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Best Financial Consultants, Inc v. William Chapman et al

December 17, 2010


(Super. Ct. No. 37-2007-00071738-CU-OR-CTL) APPEAL from a judgment of the Superior Court of San Diego County, Jay M. Bloom, Judge. Affirmed.

The opinion of the court was delivered by: McDONALD, J.

Best Financial Consultants v. Chapman CA4/1


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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

Best Financial Consultants, Inc. (Best), Ben Williams (Ben), and Andre Williams (Andre) (collectively Brokers) appeal a judgment entered after a jury found them liable for damages in an action filed by William Chapman and Martha Chapman (together the Chapmans) arising out of Brokers' representation of the Chapmans in the sale of an apartment building they inherited. On appeal, Brokers contend the evidence is insufficient to support the following findings: (1) the Chapmans suffered economic and non-economic damages; (2) Brokers' alleged wrongful actions were a legal cause of the Chapmans' damages; (3) Brokers were liable on the cause of action for fraud by misrepresentation; (4) Brokers were liable on the cause of action for fraud by concealment; (5) Brokers were liable on the causes of action for negligence and negligent misrepresentation; (6) Brokers were liable on the cause of action for breach of fiduciary duty; (7) Brokers were liable on the cause of action for financial elder abuse; (8) Andre or another officer, director, or managing agent of Best authorized, or knew of and subsequently adopted or approved, any wrongful actions by William Wyckoff, Ben, or Andre; and (9) Ben, Andre, Wyckoff, and/or Best committed the wrongful acts with malice, oppression, or fraud, a finding required to support the awards of punitive damages against Best and Ben. Brokers further contend the trial court erred by denying them due process of law and denying Best's request for a special verdict on its cross-complaint for recovery of a real estate commission.


In 2006, William Chapman's step-grandfather died, leaving a trust naming the Chapmans as beneficiaries of an eight-unit apartment building (Property) on Cleveland Avenue in San Diego. They retained long-time friend Wyckoff, an accountant (and real estate agent), to advise and assist them regarding the tax and accounting aspects of the estate. An appraisal of the Property was obtained for estate tax purposes, showing its fair market value was $1,640,000 as of June 10, 2006, the date of the step-grandfather's death. To reduce the amount of the estate tax, Wyckoff advised the Chapmans to obtain an amended appraisal with a lower value for the Property. Wyckoff called the original appraiser and stated he needed an appraisal showing a value of $1,200,000 instead of $1,640,000.*fn1 On December 10, 2006, the appraiser issued an appraisal showing the fair market value of the Property was $1,200,000.

In or about February 2007, Wyckoff suggested that the Chapmans sell the Property so they could retire. In May 2007, the Chapmans obtained title to the Property. In late June 2007, Wyckoff called the Chapmans and told them he had a potential buyer for the Property. On June 28, Martha met Wyckoff and Ben and showed them the Property. Wyckoff had recently begun working for Best, which was managed by Ben (not a licensed real estate agent). Andre, Ben's father, was the licensed real estate broker for Best. Later on June 28, Wyckoff met the Chapmans at their Temecula home and had them sign an exclusive listing agreement with Best for the sale of the Property with a listing price of $1.3 million to $1.4 million, but guaranteeing the Chapmans net proceeds of $1.2 million after payment of commissions, escrow, and other costs. Neither Wyckoff nor anyone else at Best provided the Chapmans with any information regarding comparable property listings or sale prices to support the listing price for the Property. The listing agreement provided for a commission of 7 percent of the sale price if another broker was involved (i.e., 4 percent commission to Best as the listing broker and 3 percent to the buyer's broker), but an increased commission of 10 percent would be paid to Best if it represented both the seller and the buyer.*fn2

On June 30, Martha met Wyckoff and Ben at the Property for a showing of the Property to Kamran Shoberi, a prospective buyer. On July 1, Wyckoff met the Chapmans at their Temecula home and presented an offer by Shoberi, whom Wyckoff (and Best) also represented, to purchase the Property for $1,333,000.*fn3 Shoberi's offer provided that he would be required to obtain a loan prequalification letter from a lender within seven days of the Chapmans' acceptance of his offer. The offer also provided that it would be deemed a binding agreement when a copy of the Chapmans' signed acceptance of the offer was personally received by Shoberi or by his authorized agent. The offer provided that escrow was to close within 60 days after acceptance. On July 1, at Wyckoff's urging, the Chapmans signed an acceptance of Shoberi's offer.

On July 5, Wyckoff presented the Chapmans with a "backup" offer from Art Bell to purchase the Property for $1,400,000. Bell's offer provided the price would be paid entirely with cash (i.e., without any loan) and escrow would close within 14 days after the Chapmans' acceptance, and was contingent on nonperformance of the pending sale to Shoberi. At Wyckoff's urging, the Chapmans signed an acceptance of Bell's backup offer.

On July 7, because Shoberi had not yet provided a loan prequalification letter, the Chapmans met Wyckoff who presented them with a 24-hour notice for Shoberi to perform on the purchase agreement. They signed the notice. On July 9, Shoberi obtained a prequalification letter from Washington Mutual Home Loans. Also on that date, Wyckoff presented the Chapmans with a notice to Shoberi of cancellation of contract, which they signed. Wyckoff then informed Bell's real estate agent that Bell was free to proceed with his purchase of the Property pursuant to his backup offer. The Chapmans then proceeded toward closing the sale of the Property to Bell.

On July 7, Dan Floit submitted to Best an offer to purchase the Property for $1,425,000. However, that offer was never presented to the Chapmans by Best, Wyckoff, Ben, or Andre. A Best representative (either Wyckoff or Ben) informed Floit that the Property was already under contract for sale to another purchaser.*fn4 On or about July 17, Floit offered to pay $50,000 to Brokers and $50,000 to the buyer with the first contract for assignment to him of that buyer's rights to purchase the Property. Apparently on or about July 18 or 19, Ben called William and demanded that he allow a new buyer to view the Property, stating he had an obligation to do so. William became upset because he interpreted Ben's statement as a threat. William apparently refused Ben's demand that he show the Property.

On July 20, Floit offered to pay $50,000 to Brokers and $75,000 to Shoberi for assignment of Shoberi's contract to purchase the Property, with payment to be made one day after closing of the sale to Floit.*fn5 Apparently on July 21, Shoberi signed an acceptance of Floit's offer to acquire assignment of Shoberi's right to buy the Property.

Around this time, the Chapmans contacted Carlos Santiago, Bell's real estate agent, and learned that Ben had conveyed an offer to assign Shoberi's contract to Bell for $75,000, which offer Bell had refused. The Chapmans then retained an attorney, John Schau, to advise them. On July 23, Schau sent a letter to Best informing Best that the Chapmans were terminating its services as the listing agent for the sale of the Property. Also on July 23, the Chapmans and Bell opened an escrow at a different escrow company for the closing of the sale of the Property to Bell. On July 24, that escrow closed and the sale of the Property by the Chapmans to Bell was completed.*fn6

On July 24, Floit filed a complaint against the Chapmans seeking specific performance of Shoberi's contract rights, which had been assigned to him. On July 25, Floit recorded a lis pendens on the Property, but it was too late to stop the sale of the Property to Bell that occurred the previous day (i.e., on July 24). Apparently, Floit then amended his complaint to add Bell as a defendant. The Chapmans filed a cross-complaint against Brokers, Wyckoff, Shoberi, and Floit, alleging various causes of action. Best, Ben and Andre filed a cross-complaint against the Chapmans for commissions earned.*fn7 Apparently, Floit, Shoberi, and Bell entered into settlements before trial.

Following a trial, the jury returned verdicts in favor of the Chapmans on their causes of action against Brokers and Wyckoff and on Best's causes of action against the Chapmans. The jury awarded the Chapmans compensatory damages as follows: (1) against Wyckoff for $20,300 for economic loss and $15,000 for non-economic loss; (2) against Best for $14,500 for economic loss and $1,500 for non-economic loss; (3) against Andre for $2,900 for economic loss and $1,500 for non-economic loss; and (4) against Ben for $20,300 for economic loss and $12,000 for non-economic loss. The jury further awarded the Chapmans punitive damages as follows: (1) against Wyckoff for $225,000; (2) against Ben for $200,000; and (3) against Best for $200,000. On April 24, 2009, the trial court entered a judgment on the jury verdicts, awarding the Chapmans the damages set forth above. The court denied Brokers' posttrial motions for judgment notwithstanding the verdict and for a new trial. Brokers timely filed a notice of appeal.*fn8


I Appellants' Burdens on Appeal Generally

On appeal, the judgment of the trial court is presumed to be correct. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) Accordingly, if the judgment is correct on any theory, the appellate court will affirm it regardless of the trial court's reasoning. (Estate of Beard (1999) 71 Cal.App.4th 753, 776-777; D'Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 18-19.) If the appellate court affirms the judgment on certain grounds, it generally need not address alternative grounds for affirmance. (Sutter Health Uninsured Pricing Cases (2009) 171 Cal.App.4th 495, 513 (Sutter).) All intendments and presumptions are made to support the judgment on matters as to which the record is silent. (Denham, at p. 564.) An appellant has the burden to provide an adequate record and affirmatively show reversible error. (Ibid.; Ballard v. Uribe (1986) 41 Cal.3d 564, 574.) If an appellant does not provide an adequate record to support a contention of insufficiency of the evidence to support a finding, that contention may be deemed waived. (Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 132; Goldring v. Goldring (1949) 94 Cal.App.2d 643, 645.) Furthermore, it is the appellant's duty to support arguments in his or her briefs by references to the record on appeal, including citations to specific pages in the record. (Duarte v. Chino Community Hospital (1999) 72 Cal.App.4th 849, 856 (Duarte).) "Failure to set forth the material evidence on an issue waives a claim of insufficiency of the evidence." (Brockey v. Moore (2003) 107 Cal.App.4th 86, 96.) If an argument is not supported with necessary citations to the record on appeal, that portion of the brief may be stricken and/or the argument may be deemed waived.*fn9 (Duarte, supra, 72 Cal.App.4th at p. 856.) Likewise, if an argument is not supported with citations to legal authorities, that argument may be deemed waived. (McComber v. Wells (1999) 72 Cal.App.4th 512, 522.)

Because the arguments on appeal must be restricted to evidence in the record, any reference to matters outside the record on appeal generally will not be considered.*fn10 (Cal. Rules of Court, rule 8.204(a)(2)(C) [appellant's opening brief must provide a summary of significant facts limited to matters in the record on appeal]; Banning v. Newdow (2004) 119 Cal.App.4th 438, 453, fn. 6 (Banning).) Furthermore, "[a]ppellate briefs must provide argument and legal authority for the positions taken. 'When an appellant fails to raise a point, or asserts it but fails to support it with reasoned argument and citations to authority, we treat the point as waived. [Citations.]' " (Nelson v. Avondale Homeowners Assn. (2009) 172 Cal.App.4th 857, 862 (Nelson).) "We are not bound to develop appellants' argument for them. [Citation.] The absence of cogent legal argument or citation to authority allows this court to treat the contention as waived." (In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 830 (Falcone & Fyke); see also Associated Builders & Contractors, Inc. v. San Francisco Airports Com. (1999) 21 Cal.4th 352, 366, fn. 2 (Associated Builders); People v. Stanley (1995) 10 Cal.4th 764, 793 (Stanley).)

II Substantial Evidence Standard of Review

When an appellant contends the evidence is insufficient to support a judgment or factual finding, we apply the substantial evidence standard of review. "Where findings of fact are challenged on a civil appeal, we are bound by the 'elementary, but often overlooked principle of law, that . . . the power of an appellate court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted,' to support the findings below. [Citation.] We must therefore view the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference and resolving all conflicts in its favor in accordance with the standard of review so long adhered to by this court." (Jessup Farms v. Baldwin (1983) 33 Cal.3d 639, 660.) "Substantial evidence" is not synonymous with "any" evidence; rather, it means the evidence must be of ponderable legal significance, reasonable, credible, and of solid value. (Kuhn v. Department of General Services (1994) 22 Cal.App.4th 1627, 1633.) An appellate court presumes in favor of the judgment all reasonable inferences. (Id. at pp. 1632-1633.) If there is substantial evidence to support a finding, an appellate court must uphold that finding even if it would have made a different finding had it presided at the trial. (Rupf v. Yan (2000) 85 ...

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