Judge: Malcolm Mackey, Case: BC475181, Date: 2023-08-11 Tentative Ruling

Case Number: BC475181    Hearing Date: August 11, 2023    Dept: 55

BROWN v. ZIVE                                                                              BC475181

Date of Hearing: 8/11/23, Dept. 55

#5:  MOTION FOR NEW TRIAL.

Notice: Okay.

Opposition

MP:     Defendant YOUVAL ZIVE

RP:      Plaintiff

Summary

On 12/13/11, Plaintiff CHERIE BROWN filed the Complaint.

On 10/18/12, Plaintiff filed a Second Amended Complaint for (1) FRAUD, (2) QUIET TITLE AND (3) FRAUDULENT TRANSFER, alleging the foreclosure sale of the family residence at 3751 Lankershim Boulevard, initially due to VOUVAL ZIV’s, in a conspiracy with other defendants, inducing her to make payments on a loan to him, based upon misrepresentations of being an experienced real estate attorney.  Also, that pleading alleges post-judgment aiding and abetting of sale of the subject property to Lanker Partnership,  to hinder Plaintiff as judgment creditor, after prevailing at trial on those underlying facts.

Before reversal and remand in appellate proceedings (opinion, filed 11/16/21), the Court had granted moving defendants motion to dismiss this action under the five-year statute.

On 11/16/21, an appellate opinion directed a new order denying a motion to dismiss as to the causes of action for quiet title and fraudulent conveyance, and reconsidering dismissal as to the cause of action for fraud.

On 11/14/22, Plaintiff filed a notice of appeal from the Summary Judgment on 9/27/22 for Defendant DEUTSCHE BANK.

On 6/14/23, Judgment after jury trial was filed in favor of the Plaintiff in the amount of $175,000, plus $3,000,000 was imposed on Defendant Youval Zive, $1,000,000 was imposed on Defendant Vaca Partnership, and $2,000,000 was imposed on Defendant Phoenix Realty Investments, LLC.

On 7/3/23, Defendant filed a notice of intent to move for new trial.

On 7/21/23, Defendant filed a motion for new trial.

MP Positions

Moving party requests an order granting a new trial, on bases including the following:

·         Zive was forced to represent himself while experiencing a very compromised ability to communicate, after the court refused to continue trial again to allow defendant Zive time to see emergency medical attention for stage 4 cancer.

·         The statute of frauds and parol evidence rule should have precluded Brown from testifying about oral representations regarding purchase of property, e.g. monthly payments would never go up, loan was not subject to negative amortization, she would not have to refinance in two years (contradicted by Loan Extension Agreement negotiated by attorney John Rowell), and that Zive was acting as her attorney. These statements were the basis for her fraud claim.

·         No cause of action was pled for wrongful foreclosure. During trial, plaintiff's counsel asked to conform to proof, which the court granted. This new cause of action for damages completely blindsided defendant Zive.

·         The jury awarded excessive non-economic damages for the emotional distress that Brown claimed she suffered, yet there was no evidence whatsoever in the form of therapy or medical bills to substantiate any such emotional distress.

·         The court permitted testimony and documents replete with inadmissible hearsay.

·         The jury's outrageous punitive damages award was much more than three to five times either economic or non-economic damages awarded. As the court is aware, excessive punitive awards are not permitted and violate due process.

RP Positions

Opposing party advocates denying, for reasons including the following:

·         The motion was filed untimely, beyond ten days of the filing of the notice of intention to move for new trial. CCP Section 659a.

·         Moving party filed no declarations to support the motion.

·         The failure to include "excessive damages" (CCP Section 657 5) as a basis for the new trial motion, deprives this Court of jurisdiction to grant a new trial on that basis.

·         The Court had discretion to deny another trial continuance.  Moving party was not forced to represent himself-- he chose the strategy, in an effort to get yet another continuance. When he decided to become self-represented, ZIVE was well aware of all limitations on his voice. As to the biopsy, ZIVE apparently was resetting the biopsy for almost three months later. This impeaches his claim of a "medical emergency".  Medical conditions are not supported by any sworn testimony or declaration.

·         Parol evidence may be used to show fraud in the inducement. It was used to circumstantially show ZIVE's state of mind and intent to deceive.

·         As to allowing an amended complaint to conform to proof, the Court clearly made the correct decision.  The defense has known of the factual basis for the wrongful foreclosure claim since, at least, the time a Second Amended Complaint was filed on October 31st 2013.  The wrongful foreclosure theory was based upon the fact that ZIVE and PRI used the Promissory Note and Deed of Trust that were procured by fraud to start and effect the foreclosure in September of 2011, and. through the foreclosure deed, unlawfully and improperly transfer The Property to PRL.

·         The amount of the non-economic award was not excessive.  The jury learned of the pain Plaintiff suffered, the anxiety and fear caused by the foreclosure and threats of ZIVE to take her home. They heard about the emotional distress she suffered.

·         Evidentiary rulings are no basis to grant a new trial here.  Plaintiff does not recall ZIVE making any evidentiary objections to the materials referenced in the memorandum. To the extent objections were interposed, Mr. Cole, representing other parties, and Mr. Koldzie. representing Mr. Peres, made the objections.  These documents were admitted during the examination of Ms. Celestine Uriarte, a broker working for ZIVE. She signed the documents and identified them. She eventually did lay the foundation for admission of certain of the short-sale materials. Mr. Peres was also examined about the documents, as he signed some of them. Adequate foundation was laid for admission of these documents, to the extent such objections were interposed. As to the hearsay argument, some of the short-sale exhibits were signed by ZIVE and PERES and statements therein would constitute admissions (Ev. Code 1220), and/or statements by a party whose liability or breach of duty is in issue (Ev. Code 1224). Mr, Peres testified that he was directed to sign documents by Eric Imas and ZIVE, so Evidence Code section 1222 also applied to some of these documents.

·         Regarding punitive damages, for purposes of determining the constitutional ratio, the issue is not necessarily the damages that may be recovered by the plaintiff, as much as it is the harm caused by the defendants. See, Simon v. San Paolo US. Holding Co.„ Inc. (2005) 35 Cal.4th 1159, 1174.  Plaintiff presented substantial evidence that the voidable transfers were intentional and engineered and undertaken by ZIVE to hinder, delay, and or avoid collection (by using or executing on The Property), of the then anticipated ZIVE and VACA debt from the BC440484 case.  Specifically, the jury found that the transfer to PRI by ZIVE and VACA in September of 2011, which was effected using the fraudulently obtained wrap-around Note and Deed of Trust was a transfer in violation of the Voidable Transfer Act.

·         ZIVE also asserts that, even though neither party requested CACI 201, which defines "clear and convincing evidence", the Court had a duty to so instruct sua sponte. No case is cited for this preposition, and having failed to request the instruction, the defense has waived the claim of error.

Tentative Ruling

The motion is denied.

The Court incorporates the opposition in its statement of decision.  Additionally, the Court states the following:

            Procedure

“A new trial shall not be granted upon the ground of insufficiency of the evidence to justify the verdict or other decision, nor upon the ground of excessive or inadequate damages, unless after weighing the evidence the court is convinced from the entire record, including reasonable inferences therefrom, that the court or jury clearly should have reached a different verdict or decision.”  CCP §657.  “ ‘A trial court serves as a “gatekeeper” on a motion for new trial. It opens the gate only rarely, a testament to the fact that the vast majority of trials … are fairly conducted. In these cases, motions for new trial are routinely made, routinely denied, and are routinely affirmed on appeal.’ ”  Baker v. Amer. Horticulture Supply, Inc. (2010) 186 Cal.App.4th 1059, 1068.  “[T]he power to grant a new trial may be exercised only by following the statutory procedure….”  Smith v. Sup. Ct. (1976) 64 Cal. App. 3d 434, 436.  Accord  Cembrook v. Sterling Drug, Inc. (1964) 231 Cal. App. 2d 52, 66-67 (party failed to file affidavits required to show grounds for new trial where based upon facts outside the record).  New trials shall not be granted unless moving parties show a reasonable probability that a more favorable result could have been obtained, were it not for an error.  Winfred D. v. Michelin No. Amer., Inc. (2008) 165 Cal.App.4th 1011, 1038.  “[O]rders granting a new trial are examined for abuse of discretion.”  Aguilar v. Atlantic Richfield Co. (2001) 25 Cal. 4th 826, 859.  Accord  Lane v. Hughes Aircraft Co.(2000) 22 Cal.4th 405, 412.  In ruling on a new trial, a trial court sits as an independent trier of fact.  Ibid.

Failure to file documents supporting a notice of intent to move for new trial, within the statutory time, is a ground to deny the motion.  Capaldi v. Levy (1969) 1 Cal. App. 3d 274, 280.

            Parol Evidence Rule

“The parol evidence rule protects the integrity of written contracts by making their terms the exclusive evidence of the parties' agreement. However, an established exception to the rule allows a party to present extrinsic evidence to show that the agreement was tainted by fraud.”  Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Ass'n  (2013) 55 Cal.4th 1169, 1171-72.

            Conform to Proof

Generally, judges should liberally grant amendments of pleadings to conform to proof, although the determination is a matter of discretion.  Pellegrini v. Weiss (2008) 165 Cal.App.4th 515, 527.  In ruling on motions to amend complaints to conform to proof, during trial, courts consider whether there is a reasonable excuse for the delay in amending, the change relates to facts or only legal theories, and the opposing party would be prejudiced by the amendment.  Duchrow v. Forrest (2013) 215 Cal.App.4th 1359, 1377-79.

            Jury Instructions

A party’s failure to object to a jury instruction or a special verdict, or to request the court to give those, results in a waiver of any objection to the ones given.  Bisno v. Douglas Emmett Realty Fund 1988 (2009) 174 Cal.App.4th 1534, 1555.

Damages 

“The amount of damages is a fact question, committed first to the discretion of the jury and next to the discretion of the trial judge on a motion for new trial…. All presumptions favor the trial court's ruling, which is entitled to great deference because the trial judge, having been present at trial, necessarily is more familiar with the evidence and is bound by the more demanding test of weighing conflicting evidence rather than our standard of review under the substantial evidence rule.”  Westphal v. Wal-Mart Stores, Inc. (1998) 68 Cal.App.4th 1071, 1078.

Further, the Court’s independent research reveals there is no California case requiring expert medical proof in support of emotional distress.  "A legal proposition asserted without apposite authority necessarily fails."  People v. Taylor (2004) 119 Cal.App.4th 628, 643.

            Punitive Damages

“ ‘[R]atios between the punitive damages award and the plaintiff's actual or potential compensatory damages significantly greater than 9 or 10 to 1 are suspect and, absent special justification (by, for example, extreme reprehensibility or unusually small, hard-to-detector hard-to-measure compensatory damages), cannot survive appellate scrutiny under the due process clause.’ ” Nickerson v. Stonebridge Life Ins. Co. (2016) 5 Cal. App. 5th 1, 24.

" A court determining whether a punitive damages award is excessive under the due process clause must consider three guideposts: '(1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases. [Citation.]' (State Farm, supra, 538 U.S. at p. 418.) The defendant's financial condition also is a permissible consideration under the due process clause in determining the amount of punitive damages necessary to further the state's legitimate interests in punishment and deterrence."  Izell v. Union Carbide Corp. (2014) 231 Cal. App. 4th 962, 982.  Denying a continuance request has been allowed, where evidence failed to show that being incapacitated due to illness was a valid explanation for the need for a continuance.  See  Mahoney v. Southland Mental Health Assocs. Med. Grp. (1990) 223 Cal. App. 3d 167, 172.