Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of San Diego County, Eddie C. Sturgeon, Judge, No. GIE031105, consolidated with No. 37-2007-00060480-CU-OR-EC
HUFFMAN, Acting P. J.
These consolidated cases involve a dispute between plaintiffs, cross-defendants and appellants Alex Hermiz, Mike Hermiz and Ann Hermiz (collectively the Hermizes or individually by respective first name) and defendant, cross-complainant and respondent Brenda Asaro (Asaro) and defendant/respondent Brenex, LLC (Brenex) concerning a restaurant in Lakeside, California. In September 2005, Mike and Ann, who had originally leased and operated the restaurant under the name "Victoria's Restaurant," orally agreed, among other things, to sell Asaro a 50 percent interest in the restaurant for $45,000 and to give their son Alex the other 50 percent interest in the restaurant to operate it with Asaro under the name "Café 67." When dissension subsequently arose between Alex and Asaro regarding the restaurant, Alex sued Asaro and Brenex in San Diego Superior Court Case No. GIE031105 (Hermiz v. Brenex, LLC (Super. Ct. San Diego County, 2006)) for involuntary dissolution of Brenex, sued Asaro for breach of fiduciary duty and conspiracy to induce further breach of fiduciary duty to him, and the Hermizes sued Asaro for promise without intent to perform and rescission of contract. Asaro cross-complained against Alex for declaratory relief, a judicial determination of disassociation and breach of fiduciary duty as well as against the Hermizes for breach of contract, fraud and negligent misrepresentation. Mike then cross-complained against Asaro for money in the amount of $9,270.45 purportedly lent to her.
While Case No. GIE031105 was pending, Mike and Ann filed a separate action in San Diego Superior Court, Hermiz v. Asaro (Super. Ct. San Diego County, 2007, No. 37 2007-00060480-CU-OR-EC) for ejectment, damages and preliminary and permanent injunction against Asaro and Brenex to obtain possession of the restaurant under the lease. After a preliminary injunction was denied, the cases were consolidated, and the Hermizes' summary judgment or summary adjudication motions were denied. The matter was then continued for court trial, which commenced on May 29, 2008.
After a four-day trial, for which only the first day was reported by a court reporter, and taking the matter under submission, the trial judge issued a letter ruling and minute order essentially finding judgment for Asaro and Brenex and against the Hermizes in the consolidated cases. The judgment entered September 10, 2008, specifically found that:
"1. At all relevant times prior to December 13, 2005,... Asaro and Alex... acted as de facto partners in the management of Café 67. Brenex... does not and never has owned, operated or otherwise acquired any interest in Café 67. [¶] 2. Pursuant to California Corporations Code section 16601(5), Alex... disassociated himself from the de facto partnership on December 13, 2005. [¶] 3. The Hermizes breached the purchase and sale agreement by failing to make capital contributions to the de facto partnership. [¶] 4. As of December 13, 2005, the value of Café 67 was $59,263.00. [A]saro contributed $74,252.00 and Alex... contributed $6,000.00 to the de facto partnership. The net contribution by... Asaro is $68,252.00. Each de facto partner should have equally contributed $34,126.00. Alex... did not make his additional contribution of $34,126.00. The de facto partner's net value of the business is $25,137.00. Each de facto partner is entitled to $12,568.50. [¶] 5. The Hermizes did not commit fraud against... Asaro."
Based on such findings, the court ordered that the Hermizes take nothing by their first amended complaint against Brenex and Asaro in Case No. GIE031105, that Mike take nothing by his cross-complaint against Asaro in that case, that cross-complainant Asaro "is awarded the business known as Café 67 [and] shall pay cross-defendant Alex... $12,568.50 for his interest in Café 67," and that cross-defendants Hermizes "are ordered to assign the lease for the premises... to cross-complainant... Asaro." Further, in Case No. 37-2007-00060480-CU-OR-EC, the court ordered that Mike and Ann "shall take nothing by their complaint against defendants... Asaro and Brenex...." Finally, the court ordered that Asaro shall recover her costs of the various actions from the Hermizes.
The Hermizes, who were represented by various counsel for all proceedings below, have appealed in propria persona from the judgment after court trial. In their opening brief, they contended that the trial court violated due process by granting relief beyond the scope of the pleadings being litigated when it ordered the dissolution of the partnership, partitioned the assets of the restaurant, ordered Asaro pay Alex $12,568.50, and ordered them to assign the lease for the Café 67 premises to Asaro. The Hermizes also asserted the court erred in ordering distribution of partnership assets without granting them an accounting in violation of Corporations Code section 16100 et seq., in ordering partition of personal property without following due process, in determining the value of Café 67 without sufficient evidence, in improperly refusing evidence as to the value of the beer and wine license for the restaurant, in improperly refusing to admit evidence as to the bounced check, and in holding that the failure of the Hermizes to make capital contributions breached the purchase agreement. The Hermizes additionally claimed they were entitled to a new trial because the court reporter failed to transcribe portions of the trial despite their request to do so.
Regarding this latter point, several days after the Hermizes filed their opening brief, a supplemental reporter's transcript of the parties' opening statements on the first day of trial was filed, rendering a portion of their new trial argument moot. As for the other portion of their argument, a supplemental clerk's transcript reveals that the requested minutes claimed not contained in the appellate record were not on the originally designated record filed by the Hermizes. Nonetheless, Asaro and Brenex's unopposed request to augment the record on appeal, which contains copies of the clerk's minutes from July 15 and 17, 2008, was granted, thereby totally mooting the Hermizes' claim for a new trial based on an inadequate preparation of the record they requested.
As to the Hermizes' other contentions, Asaro and Brenex assert their essence is a challenge to the sufficiency of the evidence to support the trial court's various findings and conclusions, which must be presumed correct on appeal as the Hermizes have failed to state the correct standard of review or to provide a complete record because they waived the presence of a court reporter for the last three days of the continued court trial, failed to timely request a statement of decision, and failed to offer any expert evidence on the valuation of the issues on which they now complain. Asaro and Brenex argue that even on the limited record there is enough sufficient evidence to support the judgment and all rulings and orders made by the trial court.
In their reply brief, the Hermizes acknowledge the record on appeal does not include the entire trial transcript, but argue there is a sufficient record to review and show error, especially since several of the claimed errors occurred during the first day of trial. The Hermizes posit that the standard of review for all but the valuation of Café 67 is de novo and contend for the first time that the trial court further erred by treating borrowing money in the name of the restaurant as capital contribution and by ignoring the parol evidence rule, which bars considering the alleged oral agreements of the parties contrary to the written "partnership agreement."
We affirm.
FACTUAL BACKGROUND
Because there is not a complete transcribed record of the trial below, we set out background facts for our discussion as best we can glean from the various pleadings and court minutes, as well as from the reporter's transcripts of the first day of trial, which contain opening statements and Mike's and Alex's direct testimony and the exhibits lodged with this court which were admitted at trial.
The Hermizes' unopposed motion to augment the record on appeal filed July 13, 2009 after the completion of all briefing in this case is denied. Several of the documents requested to be included in the record already are in the record and as to the other documents, the Hermizes have not shown "some certainty" as to how they may be useful to their appeal in light of the incomplete trial transcript and record. (See People v. Gaston (1978) 20 Cal.3d 476, 482.)
Essentially, the parties agree that in February 2004, Mike and Ann had leased the subject restaurant in Lakeside from Frank and Kathleen Pernicano and had opened it as Victoria's Restaurant for lunch and dinner service around June 2004. During the summer of 2005, Asaro and a friend of hers met with the Hermizes on several occasions and discussed the possibility of Asaro buying into the restaurant and partnering with Alex to convert it into a diner themed restaurant named Café 67, which would serve breakfast, lunch and dinner with Asaro managing the earlier meals and Alex running the dinner operation. Then on September 30, 2005, the Hermizes and Asaro entered into an oral agreement whereby Mike and Ann would sell their ownership interest in Victoria's Restaurant to Asaro for $45,000, give the other half of their interest in the restaurant to Alex so that Asaro and Alex would become "50/50 partners" with Asaro being the managing partner, and Asaro and Alex would form a limited liability company. Asaro paid Mike and Ann $5,000 that day as a down payment on the deal.
During October 2005, Asaro, among other things, executed the articles of organization for Brenex and filed them with the state; she opened a bank account in the name of Café 67 at Washington Mutual (WaMu), which included both her and Alex's name as signators; Asaro paid another $5,000 toward the purchase price by check and the final $35,000 in cash; Alex filed a fictitious business name for Café 67; and the parties discussed how the restaurant was going to be remodeled and run. The parties also discussed "money and various other things." On October 28, 2005, the parties signed a document entitled "Asset Sale/Transfer of Victoria's Restaurant" memorializing the terms of payment of the parties' oral agreement.
Although the "Asset Sale/Transfer of Victoria's Restaurant" identifies the LLC to be formed as Café 67, the LLC actually applied for through the Secretary of State names Brenex as the LLC, which was an acronym for "Brenda" and "Alex."
Café 67 opened for all three meals on November 9, 2005. The next day a joint decision was made to temporarily suspend the dinner operations until they could properly staff and manage that time period. On November 14, 2005, Asaro received a letter from the Pernicanos's attorney, which stated in pertinent part, that he looked "forward to working with [her] in establishing a great relationship between [her], Café 67, and the Pernicanos." However, troubles immediately arose between Asaro and Alex regarding the money necessary for the operation of Café 67. Although up to that time Mike had contributed $6,000 to the business on behalf of Alex and had paid approximately $3,700 for taxes, Asaro had put in over $27,802 of her own funds for the operation of the restaurant while she waited for the Hermizes to match the funds. When no additional capital was forthcoming, Asaro put in more of her own personal funds and established a line of credit with Union Bank for the restaurant on November 21, 2005. In doing so, Asaro discovered that the fictitious business name statement Alex had filed for Café 67 has not been published as required by law and reapplied and properly published such fictitious name statement.
Matters between Asaro and Alex and the Hermizes continued to worsen the end of November and early December. The facts conflict as to who and what was responsible for the further breakdown in the business relationship. Alex and the Hermizes believed that Asaro was attempting to take over and operate the business herself as evidenced by her opening various bank accounts for Café 67 without Alex's awareness, taking out a seller's permit as the sole owner of the restaurant, taking a car allowance for her business use, treating Alex as a mere employee, and accusing Alex of taking several checks from the business's WaMu account.
Asaro believed that Alex and the Hermizes had misrepresented what they were selling her because she subsequently learned from the Pernicanos that equipment and furniture represented by the Hermizes as their own really belonged to the Pernicanos and the Pernicanos rejected her check for rent under the lease, making her suspicious that the Hermizes had failed to obtain an assignment of the lease to include her interest as promised. Asaro also continually put in her own money from various accounts for improvements and operating expenses while she waited for Alex and the Hermizes to put in their capital for the restaurant.
Although the file-stamped copy of the articles of organization from Brenex came back from the Secretary of State at the end of November 2005, the LLC was never completely formed and Café 67 only operated under its fictitious name as a purported partnership. In early December 2005, the Hermizes gave Asaro a check for $1,188 from the credit card receipts of the restaurant during the transition for Café 67, but the check came back without sufficient funds. Although that mistake was subsequently corrected, Asaro then discovered that $400 was missing from the WaMu account, taken by Alex via two checks, so that a reissued rent check would not be covered in full. When Asaro confronted Alex about those checks on December 13, 2005, he walked out of the restaurant and did not come back.
According to Alex, he went back to the restaurant on December 14, 2005, prepared to work and handed Asaro a check for the rent, but she walked away. Feeling uncomfortable with the situation, Alex went to see an attorney regarding the restaurant. When he returned to the restaurant the next day, the locks on the doors and the building alarm system had been changed.
Alex filed Case No. GIE031105 in February 2006, seeking to rescind the agreement with Asaro because she allegedly had not kept her promises to him. Asaro filed her cross-complaint against Alex in November 2006, for among other things, a judicial determination of disassociation of the de facto partnership as of December 13, 2005, as well as cross-complaining against the Hermizes for fraud and breach of the "Asset Sale/Transfer Agreement." In December 2006, Mike cross-complained against Asaro to recover the $6,000 and the money given to her for taxes on the restaurant, claiming they were loans. In June 2007, Alex, joined by Mike and Ann, filed a first amended complaint in GIE031105 adding Mike and Ann as plaintiffs and alleging additional causes of action for rescission of the contract and making promises without the intent to perform.
In August 2007, Mike and Ann retained a second attorney and filed the lawsuit in Case No. 37-2007-00060480-CU-OR-EC for ejectment, damages and preliminary and permanent injunction. After a preliminary injunction motion was denied, the case consolidated with Case No. GIE031105, and summary judgment motions were denied in the consolidated cases, the Hermizes substituted in yet another attorney who was granted a continuance of the matter for trial.
On May 29, 2008, the parties commenced a court trial in the consolidated cases with the Hermizes waiving a reporter, but Asaro paying for the court reporter that day. In opening statements, the parties in essence agreed that this case was about broken promises regarding the restaurant. Based on such broken promises, Alex requested the agreement be rescinded because he "never got what he bargained for," or in the alternative, that the business be appraised at its current market value, that it be sold or one of the parties buy the other one out, and that he be compensated for half of all profits made since November 2005. Asaro asked the court to find "that to the extent a partnership existed between [her] and Alex..., that that partnership was disassociated and dissolved as of December 13th, 2005. And we're going to ask [the court] to make a finding that in connection with that disassociation and to affect that disassociation, the Hermiz[es] be required to assign the lease to Ms. Asaro, and that any interest that Alex [and] Asaro has in the business be valued as of that date." Alternatively, Asaro asked the court, if it were inclined to go down the rescission path as requested by the plaintiffs that it make an order of equalizing payments to her for her capital input as well as "draw or salary for approximately... 30 months" since Café 67 opened, valuing her services at about $4,000 a month. Mike and Alex gave direct testimony the first day of trial.
The matter was then continued to July 15, 2008, at which time the court minutes reflect that all parties waived the presence of a court reporter for the remainder of the trial. The minutes reflect that on the second day of trial, Alex provided additional direct testimony, Asaro was called as an adverse witness, Alex's first attorney who filed the original complaint in Case No. GIE031105 testified, and over 40 exhibits were admitted into evidence. The minutes for July 16, 2008, show that Alejandro Matuk, the Pernicanos's attorney, testified and was cross-examined, Asaro testified on her own behalf and was cross-examined, Victoria Whitmire testified and was cross-examined, and 13 additional exhibits were admitted into evidence. On July 17, 2008, the minutes reveal that Vicki Marie Wolf, whose qualifications as an expert were stipulated to by the parties, testified and was cross-examined; each of the Hermizes was called to testify for Asaro and cross-examined; 10 additional exhibits were received into evidence; a petition to confirm an arbitration award with its attachments in another case was received into evidence; and an offer of proof was made and accepted by the court as to what a person named Mr. Silva "did not do for Victoria's Restaurant."
The court minutes also reflect that before closing arguments the parties' counsel and the court discussed the unresolved issues for the trial, which would include those raised in the Hermizes' first amended complaint, Asaro's cross-complaint, Mike's cross-complaint against Asaro, and any unresolved issues in the ejectment case. After hearing arguments and making additional inquiries of counsel, the court took the matter under submission. The court issued a letter ruling and minute order in favor of Asaro on August 1, 2008. Judgment was entered in favor of Asaro on September 10, 2008, as noted above.
The Hermizes filed a timely notice of appeal.
Alex's petition for a writ of supersedeas, staying enforcement of the judgment to preserve the status quo of the lease, was summarily denied by this court on November 20, 2008.
DISCUSSION
At the outset, we note that we decline to elaborate on most of the Hermizes' contentions on appeal because they have failed to provide a sufficient record to evaluate their arguments, and, as already determined above, we conclude they are not entitled to a new trial based on alleged court reporter and court clerk omissions in preparing the record for appeal.
Concerning the former, the law is well established that the trial court's judgment is presumed to be correct and that the burden is on the appellant to overcome such presumption and to show reversible error. (State Farm Fire & Casualty Co. v. Pietak (2001) 90 Cal.App.4th 600, 610.) In this regard, " ' " '[a]ll intendments and presumptions are indulged to support [the judgment] on matters as to which the record is silent.' " ' " (Wilson v. Sunshine Meat & Liquor Co. (1983) 34 Cal.3d 554, 563.) We presume the trial court followed the law and considered only admissible evidence. (Ibid.; Mike Davidov Co. v. Issod (2000) 78 Cal.App.4th 597, 606.)
Moreover, it is the appellant's responsibility to provide an adequate record demonstrating error and prejudice from the error. (Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 132; Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) When no statement of decision was requested, we imply all findings necessary to support the judgment. (In re Marriage of Cohn (1998) 65 Cal.App.4th 923, 928.) When no completed reporter's transcript is provided on appeal, we conclusively presume the trial court's findings are supported by the evidence. (Estate of Fain (1999) 75 Cal.App.4th 973, 992 (Fain).)
Here, the Hermizes, although complaining that the trial court committed numerous errors, did not preserve or otherwise provide an adequate record showing those errors because they failed to request a statement of decision or provide reported transcriptions for three of the four days of trial. Their failure to secure a complete record precludes any meaningful review of their alleged errors. This is particularly true as to their assertions based on the Corporations Code that the court erred in accounting for the parties' respective contributions to the business and in determining Alex's interest in it as of the date of dissociation. There is absolutely no record regarding any objection by Alex or the Hermizes to the accounting and method of valuation of the business proffered by Asaro or to the court's accounting. Nor is there a record of the expert's testimony regarding any such valuation or accounting. The only thing in the designated record on appeal arguably concerning such matter is a reference in the court minutes that the parties stipulated to the qualifications of Asaro's expert. Under these circumstances, the Hermizes cannot show that they even raised or objected to the issue below. Absent such objection, the issue is waived on appeal. (In re Aaron B. (1996) 46 Cal.App.4th 843, 846.)
As to the record before us, however, we note that contrary to the Hermizes' assertion the trial court violated due process by granting relief beyond the scope of the pleadings being litigated, the record clearly reveals the court granted the relief specifically requested by Asaro in her opening statements, which was consistent with the relief requested in her various pleadings; i.e., in her answers to the Hermizes' complaint and first amended complaint in Case No. GIE031105, in her cross-complaint in that case, in her answer to Mike and Ann's complaint in the consolidated Case No. 37-2007-00060480-CU-OR-EC, in her oppositions to the preliminary injunction and summary judgment motions, and in the trial readiness conference report. The existing record, together with the presumption of correctness, demonstrates that all issues upon which relief was granted were raised, tried and argued by the parties before being resolved by the trial court. Quite simply, none of the court's ordered relief exceeded the scope of the pleadings or the matters before the court.
Additionally, although the record of the first day of trial reveals the trial court sustained several objections to Mike's direct testimony regarding the value of the beer and wine license and a bounced check, even assuming those evidentiary rulings could be determined to be in error, which we do not, the record the Hermizes have provided is inadequate to assess or determine any prejudice from those alleged errors.
Regarding the Hermizes' claims that the evidence was insufficient for the court to determine a value for Café 67 and incorrectly held Alex's failure to make equalizing capital contributions breached the purchase agreement, without a complete reporter's transcript, we conclusively presume the court's valuation of Café 67 and its interpretation of the parties' oral agreements were supported by the evidence. (Fain, supra, 75 Cal.App.4th at p. 992.) As to the Hermizes' assertion the trial court improperly partitioned personal property in violation of due process, no such relief was ordered, only an evaluation of Alex's interest in the business. As to their issues raised for the first time in their reply brief, i.e., that the court erred by treating borrowed money as a capital contribution in the valuation equation and by ignoring the parol evidence rule, those issues are waived.
In sum, the Hermizes have simply failed to provide a sufficient record to overcome the presumption that the trial court's judgment is correct and to show reversible error. (Ballad v. Uribe (1986) 41 Cal.3d 564, 574-575.)
DISPOSITION
The judgment is affirmed. Asaro is awarded costs on appeal.
WE CONCUR: McDONALD, J., O'ROURKE, J.