Norholm v. Cirovic CA2/6 ( 2021 )

Filed 4/22/21 Norholm v. Cirovic CA2/6
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
POUL NORHOLM et al., 2d Civil No. B308563
(Super. Ct. No. 17CV-0387)
Cross-complainants and (San Luis Obispo County)
Appellants,
v.
MICHAEL CIROVIC et al.,
Cross-defendants and
Respondents.
Norholm Builders, Inc. (Norholm Builders) and Poul
Norholm appeal on the clerk’s transcript from an order granting
respondents Michael and Maria Cirovic’s motion for new trial on
appellants’ cross-complaint.1 The jury returned a special verdict
finding in favor of appellants and awarding Norholm Builders
damages for breach of contract. Respondents claimed that the
A court reporter was not present during the trial, so there
1
is no reporter’s transcript of the proceedings.
jury had committed misconduct by including appellants’ attorney
fees in the award of damages. The trial court granted a new trial
on the ground of jury misconduct. We agree with appellants that
there was no misconduct. Accordingly, we reverse.
Procedural Background
In 2017 respondents filed a complaint against appellants
consisting of five causes of action. Appellants filed a cross-
complaint against respondents consisting of seven causes of
action. Appellants requested general damages of $18,688.50
“plus additional amounts according to proof.” They did not
separately request attorney fees. The jury returned special
verdicts in favor of appellants on respondents’ complaint and in
favor of Norholm Builders on appellants’ cross-complaint. The
jury awarded damages of $27,688.50 to Norholm Builders for
breach of contract. Judgment in this amount was entered in
favor of Norholm Builders.
Respondents claimed that the damages improperly
included an award of $20,000 for appellants’ attorney fees. After
judgment was entered, respondents filed a motion to modify “the
judgment award . . . to strike any portion of the award
attributable to attorneys fees.” In support of their motion, they
attached declarations under penalty of perjury from two jurors –
presiding juror D.P. and E.B. D.P. declared that the damages
award consisted of $7,688.50 “for outstanding amounts still owed
to” appellants plus “attorneys fees in the amount of $20,000.00.”
E.B. declared: “[T]he jury . . . calculated the amount of damages
recoverable by [appellants] to be $27,688.50, of which $7,688.50
was for the remaining balance owed on the contract, and
$20,000.00 was for attorneys fees paid by [appellants]. The
specific amounts were calculated by some of the jurors, and
2
presented to the group for approval. [¶] I do not recall any
testimony in the case stating that the attorneys fees were
$20,000.00, but at least one of the jurors was adamant that this
was the amount and should be part of the award.”
In its written opposition to the motion, Norholm Builders
argued that the jury declarations were inadmissible, the damages
award of $27,688.50 was supported by the evidence, and that
respondents “should not be able to complain of juror misconduct
regarding attorney fees when they failed to have the jury
instructed to not consider them.” Respondents had not requested
CACI No. 3964, which provides, “You must not consider, or
include as part of any award, attorney fees or expenses that the
parties incurred in bringing or defending this lawsuit.” The trial
court noted that in its opposition Norholm Builders did “not
argue that there was a contractual or statutory basis for an
award of attorney fees.”
In supplemental briefing respondents stated, “[N]o case law
had been found to allow for modification of an award ‘post-
judgment’ that involved a jury trial.” Respondents requested
that, if the trial court cannot reduce the damages award because
judgment has already been entered, the court should grant a new
trial based on jury misconduct.
In its written ruling the trial court stated: “[It] specifically
recalls [Poul] Norholm testifying on direct examination that he
had spent more than $20,000 on attorney fees as the result of this
action. The Court further recalls that [respondents’] counsel did
not object when that testimony was admitted. The Court finds
that the award was supported by the evidence presented at trial.
[¶] The Court therefore denies [respondents’] motion for a new
trial on the grounds of excessive damages or insufficiency of the
3
evidence.” “[T]he jury did not award excessive damages because
they based their award on the testimony about attorney’s fees
that was presented to them without objection.”2
However, the court concluded that the jurors’ declarations
are admissible and “clearly evidence an agreement to include
attorney fees in their verdict.” It ruled “that [respondents] have
shown juror misconduct because the jury awarded attorney fees
where there was no legal basis for their recovery.” Accordingly, it
granted respondents’ “motion for new trial.”
Standard of Review
“‘In ruling on a request for a new trial based on jury
misconduct, the trial court must undertake a three-step inquiry.
[Citation.] First, it must determine whether the affidavits
supporting the motion are admissible. (Evid.Code, § 1150.) If the
evidence is admissible, the trial court must determine whether
2 In view of the court’s ruling, we cannot affirm the order
granting a new trial on the ground of excessive damages or
insufficiency of the evidence. “On appeal from an order granting
a new trial the order shall be affirmed if it should have been
granted upon any ground stated in the motion, whether or not
specified in the order or specification of reasons, except that (a)
the order shall not be affirmed upon the ground of the
insufficiency of the evidence to justify the verdict or other
decision, or upon the ground of excessive or inadequate damages,
unless such ground is stated in the order granting the
motion . . . .” (Code Civ. Proc., § 657; see Sanchez-Corea v. Bank
of America (1985) 38 Cal.3d 892, 905 [“this court cannot affirm
the present order [granting a new trial] on grounds of
insufficiency of the evidence or excessive damages” because
neither ground “is stated in the new trial order”].)
4
the facts establish misconduct. [Citation.] Lastly, assuming
misconduct, the trial court must determine whether the
misconduct was prejudicial.’ [Citation.] . . . ‘[A] trial court has
broad discretion in ruling on each of these issues, and its rulings
will not be disturbed absent a clear abuse of discretion.’”
(Whitlock v. Foster Wheeler, LLC (2008) 160 Cal.App.4th 149,
160.)
Admissibility of Jurors’ Declarations
“Upon an inquiry as to the validity of a verdict, any
otherwise admissible evidence may be received as to statements
made, or conduct, conditions, or events occurring, either within or
without the jury room, of such a character as is likely to have
influenced the verdict improperly. No evidence is admissible to
show the effect of such statement, conduct, condition, or event
upon a juror either in influencing him to assent to or dissent from
the verdict or concerning the mental processes by which it was
determined.” (Evid. Code, § 1150, subd. (a).) Accordingly, “[a]
jury verdict cannot be impeached by evidence of the jurors'
mental processes and reasoning . . . .” (Bandana Trading Co.,
Inc. v. Quality Infusion Care, Inc. (2008) 164 Cal.App.4th 1440,
1446.)
The trial court erred and abused its discretion in
determining that juror D.P.’s declaration was admissible. It
described in conclusionary language how the jury had calculated
the amount of damages. (See Maxwell v. Powers (1994) 22
Cal.App.4th 1596, 1604 [“The juror affidavits submitted by
Maxwell recited the reasoning process the jury employed during
deliberations to arrive at its damages figures. . . . As such,
the affidavits reflected the jurors’ subjective mental processes
and constitute inadmissible evidence to impeach a
5
verdict”]; Mesecher v. County of San Diego (1992) 9 Cal.App.4th
1677, 1683 [“evidence about a jury’s ‘subjective collective mental
process purporting to show how the verdict was reached’ is
inadmissible to impeach a jury verdict”].)
Juror E.B.’s declaration, on the other hand, was admissible
to show jurors’ statements and conduct during deliberations.
(Evid. Code, § 1150, subd. (a).) E.B. declared that “one of the
jurors was adamant that” appellants had incurred attorney fees
of $20,000. “[S]ome of the jurors” made a calculation that
included the $20,000 figure in the total amount – $27,688.50 – of
recoverable damages. They “presented” this calculation “to the
group for approval.” The jurors’ presentation of the calculation,
which included attorney fees, is an admissible overt act.
“Juror declarations are admissible to the extent that they
describe overt acts constituting jury misconduct, but they are
inadmissible to the extent that they describe the effect of
any event on a juror’s subjective reasoning process.” (Barboni v.
Tuomi (2012) 210 Cal.App.4th 340, 349; see Tramell v.
McDonnell Douglas Corp. (1984) 163 Cal.App.3d 157, 172 [“The
declaration of the foreperson . . . evidenced a discussion dealing
with the specifics of attorney fees . . . . The fact that such
comments were made is overt conduct, objectively
ascertainable”]; Krouse v. Graham (1977) 19 Cal.3d 59, 80-81
(Krouse) [“if the jurors . . . actually discussed the subject of
attorneys’ fees and specifically agreed to increase the verdicts to
include such fees, such discussion and agreement would appear
to constitute matters objectively verifiable, subject to
corroboration, and thus conduct which would lie within the scope
of [Evidence Code] section 1150”].) The jury must have approved
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the $20,000 attorney fees figure because it awarded damages of
exactly $27,688.50.
No Misconduct Because the Evidence
Supported an Award of Attorney Fees
The trial court abused its discretion in concluding that a
new trial was warranted because the jury had engaged in
misconduct. Poul Norholm testified that he had incurred
attorney fees in excess of $20,000. Respondents did not object or
move to strike his testimony. “[E]vidence which is admitted in
the trial court without objection, although incompetent, should be
considered in support of that court's action . . . .” (In re Fraysher’s
Estate (1956) 47 Cal.2d 131, 135; see also In re Doran’s Estate
(1956) 138 Cal.App.2d 541, 553 [“evidence admitted
without objection or motion to strike may be considered in
support of the judgment”].) The trial court ruled: “[T]he jury did
not award excessive damages because they based their award on
the testimony about attorney’s fees that was presented to them
without objection.” “The Court finds that the award was
supported by the evidence presented at trial.”
Respondents assert: “[They] object to the unsubstantiated
statements by Appellants that any evidence was presented at
trial to support an award for attorneys fees. No court reporter
transcribed the court testimony, and the trial court relied on its
own recollections as to whether appellant Poul Norholm actually
uttered an amount for attorneys fees incurred by him. . . .
Respondents[’] legal counsel does not recall the testimony.” But
we must presume that the trial court’s findings as to Poul
Norholm’s testimony are correct. “On an appeal on
the clerk’s transcript alone, findings are presumptively correct
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[citation] and the appellate court must assume that there was
substantial evidence adduced at the trial to support the findings.”
(Berg v. Investors Real Estate Loan Co. (1962) 207 Cal.App.2d
808, 813; see also Construction Financial v. Perlite Plastering Co.
(1997) 53 Cal.App.4th 170, 179 [“It is a fundamental principle of
appellate review that the factual findings of the trial court
are presumed correct”].)
No Misconduct Because Jury Could Reasonably
Construe Instructions as Allowing Attorney Fees Award
The trial court’s finding of misconduct cannot be premised
upon the jury’s failure to follow instructions on the calculation of
damages. (See People v. Lavender (2014) 60 Cal.4th 679, 687
[“The violation of the court’s instructions constitute[s]
misconduct”].) The damages were awarded on Norholm Builders’
cause of action for breach of contract. As to such damages, the
jury was instructed as follows pursuant to CACI No. 350: “If you
decide that Norholm Builders, Inc. has proved its claim against
[respondents] for breach of contract, you also must decide how
much money will reasonably compensate Norholm Builders, Inc.
for the harm caused by the breach. This compensation is called
‘damages.’ The purpose of such damages is to put Norholm
Builders, Inc. in as good a position as it would have been if
[respondents] had performed as promised. [¶] To recover
damages for any harm, Norholm Builders, Inc. must prove that
when the contract was made, both parties knew or could
reasonably have foreseen that the harm was likely to occur in the
ordinary course of events as [a] result of the breach of the
contract. [¶] Norholm Builders, Inc. also must prove the amount
of [its] damages according to the following instructions. It does
not have to prove the exact amount of damages. . . . [¶] Norholm
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Builders, Inc. claims damages for the remaining amount due on
the contract for remodeling work for [respondents].”
The jury could have reasonably found that an award of
attorney fees was necessary to put Norholm Builders “in as good
a position as it would have been if [respondents] had performed
as promised.” If respondents had performed as promised,
Norholm Builders would not have incurred attorney fees. The
jury could also have reasonably concluded “that when the
contract was made, both parties knew or could reasonably have
foreseen that [attorney fees were] likely to [be incurred] in the
ordinary course of events as [a] result of the breach of the
contract.” Neither party could have reasonably expected that the
innocent party suffering harm as a result of the breach would sue
in propria persona.3
The jury was instructed that “Norholm Builders, Inc.
claims damages for the remaining amount due on the contract for
remodeling work for [respondents].” The instruction did not limit
the recoverable damages to this amount.
The trial court gave CACI No. 355, which provided, “To
recover damages for the breach of a contract to pay money, the
party claiming a breach must prove the amount due under the
contract.” The jury was not instructed that its award of damages
could not exceed the amount due under the contract.
Thus, by including attorney fees in its award of damages,
the jury did not violate the instructions.
3 Because Norholm Builders is a corporation, it “must be
represented by licensed counsel in proceedings before courts of
record.” (CLD Construction, Inc. v. City of San Ramon (2004) 120
Cal.App.4th 1141, 1145.)
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Krouse is Distinguishable
In granting a new trial, the trial court relied on
Krouse, supra, 19 Cal.3d 59. The court stated, “[I]t is clear, based
on Krouse, that jury consideration of attorney fees where they are
not recoverable is juror misconduct leading to a new trial.” The
trial court concluded that respondents “have shown juror
misconduct because the jury awarded attorney fees where there
was no legal basis for their recovery.”
Krouse is distinguishable. There, in support of his motion
for new trial, defendant submitted the declarations of four jurors
“alleging that ‘several jurors commented’ on their belief that
plaintiffs’ counsel would be paid one-third of the total award.”
(Krouse, supra, 19 Cal.3d at pp. 79-80.) The declarations recited
“that the award to [plaintiff] Mladinov was ‘determined’ by
adding $30,000 for legal fees to the $60,000 the jury estimated
Mladinov would require to hire a helper for 10 years.” (Id. at
p. 80.) Mladinov had sued defendant for personal injuries
sustained in a collision with defendant’s vehicle.
The trial court struck the juror declarations because they
“contained inadmissible evidence and involved the ‘mental
processes’ of the jurors.” (Krouse, supra, 19 Cal.3d at p. 80.) The
trial court denied defendant’s motion for a new trial. The
Supreme Court concluded “that the declarations were admissible,
necessitating a reconsideration [by the trial court] of defendant’s
motion for a new trial.” (Ibid.) The Supreme Court stated:
“Generally, it is clear, attorneys’ fees are not recoverable in
personal injury or wrongful death actions [citations]. An express
agreement by the jurors to include such fees in their verdict, or
extensive discussion evidencing an implied agreement to that
effect, constitutes misconduct requiring reversal.” (Id. at p. 81.)
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Unlike the present case, in Krouse (1) no evidence was introduced
as to the amount of Mladinov’s attorney fees, and (2) the trial
court did not give jury instructions on breach of contract damages
that could reasonably be construed by the jurors as authorizing
the inclusion of attorney fees in their award of damages.
Conclusion
The jury’s award of attorney fees was due to two factors:
(1) the admission of Poul Norholm’s testimony that he had
incurred attorney fees of more than $20,000, and (2) instructions
on breach of contract damages that could reasonably be construed
by the jury as authorizing an award of attorney fees. Both of
these factors were within respondents’ control. They could have
prevented the award by objecting to the question that elicited
Poul Norholm’s testimony about attorney fees or by moving to
strike his testimony and requesting that the jury be admonished
to disregard it. Respondents also could have prevented the
award by requesting that the court give CACI No. 3964 informing
the jury to “not consider, or include as part of any award,
attorney fees or expenses that the parties incurred in bringing or
defending this lawsuit.” In view of Poul Norholm’s unstricken
testimony about attorney fees, the instructions on breach of
contract damages, and respondents’ failure to request CACI No.
3964, the jury did not commit misconduct by including an award
of attorney fees in the amount of damages. The trial court
therefore abused its discretion in granting respondents’ motion
for a new trial on the ground of jury misconduct.
Disposition
The order granting respondents’ motion for a new trial is
reversed. Appellants shall recover their costs on appeal.
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NOT TO BE PUBLISHED.
YEGAN, J.
We concur:
GILBERT, P. J.
PERREN, J.
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Ginger Garrett, Judge
Superior Court County of San Luis Obispo
______________________________
Law Offices of Clay A. Schroeder and Clay A. Schroeder, for
Cross-complainants and Appellants.
Law Offices of Daniel M. McGee and Daniel M. McGee, for
Cross-defendants and Respondents.