduction in compensatory damages concomitantly requires a reduction in punitive damages. (11) The trial erred in awarding De Jong prejudgment interest in addition to appreciation on the Ripon property. (12) De Jong was not required to bring a motion to compel further responses to those responses given by the Beaches and Bellinos that amounted to failure to admit requested facts. (13) Appellants have not demonstrated that the trial court abused its discretion in implicitly rejecting their argument that they had good faith bases for denying De Jong's request for admission. (14) The Bellinos have demonstrated an abuse of discretion in the trial court's award of costs-of-proof for three of their responses to De Jong's requests for admission. (15) Appellants have not established that the trial court's award of costs-of-proof included matters for which no proof was made. (16) We reject appellants' assertion that costs-of-proof are constrained to fees incurred during the evidentiary phase of trial. (17) The trial court erred in awarding, as costs-of-proof, fees incurred for opposing appellants' request for a jury trial and for preparing a motion in limine to exclude appellants' evidence. (18) Appellants have not demonstrated error in the trial court's allocation of costs-of-proof among appellants. (19) The trial court erred in making appellants jointly and severally liable for each other's costs-of-proof.
Accordingly, we affirm the trial court's judgment insofar as it awards compensatory and punitive damages to De Jong, but reverse to the extent that the judgment awards both prejudgment interest and appreciation on the Ripon property to De Jong. On remand, the trial court shall award either prejudgment interest or appreciation on the Ripon property to De Jong. We reverse the award of costs-of-proof with instruction that the trial court strike costs-of-proof relating to De Jong's requests for admission numbers 2, 4, 5, and 15 to the Bellinos; exclude time claimed by De Jong's trial counsel for opposing the request for jury trial and in moving in limine to exclude appellants' evidence; and strike the imposition of joint and several liability on appellants for the costs-of-proof.
During the summer of 2008, De Jong began a dating relationship with Solario while his divorce was being finalized. In December 2008, De Jong began living with Solario in a house on East River Road in Escalon California. The Escalon property consisted of a one-acre ranchette that was owned by Judith Bellino and situated next to the Bellinos' own property.
At some point, Solario informed De Jong that her parents intended to sell the Escalon property and asked if he would be interested in buying it. Not long thereafter, the Bellinos and De Jong agreed on a “short sale” purchase price of $345 000. However, the two lenders who held liens on the Escalon property would not accept a purchase price below $425, 000. De Jong borrowed $340, 000 from his friends for the purchase of the Escalon property. However, his available funds were $85, 000 short of the purchase price. To help him bridge the shortfall, the Bellinos reached out to their longtime friends, the Beaches. The Beaches agreed to loan $85, 000 to De Jong. In August 2009, the Beaches signed a residential purchase agreement as copurchasers for the Escalon property. The residential purchase agreement shows that the offer to purchase initially came from De Jong alone in February 2009. The Beaches later cosigned part of the residential purchase agreement.
The residential purchase agreement does not mention Solario, nor does it contain her signature. She was not involved in negotiating the purchase. And Solario did not pay any amount toward the purchase of the Escalon property.
Shortly after the residential purchase agreement was signed, De Jong determined that h...
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