Judge: Gail Killefer, Case: 20STCV27444, Date: 2025-06-16 Tentative Ruling
Case Number: 20STCV27444 Hearing Date: June 16, 2025 Dept: 37
HEARING DATE: Monday, June 16, 2025
CASE NUMBER: 20STCV27444
CASE NAME: Sebastian Zurita, et al. v.
Martel Investment, LLC, et al.
TRIAL DATE: Post Judgment
PROOF OF SERVICE: OK
MOVING PARTY: Plaintiffs
Sebastian and Emiliano Zurita
OPPOSING PARTY: Defendant Drail Investments, LLC
PROCEEDING: Motion
for Judgment Not Withstanding the Verdict (MJOV)
OPPOSITION: 19
May 2025
REPLY: 27 May 2025
TENTATIVE:
Plaintiffs’ JNOV
is granted.
MOVING PARTY: Defendants Martel Investment, LLC and Ron Fattal
OPPOSING PARTY: Plaintiffs Sebastian and Emiliano Zurita
PROCEEDING: Motion
for Judgment Not Withstanding the Verdict (MJOV)/Motion for a New Trial in the
Alternative
OPPOSITION: 19
May 2025
REPLY: 27 May 2025
TENTATIVE:
Plaintiffs’ JNOV is granted. The Fattals
Defendants’ JNOV is denied as is their alternative motion for a new trial.
Background
On July 15, 2020, Plaintiffs
Sebastian and Emiliano Zurita (collectively “Plaintiffs”) filed this action
against Defendants Martel Investments, LLC (“Martel”) and Ron Fattal (“Fattal”)
due to construction defects found in the property located at 415 North Martel
Avenue, Los Angeles, California 90036 (the “Martel Property”).
On July 20, 2023, Plaintiffs filed
the operative Third Amended Complaint
(“TAC”) alleging three cause of action: (1) Violation of California
Right to Repair Act (California Civil Code § 896, et seq.) against Defendants
Fattal, Martel, Drail Investments, LLC (“Drail”); (2) Negligence against
Fattal, Martel, Drail, Jose De Jesus Rodriguez, The Right Team Construction,
Inc., Tiran Benmoshe, Pacific Ocean Wall, Inc., HC Builders, Inc., Roberto’s
Wrought Iron, Inc., and John Biczo, and (3) Fraudulent Concealment against
Fattal, Martel, and Drail.
On September 6, 2023, the Court
entered Dismissal, without prejudice, as to Defendant John Biczo.
On September 21, 2023, Plaintiffs
filed their Amendment to Third Amended Complaint, adding Roberto Vazquez Gomez
as a Defendant to the Second Cause of Action for Negligence.
On October 15, 2023, the Court
entered Dismissal, without prejudice, as to Defendant Roberto’s Wrought Iron,
Inc.
On October 23, 2023, the Court
entered Default as to Defendant Pacific Ocean Wall, Inc.
On October 25, 2023, the Court
entered Default as to Defendant Jose de Jesus Rodriguez.
On November 21, 2023, the Court
entered Default as to Defendant Roberto Vazquez Gomez.
On December 6, 2023, Plaintiffs
filed their Amendment to Third Amended Complaint adding HomeMade Custom
Builders, Inc. as a Defendant to the Second Cause of Action for Negligence.
On July 10, 2024, the Court entered
Dismissal, with prejudice, as to Defendant The Right Team Construction, Inc.
On July 25, 2024, Plaintiffs
dismissed their Second Cause of Action for Negligence,
without prejudice, as to Fattal,
Martel, and Drail.
On August 2, 2024, the Court
entered Dismissal, with prejudice, as to Tiran Benmoshe.
On August 6, 2024, the Court
entered Dismissal, with prejudice, as to Defendants HC Builders, Inc. and
HomeMade Custom Builders, Inc.
This action came on regularly for a
jury trial on Plaintiffs’ First Cause of Action for Violation of California
Right to Repair Act (California Civ. Code § 896, et seq.) and Third Cause of
Action for Fraudulent Concealment against Fattal, Martel, and Drail. The trial commenced
on Tuesday, February 18, 2025, and continued through Friday, February 28, 2025,
and resumed for one day on Friday, March 7, 2025, in Department 37 of the
Stanley Mosk Courthouse of the Los Angeles Superior Court, the Honorable Gail
Killefer, Judge presiding. A jury of twelve persons was regularly impaneled and
sworn to try the action. Witnesses on the part of both Plaintiffs and Martel,
Fattal, and Drail were sworn and examined.
During the course of the trial,
prior to the jury rendering its Verdict, Plaintiffs withdrew their Third Cause
of Action for Fraudulent Concealment as to Drail Investments, LLC.
On February 28, 2025, the jury
rendered its verdict, finding that Plaintiffs are the prevailing parties in
this action with respect to their two claims against Ron Fattal and Martel
Investment, LLC and that Drail Investments, LLC is the prevailing party in this
action with respect to Plaintiffs’ First Cause of Action for Violation of
California Right to Repair Act (Civ. Code, § 896, et seq.)
On April 2, 2025, Judgment was
entered as follows:
1) On Plaintiffs’ First Cause of Action for Violation of California Right to
Repair Act (California Civil Code § 896, et seq.), Plaintiffs are entitled to
recover from Ron Fattal and Martel Investment, LLC, jointly and severally,
compensatory damages in the principal sum of $963,146.32.
2) On Plaintiffs’ First Cause of Action for Violation of California Right to
Repair
Act (California Civil Code § 896, et seq.),
Plaintiffs are entitled to recover nothing from Drail Investments, LLC.
3) On Plaintiffs’ Second Cause of Action for Negligence, in light of
Defaults being previously entered, Plaintiffs are entitled to recover from
Pacific Ocean Wall, Inc., Jose de Jesus Rodriguez, and Roberto Vazquez Gomez,
jointly and severally with Ron Fattal and Martel Investment, LLC, compensatory
damages of $963,146.32, which is inclusive of the compensatory damages awarded
under the First Cause of Action.
4) On Plaintiffs’ Third Cause of Action for Fraudulent Concealment,
Plaintiffs are entitled to recover from Ron Fattal and Martel Investment, LLC,
jointly and severally, compensatory damages in the amount of $1,975,223.32,
which is inclusive of the compensatory damages awarded under the First and
Second Causes of Action. Plaintiffs are entitled to recover from Ron Fattal the
additional amount of $2,000,000, reflecting punitive damages. Plaintiffs are
entitled to recover from Martel Investment, LLC the additional amount of
$1,000,000, reflecting punitive damages. Thus, the total principal sum
Plaintiffs are entitled to recover on the Third Cause of Action for Fraudulent
Concealment is $4,975,223.32.
Plaintiffs now move for judgment
notwithstanding the verdict as to the First Cause of Action for violation of
the Right to Repair Act (the “Act”).
Defendants Martel and Fattal also
move for judgment notwithstanding the verdict as to the Third Cause of Action
for Fraudulent Concealment or, alternatively, a new trial. The matter is now before the court.
Legal Standard
A. Judgment
Not Withstanding the Verdict
CCP § 629(a) provides that, “[t]he
court… on motion of a party against whom a verdict has been rendered, shall
render judgment in favor of the aggrieved party notwithstanding the verdict
whenever a motion for a directed verdict for the aggrieved party should have
been granted had a previous motion been made.” A motion for judgment
notwithstanding the verdict has been described as in the nature of a demurrer
to the evidence.” (Martin v. Ideal Packing Co. (1957) 156 Cal.App.2d
232, 235.)
“The trial judge’s
power to grant a judgment notwithstanding the verdict is identical to [her]
power to grant a directed verdict. The trial judge cannot weigh the evidence,
or judge the credibility of witnesses. If the evidence is conflicting or if
several reasonable inferences may be drawn, the motion for judgment
notwithstanding the verdict should be denied. ‘A motion for judgment
notwithstanding the verdict of a jury may properly be granted only if it
appears from the evidence, viewed in the light most favorable to the party
securing the verdict, that there is no substantial evidence to support the
verdict. If there is any substantial evidence, or reasonable inferences to be
drawn therefrom, in support of the verdict, the motion should be denied.’ ” (Hauter
v. Zogarts (1975) 14 Cal.3d 104, 110.)
B. New
Trial
Pursuant to CCP § 657,
a motion for a new trial may be granted if there is any:
1.¿Irregularity in the proceedings
of the court, jury or adverse party, or any order of the court or abuse of
discretion by which either party was prevented from having a fair trial.
2.¿Misconduct of the jury; and
whenever any one or more of the jurors have been induced to assent to any
general or special verdict, or to a finding on any question submitted to them
by the court, by a resort to the determination of chance, such misconduct may
be proved by the affidavit of any one of the jurors.
3.¿Accident or surprise, which
ordinary prudence could not have guarded against.
4.¿Newly discovered evidence,
material for the party making the application, which he could not, with
reasonable diligence, have discovered and produced at the trial.
5.¿Excessive or inadequate
damages.
6.¿Insufficiency of the evidence to justify the verdict or other decision, or
the verdict or other decision is against law.
7.¿Error in law, occurring at the
trial and excepted to by the party making the application.
When ruling on an application for
a new trial, the court sits as an independent trier of fact.¿(Lane v. Hughes
Aircraft Co. (2000) 22 Cal.4th¿405, 412.)¿The court, therefore, has broad
discretion to order new trials, limited only by the obligation to state its
reasons for granting a new trial and the existence of substantial evidence in
the record to support those reasons.¿(Id.)¿¿In assessing¿the need for a
new trial,¿the court must rely on its¿view of the overall record,¿taking into
account such factors, among others, as the nature and seriousness of
the¿alleged¿misconduct, the general¿atmosphere, including the judge’s control,
of the trial, the likelihood of prejudicing the jury, and the efficacy of
objection or admonition under all the circumstances.¿(Dominguez v.
Pantalone¿(1989) 212 Cal.App.3d¿201, 211.)¿
“The right to a
new trial is purely statutory, and a motion for a new trial can be granted only
on one of the grounds enumerated in the statute.” (Fomco, Inc. v. Joe
Maggio, Inc. (1961) 55 Cal.2d 162, 166.) Since new trial motions are
“creatures of statute,” the procedural steps for making and determining such a
motion are mandatory and must be strictly followed, or else the court acts in
excess of jurisdiction. (Maroney v. Iacobsohn (2015) 237 Cal.App.4th
473, 485; Wall Street Network, Ltd. v. New York Times Co. (2008) 164
Cal.App.4th 1171, 1193; Mercer v. Perez (1968) 68 Cal.2d 104,
118.)
PLAINTIFFS’ motion for
judgment notwithstanding the verdict
I. Request for Judicial Notice
The
court may take judicial notice of records of any court of record of the United
States. (Evid. Code, § 452(d)(2).) However, the court may only judicially
notice the existence of the record, not that its contents are the truth. (Sosinsky
v. Grant (1992) 6 Cal.App.4th 1548, 1565.)
Plaintiffs
request judicial notice of the following:
Exhibit A:
A true and correct copy of The Third Amended Complaint filed by Plaintiffs on
July 20, 2023 with the Los Angeles Superior Court, assigned Case Number
20STCV27444.
Exhibit B:
A true and correct copy of the Joint Submission of
Jury Instructions submitted by the parties in the above-referenced action on
February 26, 2025
Exhibit C:
A true and correct copy of the Verdict entered by the jury in the
above-referenced action on February 28, 2025, a true and correct copy of which
is attached hereto as Exhibit “C”.
Exhibit D:
A true and correct copy of the Judgment entered in the above-referenced action
on April 2, 2025.
Plaintiffs’
request for judicial notice is granted.
II. Discussion
Plaintiffs’ move for a judgment notwithstanding
the verdict (“JNOV”) against Defendant Drail Investment, LLC (“Drail”) as to
the first cause of action for violation of the Right to Repair Act (the “Act”)
on the basis that the jury’s verdict is contrary to facts and law. “A trial court may grant a motion JNOV only
if it appears from the evidence, viewed in the light most favorable to the
party who won the verdict, that there is no substantial evidence to support the
verdict.” (Gillotti v. Stewart (2017) 11 Cal.App.5th 875, 898.)
A. The Parties’ Stipulation
Plaintiffs show that on July 25,
2024, at the Final Status Conference, Defendant Drail stipulated to being a
“Builder” under the Right to Repair Act in exchange for the negligence claim
being dismissed. (Torkamani Decl., Ex. A [07/25/24 Trans. at p. 23:21-23].)
Plaintiffs explain that the first cause of action for violation of the Act was
pled in the alternative to the second cause of action for negligence in the
event that Defendants were not the Builder of the Martel Property. (Id.
at pp. 19:22-20:27.) Plaintiffs’ counsel explained that the first cause action
is “framed as a cause of action for strict liability under the Right to Repair
Act.” (Id. at p. 20:4-5.)
MR. TORKAMANI: [¶] If they’re builders,
they're liable under the cause of action for strict liability under the Right
to Repair Act. If they're not builders, they're subject to negligent violation
of the standards set forth in the Right to Repair Act. So both are available as
alternatives; not both available as to any specific party, they're alternative
causes of action.
(Id. at p.
20:20-27.)
Defendant Drail agreed to stipulate
that it qualified as a “Builder” for purposes of the Right to Repair Act in
exchange for Plaintiffs dismissing the negligence claim:
MR. PARADES: [¶] One, I do have authority to stipulate that Mr. Fattal is
a builder under the Right to Repair Act so that the negligence claim does go
away.
(Torkamani
Decl., Ex. A at p. 23:21-23.)
Defendant Drail’s counsel clarified
that Martel and Drail, not just Fattal, were stipulating that they were
Builders under the first cause of action:
THE COURT: Let's clarify: Mr. Parades, how about the two other
defendants? Are they also stipulating that those entities are builders?
MR.
PARADES: Yes, your Honor.
(Id., at pp. 24:27-25:2.)
The court summarized the Parties’
stipulation on the record as follows:
MR. TORKAMANI: If we can get that stipulation in writing, we will dismiss the negligence
cause of action as to the builders.
THE
COURT: It's a matter of
record.
MR.
SAUER: It's on the record.
MR.
TORKAMANI: Then we'll go ahead and
dismiss the negligence.
THE COURT: So, Mr. Paredes, if that is your firm position, that’s
your representation to the Court, I’ll ask Mr. Torkamani if he wants to move to
dismiss the negligence cause of action.
So
I'm assuming that you truly are seeking, or stipulating that all three of your
clients are builders in this case; is that correct?
MR.
PARADES: Yes, your Honor, that is
correct.
MR.
TORKAMANI: We’ll dismiss the negligence
cause of action, your Honor.
THE
COURT: All right.
(Id. at p. 25:3-21.)
Defendant Drail denies that it was the
builder of the Martel Property.
Drail
invests in renovation projects, as opposed to new builds such as the Martel
Property. That being the case, Drail never would have, nor did it stipulate to
being a builder of the Martel Property. What Drail did was stipulate that it
was a builder, in return for Plaintiffs’ dismissal of their Negligence claim.
In so doing, Drail eliminated Plaintiffs’ burden to prove that Drail was a
builder of real estate, versus being merely an investor.
(Opposition, at p. 2:11-15.)
“Courts may interpret stipulations to
determine their effect.” (City of Martinez v. Workers'
Comp. Appeals Bd. (2000) 85 Cal.App.4th 601, 621.) Defendant Drail
is correct that in stipulating to being a “Builder” under the Right to Repair
Act, Plaintiffs' burden of proof was eliminated. “Stipulations obviate the need
for proof and are independently sufficient to resolve the matter at issue in
the stipulation.” (People v. Palmer (2013) 58 Cal.4th 110, 118.) “Even
at trial, counsel may stipulate to the existence or nonexistence of essential
facts.” (Ibid.) However, Drail’s stipulation that it was a Builder under
the Right to Repair Act also resolved the issue of whether Drail was the
builder of the Martel Property in Plaintiffs’ favor.
The Act defines “Builder” as the entity
that sold the property at issue:
(a) For purposes of this title, except as provided in subdivision (b),
“builder” means any entity or individual, including, but not limited to a
builder, developer, general contractor, contractor, or original seller, who, at
the time of sale, was also in the business of selling residential units to the
public for the property that is the subject of the homeowner's claim or was in
the business of building, developing, or constructing residential units for
public purchase for the property that is the subject of
the homeowner's claim.
(b) For the purposes of this title, “builder” does not include any
entity or individual whose involvement with a residential unit that is the
subject of the homeowner's claim is limited to his or her capacity as general
contractor or contractor and who is not a partner, member of, subsidiary of, or
otherwise similarly affiliated with the builder. For purposes of this title,
these nonaffiliated general contractors and nonaffiliated contractors shall be
treated the same as subcontractors, material suppliers, individual product
manufacturers, and design professionals.
(Civ. Code, § 911(a).)
Defendant Drail fails to explain how it
could be a “Builder” under the Act but not be the “Builder” of the Martel
Property when the Act defines “Builder” as the entity that sold “the property
that is the subject of the homeowner's claim.” (Civ. Code, § 911(a).) In other
words, Drail fails to show that it could stipulate to being the “Builder” under
the Act while also maintaining that it was not the “Builder” of the Martel
Property when such a position would be contrary to both the Act and the
Parties’ stipulation.
B. The Jury Instructions, Verdict, and
Relevant Case Law
The effect of Defendant Drail’s
stipulation is reflected in the Joint Submission of Jury Instructions given to
the Jury:
INSTRUCTION NO. 28
In order for a defendant to be
strictly liable under the Right to Repair Act, the defendant must be a builder.
In this case, you are to accept as true that Fattal, Martel Investment, LLC,
and Drail Investments, LLC qualify as builders for purposes of the Right to
Repair Act.
INSTRUCTION NO. 29
If you find that Fattal, Martel
Investment, LLC, and/or Drail Investments, LLC are liable as builders under the
Right to Repair Act, you should not attempt to apportion or allocate liability
between them or any other party. Fattal, Martel Investment, LLC, and/or Drail
Investments, LLC are liable for all damages that may be awarded under the Right
to Repair Act.
(Plaintiffs’ RJN Ex. B.) Defendant
Drail’s stipulation means it acquiesced to the fact it was a builder of the
Martel Property. (Torkamani Decl., Ex. A
at pp. 24:27-25:2.) The effect of the stipulation was
explained to Drail by Plaintiffs’ counsel prior to Drail’s stipulation. (Id. at pp. 20:3-27.)
Civ. Code § 942 states:
In order to make a claim for violation of the standards set forth in
Chapter 2 (commencing with Section 896), a homeowner need only demonstrate, in
accordance with the applicable evidentiary standard, that the home does not
meet the applicable standard, subject to the affirmative defenses set forth in
Section 945.5. No further showing of causation or damages is required to meet
the burden of proof regarding a violation of a standard set forth in Chapter 2
(commencing with Section 896), provided that the violation arises out of,
pertains to, or is related to, the original construction.
As the Act has no causation component
and because Defendant Drail was a “Builder” of the Martel Property, Plaintiffs
only needed to show that it suffered a violation under the Act for Drail to be
liable under the first cause of action.
Question No. 1 of the Verdict Form
states as follows:
Which,
if any, of the following Defendants do you find are liable to Plaintiffs
Sebastian Zurita and Emiliano Zurita for violation of California's Right to
Repair Act?
(Plaintiffs’ RJN Ex. C.) The Jury
responded by finding that Defendants Ron Fattal and Martel Investment, LLC were
liable but that Drail Investments, LLC was not. (Ibid.)
As the Jury found that Defendants Ron
Fattal and Martel Investment, LLC were liable to Plaintiffs under the Act, it
means that Plaintiffs prevailed in showing they suffered a violation under the
Act. Therefore, Defendant Drail could only escape liability under the Act if it
prevailed on one of the affirmative defenses set forth in Civ. Code section 945.5:
A builder . . . under the
principles of comparative fault pertaining to affirmative defenses, may be
excused, in whole or in part, from any obligation, damage, loss, or liability
if the builder, general contractor, subcontractor, material supplier,
individual product manufacturer, or design professional, can demonstrate any of
the following affirmative defenses in response to a claimed violation:
(a) To the extent it is caused by an unforeseen act of nature which
caused the structure not to meet the standard. For purposes of this section an
“unforeseen act of nature” means a weather condition, earthquake, or manmade
event such as war, terrorism, or vandalism, in excess of the design criteria
expressed by the applicable building codes, regulations, and ordinances in
effect at the time of original construction.
(b) To the extent it is caused by a homeowner's unreasonable failure
to minimize or prevent those damages in a timely manner, including the failure
of the homeowner to allow reasonable and timely access for inspections and
repairs under this title. This includes the failure to give timely notice to
the builder after discovery of a violation, but does not include damages due to
the untimely or inadequate response of a builder to the homeowner's claim.
(c) To the extent it is caused by the homeowner or his or her agent,
employee, general contractor, subcontractor, independent contractor,
or consultant by virtue of their failure to follow the builder's or
manufacturer's recommendations, or commonly accepted homeowner maintenance
obligations. . .
(d) To the extent it is caused by the homeowner or his or her
agent's or an independent third party's alterations, ordinary wear and tear,
misuse, abuse, or neglect, or by the structure's use for something other than
its intended purpose.
(e) To the extent that the time period for filing actions bars the
claimed violation.
(f) As to a particular violation for which the builder has obtained
a valid release.
(g) To the extent that the builder's repair was successful in
correcting the particular violation of the applicable standard.
(h) As to any causes of action to which this statute does not apply,
all applicable affirmative defenses are preserved.
Defendant Drail does not claim that
it escaped liability under the Act because it prevailed on one of the
affirmative defenses set forth in section 945.5. Instead, Drail asserts the jury verdict is
not erroneous because Plaintiff failed to meet its burden of showing that Drail
is a “Builder’ as defined by Civ. Code § 911. As explained above, the effect of
the July 25, 2024, stipulation is that Drail stipulated to being a builder
under the Act, precluding Drail from challenging this fact and eliminating the
need for Plaintiffs to prove Drail was a “Builder” under the Act.
First, Plaintiffs did put forth
evidence that Drail entered into a contract to create the architectural plans
for the Martel Property, while Defendant Fattal, as the sole owner and member
of Drail, maintained he signed the contract on Drail’s behalf by mistake.
(Torkamani Decl. Ex. C [02/24/2025 Trial Trans. at pp. 12:4-14:11, 25:12-26:24,
94:13-95:22; Exs. 7, 8, 13.) Defendant Drail fails to cite a single legal
authority that would have allowed the Jury to deviate from the Jury
Instructions, which instructed the Jury to consider Drail as qualifying as a
“Builder” under the Act and not to apportion liability between Defendants. (Plaintiffs’ RJN Ex. B.) Plaintiffs were
also entitled to rely on Drail’s stipulation that it was a Builder under the
Act to prove Drail’s liability under the Act.
Second, because of the stipulation,
the Jury was instructed to accept as true that Defendant Drail was a “Builder”
under the Act, meaning that once Plaintiff established a violation of the Act,
Drail could only escape liability if Drail prevailed on an affirmative defense
set forth in Civ. Code section 911. (See Plaintiffs’ RJN Ex. B, Jury
Instructions Nos. 28, 29.) Drail does not assert, nor does the record show,
that Drail prevailed on an affirmative defense under section 911 such that it
could escape liability under the Act. Drail also fails to cite any legal
authority that would have permitted the Jury to deviate from the Jury
Instructions.
Third, if Defendant Drail wished to renege on
the stipulation that it was a “Builder” under the Act during trial, Plaintiffs
should have been allowed to revive the negligence claim against Drail. During
its closing argument, Drail’s counsel argued that Drail was not the builder of
the Martel Property:
INSTRUCTION NUMBER 28, IN ORDER FOR A DEFENDANT TO BE STRICTLY LIABLE
UNDER THE RIGHT TO REPAIR ACT, THE DEFENDANT MUST BE A BUILDER. IN THIS CASE,
YOU ARE TO ACCEPT AT TRUE THAT FATTAL, MARTEL INVESTMENT AND DRAIL INVESTMENTS
LLC QUALIFY AS BUILDERS FOR THE PURPOSE
OF THE RIGHT TO REPAIR ACT. WHY AM I SHARING THIS WITH YOU? IT’S BECAUSE ALTHOUGH MR. FATTAL AND MARTEL
INVESTMENTS, LLC WERE THE BUILDERS OF THE MARTEL PROPERTY, DRAIL INVESTMENTS
WAS NOT. DRAIL INVESTMENTS WAS NOT THE BUILDER OF THE MARTEL PROPERTY AND
THEREFORE HAS NO GREATER LIABLITY TO THE PLAINTIFFS THAN ANY OTHER BUILDER THAT
EXISTS.
(Grossman Decl., Ex. A [Drail
Closing Argument at pp. 57:22-58:28 [All caps original].)
The Jury was instructed that
statements made during closing arguments are not evidence. Jury Instruction No.
5 states in the relevant part:
What the attorneys say during the trial is not evidence. In their opening
statements and closing arguments, the attorneys will talk to you about the law
and the evidence. What the lawyers say may help you understand the law and the
evidence, but their statements and arguments are not evidence.
(Plaintiffs’ RJN Ex. B.)
While Defense counsel has the right to refer to the law in its closing
argument, counsel cannot correct or vary from the instructions given to the
jury. (See Gotcher
v. Metcalf
(1970) 6 Cal.App.3d 96, 100 [“However, it is the right of counsel, and
therefore not misconduct, to discuss the law of the case in his oral argument,
provided, of course, that his statement of the law is correct and is not at
variance with instructions on the law which the court has advised counsel it
will give.”].) “Nor does it violate the rule that the jury must follow the law
as given in the jury instructions and must disregard the attorneys' remarks to
the extent that they conflict with the jury instructions.” (People v. Brown
(2017) 11 Cal.App.5th 332, 341.)
The
court agrees that because Defendant Drail stipulated it was the “Builder” under
the Act, the Act’s definition of builder designated Drail as the “Builder” of
the Martel Property. (Civ. Code, § 911(a).) Therefore,
Defendant Drail was strictly liable to Plaintiffs for violations of the Act
along with the other Defendants. And as fault could not be apportioned, the
Jury could not find that some “Builders” were responsible for the violations
while other “Builders” were not. (Civ. Code, § 942.)
Defendant Drail asserts that Plaintiffs cannot show that Drail’s
stipulation was a “clear and unmistakable” acknowledgment that Drail was the
builder of the Martel Property. The court disagrees. “Case law is clear that ‘
“[w]aiver is the intentional relinquishment of a known right after knowledge of
the facts.” [Citations.] The burden ... is on the party claiming a waiver of a
right to prove it by clear and convincing evidence that does not leave the
matter to speculation, and 'doubtful cases will be decided against a waiver'
[citation].’ ” (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1,
30.) “The waiver may be either express, based on the words of the waiving
party, or implied, based on conduct indicating an intent to relinquish the
right.” (Ibid.)
The record before the court reflects that Defendant Drail expressly
agreed to stipulate that it was a “Builder” as defined by the Act and that as
the “Builder’ it was subject to strict liability for any violations under the
Act. (Torkamani Decl., (Ex. A [07/25/24 Trans. at pp. 19:27-20:27,23:21-23,
24:27-25:21.) Defendant Drail fails to show that by stipulating to being a
“Builder” under the Act, it could also take the position that it was not the
“Builder” of the Martel Property when the Act defines the “Builder” as the
entity that sold “the property that is the subject of the homeowner's claim.”
(Civ. Code, § 911(a).) In other words, the legal effect of Drail accepting it
was a “Builder” under the Act was that Drail accepted it was the “Builder” of
the Martel Property and was subject to strict liability. Therefore, once the
other “Builders” were found liable under the Act, “Drail” was also liable as
liability could not be apportioned. (Civ. Code, § 942.)
Moreover, Defendant Drail accepted the benefits of having the negligence
claim dismissed, to Plaintiffs’ detriment, while taking the position that Drail
was mistakenly included as the entity that contracted the creation of the
architectural plans for the Martel Property. (Torkamani Decl., Ex. C
[02/24/2025 Trial Trans. at pp. 12:4-14:11, 25:12-26:24, 94:13-95:22; Exs. 7,
8, 13.) Drail waited until closing arguments to assert that it was not the
“Builder” the Martel Property, despite the Act defining Drail as the “Builder”
of the Martel Property. (Grossman Decl., Ex. A [Drail Closing Argument at pp.
57:22-58:28 [All caps original].)
Consequently, the court finds that the record shows by clear and
convincing evidence that Defendant Drail stipulated that it was the “Builder”
under the Act, precluding Drail from challenging said definition by asserting
it was not the “Builder” of the Martel Property.
For the reasons set forth above, Plaintiffs’ Motion is granted.
Fattal Defendants’
motion for judgment notwithstanding the verdict
I. Request for Judicial Notice
The
court may take judicial notice of records of any court of record of the United
States. (Evid. Code, § 452(d)(2).) However, the court may only judicially
notice the existence of the record, not that its contents are the truth. (Sosinsky
v. Grant (1992) 6 Cal.App.4th 1548, 1565.)
Fattal
Defendants request judicial notice of the following:
Exhibit 1:
Plaintiffs’ Third Amended Complaint filed on or about July 20, 2023.
Exhibit 2:
Plaintiffs’ Brief re Motion in Limine No. 5 filed on or about
February 16, 2025.
Exhibit 3:
Minute Order entered February 19, 2025.
Exhibit 4:
Excerpts of Jury Instructions filed on February 28, 2025.
Exhibit 5:
Notice of Entry of Judgment filed on or about April 16, 2025.
Exhibit 6:
Excerpts of Trial Testimony by Mark Vanderslice on February 21, 2025.
Exhibit 8:
Excerpts of Trial Testimony of Sebastian Zurita on February 19, 2025.
Fattal
Defendants’ request for judicial notice is granted.
Plaintiffs’
request judicial notice of the following:
Exhibit A:
A true and correct copy of the Third Amended Complaint filed by Plaintiffs
on July 20, 2023 with the Los Angeles Superior Court, assigned Case Number
20STCV27444.
Exhibit B:
A true and correct copy of the Order on the Parties’ Stipulation Re
Striking Allegations From Third Amended Complaint entered by the Court on
January 13, 2025
Exhibit C:
The Order on the Parties’ Stipulation Re Amendment Of Third Amended
Complaint To Conform To Proof entered by the Court on February 25, 2025.
Exhibit D:
A true and correct copy of the Joint Submission of Jury Instructions
submitted by the parties in the above referenced action on February 26, 2025.
Exhibit E:
A true and correct copy of the Verdict entered by the jury in the
above-referenced action on February 28, 2025.
Exhibit F:
The Judgment entered in the above-referenced action on April 2, 2025.
Plaintiffs’
request for judicial notice is granted.
II. Discussion
Defendants Martel Investment, LLC and Ron Fattal (collectively “Fattal
Defendants”) seek a judgment notwithstanding the verdict and/or a new trial on
Plaintiffs’ Third Cause of Action for Fraudulent Concealment. “A motion for
judgment notwithstanding the verdict may be granted only if it appears from the
evidence, viewed in the light most favorable to the party securing the verdict,
that there is no substantial evidence in support.” (Sweatman v. Department
of Veterans Affairs (2001) 25 Cal.4th 62, 68.)
The Fattal Defendants assert that Plaintiffs offered no evidence that the
Martel Property’s construction defects and resulting damages were caused by any
of the alleged non-disclosures rather than faulty workmanship. “As such, there
is no causal connection between the non-disclosures and any of the damages
awarded to the Plaintiffs. Without causation, there can be no fraudulent
concealment, and on that basis Fattal is entitled to a judgment notwithstanding
the verdict.” (Motion, at p. 2:11-14.)
The Jury Instructions on the
Defendants’ Nondisclosure of Material Facts state as follows:
INSTRUCTION NO. 32
Sebastian and Emiliano Zurita also claim that Ron Fattal, Martel
Investment, LLC failed to disclose certain information, and that because of
this failure to disclose, Sebastian and Emiliano Zurita were harmed. In order
to establish this claim, Sebastian and Emiliano Zurita must prove all of the
following:
a.
Fattal acted as an owner/builder in connection with overseeing
construction at the Property, despite the fact that he did not hold a valid
contractor’s license and was not qualified to oversee the work of the
subcontractors, and did not carry appropriate insurance coverage, in order to
save money on the cost of construction of the property; or
b.
Fattal failed to hire a licensed general contractor to oversee the
construction at the Property, failed to hire subcontractors who possessed the
requisite licenses to perform the construction, failed to hire subcontractors
who carried appropriate insurance coverage, and failed to hire tradespersons
sufficiently skilled to construct the Property in order to save money on the
cost of construction.
The Fattal Defendants do not dispute the fact that the Martel Property
suffered from construction defects, and that Defendant Fattal failed to
disclose that he held no valid contractor’s license or that there was no
licensed general contractor or subcontractors who had the requisite skill to
construct the Martel Property. Instead, the Fattal Defendants assert that there
is no causal link between the Defendants’ fraudulent concealment and the damage
award as they relate to the cost of correcting the construction defects and
loss of rental income.
Jury Instruction No. 37 sets out the specific items of damages Plaintiffs
sought:
Sebastian and Emiliano Zurita must prove the amount of their damages.
However, Sebastian and Emiliano Zurita do not have to prove the exact amount of
damages that will provide reasonable compensation for the harm. You must not
speculate or guess in awarding damages.
The following are the specific items of damages claimed by Sebastian and
Emiliano Zurita:
1.
Amounts that Sebastian and Emiliano
Zurita reasonably spent in reliance on Ron Fattal and Martel Investment, LLC’s
failure to disclose if those amounts would not otherwise have been spent in the
purchase or acquisition of the property; and
2.
Amounts that Sebastian and Emiliano
Zurita have spent or will spend to repair the property to the extent that Ron
Fattal and Martel Investment, LLC’s failure to disclose was a substantial
factor in causing those expenses; and
3.
Lost profits or lost rental income
to the extent that Ron Fattal and Martel Investment, LLC’s failure to disclose
was a substantial factor in causing those lost profits or lost rental income.
(Plaintiffs’ RJN Ex. D [Jury Instruction No. 37].)
The Jury awarded damages for the fraudulent concealment as follows:
Question No. 4: What is the total amount of damages, if any, that you award to
Plaintiffs Sebastian Zurita and Emiliano Zurita with respect to their claim for
Fraudulent Concealment?
ANSWER: Repair costs, investigative costs, and costs incidental to the repair:
$963,146.32
Rent and incidental rental costs: $1,012,077.00
(Plaintiffs’ RJN Ex. E [Jury Verdict].)
Plaintiffs point to the testimony of their real estate agent, Gloria
Carmona (“Carmona”), who testified that Defendants were required to disclose
information affecting the condition of the Martel Property “and everything that
can impact the value or desirabilities [sic] of the home” via two documents,
the Seller Property Questionnaire and the Transfer Disclosure Statement.
(Torkamani Decl., Ex. B [02/20/2025 Trial Trans. at pp. 84:16-87:7].) On the
Seller Property Questionnaire, Defendant Fattal did not disclose water
intrusion issues and answered no to questions related to disclosures that
pertain to the condition or repair or improvement of the property or “any past
or present known material facts or other significant items affecting the value
or desirability of the property not otherwise disclosed by buyer.” (Id.
at pp. 96:2 – 98:4.)
Carmona further testified that Defendants were required to disclose the
fact that work done on the Martel Property was not done by a licensed general
contractor or an insured subcontractor:
Q BY MR. SAUER: MS. CARMONA, WITH RESPECT
TO THE WORKER, IF THE CONTRACTOR IS EITHER SUB OR GENERAL OR UNLICENSED, IS
THAT SOMETHING THAT SHOULD BE DISCLOSED?
A ABSOLUTELY.
Q IF THERE'S NO INSURANCE THAT THE GENERAL CONTRACTOR, SUBS
DON'T CARRY INSURANCE, IS THAT SOMETHING THAT SHOULD BE DISCLOSED?
A 100 PERCENT.
Q AND AGAIN, IT GOES TO VALUE AND DESIRABILITY; CORRECT?
A CORRECT.
(Torkamani Decl., Ex. B at p. 99:7-18.)
Defendant Fattal confirmed that he was not a licensed contractor and that
he acted as the owner-builder for the Martel Property and was responsible for
overseeing its construction, hiring licensed subcontractors, and ensuring that
they were insured. (Torkamani Decl., Ex. D [02/24/2025 Trial Trans. at pp.
18:6-23:15.) Plaintiffs presented evidence that Fattal did not take any action
to confirm licenses or insurance of the subcontractors. (Id. at pp.
30:5-38:27.) Fattal also admitted that he did not disclose to Plaintiffs he
acted as an owner-builder, did not carry a license as a general contractor, and
did not believe these facts were not relevant to the value or desirability of
the Martel Property. (Id. at pp. 39:3-42:25.)
Based on the evidence above, the Jury had substantial evidence to
conclude that the costs of purchasing and subsequently having to repair the
Martel Property could be attributed to both the faulty workmanship and the
Defendants’ failure to disclose that there was no general licensed contractor
or licensed and insured subcontractor who worked the Martel Property. In other
words, Defendants’ nondisclosures were a substantial factor in bringing
Plaintiffs’ harm because they induced Plaintiffs to purchase the Martel
Property by depriving Plaintiff of the opportunity to know the true value of
the Property and its desirability, causing Plaintiffs to incur repair costs and
loss of rental income due to the purchase. “Causation for fraud is properly
determined using the substantial factor test.” (Knutson v. Foster (2018)
25 Cal.App.5th 1075, 1091 [Confirming that causation for fraud is determined by
the substantial factor test, not the “but for” test].)
Plaintiffs also point to the testimony of the expert, Jeffrey Hughes
(“Hughes”), who prepared a report that included a list of the defects at the
Martel Property and estimated the total repair costs of those defects to be
around $743,100. (Torkamani Decl., Ex. C [02/21/2025 Trial Trans. at pp.
111:18-21; Trial Exs. 42, 46, 471, 535, 543].) Hughes also testified that
additional costs had not yet been incurred and that the costs of repair were
reasonable. (Id. at pp. 132:18-136:5.) Plaintiffs’ roofing and waterproofing
expert, Mark Vanderslice (“Vanderslice”), prepared a report that gave a
detailed explanation as to a variety of defects at the roof and waterproofing
of the Martel Property. (Torkamani Decl., Ex. 47.)
Defendants’ expert, Don Boatwright (“Boatwright”), agreed that there were
defects at the Martel Property, agreed with the Vanderslice’s report, and agreed
that Plaintiffs had incurred repair costs.
He opined, however, that the list of defects was shorter than what
Hughes had prepared, and that it would cost less to repair the Martel Property
than the estimate given by Hughes. (Torkamani Decl., Ex. E [02/25/25 at pp.
13:13-40:20, 44:12-51:19; Trial Exs. 46, 57, 530.) Boatwright did not provide an estimate of what
the costs should have been. (Id. at p. 45:3-6.)
In addition, Plaintiffs also provided evidence in the form of testimony
that they suffered loss of rental income due to Defendants’ nondisclosure.
(Torkamani Decl., Ex. A [02/19/2025 Trial Trans. at pp. 86:27-89:16.)
Plaintiffs leased the Martel Property for $17,000 per month. (Ibid.) The
tenants began to complain about various property defects, including leakage in
the master bedroom, patio, and living room. (Id. at p. 89:22-90:13.) The
water damage caused the roof of one of the rooms to collapse, resulting in the
lease termination. (Id. at p. 91:6-95:7; Exs. 62, 531.)
The court finds that substantial evidence supports the fact that
Defendant Fattal’s concealment of the facts that he was not a licensed
contractor and did not employ or oversee that licensed or insured
subcontractors worked the Martel Property were substantial factors that led
Plaintiffs to purchase the Martel Property and deprived Plaintiffs of the
opportunity to cancel the purchase or negotiate a price reduction. (Torkamani
Decl., Ex. B [02/20/2025 Trial Trans. at pp. 84:16-87:7.)
Accordingly, Plaintiffs incurred repair costs and other damages caused by
Defendants’ nondisclosure of the facts that construction of the Martel Property
was not adequately supervised and was built by unlicensed and/or uninsured
contractors and/or by unskilled tradespeople. (Torkamani Decl., Ex. D
[02/24/2025 Trial Trans. at pp. 18:6-23:15, 30:5-38:27, 39:3-42:25.)
Substantial evidence also exists to support the Jury’s award of damages for the
loss of rental income on the Martel Property because the loss was substantially
caused by the Defendants’ concealment of who and how the Martel Property was
built. (Torkamani Decl., Ex. A [02/19/2025 Trial Trans. at pp. 86:27-89:16;
91:6-95:7]; Exs. 62, 531.)
Because substantial evidence supports the Jury’s verdict, the Fattal
Defendants’ JNOV is denied.
Fattal Defendants’ Motion For A New Trial
I. Discussion
In the alternative, the Fattal Defendants move for a new trial on the
basis that there is insufficient evidence
to justify the verdict. (CCP, 657(6).) “In weighing and evaluating the
evidence, the court is a trier-of-fact and is not bound by factual resolutions
made by the jury. The court may grant a new trial even though there be
sufficient evidence to sustain the jury's verdict on appeal, so long as the
court determines the weight of the evidence is against the verdict.” (Candido
v. Huitt (1984) 151 Cal.App.3d 918, 923.)
The
evidence presented at trial shows that Defendants’ concealed of how and who
built the Martel Property, despite such a disclosure being required because it
related to the value and desirability of the Property. (Torkamani
Decl., Ex. B [02/20/2025 Trial Trans. at p. 99:7-18]; Ex. D [02/24/2025 Trial
Trans. at pp. 18:6-23:15, 30:5-38:27, 39:3-42:25.) Defendants’ concealment induced Plaintiffs to purchase the Martel
Property by depriving Plaintiffs of the necessary facts needed to make an
informed decision during the escrow “due process” period, which would
have allowed Plaintiffs to negotiate a price reduction and/or decide whether to
cancel the purchase of the Martel Property. Consequently, Plaintiffs purchased
the property and incurred repair costs and loss of rental income. (Id.
Ex. B at pp. 81:5-83:17, 84:16-87:7; Ex. D [02/24/2025 Trial
Trans. at pp. 18:6-23:15, 30:5-38:27, 39:3-42:25]; Ex. A [02/19/2025 Trial
Trans. at pp. 86:27-89:16; 91:6-95:7]; Exs. 62, 531.)
This evidence was sufficient for the jury to conclude that Defendants’
fraudulent concealment was a substantial factor in Plaintiffs’ decision to
purchase the Martel Property, and that the consequential damages that flowed
from that purchase were substantially caused by the concealment. (See Strebel
v. Brenlar Investments, Inc. (2006) 135 Cal.App.4th 740, 752 [“The jury was
instructed on the proper standard of causation (“substantial factor”) and the
record supports its finding that defendants' fraud was a substantial factor in
bringing about Strebel's damages.”].)
In other words, the jury could conclude that both the subpar workmanship
and the Defendants’ concealment of the fact that no licensed or insured
contractors worked or oversaw construction on the Martel Property, were
substantial factors in Plaintiffs’ decision to purchase the Martel Property. Plaintiffs incurred repair costs and loss of
rental income resulting from the purchase. For this reason, damages on the
third cause of action for fraudulent concealment were “inclusive of the
compensatory damages awarded under the First and Second Causes of Action.”
(Plaintiffs’ RJN, Ex. F.)
Therefore, the Fattal Defendants’ motion for a new trial is denied.
Conclusion
Plaintiffs’ JNOV is granted. The Fattals
Defendants’ JNOV is denied as is their motion for a new trial.