California Court of Appeal Jun 25, 2015 No. D064302Unpublished
Filed 6/25/15 Farhoomand v. Caine CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
KAVEH S. FARHOOMAND, D064302
Plaintiff, Cross-defendant and Respondent, (Super. Ct. No. v. 37-2011-00050839-CU-HR-NC)
JANET JUSTIN CAINE,
Defendant, Cross-complainant and Appellant.
APPEAL from a judgment of the Superior Court of San Diego County, Earl H.
Maas III, Judge. Affirmed in part, reversed in part, and remanded with directions.
Fransen and Molinaro and Nathan W. Fransen for Defendant, Cross-complainant
and Appellant.
Law Offices of Linda J. Alexander and Linda Joyce Alexander, Paul Marion
Grinvalsky; Lotz, Doggett & Rawers and Jeffrey S. Doggett for Plaintiff, Cross-
defendant and Respondent.
Defendant, cross-complainant and appellant Janet Justin Caine appeals from a
judgment entered in favor of plaintiff, cross-defendant and respondent Kaveh S.
Farhoomand following a jury trial on Farhoomand's operative complaint and Caine's
operative cross-complaint arising out of a real estate transaction between them, the
surrounding circumstances of which were highly contested at trial. By special verdicts
the jury made numerous factual findings accepting Farhoomand's claims and rejecting
Caine's, resulting in a judgment in Farhoomand's favor in which the trial court found in
part that Farhoomand was the prevailing party and ordered Caine to turn over a deed she
had executed granting the subject property to Farhoomand. Thereafter, the court ordered
Caine to pay cost-of-proof sanctions under Code of Civil Procedure1 section 2033.420,
subdivision (b)(3), and entered an amended judgment awarding those sanctions, costs and
attorney fees, as well as declaring the property's purchase price to be $525,000.
On appeal, Caine contends: (1) the court abused its discretion by excluding under
Evidence Code sections 350 and 352 testimony and evidence that assertedly showed
Farhoomand's cultivation of marijuana at the property; (2) the court lacked jurisdiction to
enter the amended judgment declaring the property's purchase price; and (3) the court
erred by awarding cost-of-proof sanctions after she had filed her notice of appeal and also
abused its discretion by including a substantial attorney fee award in connection with
those sanctions. We agree the trial court lacked jurisdiction to amend the judgment to
include the property's purchase price. We reverse that portion of the judgment and
1 Statutory references are to the Code of Civil Procedure unless otherwise specified. 2
remand the matter with instructions that the court modify it to omit that declaration. In
all other respects, we affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
Farhoomand and Caine's Relationship
Farhoomand is a physician in internal medicine with a private practice in
Oceanside, California. Caine and her husband maintained multiple residences in Nevada
and California. In 2007, another physician referred Caine to Farhoomand and
Farhoomand began treating Caine's husband, who was then gravely ill with various
chronic conditions. Given his severe condition and because Caine requested it,
Farhoomand began making house visits to Caine's husband at their Oceanside residence,
and continued to treat him there and in the hospital until he died in March 2008. On two
occasions during this time, Caine stuffed a $1000 check into Farhoomand's pocket and
insisted he take it as a gift or tip, telling him she would be offended if he did not.
Farhoomand and Caine eventually became close friends: Farhoomand took to calling her
"Aunt Janet" as did other friends of Caine's, and Caine referred to Farhoomand as her
"nephew." Eventually Caine asked Farhoomand to become her physician, and he saw her
four times in mid-2008 and early 2009. In late 2008, Farhoomand's marriage was
deteriorating and Caine was still grieving her husband's death. They began having dinner
together and talked increasingly over the phone until they spoke once a day, treating each
other as family. They both expressed love for each other as friends.
In September 2008, Caine offered to lend Farhoomand $50,000 and he executed a
promissory note payable "on demand" by Caine for the monies, which Farhoomand used
3
to pay credit card debt from his marriage. Caine then inserted herself into Farhoomand's
business and affairs, telling him he had helped her husband, he was her "project," and it
was now her place to "straighten out [his] life."2 Thereafter at various times Caine lent
Farhoomand additional sums of money and helped him with his finances as well as the
disposition of Farhoomand's home following his divorce. Farhoomand began to repay
Caine in June 2009.
In the spring of 2009, Caine and her realtor began looking for a house for
Farhoomand to purchase. Caine, herself a licensed real estate agent in California, told
Farhoomand it would be an investment for her and beneficial to him in that they would
consolidate his preexisting debts to her in a mortgage, and give him a better interest rate
than his old house and her a better rate than a bank. Eventually, she located a house on
Juniper Lane (the Juniper property) and closed escrow in July 2009, sending Farhoomand
a card on the day escrow closed reading, " 'Hope your new address . . . [¶] . . . [¶] . . .
Feels more like home every day. Congratulations.' " In it, she handwrote a note telling
Farhoomand to "enjoy your new life" and asking him not to bring physical or mental "
'baggage . . . into your new home.' " Caine's realtor at the time noted that Caine was
buying the house for her "nephew," who the realtor understood was Farhoomand.
2 Farhoomand testified that Caine "told me that she wanted to help me, straighten me out financially after the divorce. She said that she's a business women and she's savvy and that it would be therapeutic for her to make me a project"; that it was "good for her to do" that. Farhoomand testified, "We were good friends, so I trusted her. She said that she was—she had done real estate for many, many years. And she also said that it was good for her. It was therapeutic for her." In deposition testimony admitted at trial, Caine testified that if she could help Farhoomand she would do it, that she was alone and depressed and it was like therapy to her. 4
Caine told Farhoomand she would handle the arrangements and documentation.
She took him to a document center where Caine signed a grant deed conveying the
Juniper property to Farhoomand, and Farhoomand signed a note secured by a deed of
trust, both prepared by broker and notary Doreen Kessinger. Kessinger also prepared and
certified a preliminary change of ownership report, signed by Farhoomand and initialed
by Caine, indicating the transaction was a purchase and that Caine was transferring 100
percent of the interest in the Juniper property to Farhoomand via a $605,000 loan
"[c]arried by seller" secured by a first deed of trust at 5.5 percent interest for a 30-year
term. Caine and Farhoomand told Kessinger that the Juniper property was going to be
Farhoomand's primary residence, and Kessinger understood that Caine was selling the
property to him as the lender.3 Caine approved the note, trust deed, change of ownership
report, and an amortization schedule. Kessinger did not notice any indicia of duress or
undue influence in connection with the transaction, and she went over every line of the
documents with Caine before Caine signed them. Caine took all of the documents, which
were unrecorded, and told Kessinger she would record them later.
3 At trial, Farhoomand's office assistant testified that Caine told her she was buying Farhoomand a house and selling it to him; that she "was going to make him walk away from his old house and get him a new house, a better house, and then he was just going to be making the payments to her, and it was just going to be like a win, win situation." Grant Jacobson, who was a landscaper, testified he was hired by Caine and Farhoomand to be the gardener at the Juniper property. According to Jacobson, Caine told him that she had purchased a house and sold it to Farhoomand, and that the house needed a gardener. Caine made an initial prepayment, then Farhoomand paid Jacobson's bills every month thereafter.
5
The note securing the deed of trust indicates Caine gave Farhoomand a 30-year
loan of $605,000 at a 5.5 percent interest rate. The total loan amount was calculated by
adding the $525,000 purchase price to Farhoomand's existing debts, and included money
Caine spent to purchase furniture for Farhoomand.4 Caine prepared two mortgage
ledgers and made handwritten entries for Farhoomand's monthly payments, which were
usually each in the sum of $5,000 or more. Farhoomand moved into the Juniper property
in October 2009 and Caine lived there while some construction was occurring, but soon
afterwards Farhoomand asked to live in the house by himself. In response to
Farhoomand's request, Caine wrote Farhoomand a note telling him they were "on the
same page" and that it was "foolish" of him to ask, as she had to return to her own
affairs.5 Caine moved out of the Juniper property within a couple of days. Farhoomand
paid the utilities, property taxes, home warranty and homeowner's insurance on the
Juniper property until 2012, when Caine paid the property taxes and insurance "out from
under" him.
After November 2010, Caine and Farhoomand had a falling out and Caine stopped
accepting Farhoomand's checks. Farhoomand terminated his physician/patient
4 In discovery responses read to the jury, Caine admitted the principal balance of $605,000 was "based on the fair market value of the Juniper property, the furnishings in the Juniper property, and the outstanding balance of Dr. Farhoomand's loans he received from responding party."
5 Caine read her note into the record. It stated: "Dear one, either you read my mind or you overhear my phone calls, as we are, once again, on the same page. How foolish of you to ask. I really must get back to my own affairs, though I will always be on tap for you, as you know. We'll always be closely connected, no matter what distance is between us. . . . Love you, Janet." 6
relationship with Caine. In December 2010, Caine served him with an eviction notice
and claimed the Juniper property was her house, though he attempted to make payments
in December and January. Feeling he had been "duped," Farhoomand eventually
obtained a court order permitting him to deposit payments into an interest-bearing
account. He also applied for and obtained a restraining order against Caine.
The Lawsuits
In January 2011, Farhoomand filed suit against Caine for, inter alia, breach of
contract and breach of the covenant of good faith and fair dealing. Caine answered and
filed a cross-complaint asserting causes of action for elder abuse, conversion, breach of
fiduciary duty, fraud, unjust enrichment, intentional infliction of emotional distress and
rescission. In March 2011, Farhoomand filed a first amended complaint alleging causes
of action for breach of contract, breach of fiduciary duty, constructive and promissory
fraud, and declaratory relief/quiet title. He sought an injunction, interpleading of the
monies paid on the Juniper property, an accounting, and implied contractual or equitable
indemnity. In part, Farhoomand alleged that Caine gave him real estate advice in 2009
and purchased the Juniper property with the parties' understanding that she would
purchase it for his benefit and sell it to him with Caine holding the mortgage and
Farhoomand making monthly payments for its purchase. He alleged they entered into an
oral agreement whereby Caine would transfer title to the Juniper property by grant deed
to Farhoomand, and Farhoomand would pay Caine $605,000 at a 5.5 percent interest rate.
He alleged that while a grant deed, note, preliminary change of ownership report, deed of
7
trust and loan schedule were prepared, Caine instructed the document center not to file
the documents, then served Farhoomand with a notice to vacate the premises.
Caine eventually filed a first amended cross-complaint in part alleging financial
elder abuse. She alleged Farhoomand had engaged in a "surreptitious scheme . . . to take
financial advantage" of her by convincing her he was her friend while he acted as her
physician. She alleged he improperly accepted money from her while she was
emotionally and physically depleted, and manipulated her into lending him money, which
she "felt compelled" to do because she "felt she had no choice." Caine alleged she
purchased the Juniper property in her own name, furnished it, and began residing in it.
Caine alleged that in September 2009, Farhoomand expressed an interest in purchasing
the Juniper property from her, and based on his false representations, she allowed him to
reside there and would transfer title to him on the condition that he repay the personal
loans, pay for the furnishings, and make an approximately 20 percent down payment.
Caine alleged that Farhoomand agreed in response he would only use the Juniper
property for legal purposes and would continue to be her physician and friend, and that
she prepared the note, deed of trust and grant deed only for "estate purposes" so her heirs
would know her wishes; she purposely did not deliver or record them with Farhoomand's
knowledge and consent. Caine alleged that in early December 2010, she discovered
Farhoomand was cultivating and using marijuana and confronted him about it, after
which he discontinued his contact and care. She alleged he changed the locks on the
Juniper property and sought a temporary restraining order against her, falsely alleging she
harassed him in order to prevent her from visiting or staying at her property.
8
Farhoomand's In Limine Motion
Following the parties' unsuccessful dispositive motions, the matter proceeded to a
jury trial. Before trial, Farhoomand moved in limine to exclude evidence and testimony
from Caine—originally contained in an earlier-filed opposing summary judgment
declaration—regarding marijuana and its use or cultivation. He argued the probative
value of any such evidence or testimony would be substantially outweighed by undue
prejudice, the evidence would confuse or mislead the jury, and it would unduly consume
time under Evidence Code section 352. He also argued such evidence or testimony
would lack foundation and constitute improper character evidence. He asserted Caine
could not demonstrate that any alleged breach of the deed of trust arising from purported
marijuana was material or caused any damage. As to the latter point, Farhoomand argued
the deed of trust merely required the trustor to "commit or permit no . . . violation of laws
. . . relating to use, alterations or improvements . . . and do all other acts which . . . this
Deed of Trust may require to preserve this security" and that Caine's sole recourse was
not to invalidate the trust deed, but to have Farhoomand "appear in and defend any action
or proceeding purporting to affect the security" or the beneficiary or trustee's rights. He
maintained Caine could not show any action or proceeding had been commenced, or that
Farhoomand had not appeared or failed to defend any such action.
In opposition, Caine argued the evidence was not impermissible character
evidence but rather was critical to her defense of Farhoomand's breach of contract action
in that Farhoomand was required to show he had substantially performed under the
contract or that his performance was excused. She argued that California and Federal law
9
subjected property used to manufacture controlled substances to forfeiture and exposed
her to serious threat of criminal liability, which was relevant to explain why she served
the 60-day notice to vacate and as to her severe emotional distress. She argued the fact
Farhoomand was growing marijuana at the property and likely abusing it was a factor that
tended to show he may have committed elder abuse.
The court granted Farhoomand's motion on both relevance and Evidence Code
section 352 grounds. It stated that "the quantity, the quality, the amounts, the
circumstances actually all have a great deal to do with the criminality of the event. And
the only thing I've seen so far is a picture of some small seedlings that you can't tell from
the picture that they're marijuana, but sounds like there may be circumstances that would
support the suggestion that it is. And maybe even a statement from Dr. Farhoomand that
they were his father's marijuana. But it's a side issue that I think could take the jury
completely down the wrong path." At the same time, the parties discussed whether the
court would admit evidence of the restraining order Farhoomand had obtained against
Caine, and the court indicated the underlying factual findings supporting that order—
which did not mention any facts concerning marijuana—could be relevant on Caine's
defenses and cross-complaint depending on Caine's testimony. Caine's counsel protested
that Caine was unable to tell the jury "what precipitated all of this" and that the marijuana
evidence was a "big, big part of this case." The court responded it had a picture of eight
seedlings;6 that that amount of seedlings was "consistent with personal use, which in
6 The photographs actually show six boxes of some sort of seedlings. 10
California isn't a crime. . . . I've got one picture and your statements, even if I accept
those as true, I don't think they're violations of the law. [¶] And if it's a sale, she doesn't
have the right to tell him to stop. If it's a rental, she doesn't have the right to tell him to
stop." The court acknowledged that federal law was different, and "the reason I'm
keeping [the marijuana evidence] out under [Evidence Code section] 352 [is] that it's . . .
a side issue." It reiterated its ruling while explaining that Caine was bound by the
findings of the judge who had presided over the restraining order proceedings, stating that
Caine "can't argue separately from what that judge has found. [¶] But if she doesn't deny
that or if she says, 'Yeah, I yelled at his mother and at him, but I was mad because he was
stealing my money and stealing my house and everything else,' I think that's fair game. I
just don't think that this marijuana thing—it's not in here. And grant it, I haven't read
every transcript of everything that was said, but I read the statements of decision, the
objection, . . . and final statement of decision [on the restraining order]. And I think
under [Evidence Code section] 352, if we start going down that path, I run the risk that—
I run two risks. One, that some jurors thinks that everybody who has ever used marijuana
is a drug person and should be found against. On the other hand, we have got to question
them about medicinal marijuana and their knowledge of that. And we may end up with
somebody who takes sympathy. It's a side issue we're not going to go on."
Trial Evidence
At trial, Farhoomand testified that before Thanksgiving 2010, he had told Caine
that he was dating a woman named Samantha, and believed Caine would be happy for
him. Instead, Caine researched the woman, called his family, and came to his office
11
saying his girlfriend was uneducated, unfit and loose. According to Farhoomand, on the
Thanksgiving holiday weekend, Caine called him and told him she was coming to the
Juniper property to throw his girlfriend out and made derogatory comments.
Farhoomand testified that Caine arrived at the house and yelled at him from her car,
telling him he had five minutes to get her out of the house or Caine would throw her out
herself. He testified that the next day, he brought his mortgage payment and Caine's
Oceanside house keys back to her and told her he could not be her doctor. In December
2010, Caine left berating messages on Farhoomand's phone, in part calling him a "dumb
fuck" and telling him he was letting "a nobody that has nothing to dictate to you" and
should "get rid of the god damn ho."
Caine testified that she purchased the Juniper property to use as a residence and
live in it herself, and she did so when she was in California until December 2009. Caine
denied that the dual ledgers in her handwriting were mortgage ledgers despite the fact
that they read "mortgage balance," contained "principal" and "interest" columns, reflected
a 30-year term, and showed the balance decreasing when Farhoomand made payments.
Caine testified that Farhoomand was paying her back and living on the property, and she
characterized his interest payments as rent. According to Caine, her agreement with
Farhoomand was that she would turn the property over to him if he had made enough
payments—about 20 percent of the $526,000 cost—to obtain "hard money equity" in it.
Caine denied getting upset about Farhoomand's girlfriend or that she had inquired about
the woman with Farhoomand's office assistant and sister. Though she admitted going to
the Juniper house, she denied ever speaking to Farhoomand's girlfriend, telling
12
Farhoomand she never wanted to see his girlfriend at the Juniper property, or calling his
girlfriend names. Caine admitted she later mailed Farhoomand a card in which she wrote
that Samantha—who she referred to as a "hoe handle"—had "destroyed our four-year
friendship."
Caine was permitted to testify that on December 6, 2010, she discovered some
activity on the Juniper property that she thought jeopardized her interest in it; that she
was "worried to death" and was "very suspicious of what was going on . . . like I'm going
to be losing my property" and her investment in it. She testified that she called
Kessinger, who instructed her to file a 60-day notice to evict Farhoomand. Caine
testified she believed she was locked out of the Juniper property around December 10,
2010, maybe December 8, 2010, and Farhoomand terminated his doctor/patient
relationship with her on December 8, 2010.
The Jury's Verdicts and Posttrial Motions
The jury returned eight special verdicts on the parties' causes of action, making
unanimous special findings in Farhoomand's favor on his breach of contract,
concealment/breach of fiduciary duty, false promise, negligent misrepresentation and
intentional misrepresentation causes of action.7 It likewise made findings in
7 In part, the jury found that the parties had entered into a contract, Farhoomand did all or substantially all of the significant things the contract required him to do, Caine had failed to do something the contract required her to do, and Farhoomand was harmed by her failure. It found Caine owed Farhoomand a fiduciary duty but failed to disclose a material fact she should have disclosed, deceiving Farhoomand and causing him financial damage. The jury found Caine made an important promise and false representation to 13
Farhoomand's favor on the causes of action in Caine's cross-complaint for financial elder
abuse, intentional infliction of emotional distress, and conversion. The jurors left blank
the lines for past and future noneconomic damages, and the court confirmed during
polling that the jury intended to award zero damages on those items.
In June 2013, the court entered judgment in Farhoomand's favor on his first
amended complaint and Caine's cross-complaint, granting specific performance of the
contract for the Juniper property's transfer from Caine to Farhoomand. The judgment
required turnover of the grant deed to the court, release of the funds held in trust to Caine,
and payments of $3,150 by Farhoomand to Caine until the note was paid in full. The
judgment stated it was to be amended or supplemented to reflect costs and attorney fees.
In July 2013, Caine filed her notice of appeal from the judgment.
DISCUSSION
I. Exclusion of Marijuana Evidence
Caine contends the trial court abused its discretion by excluding her testimony and
other evidence regarding Farhoomand's alleged marijuana cultivation. She repeats her
contentions asserted in opposition to Farhoomand's in limine motion, and we address
each in turn below.
A. Legal Principles
"No evidence is admissible except relevant evidence." (Evid. Code, § 350.) The
Evidence Code defines relevant evidence to mean "evidence . . . having any tendency in
Farhoomand without intending to perform them, and Farhoomand relied upon her promise and representation causing him financial damage.
14
reason to prove or disprove any disputed fact that is of consequence to the determination
of the action." (Evid. Code, § 210.) "The test of relevance is whether the evidence tends
' "logically, naturally, and by reasonable inference" to establish material facts . . . .' "
(People v. Scheid (1997) 16 Cal.4th 1, 13; see also Velasquez v. Centrome, Inc. (2015)
233 Cal.App.4th 1191, 1211.) "A trial court 'is vested with wide discretion in
determining the relevance of evidence,' but it has 'no discretion to admit irrelevant
evidence.' " (Velasquez, at p. 1211.)
"[E]ven relevant evidence may be excluded under Evidence Code section 352,
which provides that the trial court 'may exclude evidence if its probative value is
substantially outweighed by the probability that its admission will (a) necessitate undue
consumption of time or (b) create substantial danger of undue prejudice, of confusing the
issues, or of misleading the jury.' In general, evidence is substantially more prejudicial
than probative if it poses an intolerable risk to the fairness of the proceedings or the
reliability of the outcome. [Citation.] Exclusion of evidence under Evidence Code
section 352 is reserved for those cases where the proffered evidence has little evidentiary
value and creates an emotional bias against the party. [Citation.] [¶] We review any
ruling by the trial court as to the admissibility of evidence for abuse of discretion.
[Citations.] We do not substitute our judgment for that of the trial court and may grant
relief only when the asserted abuse of discretion constitutes a miscarriage of justice."
(Hernandez v. County of Los Angeles (2014) 226 Cal.App.4th 1599, 1613.)
15
B. Farhoomand's Breach of Contract Claim
Caine contends the marijuana evidence was critical to show Farhoomand's breach
of the deed of trust that he sought to enforce in his breach of contract cause of action; she
points out cultivation is illegal under California law with a possible exception for
personal medical purposes with a physician's approval, and also illegal under federal law
such that Farhoomand's actions would violate "an express and material term of the deed
of trust . . . ." She maintains that if the jury had considered this evidence, they could have
decided Farhoomand's breach of this provision precluded him from succeeding on his
breach of contract claim.
The law is settled that the breach of an "important condition" to a contract may
relieve the other party from his or her obligations (Wiz Technology, Inc. v. Coopers &
Lybrand (2003) 106 Cal.App.4th 1, 12, italics added; Civ. Code, § 1439), and thus "a
plaintiff suing for breach of contract must prove [he] has performed all conditions on
[his] part or that [he] was excused from performance." (Consolidated World Investments,
Inc. v. Lido Preferred Ltd. (1992) 9 Cal.App.4th 373, 380; Fairchild v. Park (2001) 90
Cal.App.4th 919, 934.) " 'A party complaining of the breach of a contract is not entitled
to recover therefor unless he has fulfilled his obligations.' " (Wiz Technology, Inc. v.
Coopers & Lybrand, at p. 12.) Farhoomand's contract theory on which the jury was
instructed was that he and Caine had entered into an oral or implied agreement, the terms
of which were reflected in the deed of trust and other documents prepared by Kessinger,
and that Caine breached their contract by failing to record the deed and attempting to
evict him even though he did all the things required of him under their agreement. Under
16
the above principles, it was Farhoomand's burden to establish he did all or substantially
all of the significant things their contract required him to do, and he presented proof that
he made regular mortgage payments to Caine, and then to the interest-bearing account
after their relationship ended, in accord with (and mostly exceeding) the terms of the
unrecorded trust deed and amortization schedule.
Caine relies on the provision of the trust deed stating: "TO PROTECT THE
SECURITY HEREOF, TRUSTOR AGREES: (1) . . . to commit or permit no waste,
no violation of laws or covenants or conditions relating to use, alterations or
improvements . . . and do all other acts which . . . this Deed of Trust may require to
preserve this security." To demonstrate the relevance of Farhoomand's alleged marijuana
cultivation on the theory that it was a material violation of the trust deed, however, Caine
was required to show not just a violation of law, but also a resulting diminution in the
value of the property such that her security was substantially impaired. (See Miller v.
Waddingham (1891) 91 Cal. 377, 381-382 [so long as the sufficiency of the security is
unimpaired, a vendor who holds legal title to property as security for the fulfillment of a
purchase contract "has no right to disturb the vendee in any use or enjoyment which he
may make of the land. Such use and enjoyment by the vendee is a use of his own
property, and unless he thereby impairs the security, or diminishes the estate which he
received from the vendor, or the value of the land as he received it, he should not be
restrained"]; Civ. Code, § 2929 ["No person whose interest is subject to the lien of a
mortgage may do any act which will substantially impair the mortgagee's security"];
4 Miller & Starr, Cal. Real Estate (3d ed. 2011) § 10:67, p. 10-264.)
17
The probative value of the marijuana evidence on the question of whether
Farhoomand substantially performed their contract, thus turned not only on whether
Caine could establish the six seedling boxes were in fact marijuana seedlings, but also on
whether the existence of the seedlings violated the law, and whether such a violation
resulted in the property's diminished value and substantial impairment in Caine's security.
Caine made no such showing in opposition to Farhoomand's motion in limine; she
offered no proof that any lawsuit was threatened so as to jeopardize the security or that
the Juniper property's value was diminished in any way by Farhoomand's conduct. We
conclude the trial court did not abuse its discretion in excluding on relevance grounds
Caine's testimony concerning her belief Farhoomand was growing marijuana or the
photographs of the purported seedlings. Such evidence did not tend to disprove the
substantial performance element of Farhoomand's breach of contract claim.
C. Demise of the Parties' Relationship
Caine contends the marijuana evidence was "extremely probative" to explain the
demise of her relationship with Farhoomand and the reason she served him with the
eviction notice. She points out Farhoomand was permitted to recount details of her
hostility toward his girlfriend, which she denied, and she asserts she was left unable to
controvert that narrative. Caine argues that absent the marijuana evidence, the jury was
"left with the sense that Caine was an irrationally scorned and bitter woman, and
Farhoomand, a victim of her overbearing control and rage."
Based on the claims presented to the jury, we see the deterioration of Caine's and
Farhoomand's relationship, and Caine's service of the eviction notice, of tenuous
18
importance to the action. The main controversy was the parties' differing positions
concerning their contract and Farhoomand's interest in the Juniper property.
Farhoomand's claim, which was supported by abundant documentary and other evidence
including the testimony of document preparer Kessinger and Caine's realtor, was that he
and Caine had agreed Caine had sold him the Juniper property under the terms contained
in the note, deed of trust and other unrecorded documents prepared by Kessinger.
Farhoomand demonstrated he made mortgage payments to Caine and then to the interest-
bearing account in compliance with those terms. In response, Caine maintained their
agreement was different: that Farhoomand would live in the Juniper property while he
repaid her the monies he borrowed as well as rent, and she would turn the property over
to him if he met a condition precedent of paying Caine 20 percent of the $525,000
purchase price. She denied Farhoomand's payments were mortgage payments. Caine
also claimed no contract was created because she was unduly influenced and, her consent
was obtained by duress or fraud by Farhoomand. The jury received instructions on those
affirmative defenses.
It may be that evidence of Caine's belief that Farhoomand was unlawfully growing
marijuana tended to explain why she served her eviction notice on him, and countered
Farhoomand's claim that she only did so because she harbored ill will toward his
girlfriend. However, we agree with the trial court that any probative value of the
evidence on that collateral matter—particularly in view of the fact Farhoomand is a
medical doctor and the evidence his father suffered from cancer at the time—was
substantially outweighed by its unfairly prejudicial effect. Evidence of marijuana
19
cultivation would pose a great risk of allowing the jury to decide the case on purely
emotional grounds based on a general contempt for drug use. Individuals have strong
attitudes about marijuana and such evidence could lead the jury to presume Farhoomand
was a drug user and cast doubt on his character. Admission of the evidence would
unduly consume time in assessing the foundation for and reasonableness of Caine's
belief, and would have devolved into a minitrial into medical marijuana laws requiring a
showing to the jury of legal and nonlegal uses of marijuana under both California and
Federal law. For these reasons, the trial court did not abuse its discretion in concluding
the probative value of the purported marijuana evidence was substantially outweighed by
its prejudicial effect so as to preclude its admission under Evidence Code section 352.
D. Financial Elder Abuse Claim
The trial court did not abuse its discretion by concluding the marijuana evidence
did not tend to prove or disprove any disputed fact that was of consequence to Caine's
financial elder abuse cause of action. (Welf. & Inst. Code, § 15610.30.8) Citing Welfare
8 As it was defined at the time of trial in this matter, financial abuse of an elder occurs when a person: "(1) Takes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both. [¶] (2) Assists in taking, secreting, appropriating, obtaining, or retaining real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both. [¶] (3) Takes, secretes, appropriates, obtains, or retains, or assists in taking, secreting, appropriating, obtaining, or retaining, real or personal property of an elder or dependent adult by undue influence, as defined in Section 1575 of the Civil Code." (Former Welf. & Inst. Code, § 15610.30, subd. (a).) Absent intent to defraud or undue influence, a plaintiff must prove at least a " 'wrongful use' " of property. (Welf. & Inst. Code, § 15610.30, subd. (a)(1); Stebley v. Litton Loan Servicing, LLP (2011) 202 Cal.App.4th 522, 527-528.) Effective January 1, 2014, the Legislature amended Welfare and Institutions Code section 15610.30, subdivision (a)(3) to refer to a 20
and Institutions Code section 15600, subdivision (e) for the proposition that a caretaker's
abuse of alcohol or drugs can be a "factor[]" that contributes to elder abuse, neglect or
abandonment, Caine contends Farhoomand's marijuana cultivation is "effectively an
element" of her financial elder abuse claim. The contention is meritless. Even if Caine
were permitted to testify that the seedlings she observed in the closet were marijuana,
there was no direct or circumstantial evidence that Farhoomand was using or abusing
marijuana, or under the influence of marijuana at any time. More importantly, evidence
of marijuana cultivation, standing alone, is not probative on whether the person
cultivating it took or retained another person's property for wrongful use, with intent to
defraud, or by undue influence as required to prove financial abuse of an elder.
E. Prejudice
Even if we were to conclude the trial court abused its discretion in excluding the
marijuana evidence, we would hold Caine cannot show prejudice so as to compel reversal
of the judgment. In evaluating the effect of any error, we are governed by article VI,
section 13 of the California Constitution, which precludes reversal unless " 'the error
complained of has resulted in a miscarriage of justice.' " (See Cassim v. Allstate Ins. Co.
(2004) 33 Cal.4th 780, 800-802.) To determine whether a miscarriage of justice results
from the erroneous exclusion of evidence, we examine the "entire cause," including the
evidence. (Cal. Const., art. VI, § 13; Evid. Code, § 354; California Crane School, Inc. v.
broader definition of undue influence. (Stats. 2013, ch. 668, § 2; see Bounds v. Superior Court (2014) 229 Cal.App.4th 468, 479.) We presume the jury instruction on this issue was based on the prior version of the statute.
21
National Commission for Certification of Crane Operators (2014) 226 Cal.App.4th 12,
24.) "A miscarriage of justice occurs only when the reviewing court is convinced it is
reasonably probable a result more favorable to the appellant would have been reached
absent the error." (California Crane, at p. 24; Coastside Fishing Club v. California Fish
and Game Commission (2013) 215 Cal.App.4th 397, 428; P&D Consultants, Inc. v. City
of Carlsbad (2010) 190 Cal.App.4th 1332, 1348 [erroneous exclusion of evidence causes
prejudice amounting to a miscarriage of justice only if " 'a different result was probable if
the evidence had been admitted' "]; see also Evid. Code, §§ 353, 354; Code Civ. Proc.,
§ 475.) Probability in this context means merely a " 'reasonable chance, more than an
abstract possibility.' " (Cassim, at p. 800.)
It is Caine's burden to demonstrate prejudice under these standards. (Saxena v.
Goffney (2008) 159 Cal.App.4th 316, 332; Paterno v. State of California (1999) 74
Cal.App.4th 68, 105 [appellant bears the duty of spelling out in her brief exactly how the
error caused a miscarriage of justice].) " 'Prejudice is not presumed . . . .' " (Turman v.
Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 58.)
Our review of the entire record (Cassim v. Allstate Ins. Co., supra, 33 Cal.4th at
pp. 801-802), compels us to conclude that had Caine been permitted to testify about her
belief that Farhoomand was growing marijuana seedlings and admit her photographs, it
would not have changed the outcome of this trial. Farhoomand presented abundant
evidence, including Caine's own handwritten notes and telephone messages, that severely
undermined and effectively destroyed Caine's credibility on nearly every contested issue.
Independent witnesses testified that Caine had agreed to purchase the Juniper property so
22
she could in turn sell it to Farhoomand, and that Caine had approved the deed of trust and
note, preliminary change of ownership and amortization schedule without any indication
of undue influence or duress. Caine's handwritten mortgage ledgers supported
Farhoomand's claim that they had entered into a purchase contract under the terms of the
written documents. The jury rejected Caine's version of events in its detailed special
verdict findings, and we see nothing about the purported marijuana evidence that would
have changed the result of the trial. We conclude Caine has failed to establish that any
purported evidentiary error resulted in a miscarriage of justice.
II. Entry of Amended Judgment
In October 2013, several months after Caine filed her notice of appeal, the court
entered an amended judgment awarding Farhoomand costs and attorney fees. It also
added the following line to the judgment: "The Court has determined that the purchase
price by Plaintiff to Defendant of the property known as 908 Juniper Lane was
$525,000."
Caine contends her July 2013 notice of appeal divested the court of power to
amend the judgment in that manner, and even absent her notice of appeal, the court
lacked power to amend the judgment for judicial error. She is correct that the filing and
perfecting of the notice of appeal divested the court of jurisdiction to amend the
judgment. (Takahashi v. Fish & Game Com. (1947) 30 Cal.2d 719, 725 ["An appeal
removes from the jurisdiction of the trial court the subject matter of the judgment or order
appealed from, including all issues going to the validity or correctness of such judgment
or order. The trial court has no power thereafter to amend or correct the judgment or
23
order, or to vacate or to set it aside"], revd. on other grounds, Takahashi v. Fish & Game
Com. (1948) 334 U.S. 410; California State Auto. Assn. Inter-Ins. Bureau v. Jackson
(1973) 9 Cal.3d 859, 862, fn. 3; Eisenberg v. Superior Court (1924) 193 Cal. 575, 578-
579; Linstead v. Superior Court (1936) 17 Cal.App.2d 9, 12; Foggy v. Ralph F. Clark &
Associates, Inc. (1987) 192 Cal.App.3d 1204, 1211.)
The court, however, retained jurisdiction to decide postjudgment fees and costs
notwithstanding the appeal from the final judgment. (Bankes v. Lucas (1992) 9
Cal.App.4th 365, 368; see Code, Civ. Proc., § 904.1; P R Burke Corp. v. Victor Valley
"[A]n award of expenses pursuant to section [2033.420] is not a penalty. Instead,
it is designed to reimburse reasonable expenses incurred by a party in proving the truth of
a requested admission . . . such that trial would have been expedited or shortened if the
request had been admitted." (Brooks v. American Broadcasting Co. (1986) 179
Cal.App.3d 500, 509 [discussing section 2033, subdivision (o), the predecessor to section
2033.420]; accord, Stull v. Sparrow (2001) 92 Cal.App.4th 860, 865.) "[A]n award of
costs of proof for a denial of a request for admission involves the weighing of a number
of factors, such as whether the matter denied was of 'substantial importance;' whether
there was a 'reasonable basis' for the denial; whether the party making the denial knew or
should have known at the time that the requested matter was of 'substantial importance'
and was true; whether there were 'other good reasons for the denial'; and whether and to
what extent the responding party made a good faith effort otherwise to resolve the matter.
26
[Citations.] Also, unlike sanctions for discovery misconduct, costs of proof under section
2033.420 are awarded after trial; therefore, an award of such costs is not a device used by
trial courts to control pretrial proceedings. Instead, as with attorney fees and costs
awarded after judgment to a prevailing party, an award of costs of proof is a fee shifting
and cost allocation mechanism that is available against parties." (City of Glendale v.
Marcus Cable Associates, LLC, supra, 235 Cal.App.4th at p. 354.)
B. The Trial Court Retained Jurisdiction to Consider Farhoomand's Postjudgment
Motion for Cost-of-Proof Sanctions Pending Caine's Appeal
Caine contends that Farhoomand's motion for cost-of-proof sanctions was not an
act of enforcing a judgment or order but instead sought a new judgment or order. She
maintains that as a consequence, the motion was precluded under section 916 and the
court lacked authority to make additional findings pending her appeal. Caine argues that
if her appeal is successful, it would render some or all of her denials accurate and
Farhoomand's motion "an impossibility" such that Farhoomand's motion "is properly
deemed 'embraced' in or 'affected' by" the appeal and subject to the stay. She further
argues, citing Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180 (Varian),
that Farhoomand's motion is not "ancillary" to the appealed judgment; it was not a
proceeding that "could or would have occurred regardless of the outcome of the appeal."
(Id. at p. 191.) She asks us to vacate the court's order awarding Farhoomand
$294,488.05.
Section 916, subdivision (a) provides in part that "the perfecting of an appeal stays
proceedings in the trial court upon the judgment or order appealed from or upon the
27
matters embraced therein or affected thereby, including enforcement of the judgment or
order, but the trial court may proceed upon any other matter embraced in the action and
not affected by the judgment or order." "Under section 916, 'the trial court is divested of'
subject matter jurisdiction over any matter embraced in or affected by the appeal during
the pendency of that appeal. [Citation.] 'The effect of the appeal is to remove the subject
matter of the order from the jurisdiction of the lower court . . . .' [Citation.] Thus, 'that
court is without power to proceed further as to any matter embraced therein until the
appeal is determined.' " (Varian, supra, 35 Cal.4th at pp. 196-197, fn. omitted, see also
Young v. Tri-City Healthcare Dist. (2012) 210 Cal.App.4th 35, 51.) "[W]hether a matter
is 'embraced' in or 'affected' by a judgment within the meaning of section 916 depends
upon whether postjudgment trial court proceedings on the particular matter would have
any impact on the 'effectiveness' of the appeal. If so, the proceedings are stayed; if not,
the proceedings are permitted." (Elsea v. Saberi (1992) 4 Cal.App.4th 625, 629.)
However, "the pendency of an appeal does not divest the trial court of jurisdiction to
determine ancillary or collateral matters which do not affect the judgment on appeal."
(Betz v. Pankow (1993) 16 Cal.App.4th 931, 938.)
In Varian, the California Supreme Court explained that a proceeding on a trial
court matter does not have an impact on the effectiveness of a pending appeal merely
because the proceeding may impact the outcome of the appeal, or even render it moot.
(Varian, supra, 35 Cal.4th at p. 189 ["The fact that the postjudgment or postorder
proceeding may render the appeal moot is not, by itself, enough to establish that the
proceeding affects the effectiveness of the appeal and should be stayed under section
28
916"].) "[S]omething more is needed. For example, the trial court proceeding must
directly or indirectly seek to 'enforce, vacate or modify [the] appealed judgment or order.'
. . . Or the proceeding must substantially interfere with the appellate court's ability to
conduct the appeal." (Id. at pp. 189-190, fn. and citation omitted.) "A trial court . . .
affects the effectiveness of an appeal if the possible outcomes on appeal and the actual or
possible results of the proceeding are irreconcilable" or "if the very purpose of the appeal
is to avoid the need for that proceeding." (Id. at p. 190, italics added.) None of those
situations are present here.
Caine's arguments concerning the "impossibility" of Farhoomand's motion is
misplaced as it is premised on the outcome of the appeal, not the impact of the
postjudgment motion. She does not explain how Farhoomand's postjudgment motion
indirectly or directly sought to enforce, vacate or modify the appealed judgment, or
would substantially interfere with this court's ability to conduct the present appeal.
(Varian, supra, 35 Cal.4th at p. 189.) Likewise, we need not address her argument that
the motion is not ancillary because it would have occurred regardless of the appeal's
outcome. Varian makes clear that this is a separate basis to conclude a postjudgment
proceeding is permitted as ancillary or collateral. (Id. at p. 191 ["A postjudgment or
postorder proceeding is also ancillary or collateral to the appeal despite its potential
affect on the appeal, if the proceeding could or would have occurred regardless of the
outcome of the appeal"], italics added.) Because we conclude Farhoomand's motion is
not embraced in or affected by the judgment, his motion proceedings were permitted.
(Id. at p. 190.)
29
Farhoomand's motion constitutes a postjudgment proceeding to shift and allocate
costs, akin to a postjudgment motion for prevailing party attorney fees and costs, which,
as we have stated above, is not stayed under section 916 pending an appeal. (Robertson
v. Rodriguez (1995) 36 Cal.App.4th 347, 360; Bankes v. Lucas, supra, 9 Cal.App.4th at
p. 368.) A postjudgment motion seeking prevailing party attorney fees is not stayed
under section 916 even though a successful appeal may change prevailing party status
and eliminate the basis for granting fees. Because Farhoomand's motion for cost-of-proof
sanctions is not a matter embraced within or affected by this appeal, the pendency of this
appeal did not divest the trial court of jurisdiction over his motion.
C. The Trial Court Did Not Abuse its Discretion In Awarding Attorney Fees as
Cost-of-Proof Sanctions
As stated, the determination of whether Caine had reasonable grounds to believe
she would prevail on the issues and the amount of expenses are all within the sound
discretion of the trial court. (See Brooks v. American Broadcasting Co., supra, 179
Cal.App.3d at p. 508; City of Glendale v. Marcus Cable Associates, LLC, supra, 235
Cal.App.4th at pp. 351-352.) An abuse of discretion occurs when it is shown the court's
ruling is arbitrary or capricious (Culbertson v. R.D. Werner Co., Inc. (1987) 190
Cal.App.3d 704, 710), or exceeds the bounds of reason. (Piscitelli v. Friedenberg (2001)
87 Cal.App.4th 953, 972; accord, Denham v. Superior Court (1970) 2 Cal.3d 557, 566
[abuse of discretion requires a showing that the trial court " ' "exceed[ed] the bounds of
reason, all of the circumstances before it being considered" ' "].) Under this deferential
30
standard of review, we must uphold the trial court's determination, even if we disagree
with it, as long as it is reasonable. (Stull v. Sparrow, supra, 92 Cal.App.4th at p. 864.)
Caine contends the trial court erred when it awarded Farhoomand substantial
attorney fees under section 2033.420. She does not challenge the notion that the
requested admissions were of substantial importance to the action, or that Farhoomand
ultimately proved them, and we conclude these issues met that test. (See Wimberly v.
Derby Cycle Corp. (1997) 56 Cal.App.4th 618, 634 ["An issue is of 'substantial
importance' if it has 'at least some direct relationship to one of the central issues in the
case, i.e., an issue which, if not proven, would have altered the results in the case' "].)
Rather, she maintains she had reasonable grounds to believe she would prevail on the
issues pertaining to the Juniper property's transfer, and reasonably denied Farhoomand's
request to admit that he did not commit financial elder abuse. Regarding the property's
transfer, Caine points out it was undisputed she did not deliver the deed to Farhoomand
or record the instruments, which invalidated the transfer and negated any intent to
transfer on her part. She argues that in view of the marijuana evidence, which she was
prevented from discussing on the eve of trial, she reasonably believed she would prevail.
The trial court did not abuse its broad discretion in this case; its ruling did not
exceed the bounds of reason. Caine ignores a vast amount of evidence contradicting her
claims and affecting her credibility, including matters within her own personal
knowledge, most of which existed before any litigation commenced, including Caine's
handwritten note to Farhoomand congratulating him and referring to the Juniper property
as "your new home," and the mortgage ledgers in Caine's handwriting reflecting
31
Farhoomand's payments to her and the total mortgage amount. Caine's own discovery
admissions explained how she reached the total principal sum of $605,000. She
disregards the testimony of her own realtor that Caine was buying the property for
Farhoomand, and Kessinger's testimony that Caine told her she was going to be
Farhoomand's lender in his purchase of the Juniper property.
As for her elder abuse claim, Caine points out that it was largely undisputed at trial
that Farhoomand borrowed nearly $100,000 from her, moved into the Juniper property
while she was living there, but asked her to leave the house and changed the locks. She
argues based on this evidence it was reasonable for her to believe she would prevail on a
claim for financial elder abuse. Again, we disagree, in view of the substantial amount of
evidence—all within Caine's personal knowledge before litigation commenced—
contradicting Caine's characterization of events. This includes evidence establishing it
was Caine who initiated the gifts and loans to Farhoomand and who directed and
controlled the sale of the Juniper property to him, Caine's note showing she willingly left
the Juniper property when Farhoomand asked if he could live alone there, and
Kessinger's testimony that she observed no undue influence or duress in connection with
the sales transaction, which she understood as Caine purchasing the Juniper property to
act as a lender in the sale to Farhoomand. The overwhelming nature of the evidence
against Caine is sufficient to show that she denied Farhoomand's requests for admission
without the requisite good faith or a reasonable basis for believing she would prevail on
Farhoomand's claims and her elder abuse claim.
32
"[I]f the trial court exercises its discretion and determines that the requirements of
the statute exist, reasonable expenses must be awarded." (Brooks v. American
Broadcasting Co., supra, 179 Cal.App.3d at p. 508; see § 2033.420, subd. (b).) Because
Caine raises only the reasonableness of her denials without challenging the specific
amount of fees requested by Farhoomand, she has not shown the court abused its
discretion in awarding Farhoomand $287,040 in attorney fees.
DISPOSITION
The judgment is reversed to the extent it declares the purchase price of the Juniper
property to be $525,000. The matter is remanded with directions that the superior court
modify the amended judgment to omit that declaration. In all other respects, the
judgment is affirmed. The parties shall bear their own costs on appeal.
O'ROURKE, J.
WE CONCUR:
HUFFMAN, Acting P. J.
IRION, J.
33
AI Brief
AI-generated · verify before citing
Holding. The court held that the trial court lacked jurisdiction to amend the judgment to include a declaration of the property's purchase price, but otherwise affirmed the judgment, including the exclusion of evidence regarding marijuana cultivation.
Issues
Did the trial court abuse its discretion by excluding evidence of marijuana cultivation under Evidence Code sections 350 and 352?
Did the trial court lack jurisdiction to enter an amended judgment declaring the property's purchase price?
Did the trial court err by awarding cost-of-proof sanctions after the notice of appeal was filed?
Disposition. Affirmed in part, reversed in part, and remanded.
Quotations verified verbatim against the opinion
“Exclusion of evidence under Evidence Code section 352 is reserved for those cases where the proffered evidence has little evidentiary value and creates an emotional bias against the party.”