Parish v. The Ohio Casualty Insurance Company CA4/2 (2022) · DecisionDepot
Parish v. The Ohio Casualty Insurance Company CA4/2
California Court of Appeal May 6, 2022 No. E075135Unpublished
Filed 5/6/22 Parish v. The Ohio Casualty Insurance Company CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
DON E. PARISH,
Plaintiff and Appellant, E075135
v. (Super.Ct.No. CIVDS1717151)
THE OHIO CASUALTY INSURANCE OPINION COMPANY,
Defendant and Respondent.
APPEAL from the Superior Court of San Bernardino County. John M. Pacheco,
Judge. Affirmed.
Law Offices of Robert B. Mobasseri, Robert B. Mobasseri and David Alan Cooper
for Plaintiff and Appellant.
Booth, Mitchel & Strange and Stacie L. Brandt for Defendant and Respondent.
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I. INTRODUCTION
In 2016, Don E. Parish (plaintiff) purchased a used vehicle from a licensed vehicle
dealer (dealer). He subsequently discovered defects in the vehicle and that the vehicle
had an unreported prior accident history. Plaintiff eventually filed a civil action against
the dealer alleging causes of action for (1) violation of the Consumers Legal Remedies
Act (Civ. Code, § 1750 et seq.; CLRA), (2) fraudulent concealment, and (3) violation of
the Song-Beverly Consumer Warranty Act (Civ. Code, § 1790 et seq.). Plaintiff also
alleged a cause of action against the dealer’s surety, Ohio Casualty Insurance Company
(surety defendant) for liability on a surety bond pursuant to Vehicle Code1 section 11711,
subdivision (a).
The dealer moved to compel arbitration, the trial court granted the dealer’s motion,
and the litigation was stayed with respect to the cause of action between plaintiff and
surety defendant. The arbitrator set the matter for an evidentiary hearing, held the
hearing in the dealer’s absence when the dealer failed to appear, and issued an award in
favor of plaintiff. The remaining cause of action against surety defendant was tried in a
court trial and resulted in a judgment in favor of surety defendant.
Plaintiff appeals from the judgment against him, arguing: (1) surety defendant
should have been precluded from relitigating any issues decided in plaintiff’s favor in the
arbitration proceeding involving the dealer under the doctrine of collateral estoppel;
(2) the trial court erred in “applying a common law fraud standard to his CLRA claim”;
1 Undesignated statutory references are to the Vehicle Code.
2
and (3) the trial court erred in determining that third-party vehicle history reports do not
qualify as a “written instrument furnished by the licensee, containing stipulated
provisions and guarantees which the person believes have been violated,” within the
meaning of section 11711, subdivision (a).
We conclude that plaintiff has forfeited any claims of error by failing to identify a
standard of review or tailor any arguments to the appropriate standard of review on
appeal. We further conclude that, even in the absence of forfeiture, the trial court did not
err in declining to apply the doctrine of collateral estoppel against a surety and did not err
in requiring plaintiff to prove actual fraud on the part of the dealer in order to recover
against a surety under section 11711, subdivision (a). Finally, in light of these
conclusions, we need not determine whether the trial court erred in its application of
section 11711, subdivision (a)’s written instrument requirement because, even assuming
the trial court erred, such error would not justify reversal of the judgment on appeal.
II. FACTS AND PROCEDURAL HISTORY
On September 5, 2017, plaintiff filed a civil complaint for damages arising out of
the purchase of a used vehicle from the dealer. Plaintiff alleged three causes of action
against the dealer, including (1) violation of the CLRA, (2) fraud, and (3) violation of the
Song-Beverly Consumer Warranty Act (Civ. Code, § 1790 et seq.). Plaintiff also alleged
a cause of action against surety defendant for liability on its bond pursuant to Vehicle
Code section 11711, subdivision (a). Surety defendant filed an answer to the complaint.
However, the dealer filed a motion to compel arbitration of all claims against it.
3
On December 6, 2017, the trial court granted the dealer’s motion to compel
arbitration and stayed the litigation with respect to the remaining claim against surety
defendant pending the arbitration proceedings.2 The dealer failed to appear at the time
set for the evidentiary hearing in the arbitration proceedings; the hearing was held
without the dealer’s participation; and the arbitrator issued an award in plaintiff’s favor.
The trial court confirmed the award against the dealer and entered judgment against the
dealer on April 5, 2019.
The cause of action against surety defendant proceeded in the trial court, and the
matter was set for trial. Surety defendant filed a motion in limine seeking to exclude
evidence of the arbitration, arbitration award, and judgment against the dealer. In
opposition to this motion and in his trial brief, plaintiff argued that surety defendant was
barred by the doctrine of collateral estoppel from relitigating any issues already decided
in arbitration. The trial court granted surety defendant’s motion but held that evidence
from the arbitration could be used for impeachment at trial.
Plaintiff was the only witness to testify in a one-day bench trial. Plaintiff testified
that he purchased a vehicle from the dealer. Plaintiff testified that, in doing so, he relied
on (1) oral assurances made by the dealer regarding the quality of the vehicle, (2) the
dealer’s internet advertisements that assured potential customers they could have “peace
of mind” because all of the dealer’s vehicles had been inspected, (3) and copies of two
vehicle history reports generated by independent third parties provided by the dealer. He
2 Plaintiff did not include the written submissions, oral record of proceedings, or written order of the trial court related to this motion as part of the record on appeal.
4
became dissatisfied with his purchase and believed the vehicle fell short of what the
dealer represented. Plaintiff would not have purchased the vehicle if he had known its
true condition.
On December 4, 2019, the trial court issued an intended statement of decision.
With respect to the cause of action pursuant to section 11711, subdivision (a), against
surety defendant, the trial court concluded that plaintiff met his burden to show loss or
damage under the statute but failed to show fraud practiced on him by the dealer or that
he was in possession of a written instrument from the dealer containing stipulations and
guarantees within the meaning of the statute. The trial court’s intended statement of
decision became final and judgment was entered in favor of surety defendant on February
3, 2020. Plaintiff appeals from this judgment.
III. DISCUSSION
A. Plaintiff Has Forfeited His Claims on Appeal by Failing To Identify Or Tailor
Arguments to Any Standard of Review
“ ‘ “Arguments should be tailored according to the applicable standard of appellate
review.” [Citation.] Failure to acknowledge the proper scope of review is a concession
of a lack of merit.’ ” (Ewald v. Nationstar Mortgage, LLC (2017) 13 Cal.App.5th 947,
948, quoting Sonic Manufacturing Technologies, Inc. v. AAE Systems, Inc. (2011)
196 Cal.App.4th 456, 465.) “ ‘Perhaps the most fundamental rule of appellate law is that
the judgment challenged on appeal is presumed correct, and it is the appellant’s burden to
Thus, “[w]hen an appellant fails to apply the appropriate standard of review, the
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argument lacks legal force” and “the appellant fails to show error in the judgment.”
(Ibid.)
Here, plaintiff’s briefs on appeal fail to identify the standard of review applicable
to any of his claims of error. Simply claiming error in the abstract without reference to
any standard of review or any argument designed to explain why, under the appropriate
standard of review, any such error requires reversal of the judgment, does not meet
plaintiff’s burden on appeal. For this reason alone, plaintiff’s claims must be deemed
forfeited on appeal, and the appeal must be resolved against plaintiff. Additionally, as
explained post, even in the absence of forfeiture, we would find no error warranting
reversal.
B. The Trial Court Did Not Err in Declining To Apply the Doctrine of Collateral
Estoppel
Plaintiff contends the trial court erred in permitting surety defendant to relitigate
issues already decided in plaintiff’s favor in the arbitration proceeding between plaintiff
and the dealer. According to plaintiff, it should have been permitted to apply the doctrine
of collateral estoppel offensively to preclude surety defendant from litigating any issues
the dealer could have litigated, but failed to, in arbitration. We disagree.
“The trial court’s application of the doctrine of collateral estoppel or issue
preclusion is a question of law subject to de novo review.” (Johnson v. GlaxoSmithKline,
Inc. (2008) 166 Cal.App.4th 1497, 1507; see Roos v. Red (2005) 130 Cal.App.4th 870,
878; see also Meridian Financial Services, Inc. v. Phan (2021) 67 Cal.App.5th 657, 684.)
Generally, the doctrine of collateral estoppel will bar relitigation of an issue where there
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has been (1) a final adjudication (2) of an identical issue (3) actually litigated and
necessarily decided in the first suit, and (4) the issue is asserted against one who was a
party in the first suit or one in privity with that party. (Meridian Financial Services, at
p. 686.)
With respect to matters litigated against a principal in arbitration, the Civil Code
expressly provides that “[a]n arbitration award rendered against a principal alone shall
not be, be deemed to be, or be utilized as, an award against his surety.” (Civ. Code,
§ 2855.) The express purpose of this provision is to apply existing law applicable to prior
judgments to arbitration awards. (Ibid.) Plaintiff acknowledges that this statute generally
precludes a prior arbitration award against a principal from being directly enforced
against a surety but claims that the statute is ambiguous as to “what additional steps must
be taken by a plaintiff” and “what, if anything, must be retried in a subsequent trial
against a surety.” Contrary to plaintiff’s characterization, the law appears well-settled on
both of these points.
First, the law is clear that in order to avoid an inconsistent judgment, the plaintiff
bears the burden of ensuring that both the principal and surety are joined in a single
action. Long before the enactment of Civil Code section 2855, the California Supreme
Court affirmed that “[a] judgment against the principal is not conclusive in a separate
action against the surety.” (Kane v. Mendenhall (1936) 5 Cal.2d 749, 751-752.) Thus, to
avoid the risk of obtaining diverging judgments in separately tried actions, both the
California Supreme Court and Courts of Appeal have cautioned that a plaintiff should
join the principal and surety in a single suit. (Kane, at p. 757; Dreher v. Fidelity &
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Casualty Co. (1957) 148 Cal.App.2d 695, 700-701; Mahana v. Alexander (1927)
88 Cal.App. 111, 116 (Mahana).)
For many years, joinder of the principal and surety in a single action was
permitted but not required. (Titus v. Woods (1920) 45 Cal.App. 541, 546 [citing former
version of Code Civ. Proc. holding that “ ‘[p]ersons severally liable upon the same
obligation . . . including . . . sureties on the same or separate instruments may all or any
of them be included in the same action at the option of the plaintiff’ ”].) However, the
Legislature has since amended the Code of Civil Procedure to require such joinder in
actions seeking liability on a bond. (Code Civ. Proc., § 996.430, subd. (a); National
Technical Systems v. Commercial Contractors, Inc. (2001) 89 Cal.App.4th 1000, 1006-
1007.) Thus, contrary to plaintiff’s characterization, the law is well settled with respect
to “what additional steps must be taken by a plaintiff.” A plaintiff must ensure joinder of
both the principal and surety in a single action in order to avoid diverging judgments or
arbitration awards.3
3 We recognize that, in this case, the trial court granted a motion to compel arbitration over plaintiff’s opposition, which created the risk of divergent outcomes with respect to the claims against the dealer and the claim against surety defendant. The Code of Civil Procedure expressly provides alternative options other than compelling arbitration in situations where “[a] party to the arbitration agreement is also a party to a pending court action . . . with a third party, arising out of the same transaction or series of related transactions[,] and there is a possibility of conflicting rulings on a common issue of law or fact.” (Code Civ. Proc., § 1281.2, subd. (c).) However, nothing in the record suggests plaintiff raised this issue in the trial court, and plaintiff has not challenged the trial court’s decision with respect to the order compelling arbitration. (Muao v. Grosvenor Properties, Ltd. (2002) 99 Cal.App.4th 1085, 1088-1089 [An order compelling arbitration can be “reviewed on appeal from the judgment entered after the arbitration is completed or in exceptional circumstances . . . by writ of mandate.”].)
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Second, the law appears equally settled that, in the event a surety is not joined in a
single action with the principal, then the surety is entitled to relitigate any issues relevant
to its defense in a subsequent trial. Our Supreme Court has unambiguously stated that
“ ‘[s]urties on a bond have a legal right to avail themselves of all defenses that would be
allowed the principal and are generally in no worse position than he would be if sued
Following this principle, the Courts of Appeal have repeatedly held that considerations of
fundamental fairness require that a surety be afforded the opportunity to litigate any
available defenses—including defenses that may have previously been unsuccessfully
litigated by a principal. (Mahana, supra, 88 Cal.App. at pp. 121-122 [surety is “entitled
to his day in court and to contest any attempt to fasten upon him an obligation he did not
assume”]; All Bay Mill & Lumber Co. v. Sur. Co. (1989) 208 Cal.App.3d 11, 17-18 [even
where principal and surety are sued in same action, surety is not bound by principal’s
default and “must be given an opportunity to be heard in defense”].)
As explained in Nat’l Tech. Sys. v. Superior Court (2002) 97 Cal.App.4th 415
(Nat’l Tech. Sys.), the “ ‘ “ ‘surety undertakes in general terms that the principal will
perform his official duty. They do not agree to be absolutely bound by any judgment
obtained against the principal . . . . They are only held for a breach of their own
obligations. It is a general principle that no party can be so held without an opportunity
to be heard in defense. This right is not divested by the fact that another party has
defended on the cause of action and has been unsuccessful. As the surety did not
stipulate that it would be absolutely bound by the judgment against the principal or
9
permit [it] to conduct the defense and be themselves responsible for the result of it, the
fact that the principal has unsuccessfully defended has no effect on their rights.’ ” ’ ” (Id.
at pp. 421-422.) Thus, it appears well established that principles of fundamental fairness
require that a surety be afforded the opportunity to participate in the litigation of any
available defenses.
Because the law recognizes that fundamental fairness requires a surety be given
the opportunity to participate and litigate any available defenses, a surety lacks the
required privity4 with its principal to permit the doctrine of collateral estoppel to be
applied in the manner urged by plaintiff. Absent privity, the doctrine of collateral
estoppel does not apply, and the trial court did not err in concluding that surety defendant
was entitled to litigate any issues relevant to its defense, even if previously litigated in
arbitration between plaintiff and the dealer.
C. Section 11711, Subdivision (a), Requires Proof of Actual Fraud by the Principal to
Recover on a Bond
Plaintiff also argues that, even if the doctrine of collateral estoppel could not be
applied offensively, the trial court “erroneously applied a common-law fraud standard to
the CLRA claim.” We agree with surety defendant that this entire argument erroneously
frames the issue. As we explain, once the issue is correctly understood, it is apparent the
4 “ ‘Privity is not susceptible of a neat definition, and determination of whether it exists is not a cut-and-dried exercise. [Citations.] In the final analysis, the determination of privity depends upon the fairness of binding [a party] with the result obtained in earlier proceedings in which it did not participate.’ ” (Citizens for Open Access etc., Tide Inc. v. Seadrift Assn (1998) 60 Cal.App.4th 1053, 1070.)
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trial court did not err in applying a common-law fraud standard to the cause of action
actually alleged against surety defendant: a claim for bond liability pursuant to
section 11711, subdivision (a).
1. Plaintiff Incorrectly Frames the Issue as Liability Under the CLRA
Plaintiff’s entire argument on appeal is focused on the question of what standard
should be employed to prove liability under the CLRA. However, the only cause of
action alleged against surety defendant in this case was one for bond liability under
section 11711, subdivision (a).
The fact that plaintiff separately alleged the dealer’s liability under the CLRA is
irrelevant. “ ‘A surety bond is not an insurance policy.’ ” (Schmitt v. Ins. Co. of N. Am.
(1991) 230 Cal.App.3d 245, 256; see Lumbermens Mutual Casualty Co. v. Agency Rent-
A-Car, Inc. (1982) 128 Cal.App.3d 764, 769; see also Cates Constructions, Inc. v. Talbot
Partners (1999) 21 Cal.4th 28, 48 [“[A] surety has no duty to protect the principal under
a motor vehicle dealer’s bond as if the principal were an insured under an insurance
policy.”].) “The bond does not insure the principal against liability.” (Schmitt, at p. 257.)
Thus, the fact that plaintiff may have a meritorious tort or contract claim against the
dealer does not in itself establish a claim against the dealer’s surety.
Instead, it is “settled that a surety is not liable for anything that extends beyond the
letter of its contract. [Citations.] The surety’s obligation is strictly construed so as not to
impose a burden not contained in or clearly inferable from the language of the contract.”
(Airlines Reporting Corp. v. United States Fidelity & Guaranty Co. (1995)
31 Cal.App.4th 1458, 1464.) Additionally, “ ‘ “[w]here a surety bond is given pursuant
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to the requirements of a particular statute, the statutory provisions are incorporated into
the bond.” ’ ” (Corby v. Gulf Ins. Co. (2004) 114 Cal.App.4th 1371, 1375.) Thus, “[t]he
liability of a surety on a bond issued in conformity with sections 11710 and 11711 is
determined from the express terms of the bond read in light of those statutes. The
statutory provisions are incorporated into the bond. Liability must be found within that
bond or not at all.” (Pierce v. Western Surety Co. (2012) 207 Cal.App.4th 83, 90.)
Here, plaintiff alleged a single cause of action against surety defendant for liability
on its bond pursuant to section 11711, subdivision (a). Plaintiff was required to prove
surety defendant’s liability on the bond under the provisions of this statute, regardless of
whether the dealer’s acts could give rise to the dealer’s separate liability under the
CLRA. The dealer is not a party to this appeal, the judgment against the dealer has not
been appealed, and a surety is not liable simply because its principal may be liable to the
plaintiff. Accordingly, plaintiff’s focus on the standard applicable to prove liability under
the CLRA—a claim that was never alleged against surety defendant—incorrectly frames
the issue on appeal.
2. The Trial Court Did Not Err in Concluding Surety Defendant’s Liability on the
Bond Required Proof of Fraud
As we have already explained, plaintiff was required to prove surety defendant’s
liability pursuant to the terms of section 11711, subdivision (a). By its very terms,
section 11711, subdivision (a), renders a surety liable for “any loss or damage by reason
of any fraud practiced on him or fraudulent representation made to him by a licensed
dealer . . . and such person has possession of a written instrument furnished by the
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licensee, containing stipulated provisions and guarantees which the person believes have
been violated by the licensee . . . .” Thus, the standard necessary to prove the dealer’s
liability under the CLRA would only be relevant if the terms “fraud” or “fraudulent
representation” as used in section 11711, subdivision (a), can be read to include any
deceptive practice giving rise to liability under the CLRA.
The proper interpretation of a statute is a matter subject to our de novo review.
(Sanchez v. State of California (2009) 179 Cal.App.4th 467, 478 [“Our interpretation of a
statute is typically subject to de novo review.”]; Upland Police Officers Assn. v. City of
Upland (2003) 111 Cal.App.4th 1294, 1301 [We “apply the de novo standard of review
in interpreting the statute.”].) We conclude that the terms “fraud” and “fraudulent
representation” as used in section 11711, subdivision (a), cannot be interpreted to
incorporate all acts that might give rise to liability under the CLRA.
First, multiple appellate decisions have construed the terms of section 11711,
subdivision (a), to require a plaintiff to prove an underlying claim for common law fraud
in order to recover under the statute. (Beverly Finance Co. v. American Casualty Co.
(1969) 273 Cal.App.2d 259, 267-268 (Beverly Finance Co.) [“[T]he words ‘fraud’ and
‘fraudulent representation’ in sections 11710 and 11711 of the Vehicle Code were
intended by the Legislature to be used in the normal meaning of fraud,” requiring proof
of an intent to deceive.]; American Air Equipment, Inc. v. Pacific Employers Ins. Co.
(1974) 37 Cal.App.3d 322, 327 (American Air Equipment) [applying normal elements of
common law fraud claim to evaluate sufficiency of evidence because “the Legislature
meant what it said when it used the words ‘fraud’ and ‘fraudulent representation’ in
365 [evaluating claim under § 11711, sub. (a), under same clear and convincing standard
of proof required for common law fraud].) While plaintiff has pointed to some instances
in which the term “fraud” has been interpreted more expansively in the context of other,
unrelated statutes, he has not cited to any cases adopting such an expansive interpretation
in the context of section 11711, subdivision (a).
Second, a surety’s liability was already established under Vehicle Code
section 11711 at the time of the CLRA’s enactment,5 and nothing in the CLRA suggests
that the Legislature intended to alter already existing forms of liability established by
statute or common law. In fact, the CLRA expressly provides that “[i]f any act or
practice proscribed under this title also constitutes a cause of action in common law or a
violation of another statute, the consumer may assert such common law or statutory cause
of action under the procedures and with the remedies provided for in such law.” (Civ.
Code, § 1752.) By its very terms, the CLRA was intended to afford a plaintiff an
additional remedy, without altering the requirements of any existing claims the plaintiff
might already have under existing law. (Ibid.; see Morgan v. AT&T Wireless Services,
Inc. (2009) 177 Cal.App.4th 1235, 1253, fn. 10.) Thus, the CLRA cannot be interpreted
5 Section 11711 of the Vehicle Code was enacted in 1959. (As amended by Stats. 1959, ch. 1827, § 7.) The CLRA was enacted in 1970. (Stats. 1970, ch. 1550, § 1.)
14
as expanding or altering the type of acts that might give rise to liability under Vehicle
Code section 11711, subdivision (a).6
Nothing in section 11711, subdivision (a), suggests that its reference to fraud
incorporates any and all acts that might violate the CLRA. While a dealer’s fraudulent
act can constitute a violation of the CLRA, that does not mean that all violations of the
CLRA rise to the level of fraud.7 The plain terms of the statute and weight of appellate
authority interpreting that statute does not support the expansive interpretation of section
11711, subdivision (a), which plaintiff seeks to apply in this case, and the trial court did
not err in requiring proof of the dealer’s fraud under a common-law standard in order to
establish surety defendant’s liability on its bond.
6 We also note that, consistent with this understanding, appellate decisions both before and after enactment of the CLRA continued to interpret section 11711, subdivision (a), to require proof of a traditional common law fraud claim in order to recover on a surety’s bond. (Beverly Finance Co., supra, 273 Cal.App.2d. at p. 268; American Air Equipment, supra, 37 Cal.App.3d. at p. 327.)
7 We recognize there are situations in which the same factual allegations might give rise to liability under both statutory schemes. “The conduct that violates [Vehicle Code] section 11711, i.e., fraud or fraudulent representation, falls within the CLRA.” (Pierce v. Western Surety Co. (2012) 207 Cal.App.4th 83, 91-92.) Thus, “plaintiffs routinely plead fraud, [unfair competition law], and CLRA claims based on similar allegations.” (Flores v. Southcoast Automotive Liquidators, Inc. (2017) 17 Cal.App.5th 841, 850; see Outboard Marine Corp. v. Superior Court (1975) 52 Cal.App.3d 30, 35-38 [plaintiff may allege both a common law fraud claim and CLRA claim based upon same facts].) However, simply because an act of actual fraud constitutes a violation of the CLRA does not render all violations of the CLRA the equivalent of actual fraud. “Civil Code section 1770 describes 24 separate acts that may constitute a CLRA violation.” (Pierce, at p. 91.) Most of these acts would not rise to the level of fraud or fraudulent representation because “ ‘[f]raud is an intentional tort’ ” (Lacher v. Superior Court (1991) 230 Cal.App.3d 1038, 1046; see Civ. Code, §§ 1709, 1710), and only two of the acts proscribed under the CLRA contain an intent requirement. (Civ. Code, §§ 1709, 1710.)
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D. Any Error with Respect to the Trial Court’s Interpretation of the Written Instrument
Requirement of Section 11711, Subdivision (a), Could Not Have Been Prejudicial
Finally, plaintiff contends the trial court misapplied the definition of written
instrument set forth in section 11711, subdivision (a). We need not resolve this question
because, even assuming the trial court erred in this regard, plaintiff could not have
suffered any prejudice warranting reversal of the judgment from such an error.
In order to establish liability under section 11711, subdivision (a), a plaintiff must
prove (1) he suffered loss or damage, (2) by reason of fraud practiced on him or a
fraudulent representation made to him by a licensed dealer, and (3) he has possession of a
written instrument furnished by the licensed dealer containing the stipulated provisions or
guarantees violated by the dealer. Plaintiff acknowledges that the written instrument
requirement is a distinct element of proof necessary to recover against a surety on a
bond.8
Here, the trial court found that plaintiff failed to prove the second element of fraud
practiced upon him by the dealer. Plaintiff’s sole challenge to this finding was premised
upon the argument that the term fraud in section 11711, subdivision (a), should be read to
include all acts that might constitute a violation of the CLRA. However, as we have
8The purpose of the written instrument requirement is to prevent “collusion between licensees at the expense of a bonding company” by requiring that the dealer provide written evidence of the fraudulent representation. (American Air Equipment, supra, 37 Cal.App.3d. at p. 326.) This, in turn, ensures that, to the extent a surety is required to pay, its right to seek indemnification from the principal is preserved. (Nat’l Tech. Sys., supra, 97 Cal.App.4th at p. 427 [“ ‘Under a surety bond, the principal is not indemnified [and] the surety can sue the principal for any sums it mut pay out to the obligee.’ ”].)
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already explained, the trial court applied the correct standard in evaluating whether
plaintiff proved fraud within the meaning of the statute. Plaintiff has not otherwise
challenged the sufficiency of the evidence to support the trial court’s finding on this
element, and this finding alone supports a judgment in favor of surety defendant.
Given this conclusion, we need not resolve the issue of whether an advertisement
or third party vehicle history report in this case might qualify as a written instrument for
purposes of section 11711, subdivision (a). Where the trial court’s finding on an
independent element of the cause of action has not been challenged on appeal and is itself
sufficient to warrant judgment in surety defendant’s favor, we need not address claims of
error with respect to findings related to other elements of the cause of action because,
even assuming the trial court erred, plaintiff could not have suffered prejudice warranting
reversal. (Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 801 [“ ‘No form of civil trial
error justifies reversal and retrial . . . where in light of the entire record, there was no
actual prejudice to the appealing party.’ ”]; Soule v. General Motors Corp. (1994)
8 Cal.4th 548, 574 [An error “generally does not warrant reversal unless there is a
reasonable probability that in the absence of the error, a result more favorable to the
appealing party would have been reached.”]; Cal. Const., art. VI, § 13.)
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IV. DISPOSITION
The judgment is affirmed. Surety defendant is to recover its costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
FIELDS J. We concur:
RAMIREZ P. J.
McKINSTER J.
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AI Brief
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Holding. The court held that a surety is not bound by an arbitration award against its principal and is entitled to litigate its own defenses, including the requirement that a plaintiff prove actual fraud to recover on a surety bond under Vehicle Code section 11711. Furthermore, the court found that the plaintiff forfeited his claims on appeal by failing to identify or tailor his arguments to the applicable standard of review.
Issues
Whether a surety is collaterally estopped from relitigating issues decided in an arbitration proceeding against its principal.
Whether a plaintiff must prove actual common-law fraud to recover against a surety under Vehicle Code section 11711, subdivision (a).
Whether the plaintiff forfeited his claims on appeal by failing to identify or apply the appropriate standard of review.