Powell v. Idleman
| Docket Number | B302926 |
| Decision Date | 19 November 2021 |
| Parties | LUPE POWELL, Plaintiff, Cross-defendant and Appellant, v. LUCIE IDLEMAN, Defendant and Cross-defendant; JONATHAN CHRISTODORO, Defendant, Cross-complainant and Respondent. |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC626424, Richard J. Burdge, Jr. Reversed in part and remanded with directions.
Law Offices of Daniel P. Powell and Daniel P. Powell; Esner Chang & Boyer, Stuart B. Esner, Andrew N. Chang, and Kevin K. Nguyen for Plaintiff, Cross-defendant and Appellant.
The Samini Firm, Bobby Samini and Nicole C. Prado for Defendant Cross-complainant and Respondent.
Lupe Powell's daughter, Lucie Idleman, bought a house with her friend and business partner, Jonathan Christodoro. The partners planned to remodel and resell the house within a few months. Not long into the project, Idleman, without informing Christodoro, asked Powell to provide additional funding. Idleman subsequently abandoned the project, Powell came forward and contributed her time and almost $300, 000 to complete the renovation, and the house eventually sold 18 months after Idleman and Christodoro bought it.
Powell sued her daughter (who later filed for bankruptcy) and Christodoro to recover her expenditures. Christodoro filed a cross-complaint against Powell for aiding and abetting Idleman's breach of fiduciary duty, fraudulent concealment, and constructive fraud. Christodoro alleged Idleman did not obtain permits for the project, used unlicensed construction workers, and got her mother involved in the renovation, all without Christodoro's knowledge or consent. Christodoro alleged that, as a result, he lost money on the project.
A jury awarded Powell nothing on her complaint, and awarded Christodoro $107, 374.21 on his cross-complaint. Powell appeals, arguing that the trial court erred in instructing the jury on a licensing law for contractors that she claims Christodoro raised for the first time at the close of evidence, that substantial evidence did not support the jury's verdict Powell aided and abetted Idleman's allegedly tortious conduct, and that Christodoro's expert on damages disavowed the very evidence on which the jury based its award of $107, 374.21 in damages. We conclude that Powell forfeited her argument the trial court erred in instructing the jury on the licensing law and that the trial court did not err in allowing Christodoro, at the end of the trial, to argue the licensing law barred Powell from recovering on her complaint. But we agree with Powell that substantial evidence did not support the jury's verdict against her for aiding and abetting. Therefore, we affirm the portion of the judgment against Powell on her complaint and reverse the portion of the judgment against her on Christodoro's cross-complaint.
Idleman and Christodoro met in 2002 and became friends. Idleman was a licensed real estate agent in California, and Christodoro was a businessman in New York. In 2014 Idleman and Christodoro began buying houses in Southern California, intending to improve the properties and sell them for a profit (also known as "flipping").[1] Christodoro generally provided funds to buy and renovate the houses, Idleman oversaw the renovations and listed the properties for sale, and the two partners divided the profits.
In late 2014 Idleman and Christodoro agreed to buy a house in Rancho Palos Verdes the parties call the Newridge Property for $1.065 million. Christodoro made the down payment of $397, 950 and obtained two short-term "hard money" loans for the remainder of the purchase price.[2] After the sale closed, Idleman sent Christodoro a one-paragraph email titled "investment memo," stating that the renovation would begin the first week of December 2014 and take approximately two months, that the project would have a budget of $150, 000, that the house would sell for $1.6 million to $1.75 million, and that the parties would split the net proceeds equally. Christodoro provided $75, 000 of the $150, 000 renovation budget and, according to him, Idleman agreed to provide $80, 000. Christodoro said Idleman's "role" in the project was "to do all of the work with all of the required licenses, permits, plans, general contractor required under law." Christodoro admitted, however, there was no written contract stating the terms of the partnership.
Powell, a licensed real estate agent, had experience buying and improving investment properties. Powell said that in December 2014 Idleman asked her to "invest" in the Newridge Property because Idleman's "partner [was] not sending money for the remodel." Powell decided to help her daughter because she wanted to "heal" their estranged relationship, to help Idleman succeed, and to see her grandchildren more often. Powell said that, in exchange for investing in the project, Idleman promised Powell she would get the real estate listing on the house and receive a portion of the profits from the sale. Powell said her investment was supposed to be "short-lived," until Christodoro sent Idleman more money. There was no written agreement between Powell and Idleman, no budget, and no agreed share of the profits on the sale. But Powell said Idleman agreed to repay Powell's investment at the close of escrow.
In February or March 2015 Powell had a dispute with the general contractor Idleman hired for the project, and the contractor quit. Powell began going to the job site more often and helped hire a new construction crew, but Powell said Idleman was still "running the job." But then Idleman too "abandoned" the project, and at times did not return Powell's phone calls for days or weeks.
After Idleman quit, Powell went to the job site daily, hired and paid construction workers, supervised their work, and procured materials. Powell said she did these things because she had already invested a lot of money in the project and wanted to get her money back. Powell did not ask whether any of the workers at the site (including those she hired) were licensed because she was not "running the show."
The record does not indicate why the project took longer than Idleman's original estimate of two months, but Powell's active role at the jobsite did not end until May 2015. Powell listed the property for sale in August 2015. By that time, Powell claimed, she had invested over $300, 000.
Christodoro did not know about or authorize Powell's investment or involvement in the Newridge Property. For her part, Powell knew Christodoro was an owner of the property, but she never attempted to contact him. Powell explained she had no reason to contact Christodoro because she communicated with Idleman, who was Christodoro's partner and one of the owners of the property.
The Newridge Property went into escrow in January 2016. An inspection revealed that Idleman had not obtained permits for the project and that there was a problem with a structural beam. Christodoro testified he spent approximately $50, 000 to fix the structural beam and to obtain the necessary permits, [3] which brought his total investment to "over $700, 000."
In March 2016 Powell sent the escrow agent a document titled "Demand for Payment" that purported to instruct the escrow company to pay her $180, 000 from the seller's proceeds "[f]or work and materials paid in connection with the sale of [the Newridge Property]." Idleman signed the document; Christodoro did not. According to Christodoro, he first learned of Powell's involvement in the Newridge Property from the Demand for Payment, and he instructed the escrow agent not to honor it. The escrow agent said she did not pay the demand because she received conflicting instructions from the property's owners and the amount requested was not secured against the property.
Escrow eventually closed in May 2016 at a sale price of $1, 599, 000. After paying off Christodoro's loans, related fees (including late fees), and real estate commissions, [4] the escrow company distributed $507, 399.45 to Christodoro and $95, 000 to Idleman. Neither Christodoro nor Idleman reimbursed Powell for any of the money she had invested in the property, and Christodoro claimed he lost over $200, 000 on the project.
Powell filed this action on July 8, 2016, alleging causes of action against Christodoro and Idleman for breach of contract, money lent or paid, and unjust enrichment. Christodoro filed a cross-complaint, alleging causes of action against Idleman for breach of fiduciary duty, fraud by concealment, and constructive fraud and causes of action against Powell for aiding and abetting each of those torts. Christodoro alleged Idleman breached her fiduciary duties to him by, among other things, failing to obtain "all proper permits and/or licenses to perform" the work on the Newridge Property failing to perform the work competently, and "enter[ing] into an alleged agreement and/or partnership with her mother Powell in that Powell was to furnish the same and/or similar services (i.e. expertise as a licensed California real estate agent) with respect to the renovation and/or remodeling and eventual sale of the Newridge Property," which Idleman "kept secret" from Christodoro. Christodoro alleged that Idleman fraudulently concealed Powell's involvement and investment and that such conduct also constituted...
To continue reading
Request your trial