Sherwood v. Vogele

• Decision Date: 07 May 2021
• Docket Number: D077088,D076776
• Court: California Court of Appeals Court of Appeals
• Parties: ROBERT SHERWOOD et al., Plaintiffs, Cross-defendants and Appellants, v. EUGENE VOGELE et al., Defendants, Cross-complainants and Respondents. ROBERT SHERWOOD et al., Plaintiffs, Cross-defendants and Appellants, v. EUGENE VOGELE, Defendant, Cross-complainant and Respondent, CHARLES E. GILBERT et al., Cross-complainants and Respondents.

ROBERT SHERWOOD et al., Plaintiffs, Cross-defendants and Appellants, v. EUGENE VOGELE et al., Defendants, Cross-complainants and Respondents.

ROBERT SHERWOOD et al., Plaintiffs, Cross-defendants and Appellants, v. EUGENE VOGELE, Defendant, Cross-complainant and Respondent,CHARLES E. GILBERT et al., Cross-complainants and Respondents.

D076776

D077088

COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA

May 7, 2021

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 37-2017-00012535-CU-BC-CTL)

CONSOLIDATED APPEALS from a judgment and postjudgment orders of the Superior Court of San Diego County, Kevin A. Enright, Judge. Affirmed.

Lokk Legal, Daryoosh Khashayar and Angela Ness, for Plaintiffs, Cross-defendants and Appellants, Robert Sherwood, Lazy Eye Coffee, LLC, and Ashley Babcock.

Stokes Law, Bonnie Lynn Stokes and Brittany A. Salamin for Defendant, Cross-complainant and Respondent, Eugene Vogele and Linda Luckow, in her capacity as personal representative of the estate of Eugene Vogele.

No appearance for Cross-complainants and Respondents, Charles Gilbert, Kevin Gilbert, and Linde Gilbert.

Plaintiffs and appellants Robert Sherwood and Lazy Eye Coffee, LLC (collectively Sherwood) initiated litigation against defendant and respondent Eugene Vogele arising out of a dispute over building encroachments from Vogele's property on adjacent property leased by Sherwood (the property).¹ The complaint spawned cross-complaints by Vogele against Sherwood and the property's lessor, cross-defendants and respondents Charles Gilbert, Kevin Gilbert, and Linde Gilbert (the Gilberts); by the Gilberts against Sherwood; and by Sherwood against the Gilberts. Trial resulted in a judgment on special verdicts in which a jury, assessing the parties' efforts to mitigate their damages and respective percentages of fault, awarded (1)$6,000 in damages to Sherwood against Vogele and the Gilberts; (2) $50,000 in damages to Vogele against Sherwood; and (3) $620,492 in damages to the Gilberts against Sherwood and Babcock. The trial court later awarded Sherwood $143,183.55 in attorney fees on his operative complaint; and awarded the Gilberts $425,125.94 in attorney fees and costs on their cross-complaint.²

Sherwood challenges the jury's special verdict findings as to his mitigation of damages and percentage of fault, the Gilberts' mitigation of their damages, and the award of damages to Vogele, on grounds the findings lack sufficient evidence. He contends the special verdicts resulted from juror bias and prejudice against him, warranting a new trial on that ground as well as on grounds of inadequate damages and inconsistent verdicts. Sherwood finally challenges the attorney fee order, arguing the court abused its discretion by reducing his sought-after fees to an amount the court determined was incurred on his breach of contract claim. We affirm the judgment and postjudgment orders.

FACTUAL AND PROCEDURAL BACKGROUND

We state the facts and view the evidence in the light most favorable to the jury's special verdict, resolving all conflicts and indulging all reasonable inferences to support the judgment. (American Master Lease LLC v. Idanta Partners, Ltd. (2014) 225 Cal.App.4th 1451, 1459, fn. 1; accord, Roby v. McKesson Corp. (2009) 47 Cal.4th 686, 693-694.)

In June 2016, Sherwood leased property from the Gilberts on which Sherwood and Babcock planned to build and operate a coffee house. The lease payment for the first year was $6,160 per month. The Gilberts' property had a "zero lot line," meaning it was "wall to wall" with adjacent property owned by Vogele. The Gilberts eventually understood that Sherwood's project contemplated a second story rooftop deck, but the lease specified that they did not make representations about the property and Sherwood accepted the property "as is." The lease also contained a hold harmless clause by which Sherwood would represent and indemnify the Gilberts if he caused a claim to be filed against them.

The project was the first time Sherwood had ever built a business from the "ground up." Sherwood hired a general contractor and a designer, neither of whom had ever done a ground up commercial project. The designer did not have an architectural license, nor was she working under an architect. She did not have a survey done in the initial pre-design phase. After Sherwood entered into the lease, his contractor noticed that shed roof eaves from Vogele's property were overhanging onto the Gilberts' property and would impede the ability to build the project. The Gilberts did not notice the eaves were overhanging or perceive them an encroachment onto their property until it was brought to their attention. Kevin Gilbert first sought to resolve the matter informally and amicably with Vogele, but intended to follow upwith a City of San Diego (City) code enforcement complaint if unsuccessful. Sherwood, on the other hand, expressed he saw "no alternative but to turn this over to [his] attorneys." In late August 2016, he e-mailed Kevin Gilbert that it was his opinion that Vogele had "zero intention" to resolve the matter and "make this right." Kevin Gilbert felt that from "day one" Sherwood did not believe Vogele would take down the encroachments.

After Sherwood's attorney demanded Vogele remove the encroaching eaves, Vogele and Sherwood in September 2016 entered into a written agreement by which Vogele would "remov[e] all existing illegal roof overhangs" and also remove a separate small three-window structure, which City had determined was a permit violation. On October 12, 2016, the day Vogele was to begin his work to remove the encroachment, Sherwood sent an e-mail copying Kevin Gilbert and others telling them that if he did not see Vogele's removal work in progress, he would commence litigation "without further delay." Sherwood stated he did not want to give Vogele "so much as a one-hour extension." Sherwood wrote: "We will have to proceed as if the work [by Vogele] will not be done, which means we will have to spend considerably more on the build-out to accommodate the problem." He continued: "For this reason I want to seek a million dollars in damages, and if in the end it is less, the amount can be adjusted down." Sherwood told Kevin Gilbert to break off negotiations with Vogele and Gilbert did so. Gilbert understood that this meant Sherwood was going to spend more money and build the project, but proceed with litigation against Vogele for damages.

In early 2017, based on communications from Sherwood and his designer, the Gilberts believed Sherwood was designing a "workaround" to the encroaching eaves, with a complete tear down of the existing building andconstruction of a new building. Based on that understanding and believing Sherwood was going to proceed with the project, the Gilberts authorized the demolition. In fact, Sherwood's contractor was not asked to come up with alternative solutions regarding the encroaching eaves, and the final City-approved permit for the coffee shop showed the zero lot line without any mention of the encroaching eaves. Sherwood's designer never found a definitive solution to design around the eaves. In February 2017, she e-mailed Sherwood about potential workarounds, but Sherwood wanted to proceed with the demolition permit, stating, "Once we begin demo[lition], it kind of paints a picture of Vogele that is a point of no return." Sherwood's attorney directed the designer to not submit redesigns to City for approval because Sherwood and his lawyer wanted a better understanding of which way the litigation was moving. Had the Gilberts known Sherwood was not proceeding with a workaround for his project, they would not have given permission to demolish their building because it would not make financial sense.

In March 2017, Sherwood went ahead and demolished the building on the Gilberts' property. Neighboring businesses complained of property damage as a result of the demolition.

The following month, Sherwood, and eventually Lazy Eye Coffee, LLC, sued Vogele for breach of Vogele's agreement to remove the eaves, fraud (intentional misrepresentation), willful and negligent trespass, and nuisance. In that complaint, Sherwood sought a permanent injunction to compel Vogele to remove the encroachment from the property. Vogele filed a cross-complaint against Sherwood and the Gilberts for, among other causes of action, fraud, negligence and trespass. Kevin and Linde Gilbert cross-complained against Sherwood, Babcock and Lazy Eye Coffee, LLC for breachof lease and breach of Sherwood's duty under the lease to indemnify and defend the Gilberts in connection with claims arising from Sherwood's use of the premises. The Gilberts also sought judicial declarations as to Sherwood's duty to defend them and his alleged agreement to accept the premises in an "as is" condition.

Sherwood, however, terminated his lease with the Gilberts in September 2017.³ He later filed a cross-complaint against the Gilberts alleging causes of action for fraud based on their failure to disclose what he alleged were unpermitted conditions existing on the property including the overhanging eaves, and breach of the covenant of quiet enjoyment. Sherwood sought a judicial declaration that by virtue of the Gilberts' omission of material facts about the property, the lease with the Gilberts was invalid and unenforceable.

Even after Sherwood commenced litigation, Kevin Gilbert believed based on attorney communications that Sherwood's project was only on hold; that Sherwood still intended to build on the property. It was not until the summer of 2018 that Gilbert put out a sign to relet the property. He did not market the...