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Dean Stevenson et al v. Glenn Dougherty et al

March 6, 2013


(Super. Ct. No. SCV21302)

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

Stevenson v. Dougherty



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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

Following a bench trial on plaintiffs' complaint for breach of a partnership agreement and related claims, the trial court entered judgment primarily for the defendants, concluding there had been no breach of contract or breach of fiduciary duty. However, the court did enter judgment for plaintiffs on their claims for dissolution of the partnership and an accounting. Plaintiffs appeal. We affirm the judgment of the trial court.


Plaintiff Dean Stevenson is in the business of designing custom homes. Defendant Glenn Dougherty is a general contractor in the business of constructing homes. The two met in 1989 and worked together on various home construction projects thereafter.

We note that, after first introduction, the parties will sometimes be referred to herein by their first names for the sake of simplicity and clarity.

In 2001, Dean and Glenn entered into an oral partnership agreement with Wayne Jensen and his son Matt Jensen for the development of homes (the Jensen partnership). Under this agreement, Dean would design the homes and get necessary government approvals, Wayne would provide financing for the project, Glenn and Matt would build the homes, and the four would share profits evenly. However, before the purchase of any property for development, Glenn and Wayne had a falling out and the partnership dissolved.

Dean and Glenn then decided to proceed with the plan without the Jensens. Prior to November 17, 2003, Dean and his wife, plaintiff Terina Stevenson, (hereafter collectively the Stevensons) entered into an oral partnership agreement with Glenn and his wife, defendant Judee Dougherty, (hereafter collectively the Doughertys) for the purpose of buying raw land, subdividing it, building homes thereon, and selling the homes. The parties also agreed Judee, who was a licensed real estate agent working at the time for defendant Valley of California, Inc., doing business as Coldwell Banker (Coldwell Banker), would represent the partnership in the purchase of property.

Under the terms of the partnership agreement, the Stevensons and the Doughertys (collectively the partners) would share profits evenly, after payment to each for contributions of money and time to the enterprise. They also anticipated eventually forming a limited liability company (LLC) to replace the partnership.

On November 17, 2003, the partnership offered to purchase a parcel of property located at 660 Virginiatown in Lincoln (the property) for $200,000. They eventually agreed with the sellers on a purchase price of $205,000. However, before the close of escrow, the partners agreed the Stevensons' names would not be included on the offer and the grant deed, at least in part because Dean had tax liens against him stemming from a prior business.

The Doughertys contributed $155,000 toward the purchase price and the Stevensons contributed the remainder, in part using funds obtained from their son, plaintiff Nicholas Stevenson. Escrow closed on February 18, 2004, with title to the property being taken in the names of the Doughertys alone.

The parties thereafter went about obtaining the necessary permits to subdivide the property into individual lots, with Dean doing most of the work. They also attempted to purchase adjacent property in order to increase the number of lots they could create and to enter into a joint venture with another entity, Sundance, that was in the process of buying other adjacent property.

Following a meeting with Sundance on April 25, 2006, Glenn informed Dean that he did not think an even split of the partnership was fair, given the uneven contributions toward purchase of the property. He proposed instead a 75/25 split between the Doughertys and the Stevensons.

The parties thereafter were unable to agree on how to proceed with their partnership or the development of the property. They discussed a possible buyout of the Stevensons' interest in the partnership, but were unable to reach any agreement on the terms.

The Stevensons and Nicholas (hereafter collectively plaintiffs) initiated this action against the Doughertys and Coldwell Banker, alleging seven causes of action. Regarding Nicholas, the complaint alleged he had become a partner with the others when he contributed funds toward purchase of the property.

The first cause of action alleges breach of the partnership agreement by virtue of the Doughertys having repudiated the even split of the partnership, delayed development of the property, and other things. The second cause of action alleges breach of fiduciary duty both as to the Doughertys as partners and as to Judee and Coldwell Banker as real estate agents for plaintiffs.

The third cause of action alleges fraudulent misrepresentations as to the Doughertys' intent to finance the purchase of the property, transfer ownership of the property to an LLC, and diligently pursue development, among other things. The fourth cause of action alleges negligent misrepresentation of these same things.

The fifth cause of action seeks dissolution of the partnership, while the sixth cause of action (erroneously labeled the seventh) seeks an accounting.

The seventh cause of action (erroneously labeled the eighth) alleges negligence by Judee and Coldwell Banker in failing to protect plaintiffs' interest in the partnership property.

Following a bench trial, the trial court issued a judgment against Nicholas on all claims, concluding he had not become a party to the partnership. The court entered judgment for the Stevensons on their dissolution and accounting claims, but for the Doughertys and Coldwell Banker on all other claims.

On the first cause of action, for breach of contract, the court found the Doughertys did not repudiate the partnership agreement by proposing a different split of ownership. Rather, this was a proposed amendment to the agreement, which the Stevensons rejected. The court also found no breach by virtue of delays in the development, which delays, the court concluded, were for reasons other than any wrongdoing by the Doughertys.

The court also found no breach of fiduciary duty, as alleged in the second cause of action, for the same reasons there had been no breach of contract.

The court found no breach of fiduciary duty by Judee or Coldwell Banker for failing to advise the Stevensons to seek legal advice before having their names taken off the title to the property. The court concluded these real estate defendants met their applicable standard of care. The court also concluded the Stevensons were not harmed in any event, because the property remains an asset of the partnership, regardless of the names on the title.

The court also rejected plaintiffs' misrepresentation claims, finding no misrepresentations as alleged and nothing by which the Stevensons were misled. The court also found no negligence by Judee or Coldwell Banker for the same reasons it rejected plaintiffs' claim for breach of fiduciary duty by those defendants.

On the fifth and sixth causes of action, the court concluded the Stevensons are entitled to relief. The court ordered the partnership dissolved and the property sold, with the proceeds used to repay the initial investments with interest, followed by reimbursement for the parties' time on the venture. The court retained jurisdiction to assure a proper accounting.


I Pertinent Facts

Before addressing the contentions of the parties, a few words on the facts applicable to this matter are necessary. The three plaintiffs, acting in propria persona, have filed separate appellate briefs. Dean has included in his opening brief a 16-page summary of the facts, which the other plaintiffs have adopted as their own. However, in many instances, Dean has provided no citation to the record for his factual assertions, and some of the citations he does provide do not in fact say what he indicates.

Further, and more importantly, most of plaintiffs' contentions concern the sufficiency of the evidence to support the trial court's findings. In such case, we consider the evidence in the light most favorable to the judgment. (Bunch v. Hoffinger Industries, Inc. (2004) 123 Cal.App.4th 1278, 1303.) A party challenging sufficiency of the evidence has an obligation to summarize the evidence on the points raised, both favorable and unfavorable. (Roemer v. Pappas (1988) 203 Cal.App.3d 201, 208.) Failure to do so may be considered a forfeiture of the contentions raised. (Oliver v. Board of Trustees (1986) 181 Cal.App.3d 824, 832.) In many instances, Dean has provided a one-sided recitation of the evidence that fails to meet his appellate obligations.

In addition to the foregoing, many of plaintiffs' citations are not to the evidence in the record but to the trial court's amended statement of decision, the same decision they now challenge as incorrect. They also cite documents in the record that were used as exhibits in the trial, but fail to cite any testimony authenticating those documents.

For example, on the issue of whether the parties agreed to form an LLC, plaintiffs assert: "As the partners had not yet formed the LLC prior to an offer being made to purchase the property, the offer was made in their personal names, with the express agreement that the LLC would be formed during escrow, with the property then assigned to the LLC, prior to the close of escrow." Plaintiffs cite as support a portion of the amended statement of decision. However, that portion does not pertain to the agreement between the parties but the earlier agreement on the Jensen partnership. Plaintiffs also cite Glenn's testimony. However, Glenn testified that, while the parties agreed "in theory" to form an LLC, there were no discussions regarding timing.

Plaintiffs also assert that, during escrow, Glenn changed the terms of the partnership agreement by insisting that the Stevensons contribute to the purchase price. However, plaintiffs cite no evidence of any agreement that the Doughertys would provide all the financing. The closest they come is the testimony of the real estate agent for the Jensen partnership, Robyn Buzdon, who explained that, after the Jensen partnership dissolved, Glenn told Buzdon to proceed with finding a property to purchase and he would provide the financing.

Plaintiffs next assert: "In spite of Glenn's changing of the terms they had originally agreed to months earlier, Dean & Terina then invested $6,500 and arranged for their son, Nicholas, to join in the partnership and invest $42,000, in order to have the money necessary to close escrow on the property." Plaintiffs' only record citation is to the amended statement of decision. However, the trial court said nothing about the Stevensons arranging for Nicholas to become a partner in the venture. On the contrary, the trial court specifically found Nicholas did not become a partner.

As to the decision to take the Stevensons' names off the title to the property, plaintiffs assert this had been done at Glenn's request. Plaintiffs also assert the parties agreed to modify their agreement to provide that an LLC would be formed "as soon as possible after escrow closed." However, plaintiffs provide no record citation for their assertion that Glenn requested the removal of the Stevensons' names from the purchase, and the citations they provide for their assertion that the parties agreed to form an LLC as soon as possible do not so state. Dean testified that the parties discussed forming an LLC as soon as they could. However, he did not say there was any agreement to that effect. Further, plaintiffs ignore contrary testimony of the Doughertys that removal of the Stevensons' names from the title had been at Dean's request because of tax liens, and Glenn's testimony that there had been no discussions as to timing in forming an LLC.

Further discrepancies regarding the evidence will be discussed in connection with plaintiffs' various contentions on appeal.

II Removal of Stevensons from Purchase Documents

On their claim for breach of fiduciary duty by Judee and Coldwell Banker, plaintiffs take issue with the following statement by the trial court in its amended statement of decision: "The entire issue of title being taken solely by the Doughertys is an issue of Dean's own making. In fact, the manner of taking title was an accommodation to him."

Plaintiffs assert the foregoing passage is based on speculation by the court that Dean was trying to evade paying taxes and "is not supported by, and is at complete odds with, the uncontroverted facts." (Bolding omitted.) According to plaintiffs, it is undisputed Dean did not ask to have title placed in his son's name, as he might have done, since Nicholas was investing in the property as well. Plaintiffs assert this all could have been avoided if an LLC had been formed. Plaintiffs further assert: "[T]he manner of taking title was an accommodation to ...

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