Opinion
C080405
11-19-2018
JERRY PONZO et al., Plaintiffs, Cross-defendants and Appellants, v. RONALD D. MILLER et al., Defendants, Cross-complainants and Respondents.
NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. S-CV-0029600)
After Jerry Ponzo allegedly failed to disclose material facts and engaged in damaging conduct, Ronald Miller and Brenda Crum attempted to negotiate the dissolution of Enviro-Building Systems, Inc. (EBS), a corporation they owned with Ponzo and his wife, Tracy Dillon. Ponzo responded with demands for cash and concessions, and litigation ensued. Among the various claims and cross-claims, Miller and Crum sued Ponzo, Dillon and their corporation Ivy Screen, Inc. doing business as Back Yard Dream (Ivy Screen) for fraud.
Following a bench trial, the trial court found in favor of Miller and Crum on their fraud causes of action, but against the parties on their remaining causes of action. The trial court awarded Miller and Crum $723,225.59 in compensatory damages and $170,000 in punitive damages.
Ponzo, Dillon and Ivy Screen now assert errors in the trial proceedings and admission of certain evidence. They challenge the judgment as to their breach of fiduciary duty causes of action and Miller and Crum's fraud causes of action on various other grounds. Additionally, they challenge the compensatory and punitive damages awards. We will affirm the judgment.
BACKGROUND
The facts are drawn from the statement of decision.
Ponzo had an idea called Ivy Screens which he attempted to patent. The idea was described at trial as a galvanized wire product and a process using that wire product. The galvanized wire product was essentially the same as a product registered by Greenscreen. Ponzo represented that he invented the galvanized wire product, but he did not; in fact, the process using the wire product was a common one. Moreover, Ponzo shared his idea with others without a nondisclosure agreement, and thus his idea was "unprotected and out in the public" before Miller and Crum invested in EBS.
Over a year before the formation of EBS, Ponzo sought investors for his idea and entered into a business relationship with Frank Beninsig. Beninsig was to help Ponzo with a pending patent application and with obtaining investors, but their business relationship deteriorated. Ponzo contacted law enforcement and later bragged about having Beninsig arrested for stealing his patent, even though Ponzo did not have a patent.
Ponzo's patent application had been denied before Miller expressed interest in Ponzo's idea. Nevertheless, Ponzo testified inconsistently at trial that he had a patent for the process, that all he had to do was go to the United States Supreme Court and a patent would be issued to him, and that he had a trade secret and not a patent. Ponzo used the terms "patented product," "patent," "patent pending" and "patented process" interchangeably. Miller and Crum did not know Ponzo failed at his attempt to secure a patent before they entered into a business relationship with him. Ponzo and Dillon did not disclose Beninsig's involvement to Miller and Crum prior to the creation of EBS.
Ponzo testified at a deposition that his alleged patent was worthless, but at trial he valued his alleged patent at hundreds of thousands of dollars if not millions. Ponzo and Dillon did not disclose to Miller and Crum that the patent was worthless before the creation of EBS.
Moreover, Ponzo and Dillon did not disclose Ponzo's partnerships in Southern California and Minnesota or his prior failed attempts to secure venture capitalists, funding and partners. Those undisclosed efforts and actual partnerships were for the same business operation as what became EBS. Instead, prior to the formation of EBS, Ponzo told Miller and Crum that "a lot of people want to be involved with our product over the years and for one reason or another I did not go forward with them . . . . The difference here is the two of you are our kind of people, what the two of you bring to the table is what I have been very patient waiting for to grow our company and become a distributor."
In addition, Ponzo and Dillon did not disclose to Miller and Crum that on March 25, 2009, about six months prior to the formation of EBS, Ponzo and Dillon filed a Chapter 7 petition for bankruptcy. Ponzo and Dillon declared in their bankruptcy petition that they did not own any patents or intellectual property. Ponzo and Dillon did not disclose the disavowal of ownership of intellectual property to Miller and Crum.
Ponzo, Dillon, Miller and Crum formed EBS as a corporation in September 2009. The four were the only shareholders and directors of the corporation. Dillon, Miller and Crum served as the Secretary/Treasurer, President and Vice President, respectively. Ponzo and Dillon owned a one-half interest in the corporation, while Miller and Crum owned the other half.
Miller and Crum provided the working capital for EBS, whereas Ponzo and Dillon did not contribute any money to EBS. Miller and Crum took significant financial risk in making EBS a success; Ponzo and Dillon took little financial risk in the venture.
Within a few months after the formation of EBS, Ponzo and Dillon engaged in conduct that "set EBS on a path to failure." Among other things, Ponzo sexually assaulted two EBS workers and "verbally assaulted" Dillon during a trade show.
When Miller and Crum attempted to negotiate a dissolution of EBS with Ponzo and Dillon, Ponzo responded with demands for cash and concessions. He threatened litigation and threatened to compete against EBS and to remove Miller and Crum from EBS. Both sides took steps to secure competing businesses.
Following a bench trial, the trial court issued a tentative decision finding against Ponzo, Dillon, Ivy Screen and EBS on all their causes of action against Miller, Crum and Galvacore, Inc. Galvacore, Inc. was incorporated in Nevada in October 2010 and was associated with Miller and Crum. The trial court found against Miller, Crum and Galvacore, Inc. on all their causes of action against Ponzo, Dillon and Ivy Screen, except for the fraud claims by Miller and Crum. The trial court awarded Miller and Crum damages in the amount of $723,225.59, calculated as follows: $546,740.04 (the amount Miller and Crum initially invested in EBS), plus $160,000 (for the purchase of an additional 5 percent interest in EBS), plus $16,485.55 (the amount paid to EBS creditors). The trial court found Ponzo's conduct reprehensible and concluded that punitive damages were warranted against Ponzo, Dillon and Ivy Screen.
Ponzo, Dillon and Ivy Screen objected to the tentative decision and requested specific findings. The trial court overruled the objections and adopted its tentative decision as its statement of decision. The trial court clarified that with respect to the breach of fiduciary duty claims, neither side sustained their respective burdens of proof and that Ponzo, Dillon, Ivy Screen and EBS did not sustain their burden of proof on their fraud claims.
The issue of the financial worth of Ponzo, Dillon and Ivy Screen for purposes of punitive damages was bifurcated. The trial court awarded Miller and Crum $10,000 each in punitive damages against Ivy Screen, $25,000 each in punitive damages against Dillon, and $50,000 each in punitive damages against Ponzo. Judgment was entered in favor of Miller and Crum and against Ponzo, Dillon and Ivy Screen.
DISCUSSION
I
Ponzo, Dillon and Ivy Screen assert the trial court improperly relied on the business judgment rule in connection with their breach of fiduciary duty causes of action. They argue the business judgment rule does not apply because Miller and Crum had a clear conflict of interest.
The elements of a cause of action for breach of fiduciary duty are as follows: the existence of a fiduciary duty, its breach, and damage caused by that breach. (Meister v. Mensinger (2014) 230 Cal.App.4th 381, 395 (Meister).) Majority shareholders and directors and officers owe a fiduciary duty to the corporation and its shareholders. (Corp. Code, § 309, subd. (a); Sheley v. Harrop (2017) 9 Cal.App.5th 1147, 1171-1172; Bancroft-Whitney Co. v. Glen (1966) 64 Cal.2d 327, 345.)
The business judgment rule, codified at Corporations Code section 309, protects from liability a corporate director who performs his or her duties as director "in good faith, in a manner [he or she] believes to be in the best interests of the corporation and its shareholders and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances." (Corp. Code § 309, subds. (a), (c); see Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1045.) The rule establishes a presumption that directors' decisions are based on sound business judgment. (Berg, at p. 1045.) Among other things, the presumption can be rebutted by a factual showing that the actions were taken as a result of a conflict of interest. (Ibid.; Everest Investors 8 v. McNeil Partners (2003) 114 Cal.App.4th 411, 432 (Everest Investors); Eldridge v. Tymshare, Inc. (1986) 186 Cal.App.3d 767, 776.)
The statement of decision correctly sets forth the elements of a cause of action for breach of fiduciary duty, the presumption arising from the business judgment rule, and the exception to the rule when circumstances inherently raise an inference of conflict of interest. Ponzo, Dillon and Ivy Screen bore the burden of establishing a breach of a fiduciary duty. (Evid. Code, § 500; see LaMonte v. Sanwa Bank California (1996) 45 Cal.App.4th 509, 517.) While courts have placed the burden of proof on the fiduciary to show fairness and good faith when there is evidence that the fiduciary secured an advantage for himself or herself (Heckmann v. Ahmanson (1985) 168 Cal.App.3d 119, 128; Brown v. Halbert (1969) 271 Cal.App.2d 252, 266), the trial court did not find, and the record before us does not show, that Miller and Crum gained an advantage to the detriment of Ponzo, Dillon and Ivy Screen. The trial court found that due to the credibility of the parties and witnesses, Ponzo, Dillon and Ivy Screen did not meet their burden of proof on their breach of fiduciary duty causes of action.
Whether a defendant breached his or her fiduciary duty, and the application of the standards of fairness and good faith required of a fiduciary under the business judgment rule, are questions of fact. (Biren v. Equality Emergency Medical Group, Inc. (2002) 102 Cal.App.4th 125, 138; Kirschner Brothers Oil, Inc. v. Natomas Co. (1986) 185 Cal.App.3d 784, 790; see Everest Investors, supra, 114 Cal.App.4th at p. 430 [whether a conflict of interest exists]; Efron v. Kalmanovitz (1967) 249 Cal.App.2d 187, 191 [whether a transaction was fair to the corporation and its minority shareholders].) When the trier of fact concludes that a party failed to carry its burden of proof and that party appeals, the question for a reviewing court is whether the evidence compels a finding in favor of the appellant as a matter of law, i.e., " 'whether the appellant's evidence was (1) "uncontradicted and unimpeached" and (2) "of such a character and weight as to leave no room for a judicial determination that it was insufficient to support a finding." ' " (Meister, supra, 230 Cal.App.4th at p. 395.) Because Ponzo, Dillon and Ivy Screen failed to present an adequate record on appeal, and because of the doctrine of implied findings, there is no basis to reverse the judgment.
II
Ponzo, Dillon and Ivy Screen argue they did not receive a fair trial.
They claim the trial court failed to make certain findings, such as how witness credibility was relevant to the disposal of EBS assets and what testimony was not credible. But they forfeited those arguments by not objecting to the tentative decision in the trial court on the grounds they now assert. (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133-1134; Thompson v. Asimos (2016) 6 Cal.App.5th 970, 983 (Thompson).)
They further contend the trial court violated their rights under Code of Civil Procedure section 269, subdivision (a)(1) by refusing to permit a court reporter to take down closing arguments.
In a civil case, an official reporter or official reporter pro tempore of the superior court shall take down in shorthand all testimony, objections made, rulings of the court, exceptions taken, arguments of the attorneys to the jury, and statements and remarks made and oral instructions given by the judge upon the order of the court or at the request of a party. (Civ. Proc. Code, § 269, subd. (a)(1).) A party may waive the right to have the proceedings recorded and prepared by a reporter. (People v. Turner (1998) 67 Cal.App.4th 1258, 1264.)
The courtroom clerk's minutes for the trial show that the parties waived their right to a court reporter for "these proceedings." The record does not support appellants' claim that they only waived a court reporter for the evidentiary portion of the trial. On the date designated for presenting closing arguments, counsel for Ponzo, Dillon and Ivy Screen brought a court reporter to take down closing arguments. Miller and Crum objected and the trial court did not allow the court reporter to take down the closing arguments because no court reporter had been used during the entire trial. In its ruling on Ponzo, Dillon and Ivy Screen's objections to the tentative decision, the trial court further noted that the parties had waived the use of a court reporter for the trial, no evidence was presented or received during closing arguments, and Ponzo, Dillon and Ivy Screen did not identify any prejudice from denying a court reporter during closing argument.
We perceive no prejudicial error. Ponzo, Dillon and Ivy Screen waived their statutory right to a court reporter. Even if error occurred, Ponzo, Dillon and Ivy Screen do not demonstrate that any error regarding taking down closing arguments prejudiced them. (See People v. Hulderman (1976) 64 Cal.App.3d 375, 381 [error did not deny the defendant his right to obtain review of claimed errors where the defendant could have obtained a settled statement or agreed statement].)
Ponzo, Dillon and Ivy Screen next assert the trial court erred by admitting irrelevant character evidence concerning Ponzo. They argue that evidence of alleged conduct by Ponzo -- an incident with M.W. and P.N., a tirade at a trade show, use of epithets and "bumping" Miller during trial -- was irrelevant because the conduct occurred after the alleged fraudulent inducement and was inadmissible under Evidence Code section 352.
Except for the evidence relating to M.W. and P.N., the record does not show that Ponzo, Dillon and Ivy Screen objected to the character evidence before or at the time the evidence was introduced at the trial. The failure to timely object in the trial court forfeits the appellate claims. (Evid. Code, § 353, subd. (a); Faigin v. Signature Group Holdings, Inc. (2012) 211 Cal.App.4th 726, 749; SCI California Funeral Services, Inc. v. Five Bridges Foundation (2012) 203 Cal.App.4th 549, 564 [evidentiary objections made after the close of evidence are untimely].)
As for the character evidence to which they did object, Ponzo, Dillon and Ivy Screen filed an in limine motion to exclude such evidence because it was irrelevant and inadmissible under Evidence Code section 352. M.W. and P.N. signed declarations describing, among other things, Ponzo's conduct at a 2010 trade show in Las Vegas when an intoxicated Ponzo grabbed their breasts and later loudly told P.N., in front of others, "fuck you." Ponzo, Dillon and Ivy Screen argued that the testimony of M.W. and P.N. was not relevant to whether Miller and Crum owed fiduciary duties to Ponzo, Dillon and EBS and was highly prejudicial and inflammatory. Miller and Crum opposed the motion, arguing that the evidence was relevant because Ponzo's conduct at the trade show was a significant reason for EBS's closure. The trial court reserved ruling on the in limine motion. Ponzo, Dillon and Ivy Screen now complain that the trial court did not rule on the in limine motion. But they did not assert any such failure with the trial court.
In any event, evidence relating to M.W. and P.N. was probative of the factual allegations in the first amended complaint and the cross-complaint. Ponzo, Dillon and Ivy Screen claimed that Miller and Crum's acts or omissions led to EBS' failure. Miller and Crum alleged, on the other hand, that they were forced to close EBS because of Ponzo's improper conduct, including the incidents involving M.W. and P.N. In addition, Miller and Crum's fraud and deceit cause of action alleged Ponzo and Dillon "leveraged their bad behavior" in order to force Miller and Crum to buy an additional 5 percent interest in EBS and then Ponzo and Dillon competed with EBS after Miller and Crum paid them $160,000 for that interest. Although relevant evidence may be excluded under Evidence Code section 352, Ponzo, Dillon and Ivy Screen do not address how the evidence was more prejudicial than probative. Their claim of error fails.
In addition, Ponzo, Dillon and Ivy Screen claim there was a poisonous atmosphere against them in the trial court. They point to the trial court's comment that it would consider their late disclosure of documents before concluding that it would deny Miller and Crum's motion for directed verdict.
Ponzo admitted at trial that he may possess documents which were not produced to Miller and Crum before trial. Miller and Crum moved for a directed verdict based on Ponzo's failure to produce documents in discovery. The trial court took the matter under submission. Prior to the conclusion of the trial, the trial court ordered Ponzo, Dillon and Ivy Screen to produce 17 boxes of documents. The trial court found that Ponzo failed to disclose thousands of pages of documents during discovery. Nevertheless, it denied Miller and Crum's motion for a directed verdict because Miller and Crum did not file a pre-trial motion to compel production of documents and more drastic sanctions for misuse of discovery were not available unless the offending party violated a court order to comply.
The fact that the trial court denied Miller and Crum's motion appears to contradict the suggestion that the trial court treated Ponzo, Dillon and Ivy Screen unfairly or that they suffered prejudice. In any event, Ponzo, Dillon and Ivy Screen did not object in the trial court to the comment they now reference, and thus the contention is forfeited. (In re Marriage of Arceneaux, supra, 51 Cal.3d at pp. 1133-1134; Thompson, supra, 6 Cal.App.5th at p. 983.) Moreover, their assertion that the trial court did not find that they withheld documents appears to be incorrect, and they fail to support their claim with reasoned argument and citation to authority. For all of these reasons, we do not consider the claim. (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785.)
Ponzo, Dillon and Ivy Screen further argue the trial court erred in excluding evidence of communications between Crum and her attorney after Crum testified that her attorney advised her not to dissolve EBS. Ponzo, Dillon and Ivy Screen say Crum waived the attorney-client privilege by testifying about the content of her discussion with her attorney.
The attorney-client privilege protects from disclosure a confidential communication between client and lawyer, including legal advice given by the lawyer in the course of the attorney-client relationship. (Evid. Code, §§ 952, 954.) Once the party claiming the privilege establishes that a communication was made in the course of an attorney-client relationship, the communication is presumed to have been made in confidence and the opponent of the privilege bears the burden of showing that the privilege does not apply, that an exception exists or that there has been a waiver. (City of Petaluma v. Superior Court (2016) 248 Cal.App.4th 1023, 1032; Wellpoint Health Networks v. Superior Court (1997) 59 Cal.App.4th 110, 124 (Wellpoint).)
The attorney-client privilege is waived when the holder of the privilege, without coercion, has disclosed a significant part of the communication. (Evid. Code, § 912, subd. (a).) It is also waived when " 'the client has put the otherwise privileged communication directly at issue and that disclosure is essential for a fair adjudication of the action. [Citation.]' " (Wellpoint, supra, 59 Cal.App.4th 110 at p. 128.) Whether a party has waived the attorney-client privilege is often a mixed question of law and fact. (Behunin v. Superior Court (2017) 9 Cal.App.5th 833, 843.)
Ponzo, Dillon and Ivy Screen argued in the trial court that the communications were admissible because Crum raised good faith reliance on the advice of counsel as a defense to the breach of fiduciary duty causes of action, and the communications were relevant to their claim for punitive damages. The trial court rejected those arguments.
We conclude that Ponzo, Dillon and Ivy Screen have not established error. Their breach of fiduciary duty causes of action did not allege that Miller and Crum breached their fiduciary duties by abandoning, rather than dissolving, EBS. The answer to the first amended complaint did not raise advice of counsel as an affirmative defense. And the record on appeal does not provide us with Crum's testimony. (See Aguilar v. Avis Rent A Car System, Inc. (1999)21 Cal.4th 121, 132.) Accordingly, we cannot determine whether Crum waived the privilege by disclosing a significant part of the communication. (See Southern Cal. Gas Co. v. Public Utilities Com. (1990) 50 Cal.3d 31, 46-47 [revealing the fact and the conclusion of a communication was insufficient to qualify as a waiver of the privilege under Evidence Code section 912].) We also cannot determine whether there was an implied waiver.
Nevertheless, Ponzo, Dillon and Ivy Screen assert the trial court erred by denying their request for the attorney-client communications without making a finding as to the "words spoken." But the appellate record does not show us what determinations the trial court may have made in denying the request, as there is no reporter's transcript, settled statement or agreed statement. In any event, a trial court is not required to make findings in support of its ruling to protect a privileged communication. (McDermott Will & Emery LLP v. Superior Court (2017)10 Cal.App.5th 1083, 1103.) And unlike in Maxwell v. Dolezal (2014) 231 Cal.App.4th 93, in which a trial court improperly issued a ruling incorporating by reference the " 'reasons stated in open court' " even though there was no court reporter's transcript (id. at pp. 99-100), here the trial court's statement of decision did not refer to this evidentiary ruling made during the trial, and there is no indication the parties asked the trial court to do so.
Ponzo, Dillon and Ivy Screen also contend the trial court erred in holding that reliance on advice of counsel can be tendered as a defense only if it is expressly pleaded. The statement of decision states, "The court informed [Ponzo, Dillon and Ivy Screen] that no such affirmative defense had been presented in the defense pleadings and that the court did not consider any such testimony as an offer toward an affirmative defense." But the statement of decision does not say the trial court's ruling was based on the lack of an affirmative defense pleaded in the answer. Again, there is no record of the trial court's actual ruling denying the request for the attorney-client communications.
Because Ponzo, Dillon and Ivy Screen have not shown that the judgment must be reversed, we need not discuss their contention that their breach of fiduciary duty causes of action must be remanded to a different trial judge for retrial.
III
Ponzo, Dillon and Ivy Screen further argue the judgment against Dillon and Ivy Screen must be reversed because the cross-complaint does not state a cause of action for fraud against them. The objection that a pleading does not state facts sufficient to constitute a cause of action is not waived by failure to demur, but may be raised for the first time on appeal. (Code Civ. Proc., § 430.80, subd. (a); O'Neil v. Spillane (1975) 45 Cal.App.3d 147, 156 (O'Neil).)
The cross-complaint asserts a second cause of action for fraud in the inducement, and a fifth cause of action for fraud and deceit. Fraud must be pleaded with specificity. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645 (Lazar).) However, where the record does not show that Ponzo, Dillon and Ivy Screen objected in the trial court that the pleading failed to state a cause of action, we will construe the pleading liberally and uphold the judgment if the necessary facts in the pleading appear by implication or as a conclusion of law. (O'Neil, supra, 45 Cal.App.3d at pp. 156-157.) There is no indication in the appellate record that Ponzo, Dillon and Ivy Screen demurred to the cross-complaint or objected to the tentative decision based on a pleading defect. It appears they raised the pleading defect claim for the first time in their motion to vacate the judgment. Moreover, we will not reverse a judgment because of a defect in pleading unless the error complained of resulted in a miscarriage of justice. (Spreckels v. Gorrill (1907) 152 Cal. 383, 386-387; Carroll v. Briggs (1903) 138 Cal. 452, 454; Nelson v. Department of Alcoholic Beverage Control (1959) 166 Cal.App.2d 783, 787-788; Cooper v. Weatherholt (1938) 28 Cal.App.2d 321, 323; Langstaff v. Mitchell (1931) 119 Cal.App. 407, 409; Slaughter v. Goldberg, Bowen & Co. (1915) 26 Cal.App. 318, 324-326.) "[T]he matter of pleading becomes unimportant when a case is fairly tried . . . upon the merits and under circumstances which indicate that nothing in the pleadings misled appellant to his [or her] injury." (Tietke v. Forrest (1923) 64 Cal.App. 364, 367.)
Applying the foregoing standards, we conclude that while the cross-complaint fails to plead fraud by Dillon and Ivy Screen with specificity, the defect in pleading does not require reversal of the judgment. The cross-complaint put Ponzo, Dillon and Ivy Screen on notice that the fraud causes of action sought judgment against each of them. The trial court's tentative decision awarded judgment against Ponzo, Dillon and Ivy Screen. Their objection to the tentative decision acknowledged that the trial court's fraud ruling was based on their alleged failure to disclose facts, but they did not assert that the issue of fraud by Dillon and Ivy Screen was not before the trial court. Ponzo, Dillon and Ivy Screen allowed that issue to be tried and decided by the trial court and did not attack the defect in pleading until after judgment was entered. They fail to show that the pleadings misled them to their injury.
IV
Ponzo, Dillon and Ivy Screen raise additional arguments challenging the judgment on Miller and Crum's fraud causes of action. They contend (1) the facts which the trial court found were concealed or misrepresented were not material, (2) the trial court failed to make findings on certain elements of fraud, (3) they had no duty to disclose, (4) certain findings are not supported by substantial evidence, (5) the cross-complaint does not state a fraud cause of action based on Ponzo's dealings with Beninsig, (6) the statement of decision relating to concealment or nondisclosure of "the truth of the invention itself" is deficient, and (7) the cross-complaint does not state a fraud cause of action based on concealment or failure to disclose prior partnerships.
The trial court found that "Ponzo and Dillon concealed and failed to disclose . . . [(1)] the true status of the 'patent', [(2)] the prior relationship with Beninsig vis-a-vis the 'patent' application/status, [(3)] their dire financial situation, [(4)] the truth of the invention itself, and [(5)] the similar partnerships with others, in order to obtain a financial advantage, to the detriment of Miller and Crum."
Ponzo, Dillon and Ivy Screen argue the facts which the trial court found were concealed or not disclosed had no bearing on what Miller and Crum bargained for. We disagree. A misrepresentation is material if a reasonable person would attach importance to its existence or nonexistence in determining a choice of action. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 977.) Materiality is generally a question of fact for the trier of fact unless the fact misrepresented or concealed is so obviously unimportant that the trier of fact could not reasonably find that a reasonable person would have been influenced by it. (Ibid.) Whether the product or process upon which EBS was to be based had any value, whether it was protected by a patent, whether Ponzo and Dillon had previously attempted to seek funding or partners for the same business venture, and whether they had recently filed for bankruptcy protection, were not so obviously unimportant to a decision to invest in EBS that Miller and Crum could not have reasonably been influenced by the nondisclosure or concealment of such facts. (See Pearson v. Allen (1957) 150 Cal.App.2d 638, 642-643 [concealment by seller of conditions which materially affected the desirability of the property to be sold may constitute fraud]; Malik v. Universal Resources Corp. (1976) 425 F.Supp. 350, 353-354, 359, 362 [false representation to potential investor that the defendant had secured a Holiday Inns franchise was fraud].)
The elements of fraud are (1) a misrepresentation (false representation, concealment or nondisclosure), (2) knowledge of its falsity, (3) intent to defraud, i.e., intent to induce reliance; (4) justifiable reliance; and (5) resulting damage. (Lazar, supra, 12 Cal.4th at p. 638.) Fraud and deceit include the concealment or suppression of a fact by one who gives information of other facts which are likely to mislead for want of communication of that fact. (Civ. Code §§ 1572, 1710.) Fraud in the inducement " 'occurs when " 'the promisor knows what he is signing but his consent is induced by fraud, mutual assent is present and a contract is formed, which, by reason of the fraud, is voidable.' " ' " (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294-295.) Ponzo, Dillon and Ivy Screen maintain that the trial court failed to make findings regarding an intent to deceive, justifiable reliance, and resulting damage.
The trial court made findings regarding intent to deceive or to induce action. Fraudulent intent may be established by circumstantial evidence. (Tenzer v. Superscope, Inc. (1985) 39 Cal.3d 18, 30.) The trial court found that prior to the formation of EBS, Ponzo and/or Dillon did not disclose to Miller and Crum that (1) there was a prior business relationship between Ponzo and Beninsig wherein Beninsig was to help obtain a patent and investors for Ponzo's idea, (2) there were prior, failed attempts to obtain investors and partners and prior actual partnerships were formed in Southern California and Minnesota for the business that became EBS, (3) Ponzo attempted but failed to obtain a patent because of alleged misdeeds by Beninsig, (4) Ponzo believed the alleged patent for his idea was worthless, and (5) Ponzo and Dillon filed a petition for bankruptcy on March 25, 2009, which certified that Ponzo and Dillon did not own any patent and other intellectual property. The trial court found that although there were failed attempts to secure investors and actual partnerships for the same business operation as EBS, Ponzo told Miller and Crum prior to the formation of EBS that Ponzo had not gone forward with people who wanted to be involved with his product because he was waiting for what Miller and Crum would "bring to the table." The trial court found that Ponzo and Dillon were driven by an apparent need for money and they failed to disclose the above facts in order to obtain a financial advantage to Miller and Crum's detriment.
The trial court also made findings regarding reliance and resulting harm. Actual reliance occurs when a misrepresentation causes the plaintiff to alter his or her position and when, absent such representation, the plaintiff would not in all reasonable probability have entered into the contract or transaction. (Engalla, supra, 15 Cal.4th at p. 976.) Actual reliance is presumed when material facts are misrepresented or concealed. (Id. at pp. 976-977.) A plaintiff's reliance on the representation need not be the sole or even the predominant or decisive factor in influencing his or her conduct. (Ibid.) It is enough that the representation was a substantial factor in influencing the plaintiff's decision. (Id. at p. 977.) The trial court found that Miller and Crum were induced to invest $706,740.04 with Ponzo and Dillon, and that they paid an additional $16,485.55 to EBS's debtors as a result of the inducement and deceit by Ponzo and Dillon. The trial court also found that Ponzo and Dillon's financial demands, among other things, "set EBS on a path to failure." The trial court concluded that Miller and Crum were damaged and, thus, awarded judgment in the amount of $723,225.59. With regard to Ponzo, Dillon and Ivy Screen's assertion that the trial court failed to make findings regarding whether Ivy Screen caused Miller and Crum any injury, Ponzo, Dillon and Ivy Screen forfeited that claim by not objecting on that ground in the trial court.
Ponzo, Dillon and Ivy Screen next argue that the parties dealt at arms' length during negotiations and Ponzo and Dillon did not owe Miller and Crum a fiduciary duty; therefore, Ponzo and Dillon had no duty to disclose the facts which the trial court found they failed to disclose. But the existence of a fiduciary relationship is not required for fraud based on concealment or nondisclosure. (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336.) Even where no duty to disclose would otherwise exist, where one does speak, he or she must speak the whole truth and not conceal facts that materially qualify those stated. (Vega v. Jones, Day, Reavis & Pogue (2004) 121 Cal.App.4th 282, 292 (Vega).) One who is asked for, or volunteers, information must be truthful, and the telling of a half-truth calculated to deceive is fraud. (Ibid.) Ponzo and Dillon had a duty not to defraud others even if they were negotiating at arm's length with them. (Id. at pp. 292-293; Pavicich v. Santucci (2000) 85 Cal.App.4th 382, 397-398.)
Ponzo, Dillon and Ivy Screen also raise a number of claims based on the evidence presented at the trial. They argue Miller and Crum's loss was due to a bad business plan or their decision to close EBS. They say there was no substantial evidence (1) that Ponzo misled regarding the status of the patent, (2) that Ponzo told Miller and Crum he had a patent, or (3) that the documents Ponzo presented did not disclose the involvement of Beninsig. The trial court found otherwise. "Where no reporter's transcript has been provided and no error is apparent on the face of the existing appellate record, the judgment must be conclusively presumed correct as to all evidentiary matters. To put it another way, it is presumed that the unreported trial testimony would demonstrate the absence of error. [Citation.] The effect of this rule is that an appellant who attacks a judgment but supplies no reporter's transcript will be precluded from raising an argument as to the sufficiency of the evidence." (Estate of Fain (1999) 75 Cal.App.4th 973, 992, italics omitted.)
Ponzo, Dillon and Ivy Screen further assert that the cross-complaint does not state a fraud cause of action based on Ponzo's dealings with Beninsig. It is true that the cross-complaint does not mention Beninsig. Miller and Crum state in their appellate brief that the cross-complaint does not mention Beninsig because Ponzo and Dillon withheld information about Beninsig until the trial. Ponzo, Dillon and Ivy Screen's appellate reply brief does not dispute that assertion. The trial court found the documents Ponzo provided Miller relating to the patent application "did not contain any of the work or involvement of Beninsig" and Beninsig's involvement was not known until trial. Moreover, the cross-complaint alleges Ponzo represented that he had a patent and that he had not previously gone forward with the many people who had expressed interest in his idea. The cross-complaint alleges the representations that Ponzo had a patent and was "in great financial shape" were false and made to induce Miller and Crum to invest hundreds of thousands of dollars in EBS. Ponzo's prior business relationship with Beninsig is related to Ponzo's failed attempt to obtain a patent and prior attempts to seek investors. The issue of Ponzo's dealings with Beninsig was presented at the trial. Ponzo, Dillon and Ivy Screen do not show that the allegations in the cross-complaint misled them to their injury, warranting a reversal of the judgment.
Regarding the trial court's finding that Ponzo and Dillon concealed and failed to disclose "the truth of the invention itself," Ponzo, Dillon and Ivy Screen assert that if "the truth of the invention" refers to the subject matter of the patent application, such information was in the patent file Ponzo provided to Miller. But the portions of the appellants' appendix cited by Ponzo, Dillon and Ivy Screen in support of their factual assertion do not establish which documents Ponzo actually provided to Miller. Nevertheless, Ponzo, Dillon and Ivy Screen argue that if "the truth of the invention" refers to something other than the subject matter of the patent application, the trial court failed to make findings regarding intent to defraud, materiality and resulting harm based on any failure to disclose "the truth of the invention." However, they forfeited that claim by not objecting to the statement of decision in the trial court on the grounds raised on appeal. (In re Marriage of Arceneaux, supra, 51 Cal.3d at pp. 1133-1134; Thompson, supra, 6 Cal.App.5th at p. 983.)
Ponzo, Dillon and Ivy Screen also argue that the cross-complaint does not state a fraud cause of action based on concealment or failure to disclose similar partnerships. We disagree. Miller and Crum alleged that prior to the formation of EBS, Ponzo represented that even though there had been interest in his idea over the years, Ponzo "did not go forward" with others "for one reason or another." Miller and Crum alleged that Ponzo, Dillon and Ivy Screen made the false statement to induce Miller and Crum to invest in EBS. Miller and Crum alleged they invested substantial time and energy in EBS and lost hundreds of thousands of dollars in the venture.
V
Ponzo, Dillon and Ivy Screen next contend the trial court employed an improper measure of damages.
They begin by arguing that Miller and Crum took EBS's assets when they shut the company down, but the trial court failed to consider the value of what Miller and Crum received when EBS closed down. However, the contention fails because the record on appeal is inadequate to determine its accuracy. We cannot ascertain from the referenced portions of the appellants' appendix that Miller and Crum retained any proceeds or obtained any benefit from EBS's inventory or assets after EBS was closed down.
Ponzo, Dillon and Ivy Screen also say that Miller and Crum did not plead a fraud claim based on Miller and Crum's purchase of an additional interest in EBS, and the trial court made no finding to that effect. But Miller and Crum alleged that Ponzo induced Miller and Crum to pay approximately $160,000 in order to get control over EBS, then threatened to compete against EBS and to remove Miller and Crum from EBS. Miller and Crum alleged that such conduct was fraud. As for the challenge to the trial court's lack of findings, Ponzo, Dillon and Ivy Screen forfeited the challenge by not objecting in the trial court on the ground raised here. (In re Marriage of Arceneaux, supra, 51 Cal.3d at pp. 1133-1134; Thompson, supra, 6 Cal.App.5th at p. 983.)
Ponzo, Dillon and Ivy Screen argue that the trial court erred in awarding $16,485.55 for Miller and Crum's payments to creditors on behalf of EBS because the cross-complaint did not plead such special damages. The statement of decision states that Miller and Crum testified and presented evidence of the $16,485.55 paid to EBS's creditors. The record before us does not show that Ponzo, Dillon and Ivy Screen objected to the presentation of such evidence at trial. A challenge that special damages are not pleaded is forfeited where evidence of special damages is received without objection. (Little v. Amber Hotel Co. (2011) 202 Cal.App.4th 280, 303, fn. 13; Stoltz v. Converse (1946) 75 Cal.App.2d 909, 916.)
VI
Ponzo, Dillon and Ivy Screen further challenge the punitive damages award on the grounds that (1) trial court did not apply the proper standard of proof, (2) there was no basis for a punitive damages award against Dillon and Ivy Screen, (3) the award violates due process of law, and (4) the award is excessive.
Ponzo, Dillon and Ivy Screen urge that the trial court did not apply the clear and convincing evidence standard in finding that punitive damages were warranted, and there was no basis for a punitive damages award against Dillon and Ivy Screen.
"In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant." (Civ. Code, § 3294, subd. (a).) The statement of decision states that the trial court applied the applicable burden of proof as to each claim. Ponzo, Dillon and Ivy Screen did not object to the standard of proof the trial court applied with respect to the punitive damages claim until after entry of the judgment. They did not assert this concern until their reply in support of their motion to vacate the judgment. The trial court rejected the claim, concluding that sufficient evidence supported its findings on punitive damages. We conclude the trial court was aware of, and applied, the proper standard of proof. In addition, the record on appeal does not show that the punitive damages awards lacked a sufficient evidentiary basis.
Ponzo, Dillon and Ivy Screen next argue the punitive damage awards violated due process. They point to the conduct referenced in the statement of decision: that Ponzo calling Miller derogatory names during their business relationship and deliberately bumped Miller in the courtroom during the trial. From that they argue the conduct had no connection to the alleged fraud and did not cause injury to Crum. They add that Dillon has been punished simply because she is Ponzo's wife, and Ivy Screen has been punished because it was Ponzo's company.
Whether to award punitive damages under Civil Code section 3294 and the amount of such an award are questions committed to the trier of fact. (Uzyel v. Kadisha (2010) 188 Cal.App.4th 866, 923-924.) An award of punitive damages under Civil Code section 3294 requires proof by clear and convincing evidence that the defendant is guilty of oppression, fraud or malice. On appeal, however, we " 'consider the evidence in the light most favorable to the prevailing party, giving him [or her] the benefit of every reasonable inference, and resolving conflicts in support of the judgment,' " in determining whether the record contains substantial evidence to support the trier of fact's findings by clear and convincing evidence. (Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 891, italics omitted.)
Although the statement of decision references particular conduct by Ponzo which do not appear to be related to Miller and Crum's fraud claims, the trial court also found that Ponzo, Dillon and Ivy Screen committed fraud upon Miller and Crum. A plaintiff may recover punitive damages upon proof of fraud by the defendant. (Civ. Code, § 3294, subd. (a).) In particular, punitive damages are available where a defendant fraudulently induces the plaintiff to enter into a contract. (Las Palmas Associates. v. Las Palmas Center Associates (1991) 235 Cal.App.3d 1220, 1238-1239; Walker v. Signal Companies, Inc. (1978) 84 Cal.App.3d 982, 996.) A corporation may be liable for punitive damages based on the conduct of its officer, director or managing agent, without any additional showing of ratification by the corporation. (Kelly-Zurian v. Wohl Shoe Co. (1994) 22 Cal.App.4th 397, 420.) Whether a person is a managing agent depends on whether he or she has discretion to make decisions that ultimately determine corporate policy. (Id. at p. 421.) We reject Ponzo, Dillon and Ivy Screen's appellate claims because we presume the judgment is correct (Thompson, supra, 6 Cal.App.5th at p. 982; Ermoian v. Desert Hospital (2007) 152 Cal.App.4th 475, 494) and the record on appeal is inadequate for us to evaluate the claims.
Ponzo, Dillon and Ivy Screen further argue the punitive damages award is excessive.
Punitive damages are intended to punish misconduct and deter future wrongdoing. (Neal v. Farmers Ins. Exchange (1978) 21 Cal.3d 910, 928, fn. 13.) Even where substantial evidence supports an award of punitive damages, a punitive damages award may not exceed federal constitutional constraints. As the California Supreme Court explained, " 'The imposition of "grossly excessive or arbitrary" awards is constitutionally prohibited, for due process entitles a tortfeasor to " 'fair notice not only of the conduct that will subject him to punishment, but also of the severity of the penalty that a State may impose.' " ' " (Roby v. McKesson Corp. (2009) 47 Cal.4th 686, 712 (Roby).)
A reviewing court determining whether a punitive damages award is unconstitutionally excessive must consider three guideposts: " '(1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.' " (Simon v. San Paolo U.S. Holding Co., Inc. (2005) 35 Cal.4th 1159, 1172 (Simon).) The defendant's financial condition is also a relevant consideration to ensure that a punitive damages award has the appropriate deterrent effect. (Roby, supra, 47 Cal.4th at p. 719.)
We review the award de novo. (Simon, supra, 35 Cal.4th at pp. 1172 & fn. 2.) However, "our determination of a maximum award should allow some leeway for the possibility of reasonable differences in the weighing of culpability. In enforcing federal due process limits, an appellate court does not sit as a replacement for [the trier of fact] but only as a check on arbitrary awards." (Id. at p. 1188.)
Of the three guideposts, the most important is the degree of reprehensibility of the defendant's misconduct. (Roby, supra, 47 Cal.4th at p. 713.) On this question, we must "consider whether '[1] the harm caused was physical as opposed to economic; [2] the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; [3] the target of the conduct had financial vulnerability; [4] the conduct involved repeated actions or was an isolated incident; and [5] the harm was the result of intentional malice, trickery, or deceit, or mere accident.' " (Ibid.)
The first three reprehensibility factors are not present here. The injury to Miller and Crum is purely economic, and nothing in the record indicates an indifference to or a reckless disregard of the health or safety of others or that Miller and Crum were financially vulnerable. However, although there is no indication that Ponzo, Dillon or Ivy Screen had acted similarly toward other business partners or potential investors, this case involves multiple fraudulent acts or omissions by Ponzo and Dillon against Miller and Crum. (See BMW of North America, Inc. v. Gore (1996) 517 U.S. 559, 577 [134 L.Ed.2d 809, 827] (BMW) [repeated misconduct is more reprehensible].) Ponzo and Dillon concealed material facts about Ponzo's idea, their prior business relationships and their financial condition in order to induce Miller and Crum to invest in EBS. Ponzo represented that he invented the product when he did not and the idea he claimed was his was already "out in the public." The trial court found that Miller and Crum sustained substantial damages as a result of intentional deceit by Ponzo, Dillon and Ivy Screen. Application of the factors shows a level of reprehensibility which is not low and not extremely high. (Cf. Simon, supra, 35 Cal.4th at pp. 1180-1181; Bardis v. Oates (2004) 119 Cal.App.4th 1, 21-22 (Bardis).) The varying amounts of punitive damages awarded against each plaintiff reflects the trial court's determination concerning their varying degrees of culpability. (Jet Source Charter, Inc. v. Doherty (2007) 148 Cal.App.4th 1, 11.)
Regarding the second guidepost -- the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award -- "courts must ensure that the measure of punishment is both reasonable and proportionate to the amount of harm to the plaintiff and to the general damages recovered." (State Farm Mutual Auto. Ins. Co. v. Campbell (2003) 538 U.S. 408, 426 [155 L.Ed.2d 585, 606].) Ponzo, Dillon and Ivy Screen concede the award here does not reach a constitutionally-suspect ratio. We agree. (Roby, supra, 47 Cal.4th at p. 719; Bardis, supra, 119 Cal.App.4th at p. 26 [where the compensatory damages award is neither exceptionally high nor low and where the defendant's conduct is neither exceptionally extreme nor trivial, the outer constitutional limit on the amount of punitive damages is approximately four times the amount of compensatory damages].) The total punitive damages award ($170,000) is only 23.5 percent of the general damages award.
With regard to the third guidepost, "a reviewing court engaged in determining whether an award of punitive damages is excessive should 'accord "substantial deference" to legislative judgments concerning appropriate sanctions for the conduct at issue.' " (BMW, supra, 517 U.S. at p. 583 .) Any unlawful, unfair or fraudulent business act or practice constitutes unfair competition. (Bus. & Prof. Code, § 17200.) If Ponzo, Dillon and Ivy Screen's conduct constitutes unfair competition, they are subject to a civil penalty of up to $2,500 for each violation. (Bus. & Prof. Code, § 17206, subd. (a).) The above statutory provisions show how seriously our State regards fraudulent business acts. (See Bardis, supra, 119 Cal.App.4th at p. 24 [noting that California typically imposes treble damage penalties for fraudulent and bad faith conduct].) We cannot say the award is excessive under this guidepost.
"[A] punitive damages award is excessive if it is disproportionate to the defendant's ability to pay." (Adams v. Murakami (1991) 54 Cal.3d 105, 112 (Adams).) " '[T]he function of deterrence . . . will not be served if the wealth of the defendant allows him to absorb the award with little or no discomfort.' [Citation.] '[P]unitive damage awards should not be a routine cost of doing business that an industry can simply pass on to its customers through price increases, while continuing the conduct the law proscribes.' [Citation.] On the other hand, 'the purpose of punitive damages is not served by financially destroying a defendant.' " (Simon, supra, 35 Cal.4th at p. 1185.)
The California Supreme Court has not prescribed any rigid standard for measuring a defendant's ability to pay a punitive damages award. (Adams, supra, 54 Cal.3d at pp. 112, 116, fn. 7.) While net worth is the most common measure of a defendant's financial condition, it is not the only measure of a defendant's wealth for punitive damages purposes. (Bankhead v. ArvinMeritor, Inc. (2012) 205 Cal.App.4th 68, 79 (Bankhead ).) And as several courts have recognized, net worth is subject to easy manipulation and may not accurately reflect the defendant's wealth or ability to pay. (Id. at pp. 82-83; Zaxis Wireless Communications, Inc. v. Motor Sound Corp. (2001) 89 Cal.App.4th 577, 580, 582 (Zaxis) [concluding that the defendant had ability to pay despite negative net worth reflected in its financial statements]; Lara v. Cadag (1993) 13 Cal.App.4th 1061, 1065, fn. 3.)
Ponzo, Dillon and Ivy Screen argue that the punitive damages award exceeds their combined net worth and they had no ability to pay the award. We conclude that the trial court was entitled to discredit the negative net worth and net income shown on the financial statements provided by Ponzo, Dillon and Ivy Screen because those documents did not accurately reflect Ponzo, Dillon and Ivy Screen's financial condition. Although Ponzo and Dillon's Statement of Financial Position shows a negative net worth, it does not include the value of Ivy Screen, Inc., which Ponzo and Dillon owned and which according to another statement had assets worth $201,822. The Statement of Financial Position also does not take into account any income Ponzo and Dillon anticipated earning, even though the couple's bank statements show substantial deposits, including apparent payroll deposits for Dillon and a $9,000 deposit for unemployment benefits for Ponzo. (Rufo v. Simpson (2001) 86 Cal.App.4th 573, 620-622 [the defendant's ability to earn income in the future is relevant to proper measure of punitive damages].) Ponzo and/or Dillon also had a line of credit, a note against some of their properties and several credit cards. The loans and the extension of credit to Ponzo and Dillon indicate that lenders and creditors had made a determination that Ponzo and/or Dillon had the ability to repay the amounts on those debts (over $190,000). (Bankhead, supra, 205 Cal.App.4th at p. 83 [considering the defendant's ability to borrow]; Zaxis, supra, 89 Cal.App.4th at p. 583 [same].)
The Statement of Revenue & Expenses for Ivy Screen for the period July 1, 2014 to February 12, 2015, also does not accurately reflect Ivy Screen's financial condition. The statement shows total income of $662,775, a gross profit of $290,067, and a negative net income of -$74,584 for that seven-month period. To arrive at the negative net income, Ponzo, Dillon and Ivy Screen deducted, among other things, $63,638 in legal fees. But Ponzo testified that the fees were not actually paid, casting doubt on whether the expenses shown in the statement actually reduced the amount of Ivy Screen's profits. In addition, there was evidence of monthly income derived from vehicle parking in Ivy Screen's yard. Such revenue is not shown in the statement as income.
The Statement of Assets, Liabilities & Equity for Ivy Screen is also suspect. The statement shows a -$14,819 balance on the company's checking account for January 31, 2015. However, the bank statements for the company for the period ending January 31, 2015 shows a $34,122.13 ending balance.
Despite the negative net worth or net income shown in the financial statements, there was evidence that Ponzo and Dillon had ability to pay the punitive damages award. There were substantial deposits into Ivy Screen's checking account in the months prior to the punitive damages trial, and Ponzo and/or Dillon transferred money between their personal accounts and Ivy Screen's accounts. Excluding transfers from Ponzo and Dillon's personal checking account, there were deposits totaling $83,210.64 in January 2015, $88,824.92 in December 2014, and $53,211.61 in November 2014 into Ivy Screen's checking account. Excluding transfers from Ivy Screen's checking account, there were deposits totaling $16,223.83 in January 2015, $6,962.93 in December 2014 and $15,167 in November 2014 into Ponzo and Dillon's personal checking account. During the seven-month period of July 1, 2014 to February 12, 2015, Ivy Screen had $662,775 in sales. And Ponzo had ongoing jobs at the time of trial. Ivy Screen's sales in the three fiscal years preceding July 2014 were $1.32 million, $1.46 million and $1.28 million. The statement of Ivy Screen's assets for 2015 shows the corporation loaned $80,566 to its shareholders, indicating that the corporation had money to loan despite its negative net income on paper. Evidence presented at the trial shows loans to shareholders in the 2008 through 2010 fiscal years, totaling over $240,000. (See Zaxis, supra, 89 Cal.App.4th at p. 583 [net worth calculation which included accumulated depreciation and a note to the sole shareholder did not impact the corporation's ability to pay a damage award even though they were a loss for accounting purposes].) In 2015, the corporation owned two limousines which Ponzo and Dillon said were for their personal use. Ivy Screen bought one of the limousines in 2014, even though according to Ivy Screen's Statement of Revenue & Expense the company had a negative net income. Ivy Screen's Statement of Assets, Liabilities & Equity does not show a note for those limousines and for four of the five trucks owned by the corporation. The couple also leased a current-year model Lincoln SUV for Dillon in 2015.
Considering the evidence, the guideposts and Ponzo, Dillon and Ivy Screen's ability to pay, we conclude the punitive damages award is not unconstitutionally excessive.
DISPOSITION
The judgment is affirmed.
/S/_________
MAURO, J. We concur: /S/_________
RAYE, P. J. /S/_________
ROBIE, J.