Opinion
2d Civil No. B159647.
11-23-2003
EARL LAURSEN, Appellant, v. HARRY C. POPE AND VICKI A. POPE, Respondents.
John F. Hodges, for Appellant. Jay A. Hieatt, Stephanie A. Bowen; Hall & Hieatt, for Respondents.
Earl Laursen appeals from a $1,146,000 judgment entered in favor of Harry C. Pope and Vicki A. Pope after a jury found that Laursen intentionally destroyed a water system servicing Popes house in Nipomo. Laursen contends, among other things, that the judgment is not supported by the evidence and that the award for compensatory and punitive damages is excessive.
As we shall explain, the award for $750,000 punitive damages is disproportionate to Laursens net worth and must be reduced. (Storage Services v. Oosterbaan (1989) 214 Cal.App.3d 498, 515-516.) We reduce the punitive damages to $295,000. As modified, we affirm the judgment. (Code Civ. Proc., § 906.)
Facts and Procedural History
This action arises out of a water and road dispute that dates back 20 years. In 1980, Laursen sold Harry C. Pope and Vicki A. Pope 10.63 acres (Parcel 3) which included a 10-foot wide easement across Laursens property (Parcel 2) for a water line. Laursen represented that water would be available from a neighbors well (the Rubio well) after he subdivided Parcels 1, 2 and 4 and installed a community water system. It was agreed that Pope could take water from a well on Parcel 2 until a hook up was made to the Rubio well.
Pope built a home and installed a water line to the Rubio well in 1984. Rubio, however, disconnected the water line and claimed that Pope did not have an electrical easement to operate the well.
Pope reconnected the water line to the Parcel 2 well and sued after Laursen denied access to the well. (Case No. 58423.) The trial court ordered Laursen not to interfere with Popes use of the well. We reversed and held that Laursen was not obligated to supply water from the Parcel 2 well after Pope established a water line to the Rubio well. (B029444.)
In a related action, Laursen sued to maintain a water line to the Rubio well. (Laursen v. Rubio, San Luis Obispo County Sup. Ct., Case No. 57806.) The trial court found that Laursen had an easement to install, maintain, repair and replace the well equipment, the water and electrical lines, and appurtenant facilities. The easement ran in favor of Parcels 1, 2, 3, and 4, including Parcel 3 owned by Pope.
After judgment was entered in the Laursen-Rubio action, Pope connected a water line to the Rubio well. Laursen, however, cut and pulled up the water line. Pope obtained an injunction (Case No. 58423) but Laursen continued to vandalize the water system and was threatened with criminal prosecution.
This resulted in a new round of litigation. Laursen sued for trespass, nuisance, emotional distress, and malicious prosecution. (Case No. 68528.) Pope filed a cross-complaint and obtained a preliminary injunction. In 1998, a jury found that the easement across Laursens property (Parcel 2) included the right to maintain an electrical line to operate the Rubio well.
On January 26, 1999, Laursen and Pope entered into a stipulated judgment to install a water monitoring system and water meters. The judgment provided that a 7,500 gallon community water tank would be installed on the eastern portion of Laursens property and that the parcel owners would share the cost of installing the electrical system and tank.
After Pope obtained work estimates, Laursen removed well head equipment and cut the water and electrical lines. Pope sought an injunction. (Case No. CV001013.) On August 9, 2001, the trial court enjoined Laursen from "touching, interfering, tampering with or removing any part of the water pipe line or well system located . . . on the Rubio land or that which runs within the ten foot easement on Parcel 2."
Road Dispute
Laursen also disputed Popes use of a dirt road on the south border of Parcel 4. After Pope improved the road to access his property, Laursen sued for trespass damages. (Case No. CV66124.)
In 1993, a jury found that Pope had a prescriptive easement. Laursen and his wife were awarded $100 damages for any trespass occurring before the prescriptive easement was perfected. We reversed part of the judgment because it failed to specify the dimensions of the easement and affirmed the special verdict for damages. (B085522.)
The Present Action
On November 17, 2000, Laursen sued for trespass and nuisance damages, claiming that Pope had no right to use the access road. Pope filed a cross-complaint for nuisance, infliction of emotional distress, punitive damages, and declaratory relief.
Laursens Complaint
The trial court found that Laursen was collaterally estopped from recovering trespass damages if the access road was inside the prescriptive easement adjudicated in 1993. The trial court granted an in limine motion limiting Laursens damages to encroachments outside the prescriptive easement.
A surveyor testified that the location of the access road had not changed since 1993 and was within the prescriptive easement. The jury awarded Laursen no trespass damages.
Popes Cross-Complaint
Evidence was received that Laursen intentionally cut the water line more than 10 times after he was ordered to cease and desist.
The jury, by special verdict, found that Laursen sabotaged Popes water supply and acted with malice. The Popes were awarded $80,000 property damages, $16,000 loss of use and enjoyment of their property ($8,000 each), and $300,000 emotional distress damages. In the second phase of trial, the jury awarded $750,000 punitive damages.
In Limine Order: Trespass Damages
Laursen argues that the trial court erred in finding that he was estopped by the 1993 judgment awarding Pope a prescriptive easement. In B085522, we held that the judgment was too vague and ambiguous to be enforced because it failed to describe the dimensions of the easement. Laursens award for $100 trespass damages, however, was affirmed. We held that "[t]he special verdict finding that Pope had a prescriptive easement was an interlocutory finding to calculate Laursens damages."
Having received the benefit of the 1993 judgment, Laursens present action for trespass damages was properly limited to enroachments outside the prescriptive easement. (7 Witkin, Cal. Procedure, Judgment (4th ed. 1997) § 354, pp. 915-917; Stonewall Ins. Co. v. City of Palos Verdes Estates (1996) 46 Cal.App.4th 1810, 1840; Sandoval v. Superior Court (1983) 140 Cal.App.3d 932, 936-937.) "Collateral estoppel is an equitable concept based on fundamental principles of fairness. For issue preclusion purposes it means that a party ordinarily may not relitigate an issue that was fully and fairly litigated on a previous occasion." (Id., at p. 941.)
Laursens complaint states: "Plaintiffs have previously litigated this same issue with the Defendants and have previously been Awarded Judgment against the Defendants in 2d Civ NO. B085522 . . . ." This judicial admission estops Laursen and bars consideration of contrary evidence. (Valerio v. Andrew Youngquist Construction (2002) 103 Cal.App.4th 1264, 1271.) The trial court did not abuse its discretion in granting the in limine motion limiting Laursens trespass damages. (E.g., Lucas v. County of Los Angeles (1996) 47 Cal.App.4th 277, 285 [in limine order may be based res judicata/collateral estoppel grounds].)
Popes Cross-Complaint: Property Damages
Laursen claims that the verdict for $80,000 property damages is excessive. The argument is based on the theory that the damage to the water system was a temporary nuisance and only permits an award for repair costs ($1,860). The repairs, however, did not abate the nuisance. After Laursen was ordered to stop tampering with the water system, he cut the electrical and water lines and removed a well control unit. Laursen admitted violating the injunction and said that "he didnt care, he was going to continue to do that."
Where the nuisance cannot be abated as a practical matter, the plaintiff may sue on a permanent nuisance theory. (Kornoff v. Kingsburg Cotton Oil Co. (1955) 45 Cal.2d 265, 271.) Damages include diminution in market value. (City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 464.) " In case of doubt as to the permanency of the injury the plaintiff may elect whether to treat a particular nuisance as permanent or continuing. [Citation.]" (Wilshire Westwood Associates v. Atlantic Richfield Co. (1993) 20 Cal.App.4th 732, 744.)
Here the harassment and denial of water service affected the value of Popes property. In order to sell Parcel 3, Pope reduced the sale price $75,000 to $100,000 below market value. When Laursen heard about the pending sale, he recorded documents to thwart the sale and prevent the buyer from obtaining conventional financing. Pope had to reduce the sale price another $10,000 to pay for a water hookup and new access road for the buyer.
Citing Shaeffer v. Debbas (1993) 17 Cal.App.4th 33, Laursen asserts that damages for negligent injury to real property are limited to cost of repair or diminution in value, whichever is less. We reject the argument because the damages are based on intentional acts. "There is no fixed, inflexible rule for determining the measure of damages for injury to, or destruction of, property; whatever formula is most appropriate to compensate the injured party for the loss sustained in the particular case, will be adopted. [Citations.]" (Basin Oil Co. v. Baash-Ross Tool Co. (1954) 125 Cal.App.2d 578, 606.)
The diminution in value was not due to broken water pipes, but Laursens intentional torts and harassment. Pope incurred $ 300,000 attorneys fees, sought bankruptcy protection, and obtained an injunction, all to no avail. Laursen continued to disrupt water service, causing the property to plummet in value.
The jury was instructed: "If the damages have been repaired, or are capable of repair, so as to restore the fair market value as it existed immediately before the accident, at a cost less than such difference in [the fair market] value, then the measure of damage is the cost of such repair . . . ." (BAJI 14.20, emphasis added.)
In Alexander v. McKnight (1992) 7 Cal.App.4th 973, homeowners sued a neighbor for operating a tree trimming business and were awarded damages for diminution in value. The Court of Appeal reversed on the ground that the nuisance could be abated by an injunction. Damages for diminution in value were speculative because the plaintiffs did not market or sell their homes. (Id., at pp. 978-979.)
Here it was uncontroverted that injunctions and calls to the sheriff did not abate the nuisance. Because of the on-going intentional torts, Pope sold the property $75,000 to $100,000 below fair market value. When Laursen tried to sabotage the sale, Pope had to reduce the sale price another $10,000. Substantial evidence supported the verdict for $80,000 property damages.
Advice of Counsel
Laursen contends that the trial court erred in excluding evidence that he cut the water line on the advice of counsel. To successfully assert the defense, Laursen had to show that counsels advice was based on a full disclosure of the facts and that Laursen relied on the advice in good faith. (Bertero v. National General Corp. (1974) 13 Cal.3d 43, 53-54.)
There was no evidence that the attorney knew that Pope shared water rights to the Rubio well or knew that Laursen was ordered to stop tampering with the water system. Laursen admitted violating the injunction and boasted that he would continue cutting the water and electrical lines. When a deputy sheriff questioned him about the vandalism, Laursen said "it was his property, and he was going to do what he wanted."
It is well settled that one cannot justify disobedience of a court order on the ground that he or she acted on the advice of counsel. (City of Vernon v. Superior Court (1952) 38 Cal.2d 509, 518.) "[C]ounsels advice must be sought in good faith [citation] and . . . not as a mere cloak to protect one against a suit . . . . [Citation.]" (Bertero v. National General Corp., supra, 13 Cal.3d at p. 54.)
Laursen attempted to raise the advice of counsel defense at the end of the trial. The trial court sustained a hearsay objection and ruled that Laursen could not read a letter from his former attorney. There was no abuse of discretion or prejudice. (Code Civ. Proc. § 475; e.g., People v. Livaditis (1992) 2 Cal.4th 759, 778 [proponent of hearsay must alert court to hearsay exception and lay proper foundation].) "It is futile for defendant to argue that good faith reliance on the advice of counsel is a defense, [where] the record shows no such advice." (MacDonald v. Joslyn (1969) 275 Cal.App.2d 282, 292.)
Laursen stated: "And in regards to me sabotaging the water line and electrical line, [Pope] has his electrical line and water line over on our property, on the top part of the hill. And I contacted a lawyer named OFarrell, and he says, remove it. And also Clark Nichols (sic). So I got enough legal advice to remove that water line and electrical line that was laying illegally on our property."
Before trial, Laursen indicated that he consulted the attorney after cutting the water and electrical lines. Laursen stated that Pope "tapped into my water line and electrical line, and I disconnected him. And the cops came out and the sheriff came out, and was going to arrest me. But then Mr. Nichols (sic) says, hey, you cant do that, because its his system. . . . If Earl Laursen wants to remove Popes control box from his electrical line, he has that right, and he doesnt have to have a court order to do it."
No Judicial Misconduct
Laursen claims that the trial court was hostile and denied him the right to present evidence. The argument is not supported by the record. As a pro per, Laursen argued with witnesses, asked irrelevant questions, disregarded the trial courts rulings, and tried to interject unfounded defenses. The trial court was patient and asked Laursen to focus on the issues. There was no judicial misconduct or prejudice. (Cal. Const., art. VI, § 13; Loper v. Morrison (1944) 23 Cal.2d 600, 610.)
"The [trial] courts inherent power to curb abuses and promote fair process extends to the preclusion of evidence. Even without such abuses the trial court enjoys broad authority . . . over the admission and exclusion of evidence. [Citation.]" (Peat, Marwick, Mitchell & Co. v. Superior Court (1988) 200 Cal.App.3d 272, 288; see also People v. Ponce (1996) 44 Cal.App.4th 1380, 1390 [duty of trial court to prohibit argument not supported by substantial evidence].) Laursen received a fair trial and had no right to use the trial as a forum to harass witnesses. (Evid. Code, § 765, subd. (a).)
Emotional Distress Damages
Harry Pope and Vicki Pope were each awarded $150,000 emotional distress damages. Viewing the record in favor of the judgment, we conclude that the verdict is supported by the evidence.
Harry Pope
Harry Pope testified that Laursen repeatedly cut the water line, leaving his family without water to bathe, drink, or cook. The water line extended 2,000 feet, was buried and went down a steep ravine, and crossed dense scrub oak and poison oak. Breaks in the water line took hours, if not an entire day to locate and repair. Sometimes Laursen glued golf balls inside the pipe to make it more difficult to find the breaks. On other days he removed the well control box, requiring Pope to purchase a new control box. The disruption in water service caused a storage tank to drain empty and burn out a water pressure pump. Pope had to buy three or four replacements pumps costing $400 to $500 each.
The intentional torts and harassment caused Pope great concern. Because of marital problems, he moved off the property in March 2000. Popes wife and daughter stayed in the house, isolated on 10 acres. Each time Laursen cut the water line, Vicki Pope called and got "very upset."
Pope described the anxiety of not knowing when the water would be cut off, the repair complications, and the health risk of not being able to shower after walking through poison oak. "[A]nd then, add on the top, the fact that I have three kids and a wife, living in that same situation. . . . [I]t can be very trying, at best, in that situation." Pope did not "want to come off sounding macho" and said that it was "very difficult" to cope with the harassment. Laursen threatened to sue many times and "take you guys to court until you have nothing left."
We conclude that the threats and harassment would have caused a reasonable person to suffer substantial emotional distress. The evidence showed that Pope suffered stress, anxiety, and humiliation for at least three years. The jury, by special verdict, found that Laursens conduct was outrageous and caused Pope to suffer severe emotional distress. On review, we do not reweigh the evidence or consider the credibility of witnesses. (Leff v. Gunter (1983) 33 Cal.3d 508, 518.) "The jury and the trial judge, who denied the motion for judgment notwithstanding the verdict, observed [Pope] and heard his testimony and were . . . in a far better position than we to judge the severity of [Popes] emotional distress." (Fletcher v. Western National Life Ins. Co. (1970) 10 Cal.App.3d 376, 397.)
Laursen claims that the cause of action for infliction of emotional distress is time barred because the cross-complaint was filed October 25, 2001, more than a year after Pope moved off the property. The argument is without merit. The cross-complaint relates back to November 17, 2000, the date Laursen filed his complaint. (Sidney v. Superior Court (1988) 198 Cal.App.3d 710, 714; 3 Witkin, Cal. Procedure, Actions (4th ed. 1996) § 421, pp. 530-531.) The one-year statute of limitations commenced to run November 17, 1999, when Pope was still living on the property. (See former Code Civ. Proc., § 340, par. (3).) After Pope separated from his wife, Laursen continued to destroy the water system so that Pope had to return and fix the damage. Pope did not have to live on the property to sue for intentional infliction of emotional distress. (E.g., Ingram v. City of Gridley (1950) 100 Cal.App.2d 815, 821-822.)
Laursen harassed Pope other ways. Before selling Parcel 4, he threatened to rip up the access road so that Pope would have to dispose of the hazardous waste.
Vicki Pope
Substantial evidence supported the verdict awarding Vicki Pope emotional distress damages. Vicki Pope and her daughter were alone in the house when Laursen sabotaged the water system. The damage was substantial and, on one occasion, left them without water for three or four days. Vicki Pope testified that Laursen cut off the water "many times" and that "control boxes were taken, water lines busted, golf balls put inside the water line, [and] electrical lines tore up." Between 1999 and June 2001, he cut the water line 12 or 13 times and took 4 well control boxes.
Vicki Pope suffered "extreme stress" and feared for her safety and the safety of her daughter. She believed that Laursen "carried a gun" and heard him drive up late at night and cut the water line. Laursen also blocked the access road with power poles. On one occasion, he tried to hit her with his car.
With respect to Vicki Pope, Laursen argues that the verdict for $150,000 emotional distress and $8,000 award for loss of use and enjoyment of property are cumulative. We disagree. Damages for loss of beneficial use includes annoyance and discomfort suffered by the Pope children. (City of San Jose v. Superior Court, supra, 12 Cal.3d at p. 464; Kornoff v. Kingsburg Cotton Oil Co., supra, 45 Cal.2d at p. 272; 8 Miller & Starr, Cal. Real Estate (3rd ed. 2001) § 22:23, pp. 92-93.) "[R]egardless of whether the occupant of land has sustained physical injury, [s]he may recover damages for the discomfort and annoyance of . . . members of [her] family and for mental suffering occasioned by fear for [their] safety . . . when such discomfort or suffering has been proximately caused by a trespass or a nuisance. [Citations.]" (Acadia, California, Ltd. v. Herbert (1960) 54 Cal.2d 328, 337 [discomfort for intentional disruption of water service].)
Laursen does not challenge the $8,000 award to Harry Pope for loss of use and enjoyment of property.
Laursen intentionally destroyed the water system and made life miserable for the Popes. The family was stranded without water, had to truck water to the house, and bathed and washed clothes at a neighbors house. The evidence supports the verdict for loss of use and enjoyment of property which includes discomfort and annoyance suffered by the family.
Punitive Damages
Laursen argues that the $750,000 punitive damages award is excessive and violates his due process rights. On appeal, the award is reviewed de novo to determine the reprehensibility of the defendants acts and the proportionality of the award to the compensatory damages and defendants net worth. (Diamond Woodworks, Inc. v. Argonaut Ins. Co. (2003) 109 Cal.App.4th 1020, 1055-1056; Cooper Industries, Inc. v. Leatherman Tool Group, Inc. (2001) 532 U.S. 424, 431 [121 S.Ct. 1678, 1683].) The purpose of punitive damages is to punish and deter, not to financially destroy the defendant. (Adams v. Murakami (1991) 54 Cal.3d 105, 110-111; Neal v. Farmers Ins. Exchange (1978) 21 Cal.3d 910, 928-929.) "A defendant should be punished for the conduct that harmed the plaintiff, not for being an unsavory individual or business." (State Farm Mutual Automobile Ins. Co. v. Campbell (2003) ___ U.S. ___, ___ [123 S.Ct. 1513, 1523].)
Laursens conduct was clearly outrageous, oppressive, and malicious. (Civ. Code, § 3294, subd. (a).) The jury awarded $ 750,000 punitive damages, less than two times the compensatory damages. This award is not out of proportion to the compensatory damages. (E.g., Sierra Club Foundation v. Graham (1999) 72 Cal.App.4th 1135, 1163 [punitive damages three times compensatory damages not excessive]; Diamond Woodworks, Inc. v. Argonaut Ins. Co., supra, 109 Cal.App.4th at p. 1057 ["outer constitutional limit" for punitive damages is four times compensatory damages]; State Farm Mutual Automobile Ins. Co. v. Campbell, supra, ___ U.S. at p. ___ [punitive damages exceeding a single digit ratio between punitive damages and compensatory damages may violate due process].) "[W]here a plaintiff has been fully compensated with a substantial compensatory award, any ratio over 4 to 1 is close to the line. [Citation.]" (Henley v. Philip Morris Co. (2003) 112 Cal.App.4th 198, 248.)
Our proportionality determination does not end the appellate inquiry. The punitive damages must also be measured against Laursens net worth. It is also subject to de novo review. Our courts have held that a punitive damage award may not, as a general rule, exceed 10 percent of the defendants net worth. (Weeks v. Baker & McKenzie (1998) 63 Cal.App.4th 1128, 1166; Storage Services v. Oosterbaan, supra, 214 Cal.App.3d 498, 515; Michelson v. Hamada (1994) 29 Cal.App.4th 1566, 1596 [punitive damages representing 28 percent of defendants net worth excessive; 10 percent rule cited].) We decline to follow Rufo v. Simpson (2001) 86 Cal.App.4th 573 where the punitive damages ($25 million) in a wrongful death action exceeded the defendants (O.J. Simpson) net worth. The Court of Appeal cited "unique" and "unusual circumstances" regarding defendants conduct and net worth. (Id., at pp. 623-624.) Defendant had $4.1 million in exempt pension funds and was expected to earn $2 to $3 million a year the rest of his life. (Id., at p. 617.)
Laursens net worth is approximately $2.95 million. He is retired and receives social security. The award for $ 750,000 punitive damages represents about 25 percent of his net worth. The award is excessive as a matter of law. Punitive damages in excess of $295,000 would, "in light of the defendants wealth and the gravity of the particular act, exceed[] the level necessary to properly punish and deter." (Neal v. Farmers Ins. Exchange, supra, 21 Cal.3d at p. 928, fn. 13.) An award of $295,000 in punitive damages comports with due process of law.
Pope lists, with citations to the record, Laursens assets, which include an apartment building, a house, a Tennessee farm, vehicles, promissory notes, and civil judgments. The listed assets total $3,447,150 but must be reduced. The $21,500 line of credit (Sun Trust line of credit and GMC line of credit) is not an asset. $17,127 must also be deducted to reflect the appreciated cost of the 17 acre Maxwell subdivision which was part of the 320 acre Tennessee farm. Laursens assets total $3,408,523 and he has $452,000 in debts, leaving him with a $2,956,523 net worth.
Laursen claims that he has no net worth because his property is held in a trust with his wife. We reject the argument. A tortfeasors beneficiary interest in a spendthrift trust may be taken into account in determining monetary worth. (Sligh v. First National Bank of Holmes County (1997 Miss.) 704 So.2d 1020, 1028.) Laursen may not use a self-settled trust to place property beyond the reach of creditors. (In re Moses (9th Cir. 1999) 167 F.3d 470, 473; Prob. Code, § 15304, subd. (a); Code Civ. Proc., § 709.010, subd. (b).) Where, as here, the tortfeasor spouse acts on behalf of the community, the judgment is enforceable against the community estate. (Fam Code, § 1000, subd. (b)(1).)
We conclude that a retrial on the amount of punitive damages would open the door to vexation, wasted effort, and be a further drain on our overburdened courts. Twenty years of feuding and litigation is enough. Somewhere along the line, the litigation must cease. (In re Marriage of Crook (1992) 2 Cal.App.4th 1606, 1613.) "When required by justice, a reviewing court should modify a punitive damage award to ensure that the public policies behind its making are served. [Citations.]" (Las Palmas Associates v. Las Palmas Center Associates (1991) 235 Cal.App.3d 1220, 1256 [punitive damages reduced from $10 million to $2 million].)
The award for punitive damages is reduced from $750,000 to $ 295,000. (Ibid.; Code Civ. Proc., §§ 43, 906.) We direct the trial court to enter a new judgment for $ 396,000 compensatory damages and $295,000 punitive damages. The judgment, as modified, is affirmed. Given the unique nature of this appeal and the history of litigation, the Honorable E. Jeffrey Burke, Judge of the Superior Court, County of San Luis Obispo, is specially appointed to take all necessary steps to enforce the judgment as modified. The parties shall bear their own costs on appeal.
We concur, GILBERT, P.J., PERREN, J.