Opinion
B327130
09-23-2024
STEPHEN FORDE, Plaintiff and Respondent, v. ALLAN ENTOUS et al., Defendants and Appellants
Kousha Berokim for Defendants and Appellants. Buchalter, Robert M. Dato, Robert S. Cooper and Jason E. Goldstein for Plaintiffs and Respondents.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, No. BC570050 Mark C. Kim, Judge. Affirmed.
Kousha Berokim for Defendants and Appellants.
Buchalter, Robert M. Dato, Robert S. Cooper and Jason E. Goldstein for Plaintiffs and Respondents.
LUI, P. J.
This is the second appeal we have considered in this litigation between appellant Stephen Forde and his former business associate, respondent Allan Entous. Entous lent Forde money for investment in some troubled rental properties. Entous eventually stopped lending, and Forde ultimately claimed the loans were usurious. Forde sued Entous, alleging a number of causes of action, including claims for usury and for wrongful foreclosure concerning several properties that Entous sold through nonjudicial foreclosure proceedings after claiming they were in default.
The prior appeal was from a judgment following a court trial on equitable claims. (Forde v. Entous (Oct. 2, 2020, B292606) [nonpub. opn.] (Forde).) We reversed, and on remand the case proceeded to a jury trial on Forde's claims for usury and wrongful foreclosure. Forde prevailed in that trial, and Entous now appeals from the judgment.
Entous makes a number of arguments on appeal, including that: (1) Forde's usury claim-which Forde dismissed before the first appeal and then reinstated through an amended complaint following remand-is barred by the statute of limitations; (2) the trial court erroneously permitted Forde to include in his usury claim loans that were dismissed pursuant to an earlier partial settlement; (3) the trial court erred in permitting Forde to call an expert witness who was not disclosed following remand; (4) the trial court should have excluded various documents from evidence that Entous asserts were not produced in discovery; (5) the trial court improperly removed factual issues from the jury's consideration through an instruction given during deliberations in response to a jury question; and (6) Forde was estopped from claiming attorney fees because he prevailed at trial on a theory that oral agreements governed the parties' relationship rather than the loan agreements that contained the relevant attorney fee provisions. We reject each of these arguments and affirm.
BACKGROUND
We previously summarized facts concerning the parties' business relationship in Forde, supra, B292606 . We therefore only briefly summarize the facts and procedural history relevant to this appeal.
1. The Loans
Entous made numerous loans to Forde for a number of different properties, but the case as ultimately tried concerned only five loans relevant to two different properties. The two properties were located in the city of Glendale at 306 North Jackson Street (306 Jackson) and 1129 North Verdugo Road (1129 Verdugo).
Each of these properties secured separate "optional advance notes." The note secured by 306 Jackson was dated December 26, 2013, in the face amount of $180,000. The note secured by 1129 Verdugo was dated March 19, 2014, in the face amount of $240,000. (The actual loan amounts evidenced by these notes were less than the face amounts.) (See Forde, supra, B292606.) We refer to these two optional advance notes as the "Secured Loans."
In addition to the two Secured Loans, Forde claimed at trial that the principal allegedly due on other prior loans ultimately rolled over into the principal purportedly due on the Secured Loans. We refer to these prior loans as the "Predecessor Loans."
Forde introduced evidence showing that, although the loan documents showed legal interest terms, the parties had a side arrangement through which Forde made additional cash payments of interest to Entous. This side arrangement increased the interest on the loans to amounts that were unlawful under the usury laws.
With exceptions that are not relevant here, a lender may not charge more than 10 percent interest on a loan. (Cal. Const., art. XV, § 1; Wishnev v. The Northwestern Mutual Life Ins. Co. (2019) 8 Cal.5th 199, 206-210.)
2. The First Trial and the Settlement Agreement
At the prior trial in 2018 the trial court ruled that Forde could not prevail on his wrongful foreclosure claim because he had not tendered the amounts due on the loans securing the foreclosed properties. That ruling did not affect Forde's claims for usury, which remained in the case for trial before a jury. To avoid that trial and to create a final judgment that would facilitate an appeal of the trial court's ruling on the wrongful foreclosure claim, the parties negotiated a "Settlement and Release Agreement" dated August 10, 2018 (Settlement Agreement). (See Forde, supra, B292606.)
As part of the Settlement Agreement, Forde agreed to dismiss various causes of action in his operative complaint with prejudice. Forde also agreed to waive his usury claim "except for loans associated with 1129 Verdugo and 306 Jackson."
The Settlement Agreement also stated that "Forde intends to, and shall only appeal, the Court ruling and anticipated judgment on 1st, 2nd, 3rd, 4th and 5th causes of action of second amended complaint in BC570050 as to 1129 Verdugo and 306 Jackson. If upon appeal the trial court's ruling/judgment is affirmed, then Forde's remaining claims of second amended complaint in BC570050, including usury claims (9th cause of action) as to 1129 Verdugo and 306 Jackson shall be dismissed with prejudice within 15 days of the trial court's receipt of the remittitur." Pursuant to the Settlement Agreement, Forde thereafter dismissed with prejudice his causes of action for usury and for breach of the covenant of good faith and fair dealing "as to all loans except those loans associated with 306 North Jackson, and 1129 North Verdugo." For these excepted claims, he dismissed without prejudice. (Forde, supra, B292606 .)
3. Proceedings on Remand
Following remand from this court's reversal of the judgment, Forde moved to amend his complaint. His proposed third amended complaint included causes of action for wrongful foreclosure, breach of the implied covenant of good faith and fair dealing, and usury, limited to the 306 Jackson and 1129 Verdugo properties. The trial court permitted the amendment, and later overruled Entous's demurrer.
In its ruling on the demurrer, the trial court rejected Entous's argument that the usury claims in Forde's third amended complaint were barred by the applicable statute of limitations. The court concluded that the claims related back to the second amended complaint because they "are based on the same general set of facts, they seek recovery against the same defendants for the same injuries, and they refer to the same incident that formed the basis of the already existing complaint."
The case then proceeded to trial and was ultimately submitted to the jury only on Forde's claims for usury and wrongful foreclosure. In a special verdict, the jury found in favor of Forde.
4. Posttrial Proceedings
The trial court entered judgment on the verdict on December 20, 2022 (Original Judgment). In addition to awarding Forde his damages in the amount of $118,965.95, the Original Judgment also stated that Forde "is the prevailing party and is entitled to an award of attorneys' fees and his costs of suit." Entous appealed from this judgment.
Forde thereafter filed a motion for attorney fees, which Entous opposed. In his opposition, Entous argued that Forde was estopped from claiming attorney fees under the terms of the promissory notes because Forde prevailed at trial on the theory that oral side agreements, rather than the promissory notes, were the "true and correct" agreements between the parties. The trial court rejected Entous's argument, finding that "the parties' promissory notes govern the parties' relationship and support imposition of fees, and Plaintiff merely showed, at trial, that Defendant was wrongfully seeking to recover interest and fees outside the scope of the parties' agreement." The trial court awarded attorney fees in the amount of $473,699.18. That award was included in an amended judgment entered on October 11, 2023 (Amended Judgment). Entous did not appeal from the Amended Judgment.
DISCUSSION
1. Forde's Usury Claim Is Not Barred By the Statute of Limitations
Entous claims that the trial court erred in overruling his demurrer to Forde's usury cause of action in the third amended complaint. Entous argues that, because Forde dismissed that cause of action to permit the prior appeal, the cause of action cannot relate back to the prior complaint for purposes of the statute of limitations. We disagree.
Because Entous's argument raises an issue of law regarding the proper application of the statute of limitations, we review it de novo. (Arcadia Development Co. v. City of Morgan Hill (2008) 169 Cal.App.4th 253, 260 ["Where the pertinent facts are undisputed, it is a question of law whether a case is barred by the statute of limitations"].)
Before analyzing Entous's argument in light of the law governing the relation-back doctrine, we consider it in the context of the procedural history of this case. Because Forde previously dismissed his usury claim for the specific purpose of creating a final judgment for appeal, it is fair to ask whether he may now resurrect it. Entous suggests he may not. Entous claims that Forde "cannot have it both ways," first dismissing his usury claim to create a final judgment and later claiming that the dismissal was not final. Entous characterizes our prior opinion in Forde, supra, B292606, as holding that because the dismissal of the usury claim "was not subject to waiver of statute of limitations or tolling, the dismissal was final."
Entous misinterprets our prior holding. In Forde, supra, B292606 , we simply applied the law that governs the finality of judgments when a party dismisses a pending claim to permit an appeal. As we explained, a plaintiff's dismissal of his or her claims, even without prejudice, "can create a final, appealable judgment if the dismissal is 'unaccompanied by any agreement for future litigation.'" (Id., quoting Kurwa v. Kislinger (2013) 57 Cal.4th 1097, 1105, italics added.) We noted that it is "the assurance of future viability provided by a tolling or waiver agreement that 'prevents the judgment disposing of the other causes of action from achieving finality.'" (Forde, supra, B292606 , quoting Kurwa, at p. 1106, italics added.)
The parties entered into no such agreement here. The Settlement Agreement did not preclude Entous's argument in the trial court and in this court that Forde's usury claim is time barred. But neither did the Settlement Agreement preclude Forde from attempting to reassert his usury claim in the event that his appeal was successful and the case returned to the trial court.
Thus, the status of the case at the time of the prior appeal was sufficient to create a final judgment for purposes of appeal: The parties did not agree to toll or waive the statute of limitations, and they left for future determination whether the statute of limitations would permit the usury claim to proceed in the event the case returned to the trial court. That finality for purposes of appeal did not foreclose the possibility that Forde could again assert a usury claim.
Indeed, our prior opinion recognized the possibility of future litigation on Forde's dismissed claims, framing the appealability issue as a "question about the finality of the Judgment" in light of the "possibility of future proceedings" on the dismissed causes of action. (Forde, supra, B292606 .) And we specifically left for the trial court "to decide any motion that Forde might make on remand to amend his complaint" to revive the claims that he had dismissed. (Ibid.)
Critically, the parties also did not agree-and Forde did not represent-that Forde would be precluded from arguing on remand that the statute of limitations was tolled by operation of law. The absence of any such agreement or representation precludes Entous's estoppel argument that Forde "cannot have it both ways." In entering into their stipulation to facilitate the prior appeal, the parties did not enter into any agreement or make any promises that would alter the normal operation of the statute of limitations. That includes the availability of tolling theories that would otherwise apply by operation of law. We therefore proceed to consider Forde's argument that the law governing the relation-back doctrine provided an exception to the statute of limitations that would otherwise bar his usury claim.
We need not consider whether a plaintiff's ability to assert a relation-back theory to revive dismissed claims on remand can function like a tolling agreement to undermine the finality of a judgment for purposes of appeal. Appealability is not at issue here, as the finality of the current judgment is not in doubt. However, it is worth noting that Forde's relation-back argument is not that his current usury claim relates back to the prior complaint because the prior complaint contained the usury claim that he dismissed. Such a circular relation-back theory would seem to undermine any risk posed by the statute of limitations in any case in which a plaintiff dismisses a claim for purposes of creating a final judgment for appeal. Rather, Forde's theory is that his usury claim arises from the same facts as the claims that he did not dismiss and that were the subject of the prior appeal.
An amended complaint may relate back to an earlier, timely complaint if the amended complaint (1) rests on the same general set of facts; (2) involves the same injury; and (3) refers to the same instrumentality as the original complaint. (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 408-409.) The critical issue is "whether the defendant had adequate notice of the claim based on the original pleading." (Pointe San Diego Residential Community, L.P. v. Procopio, Cory, Hargreaves &Savitch, LLP (2011) 195 Cal.App.4th 265, 277.) A claim in an amended complaint can relate back even if it alleges a different cause of action, so long as it arises from the same incident and concerns the same theory of harm. (See Smeltzley v. Nicholson Mfg. Co. (1977) 18 Cal.3d 932, 934-935 [amended complaint that alleged the defective manufacture of a machine that injured plaintiff on the job related back to the original complaint that alleged negligence in providing the plaintiff with an unsafe workplace].)
Forde's usury claim not only arises from the same set of facts as his wrongful foreclosure claim, the facts concerning the usury were an essential component of that claim. As alleged in the second amended complaint, the basis for Forde's wrongful foreclosure claim concerning the properties still at issue in the third amended complaint (i.e., 306 Jackson and 1129 Verdugo) was that Entous foreclosed on those properties even though Forde was not in default. Forde claimed he was not actually in default because the interest rates on the loans were usurious and all Forde's payments should therefore have been credited toward principal.
Forde's wrongful foreclosure cause of action in his second amended complaint specifically alleged that Entous "exacted usurious rates of interest" for the loans on both 306 Jackson and 1129 Verdugo. It also explained that "[d]ue to the inclusion of the usurious interest in the Notice(s) of Default, none of the foreclosures could lawfully proceed. The rule is well settled that no interest whatsoever can be claimed by a usurious lender and the obligation to pay interest is void. Since no interest could be assessed, Forde actually had a credit balance applicable to each loan when the Entous Defendants fabricated the sudden defaults."
Based on these allegations, Entous was on notice from the wrongful foreclosure claim itself that Forde intended to prove the loans were usurious. And Forde of course never abandoned his wrongful foreclosure claim. The Settlement Agreement memorialized Forde's intent to appeal the prior judgment against him on his first cause of action for wrongful foreclosure. He then did so, successfully.
Entous cites cases in which courts declined to apply the relation-back principle when plaintiffs had dismissed particular defendants or an entire complaint. (See Troche v. Daley (1990) 217 Cal.App.3d 403, 412 [defendant was dismissed without prejudice and then was named in an amended complaint after the statute of limitations had run]; Paniagua v. Orange County Fire Authority (2007) 149 Cal.App.4th 83, 89 [plaintiff dismissed entire action and then later sought to amend the dismissed complaint]; Fireman's Fund Ins. Co. v. Sparks Construction, Inc. (2004) 114 Cal.App.4th 1135, 1142-1144 [filing an amended complaint with no "Doe" allegations under Code of Civil Procedure section 474 had the effect of dismissing the fictional Doe defendants]; Bridgeman v. Allen (2013) 219 Cal.App.4th 288, 296-297 [probate petition did not relate back to earlier petition that had been dismissed].) The rationale of these cases is that, when a claim is dismissed, it is as if it had never been filed. (See Troche, at p. 412 [dismissal of a defendant "had the effect of removing him from the lawsuit as though no action had been filed against him"]; Paniagua, at p. 89 [" 'A plaintiff's voluntary dismissal of his action has the effect of an absolute withdrawal of his claim and leaves the defendant as though he had never been a party' "], quoting Cook v. Stewart McKee &Co. (1945) 68 Cal.App.2d 758, 761.) In other words, where there was no longer any claim pending against a dismissed defendant, there is nothing for an amended pleading to" 'relate back' to." (Bridgeman, at p. 296.)
Here, in contrast, Forde never dismissed his wrongful foreclosure claim against Entous. Although the trial court originally entered judgment against Forde on that cause of action, it remained in the case as a contested claim, and this court subsequently rejuvenated the claim by reversing the trial court's judgment on appeal. Thus, unlike a defendant who is dismissed from an action as a result of a plaintiff's decision, Entous clearly had notice that Forde intended to pursue his wrongful foreclosure claim. The notice was explicit. As mentioned, the Settlement Agreement confirmed Forde's intent to appeal the judgment on his wrongful foreclosure claim.
Moreover, the Settlement Agreement also provided explicit notice of Forde's intent to pursue his usury claim in the event of a successful appeal. The Settlement Agreement specifically excepted loans associated with 306 Jackson and 1129 Verdugo from Forde's waiver of his usury claim and stated that Forde would dismiss those usury claims with prejudice only if the judgment were affirmed on appeal.
We therefore conclude that the usury claim in Forde's third amended complaint related back to the allegations in the second amended complaint, and as a result was not barred by the statute of limitations.
2. The Trial Court Did Not Err in Rulings Relating to the Settlement Agreement
Entous makes several arguments challenging evidentiary rulings at trial stemming from the trial court's interpretation of the Settlement Agreement. As mentioned, in that agreement Forde waived his usury claim "except for loans associated with 1129 Verdugo and 306 Jackson." (Italics added.) Entous argues that those "associated" loans included just the Secured Loans because those were the only loans that specifically referred to the relevant properties. He argues that the trial court therefore erred in permitting the jury to consider three other Predecessor Loans whose principal amounts were rolled over into the Secured Loans. Entous also claims that the trial court erroneously precluded him from presenting his defense that Forde had waived any claims concerning these Predecessor Loans.
Each of these arguments depends upon Entous's interpretation of the Settlement Agreement. If, contrary to Entous's interpretation, the loans "associated with" the two properties at issue include the Predecessor Loans, Forde did not waive his claims concerning those loans and they properly formed part of his usury theory at trial. And, if Forde did not waive his claims concerning the Predecessor Loans in the Settlement Agreement, Entous had no valid waiver defense to present.
The trial court concluded that the Settlement Agreement was unclear in describing the scope of Forde's waiver. The court permitted Forde to introduce evidence of Predecessor Loans subject to laying a foundation that those loans actually rolled over into the Secured Loans. This approach to the evidence was consistent with the Settlement Agreement.
Settlement agreements are subject to the same rules of interpretation as other contracts. (Coral Farms, L.P. v. Mahony (2021) 63 Cal.App.5th 719, 726-727 (Coral Farms).) It is "solely a judicial function to interpret a written instrument unless the interpretation turns upon the credibility of extrinsic evidence." (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865.) Extrinsic evidence is admissible to explain the meaning of a written instrument only when the "offered evidence is relevant to prove a meaning to which the language of the instrument is reasonably susceptible." (Pacific Gas &Electric Co. v. G. W. Thomas Drayage etc. Co. (1968) 69 Cal.2d 33, 37 (PG&E).) Where there is no conflict in the extrinsic evidence, the appellate court independently determines the meaning of the contract. (Parsons, at pp. 865-866; Coral Farms, at p. 726.)
Entous does not identify any disputed extrinsic evidence, either admitted or proffered, that bears upon the meaning of the phrase "associated with" in the Settlement Agreement. Indeed, Entous's theory is that the term itself is unambiguous. Entous claims that there was "no ambiguity" that only the Secured Loans were "associated with" those properties. We therefore interpret the relevant language in the Settlement Agreement de novo. (See Coral Farms, supra, 63 Cal.App.5th at p. 727.)
The goal of contract interpretation is to give effect to the mutual intention of the parties at the time the contract is formed. (Civ. Code, § 1636; PG&E, supra, 69 Cal.2d at p. 38.) To that end, we give the words of the contract their "ordinary and popular" meaning. (Civ. Code, § 1644; Coral Farms, supra, 63 Cal.App.5th at p. 727.) We also interpret the contract in light of the circumstances under which it was made and the matter to which it relates. (Civ. Code, § 1647; Code Civ. Proc., § 1860.)
Here, the parties chose to use the broad term "associated with" rather than a more narrow term that would have clearly limited Forde's preserved usury claims only to the two Secured Loans. The parties could easily have identified those specific loans by name and date, or used precise language to refer to them, such as the "loans evidenced by notes secured by the deeds of trust" on the 306 Jackson and 1129 Verdugo properties. Instead, the parties selected the broader and more malleable term "associated with," suggesting that they intended the term to include those loans that ultimately contributed to the debt secured by the relevant properties.
The circumstances and subject matter of the Settlement Agreement also suggest that the loans "associated with" the relevant properties include the Predecessor Loans. Those loans were part of Forde's wrongful foreclosure theory at the time the parties negotiated the Settlement Agreement.
Forde's second amended complaint specifically identified Predecessor Loans that were associated with the relevant properties. In Forde's wrongful foreclosure claim concerning 306 Jackson, the second amended complaint alleged that "[t]he Entous Defendants made three (3) loans to Plaintiff for the financial rehabilitation of the 306 Jackson property. The loans were as follows: $91,800 on November 20, 2012; $25,000 on December 18, 2012; and $114,000 on December 26, 2013; (the $91,800 loan was paid off by Plaintiff and the $25,000 and $114,000 initially ran independently but were then consolidated). These loans were evidenced by promissory notes. Due to subsequent adjustments, the total loan balance increased to $133,800. The total loan was secured by a Deed of Trust in the amount of $180,000 recorded against the 306 Jackson property."
With respect to the 1129 Verdugo property, the second amended complaint alleged that "[t]he Entous Defendants made two loans to Plaintiff of $30,000 each that were later combined into a single loan for $60,000 on March 19, 2014. These loans were evidenced by promissory notes. The total loan was secured by a Deed of Trust against the 1129 Verdugo Property."
The second amended complaint further alleged that each of these loans "exacted usurious rates of interest."
This loan chronology is consistent with the Predecessor Loans that Forde claimed at trial were "associated with" the relevant properties. Forde's accounting expert explained at trial that each of the Secured Loans contained amounts that had been rolled over from prior loans, which included several Predecessor Loans identified in the second amended complaint. Thus, the circumstances and the subject matter of the Settlement Agreement suggest that Forde wished to preserve his usury claims concerning the Predecessor Loans, as their relationship to the Secured Loans as well as their usurious nature were both essential parts of Forde's wrongful foreclosure claim at the time the parties executed the agreement.
Specifically, the expert testified that money from a $25,000 December 18, 2012 loan rolled over into another loan dated January 18, 2013, in the amount of $102,000, and $20,000 from this January 18, 2013 loan then rolled over into the principal amount of the 306 Jackson Secured Loan, which also included a $114,000 cash advance on December 26, 2013. Another $30,000 from the January 18, 2013 loan rolled over into the 1129 Verdugo Secured Loan, along with $30,000 from a prior loan dated July 15, 2013. The $25,000 loan, the two $30,000 loans, and the $114,000 loan included in this chronology were specifically identified in the second amended complaint.
Finally, it is appropriate to consider the relevant usury law. "The parties to a contract are presumed to have the existing law in mind at the time of the execution of their agreement." (Mendocino County Employees Assn. v. County of Mendocino (1992) 3 Cal.App.4th 1472, 1480, citing Swenson v. File (1970) 3 Cal.3d 389, 394.) It is therefore significant that a case decided prior to the execution of the Settlement Agreement confirmed that a usury claim can extend to predecessor loans with usurious terms that are rolled over into subsequent notes. In Hardwick v. Wilcox (2017) 11 Cal.App.5th 975 (Hardwick), the court considered a series of loan transactions in which usurious loans were rolled over into subsequent, also usurious, loan agreements. The court rejected the appellant's argument that the loans should be considered separately for purposes of calculating principal and interest under the usury laws because the subsequent loans were not "renewals" of the prior usurious loans. (Id. at p. 993.) The court held that the" 'original taint of usury attaches to the whole family of consecutive obligations and securities growing out of the original vicious transaction[s].'" (Id. at p. 994, quoting Whittemore Homes, Inc. v. Fleishman (1961) 190 Cal.App.2d 554, 560.) In light of this law, it is reasonable to conclude that the parties here intended that Forde would retain his right to assert usury claims on the Predecessor Loans that rolled over into the final Secured Loans.
Entous does not dispute that amounts owing on the Predecessor Loans included in Forde's usury claim at trial did in fact roll over to the principal balances of the Secured Loans. Rather, his argument is that, "irrespective of whether those prior loans had been rolled into the 1129 Verdugo and 306 Jackson loans, and irrespective of whether those prior loans were related to 1129 Verdugo and 306 Jackson loans," the prior loans were not "associated with" the 1129 Verdugo and 306 Jackson loans. For the reasons discussed above, we conclude that the language and circumstances of the Settlement Agreement preclude such a narrow definition of the loans that were "associated with" the relevant properties.
Thus, Forde did not agree in the Settlement Agreement to waive his usury claims concerning the Predecessor Loans. Entous has therefore failed to show any error in the trial court's evidentiary rulings concerning those loans. And because the Settlement Agreement did not provide Entous with any valid waiver defense to Forde's usury claim on those loans, we need not consider his argument that the trial court erroneously prevented him from presenting such a defense at trial.
It is unclear whether Entous contends on appeal that he should have been permitted to present a novation defense based on some theory other than the contents of the Settlement Agreement. To the extent he intended to make such an argument, he has forfeited it by failing to plead such an affirmative defense or to request any jury instruction on the defense at trial. (Metcalf v. County of San Juaquin (2008) 42 Cal.4th 1121, 1130-1131 [" '" 'In a civil case, each of the parties must propose complete and comprehensive instructions in accordance with his theory of the litigation; if the parties do not do so, the court has no duty to instruct on its own motion'"' "], quoting Agarwal v. Johnson (1979) 25 Cal.3d 932, 950-951; Transport Clearings-Bay Area v. Simmonds (1964) 226 Cal.App.2d 405, 430 [" 'Novation must be pleaded either expressly or "by unequivocal implication," and the burden of proof is "upon the party asserting its existence"' "], quoting Alexander v. Angel (1951) 37 Cal.2d 856, 860.) Moreover, any theory that Forde was precluded from recovering damages for usury on Predecessor Loans because those loans were superseded by subsequent notes would be inconsistent with the court's holding in Hardwick, supra, 11 Cal.App.5th 975.
3. The Trial Court Did Not Err in Permitting Forde's Expert to Testify
Entous argues that Forde's accounting expert should have been precluded from testifying because Forde did not comply with statutory expert disclosure requirements. We reject the argument, because Entous never served an expert disclosure request following remand from the prior appeal.
Entous served an expert disclosure demand under Code of Civil Procedure section 2034.210 et seq. on July 10, 2015, prior to the first trial. Under section 2034.230, the information required by section 2034.260 in response to such a demand must be exchanged "50 days before the initial trial date, or 20 days after service of the demand, whichever is closer to the trial date, unless the court, on motion and a showing of good cause, orders an earlier or later date of exchange." (Code Civ. Proc., § 2034.230, subd. (b), italics added.) However, Entous did not serve such a demand before the second trial following remand from this court. Entous argues that his 2015 demand was sufficient to trigger Forde's disclosure obligations and that Forde's failure to produce expert information should therefore have led to exclusion of his expert.
The court in Hirano v. Hirano (2007) 158 Cal.App.4th 1 (Hirano), which Entous failed to cite, rejected an identical argument. The respondent in that case had served an expert witness demand before the initial trial date. (Id. at p. 5.) The trial court then dismissed the action before trial for a failure to prosecute, and the Court of Appeal reversed. (Ibid.) On remand, the trial court precluded appellant from introducing any expert testimony because the appellant had failed to comply with the demand for the exchange of expert information served before the first trial. (Ibid.)
The Court of Appeal reversed again. The court explained that "[i]t is now well settled that discovery automatically reopens following a mistrial, order granting new trial, or reversal on appeal." (Hirano, supra, 158 Cal.App.4th at p. 6.) Accordingly," '[a] case does not have one everlasting "initial" trial date, but may have a new "initial" trial date corresponding to a scheduled retrial or new trial of the action.... Thus, after reversal "the time clock for the 'initial trial date'" under the Discovery Act is reset.'" (Ibid., quoting Fairmont Ins. Co. v. Superior Court (2000) 22 Cal.4th 245, 250-251.) In accordance with that principle, the court in Hirano reasoned that, when the prior judgment in that case was reversed and a new initial trial date was set following remand, "discovery was automatically reopened. [Citations.] Because neither party made a section 2034.210 demand for exchange of expert witness information in connection with the new initial trial date, neither was required to comply with section 2034.260." (Hirano, at p. 8.)
The same reasoning applies here. When this court reversed the prior judgment and remanded for further proceedings, a new "initial" trial date was set. If Entous wished to trigger the statutory obligation to exchange expert information prior to that trial, he was required to serve a new demand under Code of Civil Procedure section 2034.230.
4. Entous Has Not Shown that the Trial Court Abused Its Discretion in Admitting Documents that Forde Allegedly Failed to Produce in Response to 2015 Discovery Demands
Prior to trial, Entous filed a motion in limine seeking to exclude various proposed exhibits that he claimed Forde had produced for the first time on the eve of trial. Forde's counsel responded with a declaration stating that the challenged documents had been identified in a joint exhibit list to which Entous had agreed over six months earlier. After hearing objections to the documents at various points during trial, the trial court overruled Entous's objection. We review the trial court's ruling for abuse of discretion. (Bookout v. State of California ex rel. Dept. of Transportation (2010) 186 Cal.App.4th 1478, 1485 (Bookout).)
Forde argues that, to "claim in a post-remand trial that Forde should have produced documents in discovery, Entous was required to engage in post-remand discovery." Forde cites no authority for this legal proposition, and we are aware of none. Requiring a party on remand to re-serve discovery requests that had already been the subject of discovery prior to appeal would be a wasteful and pointless requirement. If Forde failed to comply with valid discovery requests served prior to the appeal, we see no reason why Entous should be precluded from seeking relief simply because there was an intervening appeal.
We nevertheless conclude that Entous has failed to show that the trial court abused its discretion in admitting the challenged documents. First, it is unclear from the record the weight that the trial court placed on the lack of post-remand discovery as a ground to overrule Entous's objections. The trial court asked whether Entous had asked for any discovery after the remittitur, and when Entous's counsel stated that he "did not have to," the court expressed disbelief: "We have completely different set of attorneys. Different set of judge. And you never asked for any discovery since 2015 and you are indicating everybody is stuck on 2015?" The court later stated that "once the remittitur is issued-I already made a ruling on this," apparently referring to the court's ruling that a new expert disclosure demand was necessary following remand.
Although the trial court was clearly troubled by the lack of attention to discovery following remand, from these cryptic comments it is difficult to know what role the lack of discovery played in the trial court's ruling. In particular, we cannot conclude that the trial court's decision to admit the challenged documents rested on a supposed legal requirement for postremand document demands before Entous could seek a sanction for alleged 2015 discovery violations.
Second, the trial court cited other grounds for overruling Entous's objection that were themselves sufficient to support the court's ruling. In particular, the trial court apparently concluded that Entous had adequate opportunity to review the documents prior to trial but had failed to do so. The trial court noted that Entous's counsel had signed off on a joint exhibit list that referred to the challenged documents. In response to an argument from Entous's counsel that the list was too vague to put him on notice that the referenced documents had not previously been produced, the court observed that "it's your job to take a look at it before you sign off," and that the court did not "quite understand what your objection is because you didn't actually look at the exhibits." (See Mike Davidov Co. v. Issod (2000) 78 Cal.App.4th 597, 610 ["If the decision of a lower court is correct on any theory of law applicable to the case, the judgment or order will be affirmed regardless of the correctness of the grounds upon which the lower court reached its conclusion"].)
Third, Entous does not cite to any evidence in the record of a discovery violation severe enough to justify an evidentiary sanction. Entous does not identify any particular document request to which the challenged documents were responsive, and does not show that, even if unproduced documents were within the scope of such a document demand, Forde's failure to produce the documents was willful. Other evidence in the record weighs against a finding of willfulness, including the fact that Forde apparently identified the documents in a joint exhibit list long before the trial began. The lack of any showing in the trial court or on appeal that Forde willfully violated a discovery order is an independent ground supporting the trial court's decision. "[T]wo facts are generally prerequisite to the imposition of a nonmonetary sanction. There must be a failure to comply with a court order and the failure must be willful." (Lee v. Lee (2009) 175 Cal.App.4th 1553, 1559; see Bookout, supra, 186 Cal.App.4th at p. 1485 [trial court did not abuse its discretion in admitting documents not produced in discovery absent a finding of bad faith].)
5. The Trial Court Did Not Err in Answering a Jury Question During Deliberations
During deliberations, the jury asked: "When determining if the foreclosure sale was wrongful for the Verdugo Property, does it have to be the $60,000 loan that has to be proven to be usurious or can it be any of the loans that was rolled into the $60,000 loan?" After a discussion with counsel, the trial court answered that question with the following explanation: "Any of the loans that were rolled into the $60,000 loan can be considered in determining whether the foreclosure was wrongful." Entous argues that this response "removed the jury's prerogative and duty to decide the factual question of whether the prior notes could be considered in the jury's verdict."
Entous is wrong. The trial court's response did not address a factual issue. Rather, it properly and correctly described the law.
The trial court did not instruct the jury that it must consider the Predecessor Loans usurious; the court simply told that jury that it could consider those loans in deciding whether the foreclosure was wrongful. As discussed above, the Settlement Agreement did not preclude the jury from considering Predecessor Loans that rolled over into the final Secured Loans on the relevant properties. And the instruction was consistent with the law on usury as explained in Hardwick, supra, 11 Cal.App.5th at pages 993-994. If the loans that "were rolled" into the final $60,000 loan on 1129 Verdugo were usurious, payments on those loans should all have been credited to principal rather than interest. The jury could therefore properly consider those payments in determining whether Entous wrongfully foreclosed on the property.
6. Entous Has Forfeited His Challenge to the Trial Court's Award of Attorney Fees
Entous argues that Forde was estopped from claiming attorney fees under the attorney fee provisions of the promissory notes governing the usurious loans because Forde's theory at trial was that the loans were actually governed by separate oral agreements. We reject the argument.
We first consider this court's jurisdiction. Forde argued in his brief that Entous forfeited the right to challenge the attorney fee award by failing to appeal from the Amended Judgment. As Forde's counsel acknowledged during oral argument, that is incorrect. The Original Judgment awarded the right to attorney fees but left the amount for later determination. Entous does not challenge the amount of fees, but only Forde's right to fees. That right was established in the judgment from which he appealed. (See Grant v. List &Lathrop (1992) 2 Cal.App.4th 993, 997 (Grant) [notice of appeal from a judgment that expressly makes an award of costs and/or fees establishes appellate jurisdiction to challenge the appropriateness of the award].)
Indeed, a number of cases hold that a party who appeals from a judgment awarding attorney fees may also challenge the amount of fees established in a later order, even if the party does not separately appeal from that postjudgment order. (See Grant, supra, 2 Cal.App.4th at pp. 996-998; Kim v. TWA Construction, Inc. (2022) 78 Cal.App.5th 808, 839; Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2023) ¶ 2:156.2.) Thus, Entous did not forfeit the right to challenge the attorney fee award by failing to appeal from the Amended Judgment.
Conversely, there is also authority that an appeal from such a postjudgment order alone is itself sufficient to establish appellate jurisdiction to consider the right to attorney fees, even if a prior, nonappealed judgment established the entitlement to fees, on the theory that the portion of the prior judgment awarding the right to fees was not final until the amount had been adjudicated. (See P R Burke Corp. v. Victor Valley Wastewater Reclamation Authority (2002) 98 Cal.App.4th 1047, 1054-1055.)
However, Entous has forfeited his challenge to the trial court's fee award for a different reason. As mentioned, the trial court rejected Entous's estoppel argument, finding that "the parties' promissory notes govern the parties' relationship and support imposition of fees, and Plaintiff merely showed, at trial, that Defendant was wrongfully seeking to recover interest and fees outside of the scope of the parties' agreement." Thus, the trial court ruled against Entous on his estoppel argument based on the facts established at trial. We therefore review the court's factual findings under the substantial evidence standard. (Schafer v. City of Los Angeles (2015) 237 Cal.App.4th 1250, 1263; Blix Street, supra, 191 Cal.App.4th at p. 46.)
Entous does not explain whether his estoppel claim is based on a theory of equitable estoppel or judicial estoppel. In either case, the claim is an equitable one for the court to decide. (See Hoopes v. Dolan (2008) 168 Cal.App.4th 146, 161 [equitable]; Blix Street Records, Inc. v. Cassidy (2010) 191 Cal.App.4th 39, 46-47 (Blix Street) [judicial].)
When that standard of review applies, this court presumes that the evidence supports the factual findings below unless the appellant shows to the contrary. (In re Marriage of Fink (1979) 25 Cal.3d 877, 887 (Fink); Huong Que, Inc. v. Luu (2007) 150 Cal.App.4th 400, 409.) To meet this burden, an appellant must summarize the evidence on the challenged finding, both favorable and unfavorable, and" 'show how and why if it insufficient.'" (Huong Que, at p. 409, quoting Roemer v. Pappas (1988) 203 Cal.App.3d 201, 208.) An appellant" 'cannot shift this burden onto respondent, nor is a reviewing court required to undertake an independent examination of the record when appellant has shirked his responsibility in this respect.'" (Huang Que, at p. 409, quoting Hickson v. Thielman (1956) 147 Cal.App.2d 11, 1415.)
Entous's argument challenging the trial court's fee award does not contain a single citation to the record. He has therefore forfeited the argument. (Fink, supra, 25 Cal.3d at p. 887 [" 'It is incumbent upon appellants to state fully, with transcript references, the evidence which is claimed to be insufficient to support the findings' "].)
DISPOSITION
The judgment is affirmed. Forde is entitled to his costs on appeal.
We concur: ASHMANN-GERST, J. HOFFSTADT, J.