Opinion
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Orange County No. 30-2008-00103342 Richard Luesebrink, Judge. (Retired Judge of the Orange Super. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.)
Skanadore Reisdorph Law Office and Deborah S. Reisdorph for Plaintiffs, Cross-defendants, and Respondents.
D. Elizabeth Pierson, in pro. per., for Defendant, Cross-complainant, and Appellant.
OPINION
IKOLA, J.
D. Elizabeth Pierson appeals a judgment favoring Orange County Fair Housing Council, Inc. (Fair Housing Council), and nine of its individual directors. Pierson argues on appeal: (1) the damages awarded to plaintiff Fair Housing Council were based on evidence of fraud outside the scope of the allegations in Fair Housing Council’s operative complaint; (2) there is insufficient evidence supporting the damages awarded to Fair Housing Council; (3) there is insufficient evidence for the jury’s verdict in favor of Fair Housing Council and the individual directors on Pierson’s cross-complaint (i.e., no damages awarded to Pierson based on her allegations of harassment, discrimination, retaliation, and failure to pay money owed to her under contract and statutory rights); and (4) irregularities with regard to the jury require a new trial.
The nine individual directors who are parties to this appeal are: Wayne Ward, Christine McGuire, Gregory C. Brown, Earl Dearing, Jeffrey Bird, Emma Hightower, Aidee Lopez, Waymond Rogers, and Reyna Villarreal.
Fair Housing Council actually filed a “petition” rather than a complaint. For the sake of simplicity, we refer to Fair Housing Council (and its directors) as plaintiffs and to Fair Housing Council’s pleading as a complaint.
We conclude the court did not err in allowing Fair Housing Council to expand the factual basis for its fraud causes of action, the jury’s determination that there was no merit to Pierson’s cross-complaint is supported by substantial evidence, and Pierson received a fair trial. But the damages awarded to Fair Housing Council must be reduced to the amount supported by substantial evidence.
Fair Housing Council filed a motion to dismiss the appeal as untimely. We deny the motion. Pierson’s time to file a notice of appeal was extended by reason of Pierson filing a valid notice of intention to move for a new trial. (Cal. Rules of Court, rule 8.108(b).)
FACTS
Fair Housing Council is a nonprofit entity with the stated mission of promoting equal access to housing opportunities. Pierson was the longstanding chief executive officer, president, and general counsel of Fair Housing Council.
This case began when board members (including those listed in footnote one) authorized an investigation into anonymous allegations about Pierson’s management of Fair Housing Council. It was alleged by an anonymous tipster on or about November 19, 2007: (1) Pierson hired her boyfriend, Richard Spix, as staff attorney; (2) Fair Housing Council resources were being utilized by Spix for his private litigation practice; (3) Fair Housing Council was operating at a deficit and was unable to make payroll; (4) Pierson was only in the office one hour per week and did not provide any leadership to staff; (5) Pierson hired her son to work for Fair Housing Council; (6) Fair Housing Council lost more than half of its Housing and Urban Development Department grant money the last year; (7) Pierson hired Spix’s 16 year-old daughter as a part-time employee; and (8) Pierson used the company credit card for personal expenses.
Pierson responded in writing to the board on November 28, 2007, denying the accuracy of some of the charges and providing explanations for other allegations. Pierson’s response “left [the board] with more questions than answers” according to one board member. A Fair Housing Council employee submitted a signed set of allegations against Pierson and met with the board in December 2007 to explain his concerns.
Although the board had not even decided if there was any credence to the allegations against Pierson, Pierson sought to preempt the board’s investigation by demanding an immediate mediation of the issues. Pierson and one board member, Ramon Diaz (who also served as treasurer), refused to honor the board’s request to authorize $5,000 in funds to hire legal counsel to conduct an investigation into Pierson’s conduct. Pierson denied the board access to Fair Housing Council records and employees.
In the midst of this maneuvering, a dispute arose as to the actual membership of the board of Fair Housing Council as of January 2008. On January 17, 2008, Diaz delivered a memorandum to eight individual board members, claiming these individuals had been automatically removed from the board of directors based on past absences from board meetings. At a scheduled board meeting on February 27, 2008, security guards (accompanied by Pierson’s son) prevented the eight banished directors from entering the Fair Housing Council building. The exiled board members passed a resolution off-site to remove Diaz from the board of directors for breach of fiduciary duty and to place Pierson on paid administrative leave pending an investigation into her conduct.
Fair Housing Council (and eight individual directors) then filed (on February 29, 2008) an action against Pierson requesting: (1) a declaration that the eight directors, plus two others, were the proper board of directors; and (2) injunctive relief against Pierson to prevent her interference with the board’s control of Fair Housing Council.
The court (conducting a bench trial on this equitable issue) ultimately ruled in favor of the board members, and this aspect of the judgment is not appealed. The court concluded: The eight directors “were not properly removed as board members, nor placed into ‘advisory board’ status by the memorandum... dated January 17, 2008, and have remained authorized board members of... Fair Housing Council... since January 16, 2008 and have had and continue to have the power and authority to govern the nonprofit corporation, including the power and authority to determine the employment status of... Pierson.”
Following the filing of the action for declaratory and injunctive relief, the dispute between the parties intensified. Pierson filed a cross-complaint for damages based on her alleged mistreatment by Fair Housing Council and its individual board members. Fair Housing Council amended its complaint to include causes of action against Pierson for intentional misrepresentation and constructive fraud. These competing claims, which resulted in a jury verdict, are the focus of this appeal.
Pierson’s Operative Cross-Complaint
Pierson’s operative cross-complaint alleged Fair Housing Council and its individual directors were liable to her for damages based on: (1) violations of the Fair Employment and Housing Act (Gov. Code, § 12900 et seq.); (2) violations of the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.); (3) breaches of Pierson’s employment contract; (4) intentional infliction of emotional distress; and (5) violations of California Labor Code section 203.
In her appeal, Pierson claims “undisputed” evidence pertaining to two of her theories (the revocation of Pierson’s reasonable accommodation for her disability without adequate process, and the failure to pay her accrued salary and vacation time when she was discharged) entitle her to a new trial. Our description of the cross-complaint therefore focuses solely on allegations relevant to these theories.
“On or about 2004, Pierson contracted Salmonella poisoning. The Salmonella poisoning left Pierson with permanent physical impairments that substantially limit one or more of her major life activities. Her impairments include muscle spasms, particularly in her back and legs, fatigue, uncontrollable tremors, and severe pain.” “The Board concluded that it could and would give Ms. Pierson an accommodation that would allow her to perform her job duties.... The Board therefore accommodated Pierson’s disability by allowing her to work from home on an as-needed basis.” Pierson “frequently walked with the assistance of a cane or walker, and, when her symptoms were particularly bad, she used a wheelchair.” Beginning in late 2007 and continuing through 2008, Fair Housing Council and its directors harassed Pierson about her reasonable accommodation, failed to engage in a good faith interactive process to assess Pierson’s reasonable accommodation, and placed Pierson on administrative leave.
“On May 30, 2008, the date of Pierson’s discharge, the sum of $92,885.50 had been earned by Pierson in accrued vacation time and had not been paid by [Fair Housing Council]. In addition Pierson was and is entitled to, but was never paid, $8,750 for her salary in June 2008, $300 for her June stipend, $1,175 for her 403(b) contribution for June 2008, and a bonus in the amount of $3,150, which was paid to all [Fair Housing Council] employees in June 2008. Pierson is therefore owed a total of $106,260.50 in unpaid wages and accrued vacation.” Four hundred thirty five “days have passed since the date the wages were due and payable pursuant to the California Labor Code. Therefore, in addition to $106,260.50 in unpaid wages and accrued vacation, Pierson is entitled to $12,115.38, which represents 30 days of statutory waiting penalties, pursuant to Labor Code section 203(a) for [Fair Housing Council’s] willful failure to pay Pierson’s unpaid wages and accrued vacation.”
Fair Housing Council’s Action for Intentional Misrepresentation and Constructive Fraud
Fair Housing Council alleged the following facts. “In 2000, [the parties] signed a contract that was fully negotiated....” The 2000 contract included a prevailing party attorney fees provision in a section of the contract pertaining to mediation and arbitration.
An increase in compensation for Pierson was negotiated in September 2005 in exchange for an extended period of employment (through June 30, 2008). “The compensation and the dates [of employment] were the only terms renegotiated. [Pierson] was assigned the duty to prepare the contract for said terms to be consistent with the prior contract in all other terms and conditions.”
Pierson “presented a contract... representing that the contract was consistent with the prior contract in all terms except the increase of compensation and dates of the term of employment. Chairperson, Ana Munoz relied upon the representation... and signed the contract. However, [Pierson] failed to inform Chairperson, Ana Munoz of the material fact that [Pierson] had omitted the provision for attorney fees.” “In about March 2008, [Fair Housing Council] discovered that the contract prepared by [Pierson] did not reflect all the prior terms and conditions of the former contract intended to be transferred into the contract, and that [Pierson] had removed important terms and conditions of the contract for her own personal benefit. [Pierson] improperly removed provisions relating to attorney fees.”
“The contract prepared by [Pierson] dated September 12, 2005, failed to provide for recovery of attorney fees in any regard. The omission of this provision was intentionally misrepresented by [Pierson] for her own personal benefit causing detriment to [Fair Housing Council].” Fair Housing Council suffered damages “by having no contract terms for provision of attorney fees to the prevailing party in the event of any dispute between the parties concerning the contract of employment with [Pierson].”
Fair Housing Council’s “constructive fraud” cause of action repeated most of the same allegations, but without the allegation that Pierson intentionally omitted the attorney fees contract term.
Pierson’s Employment Contracts
Two of Pierson’s employment contracts are in the record: exhibit 532, executed on September 27, 2000 (by its terms expiring June 30, 2003), and exhibit 531, executed on September 28, 2005.
The 2000 contract set Pierson’s salary at $75,123.36, authorized Pierson to receive the same cost of living increase as other full-time employees each year, allocated 25 vacation days to Pierson per year, entitled Pierson to the same benefits received by other full-time employees, and authorized Pierson to receive any bonus or merit increase approved by the directors. The 2005 contract set Pierson’s salary at $81,310 per year, authorized Pierson to receive the same cost of living increase as other full-time employees each year, provided an additional $300 monthly expense allowance, allocated 25 vacation days to Pierson per year, entitled Pierson to the same benefits received by other full-time employees, entitled Pierson to the same bonuses awarded to regular, full-time employees (unless specifically denied by the board), and authorized Pierson to receive a merit increase if approved by the directors. Both contracts provided the salary could be increased or decreased during the employment term only in a writing executed by each party.
The 2000 contract included a term entitled, “MEDIATION AND ARBITRATION.” This provision stated, in relevant part: “Pierson and [Fair Housing Council] agree that any and all disputes, claims or controversies arising out of or relating to this Agreement, or in any way connected to Pierson’s Employment by [Fair Housing Council] shall be submitted to the American Arbitration Association (‘AAA’)... for mediation.... Pierson and [Fair Housing Council] further agree that in the event any such dispute, claim or controversy is not resolved through mediation, the matter shall be submitted to the AAA... for final and binding arbitration.... Pierson and [Fair Housing Council] further agree that [Fair Housing Council] shall pay for all mediation and arbitration cost and charges, exclusive of attorneys’ fees. The provisions of this Paragraph may be enforced by any court of competent jurisdiction. In the event of an application to a court to enforce the provisions of this Paragraph, the party prevailing in connection with the application shall be entitled to an award of all costs, fees and expenses, including attorney’s fees, she/it incurred in connection with such proceedings.” (Italics added.)
The 2005 agreement, conversely, provided under the same heading: “Pierson and [Fair Housing Council] agree that any and all disputes claims or controversies relating to this agreement or connected to Pierson’s employment will be submitted to a mutually agreeable mediator for resolution. [Fair Housing Council] will cover all costs associated with the mediation proceedings. If not resolved through mediation Pierson retains all rights under state and federal law.”
Evidence at Trial Pertaining to Pierson’s Conduct
Pierson was tasked with preparing her 2005 employment contract. The entire board did not review the completed, signed contract. The entire board did not authorize the removal of the arbitration provision and the attorney fees provision in Pierson’s employment contract. Ana Munoz, the former chairperson of the board, signed Pierson’s 2005 employment contract. According to Munoz, “In awarding contracts, we would review it in the executive committee. We did have an attorney that was present on the executive committee.” At trial, Munoz recalled the executive committee discussing Pierson’s salary and the arbitration/attorney fees clause. At trial, Munoz remembered the arbitration/attorney fees clause would be removed. But she was not clear about this fact in her deposition testimony (she recalled it had something to do with “saving money” and even said “there was something added to that with arbitration”).
The board spent approximately $200,000 in attorney fees and costs in the instant case, not including expenses incurred before Pierson filed her cross-complaint. A board member explained Fair Housing Council’s theory of damages with regard to this money: “[I]f we would have went to a mediator, and then we would have arbitrated, we would not have had all these court proceedings and all these other issues. And clearly, our costs would have been a lot less than they are now.”
Pierson’s biweekly salary as of October 6, 2006 was $3,127.31, which amounts to $81,310 per year (matching the figure in her employment contract). Pierson’s next paycheck was $4,038.46, which amounts to approximately $105,000 per year. The October 20, 2006 pay period also included a “retroactive” payment of $6,378.08 to Pierson. The November 3, 2006 pay period included a $10,000 bonus for Pierson. Pierson’s pay increase, payment of retroactive salary, and bonus were never specifically raised with and approved by the entire board of directors, although the board did apparently approve an unspecified “parity bonus” for Pierson in April 2006. There is no writing in the record, signed by both Pierson and the board, reflecting the increases in Pierson’s compensation.
Spix began working at Fair Housing Council in late 2006 and by June 13, 2007, he had received a $13,000 raise. Spix also received a bonus, even though he had not been working long enough to earn a bonus at Fair Housing Council under its bylaws. Pierson’s son, Alex Martin, received $20 per hour (more than other hourly employees at Fair Housing Council), despite his lack of experience and his incompetence.
Fair Housing Council suffered a declining performance from fiscal year 2004-2005 to fiscal year 2007-2008, as measured by net income. The numbers were as follows: $89,333 (2004-2005); $41,195 (2005-2006); negative $15,855 (2006-2007); and negative $46,836 (2007-2008). A funding grant from the Department of Housing and Urban Development declined from $65,711 (in fiscal year 2006/2007) to $23,615.41 (in fiscal year 2007/2008). Pierson’s January 2008 written report represented to the board that Fair Housing Council had more income than expenses.
Motion to Amend Pleadings to Conform to Proof by Fair Housing Council
During the trial, Fair Housing Council submitted a written motion to amend its operative complaint to conform to the evidence presented at trial. Fair Housing Council alleged it had discovered, following Pierson’s opening statement, that Pierson had repeatedly misrepresented the financial health of Fair Housing Council. Fair Housing Council also alleged in its motion that “there is evidence before the court that Ms. Pierson’s salary was moved from $81,310 to $105,000 without a writing, without a board approval by the full board as required by the bylaws, and the policies and practices of [Fair Housing Council]. There is further evidence” Pierson withheld this information from the board. Fair Housing Council “seeks to amend [its operative pleading] to include these facts of management fraud and failure to timely disclose material facts relating to financials, Pierson’s compensation, and the audit report of 2007/2008.” The motion claimed Pierson would not be prejudiced, “as her actions are the actions [providing the basis for amendment], and [Fair Housing Council] has already asserted many aspects of [Pierson’s] actions as a defense to the cross-complaint.” Pierson did not file a written opposition.
The court denied the motion. But the court simultaneously rejected the need for amendment: “The evidence is in, you can argue that. You can draw whatever inferences... you think are appropriate. But the evidence is there, the jury has heard it. There was no objection. [¶] So we don’t need to amend [Fair Housing Council’s operative pleading] to include any allegations. The causes of action are fraud by misrepresentation, fraud by concealment, [and] declaratory relief....”
The court later elaborated on its ruling: “[T]he evidence is what it is. The instructions will outline the elements, and... as long as the elements are met by a preponderance of the evidence, then that satisfies the burden of proof. [¶] So you can have multiple misrepresentations, you can have multiple concealments, and you can have multiple kinds of fraud.... [Y]our theories are in the instructions, but they aren’t evidentiary theories or issues. That’s a matter of argument, and relating it to the elements of the causes of action.”
Pierson’s counsel protested that Fair Housing Council’s operative pleading referenced only the arbitration/attorney fees issue, and asserted Fair Housing Council should not be allowed to argue for damages based on other alleged misconduct by Pierson. Pierson’s counsel also claimed Pierson did not have an opportunity to explore the alleged misrepresentation of financial information issue in discovery.
The court insisted Pierson’s counsel should have objected to evidence on other fraud theories, and asked for limiting instructions. Pierson’s counsel pointed out he had no reason to request such an instruction because he did not know Fair Housing Council would seek to broaden the scope of its claims. The court rejected this argument.
Evidence Pertaining to Pierson’s Claims
Various board members testified about the accommodation made for Pierson. “The accommodation was that if there were occasions when she was unable to get to work, that she would be permitted to work from home with her computer and telephone. And that... situation would be monitored and reviewed periodically to ensure that she was capable of performing the major duties of her job.” The board advised Pierson she should be at work as much as possible.
One board member observed Pierson “seemed to be in good condition” in 2007. “[S]he had been on several vacations, and there was no evidence... that she was having a problem, to the extent that she couldn’t be in the office.” Pierson took a trip to Guatamala in November 2007; she noted in a report that she would “‘be on vacation to travel the jungles of Guatamala.’” Photos of Pierson walking (without a cane) through Guatamalan ruins were entered into the record.
On February 22, 2008, the board wrote to Pierson: “Based on the apparent impasse we have reached... we do hereby immediately... place you on ‘paid administrative leave’ pending the outcome of our investigation of the allegations which have recently surfaced and the lack of cooperation you have demonstrated to the Board over the last several months.” Pierson nonetheless remained at the office and was “very disruptive” to the board.
On April 11, 2008, the board wrote to Pierson: “The Board has observed that direct supervision is necessary in the office of [Fair Housing Council]. The Board is concerned that your absence from the office has resulted in the lack of supervision of the managing employees, who in turn manage the staff. [Various specific problems have arisen]. Accordingly, the Board directs you, effective immediately, to be physically present in the office of [Fair Housing Council] on a daily basis during normal business hours to perform your function as Chief Executive Officer. The Board holds you accountable for the omissions or acts of the staff and managing employees. Your presence in the office is mandatory and cannot be substituted by others.” The Board placed Pierson on unpaid administrative leave as of May 30, 2008.
Fair Housing Council’s vice president testified Pierson had accrued 834.23 hours of vacation time at the time her employment ended, and Pierson was not paid for this time. The Fair Housing Council employee handbook limited the accrual of vacation time to 30 days. The vice president also testified Pierson was in the office, on average, one or two days per week, for four or five hours each of those days. Another employee testified Pierson came to work only once or twice per month during certain time periods. Cross-examination of Pierson tended to show she had not actually marked sick days and vacation days as she should have on her reporting documents.
Jury’s Verdict
All 12 members of the jury found Pierson liable for intentional misrepresentation and awarded $46,000 in damages to Fair Housing Council from Pierson on this cause of action. All twelve members of the jury also found Pierson separately liable for constructive fraud and awarded Fair Housing Council “the sum of $75,000.00, plus $150,000 for attorney fees, from... Pierson....” All 12 members of the jury rejected each of Pierson’s causes of action in the operative cross-complaint. The jury rejected each of the parties’ requests for punitive damages. The court entered judgment accordingly and denied Pierson’s motion for new trial or judgment notwithstanding the verdict.
DISCUSSION
Basis of Fraud Claim
Pierson claims the jury should not have been allowed to award damages to Fair Housing Council based on evidence of fraud unmoored to the factual allegations in Fair Housing Council’s operative complaint, which pertained solely to Pierson’s removal of the mandatory arbitration provision and attorney fees provision from her employment contract.
“It is axiomatic that ‘[t]he pleadings establish the scope of an action and, absent an amendment to the pleadings, parties cannot introduce evidence about issues outside the pleadings.’ [Citation.] When evidence is not pertinent to the issues raised by the pleadings, the evidence is irrelevant and it is proper to preclude the introduction of such evidence.” (Schweitzer v. Westminster Investments, Inc. (2007) 157 Cal.App.4th 1195, 1214.) “A plaintiff must recover, if at all, upon a cause of action set out in the complaint, and not on some other cause of action which may be developed by the proofs.” (Griffin Dewatering Corp. v. Northern Ins. Co. of New York (2009) 176 Cal.App.4th 172, 210.)
In this case, evidence of Pierson’s alleged misconduct was clearly relevant to the cross-complaint (i.e., Pierson’s malfeasance established the non-discriminatory rationale for the board’s adverse employment actions against Pierson). The evidence relating to Pierson’s management of Fair Housing Council came into evidence, without objection by Pierson’s counsel and without a request at the time by Pierson’s counsel for a limiting instruction informing the jury that the evidence could not be used as a basis for expanding a damages award to Fair Housing Council under the operative complaint.
The evidence may also have been admissible under the complaint as pleaded as relevant to prove motive, opportunity, intent, preparation, or plan under Evidence Code section 1101, subdivision (b) (i.e., if she misled the board in other areas, it makes it more likely she misled the board with regard to her employment contract). But we need not decide this issue. The evidence was presented without objection.
Ultimately, Fair Housing Council attempted to amend its complaint to conform to the evidence admitted at trial. Pierson objected that an amendment would be unfair and would prejudice her (at least with regard to the claim that Pierson misrepresented the financial status of Fair Housing Council to the board of directors). The court ruled an amendment was not necessary because Fair Housing Council did not wish to add a separate cause of action and because Pierson had not objected to the evidence coming into the record for all purposes at the time the evidence was admitted.
“[T]he trial judge has discretion on whether to permit amendment to pleadings during the course of trial, and scores of cases so hold.” (City of Stanton v. Cox (1989) 207 Cal.App.3d 1557, 1563 (Cox); see Code Civ. Proc., §§ 473, subd. (a)(1), 576.) Motions to amend a pleading at trial to conform to proof are specifically governed by Code of Civil Procedure sections 469 and 470. “No variance between the allegation in a pleading and the proof is to be deemed material, unless it has actually misled the adverse party to his prejudice in maintaining his action or defense upon the merits. Whenever it appears that a party has been so misled, the Court may order the pleading to be amended, upon such terms as may be just.” (Code Civ. Proc., § 469.) “Where the variance is not material, as provided in Section 469 the court may direct the fact to be found according to the evidence, or may order an immediate amendment, without costs.” (Code Civ. Proc., § 470.)
“The cases on amending pleadings during trial suggest trial courts should be guided by two general principles: (1) whether facts or legal theories are being changed and (2) whether the opposing party will be prejudiced by the proposed amendment. Frequently, each principle represents a different side of the same coin: If new facts are being alleged, prejudice may easily result because of the inability of the other party to investigate the validity of the factual allegations while engaged in trial or to call rebuttal witnesses. If the same set of facts supports merely a different theory... no prejudice can result.” (Cox, supra, 207 Cal.App.3d at p. 1563.)
There are bounds to a trial court’s discretion in ruling on a motion to amend a pleading to conform to proof at trial. A trial court abuses its discretion by refusing to allow amendment to include new theories of liability based on the same operative facts. (E.g., South Bay Building Enterprises, Inc. v. Riviera Lend-Lease, Inc. (1999) 72 Cal.App.4th 1111, 1124-1125.) And a radical change in the factual basis for the lawsuit at trial sometimes requires the trial court to deny a motion to amend. (E.g., Garcia v. Roberts (2009) 173 Cal.App.4th 900, 912-913 [plaintiff, after denying existence of written contract throughout case, should not have been allowed to amend complaint at trial to allege breach of written contract]; North 7th Street Associates v. Constante (2001) 92 Cal.App.4th Supp. 7, 10-11 [trial court abused discretion in unlawful detainer case by allowing amendment of complaint at trial to allege termination of tenancy because of tenant’s rent payment default rather than because of landlord’s notice of termination pursuant to terms of lease].)
Here, the court denied Fair Housing Council’s motion to amend. The rub in this case, however, is the court did not really mean to rule in favor of Pierson. Instead, the court thought it unnecessary for Fair Housing Council to amend its operative pleading to conform to proof. After denying the motion, the court, over Pierson’s objection, allowed Fair Housing Council to ask the jury for damages based on all the evidence supposedly supporting a fraud judgment (rather than just the arbitration/attorney fees set of facts).
Although it is more common to grant the moving party’s motion to amend in this situation, the court’s procedure is acceptable pursuant to the statutory scheme. Under Code of Civil Procedure section 469, a variance between the pleading and the proof is material only if “it has actually misled the adverse party to his prejudice in maintaining his action or defense upon the merits.” And, pursuant to Code of Civil Procedure section 470, the court, when presented with an immaterial variance, may either: (1) “direct the fact to be found according to the evidence” or (2) “order an immediate amendment, without costs.” Here, the court impliedly found the variance to be immaterial and, rather than ordering an immediate amendment, simply directed the facts to be found according to the evidence already admitted.
Sufficiency of Evidence Supporting Damages Award/Excessive Damages
Pierson also challenges the sufficiency of the evidence supporting the damages award to Fair Housing Council. The jury awarded Fair Housing Council $46,000 in damages from Pierson on a fraud cause of action. The jury separately found Pierson liable for constructive fraud and awarded Fair Housing Council “the sum of $75,000.00, plus $150,000 for attorney fees.”
“Fraud is either actual or constructive.” (Civ. Code, § 1571.) “Actual fraud... consists in any of the following acts.... [¶] 1. The suggestion, as a fact, of that which is not true, by one who does not believe it to be true; [¶] 2. The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; [¶] 3. The suppression of that which is true, by one having knowledge or belief of the fact; [¶] 4. A promise made without any intention of performing it; or, [¶] 5. Any other act fitted to deceive.” (Civ. Code, § 1572.)
“Under the substantial evidence standard of review, ‘we must consider all of the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference, and resolving conflicts in support of the [findings]. [Citations.] [¶] It is not our task to weigh conflicts and disputes in the evidence; that is the province of the trier of fact. Our authority begins and ends with a determination as to whether, on the entire record, there is any substantial evidence, contradicted or uncontradicted, in support of the judgment.’” (ASP Properties Group, L.P. v. Fard, Inc. (2005) 133 Cal.App.4th 1257, 1266.)
“For the breach of an obligation not arising from contract, the measure of damages, except where otherwise expressly provided by this code, is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not.” (Civ. Code, § 3333.) “‘“‘Deception without resulting loss is not actionable fraud. [Citation.] ‘Whatever form it takes, the injury or damage must not only be distinctly alleged but its causal connection with the reliance on the representations must be shown.’”’” (Stephenson v. Argonaut Ins. Co. (2004) 125 Cal.App.4th 962, 974-975.) “Whatever its measure in a given case, it is fundamental that ‘damages which are speculative, remote, imaginary, contingent, or merely possible cannot serve as a legal basis for recovery.’” (Piscitelli v. Friedenberg (2001) 87 Cal.App.4th 953, 989.)
We turn first to the $150,000 in attorney fees awarded as damages by the jury. The evidence does not support this award. The relevant contract term stated as follows: “Pierson and [Fair Housing Council] further agree that in the event any such dispute, claim or controversy is not resolved through mediation, the matter shall be submitted to the AAA... for final and binding arbitration.... Pierson and [Fair Housing Council] further agree that [Fair Housing Council] shall pay for all mediation and arbitration cost and charges, exclusive of attorneys’ fees. The provisions of this Paragraph may be enforced by any court of competent jurisdiction. In the event of an application to a court to enforce the provisions of this Paragraph, the party prevailing in connection with the application shall be entitled to an award of all costs, fees and expenses, including attorney’s fees, she/it incurred in connection with such proceedings.” (Italics added.)
There is substantial evidence Fair Housing Council incurred $200,000 in attorney fees in connection with this dispute, following the filing of Pierson’s cross-complaint. Fair Housing Council claims it would not have incurred its attorney fees in this case had the above-cited provision been in effect. But, under the old arbitration provision, Fair Housing Council was obligated to pay all mediation and arbitration costs and charges, plus its own attorney fees, if Pierson’s cross-complaint was fought in arbitration rather than in court. There is no evidence in the record estimating the costs of paying an arbitrator and other AAA costs of arbitration in a case like this one. There is no evidence in the record estimating the attorney fees Fair Housing Council would have incurred had arbitration taken place rather than a trial on Pierson’s cross-complaint. In short, there is no evidence to support a conclusion that Fair Housing Council would have spent less money had the old arbitration provision been in effect. To the extent the jury interpreted the contract term quoted above to be a general prevailing party attorney fees provision for the entire employment dispute, the jury erred. The attorney fee provision clearly applies only to a petition/motion to compel arbitration, not the entire underlying dispute. The $150,000 award of attorney fees was based on speculation and/or an incorrect interpretation of the contract provision, not evidence.
The jury also awarded $75,000 in damages to Fair Housing Council for Pierson’s constructive fraud. These damages apparently (the verdict form does not specify the particular source of damages other than the $150,000 specifically labeled by the jury as attorney fees) arose out of Pierson’s manipulation of her position in Fair Housing Council to, without a writing signed by the board, raise her own salary approximately $25,000 above the level authorized by her employment contract (while not actually putting in enough time at work), pay herself a bonus, hire her boyfriend as staff attorney, hire her son as a computer technician, and generally avoid fulfilling her fiduciary duty to act in furtherance of the interests of Fair Housing Council rather than in her own self-interest. These damages are supported by the record.
The jury separately awarded $46,000 in fraud damages, apparently based on Pierson’s alleged misrepresentations about the financial picture of Fair Housing Council to the board of directors (whose members later discovered the net income of Fair Housing Council was negative for both 2006-2007 and 2007-2008). But the record does not support a finding that these losses were caused as a result of Pierson’s misrepresentations to the board of directors. To the extent these damages reflect the misconduct of Pierson as discussed in the previous paragraph, this award is an unauthorized double recovery of damages for the same conduct.
In sum, the damages awarded by the jury should be reduced to $75,000 because there is insufficient evidence to support either damages for removing the arbitration/attorney fees provision in the employment contract or damages for misrepresenting the ongoing financial status of Fair Housing Council. (See Behr v. Redmond (2011) 193 Cal.App.4th 517, 533 [“When the evidence is sufficient to sustain some but not all alleged damages, we will reduce the judgment to the amount supported by the evidence”]; Green Wood Industrial Co. v. Forceman Internat. Development Group, Inc. (2007) 156 Cal.App.4th 766, 774, 778–779.)
Substantial Evidence Supporting Cross-complaint Judgment
Pierson also claims the evidence required the jury to rule in her favor on her cross-complaint with regard to Fair Housing Council’s alleged misconduct (i.e., revoking Pierson’s disability accommodation without adequate process and failing to pay Pierson for accrued vacation time). But the evidence of Pierson’s abuse of her position rebuts Pierson’s claims. The evidence supports a finding that Fair Housing Council and its directors were rightly concerned with mismanagement by Pierson. Pierson was not entitled to fend off the board’s investigation of her management of Fair Housing Council by interjecting specious claims and demands for mediation or other processes. The board was entitled to suspend Pierson without pay and/or fire Pierson for cause. The evidence also supports a finding that Pierson actually used her alleged vacation time (by not showing up at work) but did not record it. The jury apparently concluded Pierson manufactured her claims to distract the directors (and the court) from Pierson’s wrongful acts. The jury was entitled to reach these conclusions.
Alleged Juror Misconduct and Other Irregularities at Trial
Finally, Pierson asserts she is entitled to a new trial because of alleged juror misconduct and alleged misconduct by individuals affiliated with Fair Housing Council at the trial. (See Code Civ. Proc., § 657.) Pierson points to: (1) an incident in which one of the jurors (who was an attorney), after informing a co-worker he was on a civil jury in this case, was asked whether Spix would be a witness in the case, at which time the co-worker rolled his eyes (the juror responded he did not know who Spix was); and (2) alleged instances in which individuals affiliated with Fair Housing Council (several directors and their children) exhibited courtesy toward the jury (e.g., holding a door open for them, smiling at them, waving at them).
The juror immediately brought the Spix incident to the court’s attention and the court denied Pierson’s motion to remove the juror for cause. The juror told the court the comment would not affect him at all. Pierson’s counsel, in a posttrial declaration, claimed the juror told counsel in an interview after the trial that “Spix ‘is a boob’....”
Juror misconduct raises a presumption of prejudice. (Brassfield v. Moreland School Dist. (2006) 141 Cal.App.4th 67, 73.) “[U]nauthorized conversations about the case, outside the ambit of deliberations, may constitute [juror] misconduct sufficient to warrant a new trial.” (Bell v. State of California (1998) 63 Cal.App.4th 919, 930.) But here, the juror’s statement to a coworker (he was a juror on this case, and he did not know Spix) did not rise to the level of misconduct. (See Hasson v. Ford Motor Co. (1982) 32 Cal.3d 388, 408-409 [unintentional receipt of small piece of information bearing on trial does not amount to juror misconduct].) And even if this incident could be deemed misconduct because of the colleague’s eye roll, the presumption of prejudice is rebutted by the entire record. The juror immediately brought the incident to the court’s attention and stated he would not be affected by the incident. The jury ruled unanimously against Pierson.
In denying Pierson’s motion for a new trial, the court implicitly found no misconduct occurred by any of the individuals affiliated with Fair Housing Council and/or no prejudice inured to Pierson. The court was entitled to reach either of these conclusions. (See, e.g., Murphy v. Dept. of Water & Power (1940) 40 Cal.App.2d 109, 112-113 [rejecting claim for new trial based on plaintiff and friend allegedly staging performances during trial breaks to exaggerate plaintiff’s injury].)
DISPOSITION
Fair Housing Council’s motion to dismiss the appeal is denied. The judgment is modified to reflect a reduction in total damages against Pierson from $271,000 to $75,000. The judgment is affirmed as modified. In the interests of justice, the parties shall bear their own costs incurred on appeal.
WE CONCUR: ARONSON, ACTING P. J.FYBEL, J.
“Constructive fraud consists: [¶] 1. In any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; or, [¶] 2. In any such act or omission as the law specially declares to be fraudulent, without respect to actual fraud.” (Civ. Code, § 1573.)