F.W. Spencer & Son v. Harris Construction CA5 ( 2014 )

Filed 2/26/14 F.W. Spencer & Son v. Harris Construction CA5
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT
F.W. SPENCER & SON, INC.,
Consolidated Case Nos.
Plaintiff and Respondent, F064782 & F064793
v. (Super. Ct. No. 622179)
HARRIS CONSTRUCTION COMPANY, INC.,
OPINION
Defendant and Appellant.
APPEAL from a judgment of the Superior Court of Stanislaus County.
William A. Mayhew, Judge.
Lozoya & Lozoya and Frank J. Lozoya IV; Lax & Stevens and Paul A. Lax for
Defendant and Appellant.
Flynn Williams Riley, Sloan C. Bailey and Gary Sloboda for Plaintiff and
Respondent.
-ooOoo-
Harris Construction Company, Inc. (Harris) appeals a judgment awarding one
million dollars to F.W. Spencer & Son, Inc. (Spencer) in this action to recover delay
damages based on breach of contract and common counts. Harris contends the jury
verdict in Spencer’s favor resulted from the trial court’s errors in (1) severing Spencer’s
damage claims for trial after Spencer completed its case-in-chief, (2) allowing jury
instructions and a verdict form on legal theories not before the jury that served only to
confuse the jurors, (3) excluding percipient testimony from Harris’s witnesses on the
ground it constituted expert testimony and allowing Spencer’s experts to testify on the
reasonableness of any delay, (4) exhibiting bias against Harris’s trial counsel in front of
the jury, and (5) denying Harris’s new trial motion on the issue of excessive damages.
Harris further contends the trial court erred in awarding Spencer prejudgment interest
under Civil Code section 3287, subdivision (a)1 and in failing to reduce the amount of
attorney fees awarded to Spencer.
We find no merit in Harris’s arguments as to the jury’s verdict and to the award of
attorney fees. We do, however, find the trial court erred in awarding prejudgment
interest under section 3287, subdivision (a). Since Harris conceded below that
prejudgment interest was awardable under section 3287, subdivision (b), the alternative
ground on which Spencer sought prejudgment interest, we will reduce the prejudgment
interest accordingly. In all other respects, we affirm the judgment and post-judgment
order awarding attorney fees.
FACTS
In 2004, the Modesto City Schools entered into a $79,197,000 contract with
Harris, a general contractor, for the construction of James C. Enochs High School (the
Project). In June 2004, Harris entered into a subcontract with Spencer, a mechanical
contractor, to perform the plumbing and HVAC work on the Project for $7,545,000. The
scope of Spencer’s work included furnishing and installing a wet chemical fire
suppression system, plumbing, heating, ventilating and air conditioning, and a direct
digital control and energy management system. The work was to be completed in
1 Subsequent statutory references are to the Civil Code unless otherwise noted.
2.
accordance with the “Harris Baseline Schedule[,]” which Spencer assumed gave it
“reasonable time to install work in a reasonable manner with a reasonable flow.”
The Project originally was scheduled to finish on April 24, 2006. As the Project
progressed, the baseline schedule changed a number of times for a variety of reasons,
including weather and design issues. In June 2005, Harris notified Spencer that the
Project owner had granted a non-compensable time extension on the Project from April
2006 to June 24, 2006, as the “exceptionally bad” winter weather had a definite impact
on the schedule progress. Spencer signed a change order agreeing to the time extension
without additional compensation.
Spencer claimed Harris caused numerous problems on the site with supervision,
coordination of the various trades, weatherization, and access issues. When Spencer
agreed to accept the no cost change order in 2005, Spencer informed Harris of its
concerns regarding Harris’s management of the project and the financial impact to
Spencer should the schedule continue to change. In response, Harris agreed to address
financial impacts as they materialized. In February 2006, Spencer’s president, Bruce
Bonar, wrote Harris, expressing concerns that the schedule was continuing to slip.
In May 2006, Bonar wrote Harris with an estimated cost of the impact the delays
were having on Spencer. Bonar estimated the project would be at least 120 days late and,
on that basis, believed Spencer would incur additional costs of $626,847, which included
extension costs for the project manager, assistant project manager and plumbing
superintendant, and rental costs and home office overhead, as well as an efficiency factor
due to the extension/delay. Bonar also advised Harris that Spencer had incurred costs
due to lack of flow and efficiency factors which had not yet been quantified.
Most of the buildings in the Project were not substantially completed until
December 2006. The entire Project was completed on April 20, 2007, with a notice of
completion submitted on May 17, 2007.
3.
On December 21, 2006, Bonar wrote Harris with an update of the additional costs
Spencer incurred due to the delays in construction. At that time, Spencer still was
working on the Project. Bonar estimated the delay and impact costs Spencer incurred
totaled $870,969.20. Harris did not pay the claim.
This Lawsuit
Spencer filed this lawsuit against Harris in December 2007. The complaint
alleged causes of action for breach of contract, common counts, quantum meruit and to
collect on a payment bond. In its breach of contract cause of action, Spencer alleged
Harris breached the subcontract by failing and refusing to pay Spencer the value of
various items of work performed and materials Spencer supplied under the subcontract,
or for changes to the work, including delays, impacts and constructive changes. Damages
were alleged to include additional direct and indirect expenses, additional costs as a result
of Harris’s retention of funds, and amounts due under the subcontract, in a sum exceeding
$850,000 plus interest and attorney fees. In its common counts cause of action, Spencer
sought to recover the reasonable value of the labor, equipment, materials and services it
provided on the project, which it alleged exceeded $850,000.
In a hearing held on September 24, 2010, the trial court granted Spencer’s motion
to exclude the expert opinion of any witness offered by Harris, as Harris did not disclose
its expert witnesses after being served with a demand for exchange of expert witnesses.
Also at that hearing, the trial court found that Harris’s trial counsel, Deb C. Pedersdotter,
had lied to and misled the court in every statement she had made about the disclosure of
expert witnesses. Accordingly, the court decided to send a transcript of the hearing, as
well as a transcript of the August 24, 2010 hearing at which the statements were made, to
the State Bar for further investigation.2
2August 24, 2010 was to have been the first day of the jury trial. Pedersdotter
informed the court she had been involved in a traffic accident at the end of July 2010,
which led to her experiencing “some problems.” The trial was continued so Spencer
4.
Motions in Limine
A jury trial commenced on April 19, 2011.3 In pretrial proceedings, the trial court
made several in limine rulings. Based on the trial court’s earlier order precluding Harris
from offering expert testimony, Spencer filed motion in limine number one to bar Harris
from introducing testimony in support of its defenses that are matters only within the
knowledge of experts. Harris filed a written opposition, asserting the motion should be
denied and the trial court’s prior order applied “as appropriate to the evidence in fact
offered at trial.” At the hearing, Pedersdotter explained that while she agreed Harris did
not have a designated expert witness, percipient witnesses, such as Harris’s president,
should be able to testify, for example, regarding what was wrong with a claim from a
contractor’s perspective. The trial court explained its earlier ruling: “Any testimony that
you would have had to designate an expert on and did not, you are barred. That’s the
extent of my ruling.” Pedersdotter agreed that was “acceptable.” The court warned that
the ruling was “very broad” and she would be barred from having her witness testify
about the matters she was just talking about.
Pedersdotter responded that the president would not be testifying as an expert;
instead, he would be testifying regarding his evaluation of the claim as Harris’s president.
Pedersdotter explained: “If he can’t say how he evaluated the claim, I mean, that’s
percipient testimony about what happened during the course of construction and during
the evaluation of this claim. It’s not expert testimony. It’s not something that we ever
would have designated somebody for. He has to explain what Harris did and why it was
reasonable.” The court answered that it would not rule on “every little bit,” but, “to make
could file a motion to bar Harris from offering expert testimony. Pedersdotter was to
provide the court with medical reports from her two doctors within a week.
3 Subsequent references to dates are to dates in 2011 unless otherwise noted.
5.
it plain[,] [i]f I consider it as something you would have had to designate an expert on,
they’re not going to testify about it.”
Spencer’s motion in limine number three sought to exclude the testimony of any
Harris personnel regarding the reasonableness of Spencer’s bid estimate as Harris’s
person most knowledgeable was not qualified as an expert on the reasonableness of bid
estimates and Harris was barred from introducing expert testimony. In opposing the
motion, Pedersdotter argued that a blanket prohibition of any witness testimony
concerning Spencer’s bid would be improper and pointed out that should Spencer object
to the qualifications of any witness Harris might offer, it must challenge those
qualifications through the “appropriate process.” In addressing this motion at the pretrial
hearing, Pedersdotter told the court Harris was not talking about expert testimony, but
about “percipient testimony as to what the bids were.” The court responded that it had
not found “a percipient testimony exception in the expert disclosure rules.” The court
stated that percipient witnesses can testify on factual matters, but not expert ones.
Pedersdotter asserted Harris’s witnesses only were going to testify that Harris received a
set number of bids, what the bids were and that they called Spencer because its bid was
low. The court responded that was okay, but the witnesses could not testify the bid
should have been higher, and as long as they did not do that, Harris would be fine, “but
other than that, they cannot give expert opinions, and that would take an expert opinion.”
The court stated that the witnesses could testify about factual, “layperson kind of stuff.”
Spencer’s motion in limine number five sought to preclude Harris from presenting
testimony that delay damages Spencer incurred were not recoverable under the
subcontract, which provides that Spencer’s sole remedy should Harris delay, interfere
with, disrupt or hinder Spencer’s work is an extension of time to complete work and
under no circumstances would Harris be liable to pay Spencer compensation or damages
for delay. Spencer asserted in its in limine motion that this “no damages for delay”
provision is unenforceable in public works projects under Public Contracts Code
6.
section 7102, which allows for the recovery of delay damages by a subcontractor where
the contractee is responsible for the delay, and the delay is unreasonable under the
circumstances and not within the parties’ contemplation. Based on this provision,
Spencer argued Harris should be barred from arguing or offering testimony that delay
damages were not recoverable pursuant to the subcontract.
In discussing this motion at the pretrial hearing, the court stated that an expert
could testify as to whether the delay was reasonable or unreasonable, but a witness could
not interpret the clause itself. In opposing the motion, Pedersdotter argued Harris should
be able to testify about the no-damages-for-delay clause because that was the basis for the
parties’ actions. Pedersdotter agreed that the court ultimately would determine the
interpretation or application of the clause, but that would be done best with the facts
introduced. The court responded that no one would be interpreting the clause for the jury
except itself, but an expert could testify regarding the terms “reasonable” and
“unreasonable.” The court, however, recognized that they would “have to cross it when
we get there, because, you, know, I can’t make every ruling that possibly will come up in
the trial right now.” The court asked counsel not to go into this area at trial until it ruled
on the issue, and when it got to that point, counsel could come to the side bar and it
would rule at that point. Pedersdotter put the court and counsel on notice that she
planned to have Harris’s president, who oversaw the “claims process,” testify about this
subject matter. The court responded that if she was going to go into that during opening
statement, she could talk in terms of delay, but it did not want her to go into the contract
term itself. The court clarified that a witness could testify that he relied on that paragraph
in the contract, but the witness could not interpret the provision.
Harris’s Opening Statement
During her opening statement, Pedersdotter asserted that Spencer had developed
an attitude on the Project that if something went wrong, they should be compensated for
it, which was not a “contract-supported approach” to the Project. Pedersdotter pointed
7.
out that the subcontract provided that “[i]f you are delayed in the performance of the
work, we will compensate you by giving you additional time to perform. But we are not
going to give you any money.” Spencer’s counsel objected based on the discussion
during in limine motions about contract interpretation. The court overruled the objection.
After the opening statements concluded, the court explained, outside the jury’s
presence, that it overruled the objection because it had ruled in the in limine motions that
no witness was going to interpret the no-damages-for-delay clause. The court read Public
Contract Code section 7102 and stated that because the issue was raised in opening
statement, he would have to instruct the jury about this code section. Spencer’s counsel
had given the court such a proposed instruction, but the court did not think it was
complete. Accordingly, the court asked Spencer’s counsel to rewrite the instruction and
provide it to the court in the morning; if the court did not like the instruction, it would
simply read the code section to the jury. The court also invited Pedersdotter to write an
instruction if she so desired.
At the outset of trial the following day, the court explained to the jury that it had
heard about a no-damages-for-delay clause in the subcontract; it was the court’s duty to
interpret contract language for the jury; and therefore, the court would instruct them on
the contract clause in question, which had to be read in conjunction with Public Contract
Code section 7102. The court read the following: “Under California law, a no damages
for delay clause in a contract on a public works project will not bar a contractor from
recovering damages for delay where the parties sought to be charged for the delay was
[sic] responsible for the delay, and where the delay is unreasonable, under the
circumstances. And where the delay was not within the contemplation of the parties at
the time the parties entered into the contract in question.”4 The record is silent regarding
4The court’s instruction was not the same as the one Spencer proposed, which
read: “Under California law, a ‘no damages for delay’ clause in a contract on a public
works project will not bar a contractor from recovering damages for delay where the
8.
whether one or both parties prepared this instruction, whether any party objected to it, or
whether the court itself prepared it.
Evidence on Damages
By its lawsuit, Spencer sought to recover the amount Harris owed it for undisputed
but unpaid change orders, along with prompt payment penalties (the change order claim),
as well as delay and impact damages, including inefficiency costs, extra costs and extra
overhead, incurred on the Project (the delay claim). In its trial brief, Spencer itemized its
damages on the change order claim to include $120,210 for unpaid change orders and
$112,997 for penalties, and its damages on the delay claim at $803,113.
As pertinent to this appeal, three of Spencer’s witnesses testified about the delay
and impact damages, namely Bonar, Spencer’s CEO William Spencer, and expert witness
Christopher Anderson. Bonar testified he notified Harris in December 2006 that Spencer
had incurred an estimated $870,969 in delay costs. This was comprised of extension
costs for the project manager, assistant project manager and plumbing superintendent;
rental charges; four months of home office overhead; an efficiency factor for six
additional plumbers and six additional sheet metal workers on site; and additional costs
for responding to punch lists.
According to Bonar, Spencer was “out of pocket” almost $1.1 million, meaning
they spent much more on material, labor and equipment than they were paid. That
number did not include overhead or profit. Bonar testified the amount owed on the
change orders totaled $120,787, and his calculation of the impact claim was around
$860,000. Bonar confirmed, however, that this was not the precise amount Spencer was
seeking at trial, as Spencer’s expert came up with a different number. Spencer’s loss was
much bigger.
delay is unreasonable under the circumstances and not within the contemplation of the
parties.”
9.
On cross-examination, Bonar testified the amount of money he believed Spencer
was entitled to be paid by Harris in connection with all the claims in the lawsuit, not
including attorney fees and interest, was $1,232,000. That number reflected what
Spencer lost on the job, $1.1 million, plus the 12 percent markup for overhead and profit
that was part of Spencer’s original bid. Bonar testified Spencer had taken the position
with Harris it was willing to negotiate using the $870,000 delay claim without going
through a recalculation, because the number would have been much bigger. Bonar
acknowledged the expert Spencer hired calculated the impact damages as $803,000,
which number he thought Spencer was using “at this point.”
On redirect, Bonar testified that Spencer had reduced the dollar figure of its impact
claim to $803,000 based on the expert’s analysis, but, in his view, the $870,000 figure
was still a good one and his company was out a lot more than that, namely over
$1.1 million out-of-pocket. When asked if he was only seeking $803,000 for the impact
claim, Bonar responded: “We put 870 out there. We stood by the 870. When the expert
came back and came up with 803, it’s, again, as I said earlier, relatively close, and it’s a
more conservative number, but we’re sticking with that number at this point.” Bonar
testified that $870,000 of its approximately $1.4 million stop notice, served on Modesto
City Schools in April 2007, constituted Spencer’s impact claim, and in an August 2007
letter to Pedersdotter, Spencer mentioned its outstanding impact claim of $870,000,
which figure had not differed since December 2006.
Anderson, a construction management consultant who testified as an expert
witness, conducted a detailed analysis of Spencer’s cost accounting information, which
was an independent evaluation of the delay and impact damages. Based on that analysis,
he opined Spencer was entitled to delay and impact damages totaling $803,113. In
conducting his analysis, Anderson prepared a graphic comparing Spencer’s actual costs
incurred during the course of construction, $8,833,994, to the total payments it had
10.
received, $7,721.976, which resulted in an out-of-pocket loss of $1,112,018. This loss
does not include the markup Spencer planned to make on the Project.
Anderson also prepared a chart summarizing his analysis of Spencer’s delay and
impact costs. He performed his own independent calculation based on Spencer’s
accounting information to determine what he believed was the reasonable amount due
Spencer on the Project. The $803,113 figure is comprised of three components:
(1) $518,232 for labor inefficiency or loss of productivity; (2) $180,127 in delay costs,
which are time-driven costs associated with the project schedule extension; and (3) a 15
percent markup of $104,754, which percentage is based on the subcontract’s terms and is
very standard for the industry.
Anderson reached the $518,232 figure by looking at three factors from a
Mechanical Contractors Association of America (MCA) study, namely stacking of trades,
crew size inefficiency and ripple effect. Anderson explained that the MCA study
quantifies the impact in each area as either minor, a 10 percent impact; average, a
20 percent impact; or severe, a 30 percent impact. Anderson utilized the minor factor in
each area so he could be as conservative as possible. Totaling the three factors up
resulted in a 30 percent anticipated inefficiency pursuant to the MCA industry studies he
utilized based in part on his experience and review of the contemporaneous documents on
the Project. Anderson reduced the 30 percent factor to 25 percent total inefficiency, since
his goal was to be conservative in his calculations and he believed that represented a
conservative estimate. Multiplying 25 percent times the estimated total man hours spent
on the Project – 36,240 – results in an inefficiency of 9,060 man hours. He then
multiplied the 9,060 man hours by the average pay rate of $57.20 to reach a labor
inefficiency of $518,232.
The delay costs of $180,127 include time driven costs, namely labor costs for the
project and assistant project managers and plumbing superintendant, and delay rental
11.
costs. To get the contractual markup, Anderson totaled the labor inefficiency and delay
costs and multiplied that by 15 percent to get $104,754.
Anderson had reviewed Spencer’s December 2006 request for compensation,
which he said was submitted in a format that is not unusual or different than most
projects. Anderson would call the request a “change order request, in essence, where
Spencer is attempting to estimate its cost associated with the delay and impact on the
project.” He did not see anything unreasonable or unusual in the request. In Anderson’s
mind, Bonar’s request was a reasonable estimate of Spencer’s costs associated with the
delay and impact on the Project. According to Anderson, the variation between his total
of $803,000 and Spencer’s $870,000 request was due to Anderson’s methodology.
Anderson tried to rely as little as possible on estimates and to support the calculations
based on actual data. Spencer’s estimate relied on certain rates for certain people based
on Bonar’s judgment, while in preparing his estimate, Anderson extracted and used only
those costs he could reasonably support with the cost report document itself. Anderson
also believed the rates Bonar used included markup and “things of that nature[,]” whereas
his rates were bare rates, with the markup added at bottom line.
Spencer’s CEO and owner, William Spencer, also testified that the company lost
over one million dollars. He believed the company’s delay and disruption claim was
approximately $806,000. He helped look over the $870,000 figure his company had
presented to Harris, which was higher than the trial expert’s figure. When asked to
explain the difference, he responded that three people could look at anything and get a
different opinion.
Severance of Damage Claims
At the outset of the tenth day of trial, May 4, after Spencer had completed its case-
in-chief and several of Harris’s witnesses had testified, the trial court informed counsel,
outside the jury’s presence, that it was proposing, on its own motion, to “bifurcate” the
case pursuant to Code of Civil Procedure sections 1048, subdivision (b) and 592. Trial
12.
would continue only on the claim for impact or delay damages, and issues concerning
change orders, penalties and interest would be arbitrated or tried to a separate jury in the
future. The court believed this was necessary because the trial was moving slower than
anticipated. It previously had informed the parties that the court would be dark from
May 12 to June 2, therefore the jury needed to reach a verdict before Wednesday,
May 11.
The court further explained it was also concerned as a result of the conference on
proposed jury instructions and verdicts held after testimony concluded the prior day. The
court did not believe they had usable jury verdicts, despite twice having asked counsel to
submit both jury instructions and verdicts; they were due the first time just before trial
and the second time by Friday, April 29. Defense counsel, however, did not submit any
instructions until about 4 p.m. on May 3, just prior to the conference. The proposed
instructions were inadequate to instruct the jury on any issue. Noting that the jurors had
invested many days of their lives in this case and were never told the case could extend
into June, the court expressed its concern that if the case had to be finished in June, a
mistrial might result from lost jurors. The court believed that since the delay claim was
the major issue in the case, proceeding on that claim may result in a settlement of the
other claims. The court asked counsel for their thoughts at the noon break.
The trial proceeded with the continued testimony of a defense witness. At the
noon break, the court allowed counsel to address its proposal. Spencer’s counsel asked
the court to consider an alternative to bifurcation, arguing any delay in prosecuting the
case was not Spencer’s fault, as it had filed a motion for directed verdict and submitted
revised instructions and verdict forms that he believed substantially complied with the
court’s comments. Pedersdotter stated Harris was opposed to bifurcation, pointing out
that Harris had less time to present its defense than Spencer had to present its case-in-
chief. The court stated it was going to bifurcate the case because it was the only way to
13.
have a chance of finishing, and it would advise the jurors when they returned that the
only issue they would hear was delay and impact damages.
After the lunch break, but before the jury was brought in, Spencer’s counsel
restated Spencer’s objection to bifurcation. The court did not change its mind. Once the
jurors returned, the court explained to the jury it had decided to exercise its discretion
granted to it as the trial judge by the Code of Civil Procedure to bifurcate certain issues in
the case, so the only issue for the jury to decide in the trial was “whether Harris is legally
responsible for some delay or delays to Spencer. That is, delays as far as Spencer is
concerned and if so, what damages, if any, Spencer may have sustained.” The court
further explained that no one was responsible for the decision except the court.5
Jury Instructions and Verdict
After testimony concluded, the jury was instructed on two theories of recovery,
breach of contract and common counts, using CACI Nos. 303, 350, and 371. The jury
also was given CACI No. 3934, which advised that Spencer sought damages from Harris
under more than one legal theory, but each item of damage could be awarded only once,
regardless of the number of legal theories alleged. The jury also was given special
instructions regarding the issues the jury would be deciding and additional findings it
needed to make for Spencer to recover delay damages and causation.
On May 10, the jury returned a $1,000,000 verdict against Harris on a verdict form
that presented only the following question: “As to the issue of delays and impacts
presented to us, we the jury find in favor of the Plaintiff, F.W. SPENCER & SON, INC.
and against Defendant, HARRIS CONSTRUCTION COMPANY, INC. in the amount of
$__________.” Polling of the jurors revealed the verdict was 10 to 2.
5 After trial in this case concluded, the parties settled Spencer’s change order
claim. Harris agreed to pay Spencer $188,000 in exchange for a release of all claims
between the parties except Spencer’s delay/impact claim and related interest, judgment
and attorney fees from this trial.
14.
Motion for Prejudgment Interest
Two weeks after the jury’s verdict, Spencer filed and served its motion for
$384,678 in prejudgment interest pursuant to section 3287, subdivision (a) or, in the
alternative, $341,667 in prejudgment interest pursuant to section 3287, subdivision (b).
Spencer asserted it was entitled to prejudgment interest from December 21, 2006 to
May 2011 under section 3287, subdivision (a), based on the amount it claimed Harris
owed it for delay and impact damages in Bonar’s December 21, 2006 letter to Harris,
namely $870,969.20. Alternatively, Spencer asked the trial court to exercise its
discretion under section 3287, subdivision (b), to award it prejudgment interest on the
jury’s verdict of $1,000,000 from the date the complaint was filed, December 28, 2007,
to May 2011.
Two days later, May 27, Pedersdotter became ineligible to practice law because of
disciplinary proceedings unrelated to this case. On May 31, Spencer served on Harris’s
corporate offices a notice to appoint attorney pursuant to Code of Civil Procedure section
286,6 asking Harris to appoint another attorney to represent it in this action. On June 15,
Spencer served on Harris’s corporate offices a second notice to appoint attorney pursuant
to Code of Civil Procedure, section 286, along with Spencer’s motion for prejudgment
interest. Harris failed to file or serve an opposition to the motion for prejudgment
interest.
The trial court posted a tentative ruling on the motion, but a hearing was not
requested. Accordingly, the trial court confirmed the tentative ruling and issued an order
granting the motion and awarding prejudgment interest in the amount of $384,678.
6 Code of Civil Procedure section 286 provides: “When an attorney dies, or is
removed or suspended, or ceases to act as such, a party to an action, for whom he was
acting as attorney, must, before any further proceedings are had against him, be required
by the adverse party, by written notice, to appoint another attorney, or to appear in
person.”
15.
On August 9, Harris filed a substitution of attorney, substituting Frank J. Lozoya
IV in place of Pedersdotter.
New Trial Motion
As pertinent here, Harris filed a motion for new trial in which it argued a new trial
should be granted because the trial court erred in severing the delay and impact damages
after Spencer presented its case-in-chief, and then giving erroneous and ambiguous jury
instructions that allowed the jury to consider damages other than damages for delay and
impact. Harris also requested the court issue a remittitur under Code of Civil Procedure
section 662.5, subdivision (b), to reduce damages from $1,000,000 to $803,000, as
Spencer’s witnesses admitted at trial they were seeking to recover only $803,000 in delay
and impact damages. Finally, Harris asserted the trial court’s order granting prejudgment
interest was erroneous in part because Spencer “is not entitled to pre-judgment interest
until such time as the complaint was filed. Civil Code § 3287(b) and Lewis C. Nelson &
Sons, Inc. v. Clovis Unified School Dist. (2001) 90 Cal.App.4th 64, 72 (Lewis C. Nelson
& Sons). Throughout pre-trial and trial [Harris] could not determine pre-judgment
interest on its contingent unliquidated claim. In addition, under C.C.P. § 662.5(b)[,] the
court should also disallow all prejudgment interest prior to the filing of Spencer’s
complaint.”
Spencer opposed the motion. With respect to Harris’s argument regarding
prejudgment interest, Spencer argued Harris was asking the court to reconsider the
unopposed motion without satisfying the requirements under Code of Civil Procedure
section 1008 for a motion for reconsideration or justifying its tardiness in appointing
replacement counsel, noting that Harris should have raised the argument that interest
should have been calculated under section 3287, subdivision (b), in an opposition to the
original motion. In its reply, Harris reiterated its argument that prejudgment interest can
only be granted from the filing of the complaint.
16.
Following oral argument, the trial court took the matter under submission and
subsequently entered a written order denying the new trial motion.
Motion for Attorney Fees
Spencer subsequently filed a motion for attorney fees pursuant to section 1717,
based on an attorney fee provision in its subcontract with Harris. As relevant here,
Spencer sought to recover $562,344.50 in fees incurred by its trial counsel, Flynn
Williams, and $15,733 in fees and costs incurred by its prior counsel, McInerney &
Dillon (McInerney). Harris opposed the motion, arguing Flynn Williams’s fees should be
reduced because it engaged in block billing, Spencer improperly included fees in its
request that the parties had agreed in their settlement of the Change Order Claim Spencer
would not recover, and it was impossible to tell from the invoice of McInerney whether
that firm’s fees were reasonable.
In reply, Spencer argued its fees were reasonable, the fees Spencer had forfeited
were not included in its request, and an unredacted copy of McInerney’s invoice, attached
to a declaration of an attorney from Flynn Williams, showed the fees were reasonable.
Harris filed an objection to the trial court’s consideration of the unredacted invoice from
McInerney.
Following oral argument on the motion, the trial court took the matter under
submission. The trial court subsequently issued a written order reducing the fees
requested by $20,865. A formal order was entered awarding Spencer $557,212.50 in
attorney fees.
17.
DISCUSSION
I. Severance7 and Jury Instructions
Harris challenges the trial court’s decision to sever the delay claim from Spencer’s
other claims. It is within the trial court’s discretion to order severance or bifurcation of
claims. (Royal Surplus Lines Inc. Co. v. Ranger Ins. Co. (2002) 100 Cal.App.4th 193,
205.) We review the trial court’s ruling for abuse of that discretion. (Downey Savings &
Loan Assn. v. Ohio Casualty Ins. Co. (1987) 189 Cal.App.3d 1072, 1086.) The trial
court’s “ruling will not be disturbed on appeal absent a manifest abuse of discretion.”
(Ibid.) Here, the trial court decided to sever the delay claim from Spencer’s other claims
because the case was proceeding slower than anticipated and it wanted to ensure the trial
would be completed within the timeframe set out at the beginning of trial. The court
reasoned it made more sense to proceed solely on the delay claim than the other claims,
as that claim was the major portion of Spencer’s case and its resolution could lead to a
later resolution of the severed claims. These were valid considerations and the court’s
decision to sever the claims was well within its discretion.
Harris does not contend otherwise. Instead, Harris contends it was prejudiced by
the timing of the trial court’s order, made after Spencer had completed its case-in-chief,
as Harris had no way to deal with Spencer’s opening statement or “now ‘irrelevant’”
evidence Spencer had already presented to the jury. Harris further asserts it was ordered
not to revisit irrelevant facts, issues or testimony, and the severance order prevented it
7 As Spencer points out, while the trial court referred to “bifurcation” in ordering
separate trials of the delay claim and the change order claim pursuant to Code of Civil
Procedure section 1048, subdivision (b), the effect of the trial court’s order was to sever
these claims so separate trials could be held on them. (See, e.g., Bly-Magee v. Budget
Rent-A-Car Corp. (1994) 24 Cal.App.4th 318, 323 & fn. 5; Wegner, Fairbank, Epstein &
Chernow, Cal. Prac. Guide: Civil Trials and Evidence (The Rutter Group 2012) ¶ 4:327
to 4:328, p. 4-81.) Accordingly, we will refer to the court’s ruling as severance rather
than bifurcation.
18.
from being able to rebut all of Spencer’s claimed damage evidence, which went
unopposed for the jury to consider.
Harris’s argument, however, is completely devoid of any references to the record.
Harris does not cite to where in the proceedings it was prevented from producing
evidence or to facts that show the severance was prejudicial. It also does not cite to the
evidence it claims it was unable to rebut. Without adequate citations to the record, we
deem the argument forfeited. (Duarte v. Chino Community Hosp. (1999) 72 Cal.App.4th
849, 856; see also Nielsen v. Gibson (2009) 178 Cal.App.4th 318, 324 (Nielsen) [“On
appeal, we must presume the trial court’s judgment is correct. . . . [¶] . . . Thus, an
appellant must not only present an analysis of the facts and legal authority on each point
made, but must also support arguments with appropriate citations to the material facts in
the record. If he fails to do so, the argument is forfeited.”].)
Moreover, the trial court ameliorated any possible prejudice from the timing of the
severance by telling the jury when it first made the decision that the only issue for the
jury to decide was “whether Harris is legally responsible for some delay or delays to
Spencer. That is, delays as far as Spencer is concerned and if so, what damages, if any,
Spencer may have sustained.” The court further explained the decision would take
“certain issues” out of the case, allowing the case to get to the jury in time to finish it by
the following Wednesday. While instructing the jury, the trial court gave the following
special instruction: “The only issue[s] that you will be deciding in this trial are the issues
of delay and any damages that may have been caused by the delay. I have removed
certain other issues from this trial, as I have previously explained to you. The claims I
have removed will be determined in later court proceedings. Do not speculate about the
merits of the removed claims, nor discuss them in your deliberations.” (Special
Instruction No. 1.)
Harris contends this instruction was deficient because it failed to give the jury any
direction as to what specific evidence, whether as to liability or damages, that it was not
19.
to consider as a result of the severance. Harris also asserts the instruction was
insufficient in light of other instructions given, which it contends were either erroneous,
legally incomplete, or ambiguous. Specifically, Harris contends the trial court erred in
instructing the jury with (1) CACI No. 371 (Common Counts)8 because delay damages
are not recoverable under that theory, (2) CACI No. 3934 (Damages on Multiple Legal
Theories)9 because there was only one legal theory at issue, namely delay damages, and
(3) CACI No. 303 (Breach of Contract –Essential Factual Elements)10 because it did not
specifically limit the type of damages to the delay claim and allowed Spencer to recover
on a “non-delay impact claim, under different set of required elements th[a]n the three
impact/delay instructions, and allowed different damages ‘harm.’”11
8 The jury was instructed with CACI No. 371 as follows: “Spencer claims that
Harris owes it[] money . . . for labor, equipment, materials and services provided. To
establish this claim, Spencer must prove all of the following: One, that Harris requested,
by words or conduct, that Spencer provide labor, equipment, materials and services for
the benefit of Harris. Two, that Spencer provided the labor, equipment, materials and
services as requested. Three, that Harris has not paid Spencer for the labor, equipment,
materials and services. Four, the reasonable value of the labor, equipment, materials and
services that were provided.”
9The jury was instructed with CACI No. 3934 as follows: “Spencer seeks
damages from Harris under more than one legal theory. However, each item of damages
may be awarded only once, regardless of the number of legal theories.”
10 The jury was instructed with CACI No. 303 as follows: “To recover damages
from Harris for breach of contract, Spencer must prove all of the following: That
Spencer and Harris entered into a contract. That Spencer did all or substantially all of the
significant things that the contract required it to do, or that it was excused from having to
do those things[.] [T]hat all conditions required for Harris[’s] performance had
occurred[.] [T]hat Harris failed to do something that the contract required it to do, and
that Spencer was harmed by that failure.”
11 In making these arguments, Harris is operating under the misconception that a
claim for delay damages constitutes a separate and distinct cause of action from breach of
contract or common counts. The term “delay damages,” however, refers to consequential
damages recoverable on a breach of contract claim that stem from the defendant’s delay
in performing its contractual obligations. (See Mycogen Corp. v. Monsanto Co. (2002)
28 Cal.4th 888, 906 [describing “delay damages” as “damages for delay in the
20.
Along with Special Instruction No. 1, Harris also complains about the following
special instructions: (1) an instruction setting forth the findings the jury must make for
Spencer to recover delay damages from Harris, which incorporates the elements of Public
Contract Code section 7102 (Special Instruction No. 2);12 and (2) an instruction which
states that if the jury finds Harris impacted and delayed Spencer’s work on the project, it
must determine whether the delay caused Spencer “to incur costs that it would not
otherwise have incurred except for the delay” (Special Instruction No. 3). Harris asserts
Special Instruction No. 2 is incomplete because it does not have a damage element and
Special Instruction No. 3 improperly fails to use the word “unreasonable” with regard to
impact or delay, fails to state what damages may be recovered because of the delay, and
uses the word “costs.”
Harris asserts it was substantially prejudiced by the above CACI and special jury
instructions because they were vague and ambiguous. Harris explains the “failure to
clarify” what liability and damages evidence the jury could consider “left a substantial
and huge ambiguity wherein the jury could (and given the verdict itself – did) speculate
commencement of the defendant’s performance”]; accord Lambert v. Superior Court
(1991) 228 Cal.App.3d 383, 389 [stating that mechanic’s lien statute “does not permit a
lien for delay damages,” because “[t]he function of the mechanic’s lien is to secure
reimbursement for services and materials actually contributed to a construction site, not
to facilitate recovery of consequential damages”].) Harris does not cite any authority to
show that the delay damages sought in this case are not recoverable under the theories of
breach of contract or common counts.
12 The jury was instructed on this as follows: “In construction contracts involving
public agencies, such as the Modesto School District contract, any provision in the
contract, or any subcontracts, such as the subcontract between Spencer and Harris,
prohibiting monetary damages for delay does not bar a subcontractor, such as Spencer,
from recovering for damages for delay from a general contractor, such as Harris[,] . . . [i]f
Spencer proves the following: One, the delay or delays were not within the contemplation
of Spencer and Harris when the subcontract was executed. Two, Harris was responsible
for the delay or delays. And, three, the delay or delays were unreasonable under the
circumstances involved.”
21.
as to what liability evidence was for impact/delay claims and what evidence was
not[,] . . . [and] as to what damages evidence was for delay/impact claims and what
damages evidence was not.” Harris claims the “prejudice was obvious and substantial”
given the trial court’s use of a general verdict form that gave no direction to the jury on
how to reach its verdict, and the severance coupled with the instructions resulted in a
verdict that was greater than the delay damages Spencer’s expert admitted at trial were
$803,000. Harris reasons that, given the instructional errors, the jury was confused and
improperly included $197,000 in damages that were not part of Spencer’s delay damages.
A claim that the trial court gave an erroneous jury instruction is not reviewable on
appeal where the appellant requested the particular instruction or a substantially similar
one. Under the doctrine of invited error, a party in a civil case may not complain of error
in instructions that it has requested. (Metcalf v. County of San Joaquin (2008) 42 Cal.4th
1121, 1130-1131; Stevens v. Owens-Corning Fiberglas Corp. (1996) 49 Cal.App.4th
1645, 1653-1655; 7 Witkin, Cal. Procedure (5th ed. 2008) Trial, § 316, p. 369.) “The
invited error doctrine is based on estoppel. ‘“Where a party by his conduct induces the
commission of error, he is estopped from asserting it as a ground for reversal” on
appeal.’” (Huffman v. Interstate Brands Corp. (2004) 121 Cal.App.4th 679, 706
(Huffman), italics omitted.)
Moreover, an appellant may not claim that a jury instruction correct in law was too
general or incomplete, or lacked clarity, unless it requested an additional or qualifying
instruction. (Agarwal v. Johnson (1979) 25 Cal.3d 932, 948-949, disapproved on another
ground in White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 574, fn. 4; Conservatorship of
Gregory (2000) 80 Cal.App.4th 514, 520-521.) While under Code of Civil Procedure
section 647 an appellant need not object to an erroneous instruction for purposes of
appeal, this “‘automatic exception’ rule” does not apply where the instruction correctly
states the law and the complaint is only that it is incomplete or too general. (7 Witkin,
Cal. Procedure (5th ed. 2008) Trial, § 304, p. 356.) In the absence of any indication
22.
which party requested an instruction, we presume it was given at the appellant’s request.
(Lynch v. Birdwell (1955) 44 Cal.2d 839, 846-847; Morehouse v. Taubman Co. (1970)
5 Cal.App.3d 548, 559.)
Spencer contends that Harris is barred from challenging the CACI instructions on
appeal because it requested each of these instructions. We agree. The record, augmented
at Spencer’s request with the instructions proposed by Harris and Spencer, shows that
Harris proposed the CACI instructions which it now complains were given erroneously.13
While Harris acknowledges it presented these instructions to the court, it argues the
invited error doctrine does not apply because the instructions the court ultimately gave
were those requested by Spencer, as shown by the jury instruction number at the top of
the instructions included in the clerk’s transcript as the “Instructions Given.” This
contention is meritless, as the invited error doctrine applies where the party asserting
error acquiesces in a particular jury instruction. By proposing the exact same
instructional language the court used, Harris acquiesced in the instructions and cannot
complain about them on appeal. (See, e.g., Transport Ins. Co. v. TIG Ins. Co. (2012) 202
Cal.App.4th 984, 1000 [noting “numerous cases have held that a party who requests, or
acquiesces in, a particular jury instruction cannot appeal the giving of that instruction”].)
Harris also contends the error is not invited because it submitted its proposed
instructions before the trial court severed the delay claim from the other claims. Harris
reasons that after the court ordered severance, not all of the instructions would be used,
and asserts the court did not use Harris’s proposed instructions because Harris withdrew
them after the court issued the severance order. There is nothing in the record, however,
13 While the Common Count instruction Harris proposed was labeled “CACI 373
(Modified),” the proposed language of that instruction mirrors verbatim the CACI No.
371 instruction the trial court gave.
23.
to support the assertion that Harris withdrew its proposed instructions.14 Jury instruction
conferences were held both before and after the severance order, neither of which were
reported. It was incumbent on Harris, as the appellant, to provide a record sufficient to
support its claim of error. (Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th
121, 132.) Without a record of what occurred at the jury instruction conferences, we
cannot presume that Harris withdrew the instructions. (Faulk v. Soberanes (1961) 56
Cal.2d 466, 471 [Explaining that the appellant “has the burden to present a record
sufficiently complete to establish that the claimed errors were not invited by her, and in
the absence of such a showing she may not properly complain.”].)
This leaves the special instructions, which were not included in the packet of
proposed instructions Harris or Spencer submitted. It is unclear from the record who
drafted the special instructions. There is nothing on the special instructions themselves to
indicate whether they were requested by either party, or whether the trial court proposed
them on its own motion. It appears that a modified version of an instruction on delay and
impact damages Spencer requested became the third special instruction Harris challenges.
Since we cannot tell who requested the instructions, we may presume that Harris
requested them.
14 The record does show that after Spencer completed its case-in-chief,
Pedersdotter told the court that, unless there was a dispute about whether a contract
existed between the parties, Spencer’s alternative causes of action for quantum meruit
and common counts could be dismissed, so as not to confuse the jury with three types of
damages. Spencer’s counsel responded that would be right if Harris conceded the
contract provided the basis for entitlement, but was concerned that the construction
doctrine called “Cardinal Change” might apply to make the common counts causes of
action relevant. However, in light of the evidence, Spencer’s counsel was content to go
with the breach of contract cause of action. The court, however, denied the motion at that
point, because “they can do whatever they want in that regards,” and advised counsel to
give it some thought. The record is silent on whether any subsequent discussion occurred
on this issue or whether Pedersdotter lodged further objections regarding the common
counts claim.
24.
But even if Harris did not request the instructions, its claim of error fails because
there is nothing in the record to show that Harris requested clarification of the
instructions. Harris’s complaints about these instructions are not that they incorrectly
state the law, but rather that they are incomplete and confusing. As we have already
stated, Harris contends: Special Instruction No. 1 is deficient because it fails to specify
the evidence of liability and damages it could consider after the severance; Special
Instruction No. 2 is incomplete because it fails to include a damage element; and Special
Instruction No. 3 fails to use the word “unreasonable” with respect to delay or impact, or
state what damages may be recovered, and uses the word “costs.” The substance of
Harris’s argument is that the jury instructions needed to be clarified because they would
confuse the jury. Harris cites absolutely no legal authority to show that any of these
instructions contained incorrect statements of the law. It is Harris’s burden to present
adequate argument and legal authority on each point raised. (People v. Stanley (1995)
10 Cal.4th 764, 793 (Stanley); Guthrey v. State of California (1998) 63 Cal.App.4th
1108, 1115 (Guthrey); Muega v. Menocal (1996) 50 Cal.App.4th 868, 877 (Muega).)
Absent a request for clarification from Harris, which is not apparent on this record, the
issue is not preserved for review.
Finally, Harris also asserts the verdict form contributed to the prejudice from the
severance order. Harris contends the court erred in refusing to use a special verdict form.
Although Harris recognizes a special verdict form was not required, it asserts the court
should have used one to allow the jury to “fix the proper liability and damages ‘caused’
by the alleged ‘unreasonable’ delay.”
The argument is frivolous. Although in its brief Harris states the court refused to
use a special verdict form, there is no indication in the record of any such refusal or that
Harris objected to the verdict form that ultimately was used. Furthermore, there is no
suggestion that Harris proposed a special verdict form – there is not one in the record.
25.
And finally, Harris cites absolutely no law for its proposition that a special verdict form
was required under these circumstances.
II. Evidentiary Issues
Harris raises two evidentiary issues on appeal. Harris contends the trial court
erroneously applied its order precluding Harris from offering expert testimony when it
sustained Spencer’s objections to testimony Harris claims was regarding percipient
events, thereby resulting “in a broad elimination of evidence under the alleged umbrella
of ‘expert testimony.’” Harris also contends the trial court erred in ruling in limine that
Spencer’s experts could testify whether any delay by Harris was reasonable or
unreasonable.
We review a trial court’s ruling on the admissibility of evidence for abuse of
discretion. (San Lorenzo Valley Community Advocates for Responsible Education v. San
Lorenzo Valley Unified School Dist. (2006) 139 Cal.App.4th 1356, 1419.) A trial court
does not abuse its discretion unless it acts in an arbitrary, capricious or patently absurd
manner. (Ibid.)
A judgment or order cannot be reversed based on the erroneous admission or
exclusion of evidence unless the appellant shows that there was a miscarriage of justice.
(Evid. Code, §§ 353, subd. (b), 354; Cal. Const., art. VI, § 13.) “In civil cases, a
miscarriage of justice should be declared only when the reviewing court, after an
examination of the entire cause, including the evidence, is of the opinion that it is
reasonably probable that a result more favorable to the appealing party would have been
reached in the absence of the error.” (Huffman, supra, 121 Cal.App.4th at p. 692.)
The burden is on the appellant to establish both an abuse of discretion and a
miscarriage of justice. (Denham v. Superior Court (1970) 2 Cal.3d 557, 566.) “‘A
judgment or order of the lower court is presumed correct. All intendments and
presumptions are indulged to support it on matters as to which the record is silent, and
error must be affirmatively shown. This is not only a general principle of appellate
26.
practice but an ingredient of the constitutional doctrine of reversible error.’” (Id. at p.
564.)
We begin with the exclusion of expert testimony. Harris does not contend the trial
court erred in its ruling before trial which barred Harris from offering any expert
testimony due to its failure to disclose expert witnesses. Instead, Harris asserts the trial
court misapplied the order by excluding percipient witness testimony during trial, thereby
depriving it of “offering all the material and relevant testimony regarding what [its] own
percipient witnesses perceived, did and analyzed as well as what conduct they engaged in
regarding how the Project was run, what Spencer did, and how [it] dealt with Spencer’s
subsequent claim.”
In support of its argument, Harris cites cases in which witnesses were permitted to
testify regarding their observations and, in some cases, to give an opinion based on those
observations. (See People v. Chatman (2006) 38 Cal.4th 344, 374-376 [trial court
properly precluded psychologist who administered psychological testing to a prosecution
witness to determine her credibility from testifying about the test results and his opinion,
although he was permitted to testify that he administered the tests]; People v. Hinton
(2006) 37 Cal.4th 839, 889 [noting, without deciding, that police officer’s opinion
testimony based on his observations of the defendant’s conduct was admitted properly if
it was helpful to a clear understanding of his testimony]; People v. McAlpin (1991) 53
Cal.3d 1289, 1308-1309 [lay witnesses could testify regarding their observations of the
defendant’s conduct and their opinion based on those personal perceptions]; Manney v.
Housing Authority of City of Richmond (1947) 79 Cal.App.2d 453, 459-461 [expert
permitted to testify on cause of fire].) Harris also asserts that where there is a dispute
between parties to a contract regarding the meaning of a contract term, the parties’
conduct after the execution of the contract is admissible to ascertain their intentions,
citing Oceanside 84, Ltd. v. Fidelity Federal Bank (1997) 56 Cal.App.4th 1441, 1449-
1450.
27.
While Harris argues generally from these cases that the trial court erred in
excluding “substantial highly material percipient witness testimony” regarding various
subjects, it fails to offer any argument on specific testimony it claims the court
erroneously excluded. Instead, Harris lists a lengthy string of citations to the reporter’s
transcript without explanation or argument.
It is an appellant’s burden to establish error through reasoned arguments, not
conclusory assertions. (Moulton Niguel Water Dist. v. Colombo (2003) 111 Cal.App.4th
1210, 1215 [“Contentions are waived when a party fails to support them with reasoned
argument.”]; cf. Federation of Hillside and Canyon Associations v. City of Los Angeles
(2000) 83 Cal.App.4th 1252, 1265 [rejecting argument raised in conclusory fashion].)
We need not consider points unsupported by legal analysis or authority. (Badie v. Bank
of America (1998) 67 Cal.App.4th 779, 784–785 (Badie); In re Marriage of Nichols
(1994) 27 Cal.App.4th 661, 672–673, fn. 3.) Nor need we consider points supported by
citation to general legal principles or legal authority without application of those
principles or authorities to the case at hand. (Landry v. Berryessa Union School Dist.
(1995) 39 Cal.App.4th 691, 699 [“plaintiffs ... cit[e] only general principles governing
[reconsideration] ... motions without applying those principles to the circumstances
before the court”].) “When an appellant fails to raise a point, or asserts it but fails to
support it with reasoned argument and citations to authority, we treat the point as waived
[forfeited].” (Badie, supra, 67 Cal.App.4th at pp. 784–785.)
Harris fails to meet its appellate burden. Harris cites general principles concerning
the admission of lay testimony and opinion, but utterly fails to explain how those
principles apply to the specific testimony it claims the trial court erroneously excluded.
Harris does not analyze particular questions, objections or rulings. Although Harris lists
approximately 52 excerpts of testimony from the reporter’s transcript, citing only the
page and line numbers, it makes no coherent legal argument relevant to any particular
28.
ruling. We thus conclude Harris forfeited its argument regarding the exclusion of
percipient witness testimony on appeal. (Badie, supra, 67 Cal.App.4th at pp. 784–785.)
Harris does not fare much better in its assertion the trial court erroneously allowed
Spencer’s expert witnesses to render their opinions concerning the reasonableness of
Harris’s delay. Harris asserts the trial court’s in limine ruling on this issue improperly
permitted the experts to give opinion testimony on ultimate issues. In support of this
argument, Harris cites cases which state or apply the legal principle that experts may not
opine on pure questions of law. (See, e.g., Summers v. A.L. Gilbert Co. (1999)
69 Cal.App.4th 1155, 1178; Devin v. United Services Auto. Assn. (1992) 6 Cal.App.4th
1149, 1158 fn. 5 [expert could not opine on legal issues such as the interpretation of an
insurance policy’s scope or whether an insured reasonably could expect a defense under
the policy]; Ferreira v. Workmen’s Comp. Appeals Bd. (1974) 38 Cal.App.3d 120, 125-
126 [physician’s statement in his report that the insurance company should not be held
liable for the plaintiff’s injury because it was not industrially related was a legal
conclusion not subject to expert opinion].)
Spencer contends we must reject this argument because Harris did not object to
the admission of such testimony in the trial court. We agree Harris has forfeited this
challenge by failing to make an objection below that satisfies the requirements of
Evidence Code section 353.15 (SCI Cal. Funeral Services, Inc. v. Five Bridges
Foundation (2012) 203 Cal.App.4th 549, 563-565; see also Duronslet v. Kamps (2012)
203 Cal.App.4th 717, 725-726.) As Spencer points out, Harris has not presented a single
15 Evidence Code section 353 provides in relevant part: “A verdict or finding
shall not be set aside, nor shall the judgment or decision based thereon be reversed, by
reason of the erroneous admission of evidence unless: [¶] (a) There appears of record an
objection to or a motion to exclude or to strike the evidence that was timely made and so
stated as to make clear the specific ground of the objection or motion ....”
29.
citation to the record showing it objected to the introduction of testimony by Spencer’s
expert witnesses.
Harris contends it preserved its right to challenge the testimony because it objected
in argument during an in limine motion, citing the general rule that in certain situations
an objection made during in limine motions can satisfy the requirements of Evidence
Code section 353 and thereby preserve appellate review of the issue. (People v. Morris
(1991) 53 Cal.3d 152, 189, disapproved on another point by People v. Stansbury (1995)
9 Cal.4th. 824, 830 fn. 1; Sacramento and San Joaquin Drainage Dist. v. Reed (1963)
215 Cal.App.2d 60, 67-68.) In the portion of the reporter’s transcript Harris cites to,
however, there is no objection lodged by Harris’s counsel. The court and counsel were
discussing Spencer’s motion to preclude Harris from offering testimony that Spencer
could not recover delay damages under the subcontract. While Harris’s counsel argued
that Harris should be allowed to present evidence that it relied on the no-damages-for-
delay clause, she never objected to, or disagreed with, the court’s statements that an
expert could testify regarding whether the delay was “‘reasonable’” or “‘unreasonable,’”
or that it was for the court to interpret the clause for the jury. Without a specific
objection on that ground, the argument is forfeited.
The argument also is forfeited because it is conclusory without meaningful legal
analysis. Harris cites general principles concerning the limits of expert opinion, but
completely fails to explain how those principles apply to the specific testimony it claims
the trial court should not have admitted. Harris does not analyze particular questions,
objections or rulings. Although Harris lists approximately 27 excerpts of testimony from
the reporter’s transcript, citing only the page and line numbers, it makes no coherent legal
argument relevant to any particular testimony or ruling. We thus conclude Harris
forfeited its argument regarding the admission of expert testimony on appeal. (Badie,
supra, 67 Cal.App.4th at pp. 784–785.)
30.
Moreover, even assuming the trial court erroneously excluded or admitted
evidence, Harris fails to present facts or legal support, or make any reasoned argument, to
substantiate its assertion that it was prejudiced by these purported errors. Accordingly, it
did not meet its burden of showing there was a miscarriage of justice resulting from the
trial court’s evidentiary rulings.
III. Judicial Bias
Harris contends the trial transcript reveals that the trial judge regarded its trial
counsel, Pedersdotter, “in a most negative fashion” and “did not portend to hide or
minimize its negative and biased feelings” toward her. Harris asserts the judge made
these feelings clear to the jury in both his “regular stream of rulings” against Harris and
his negative comments, thereby undermining Harris’s position with the jury throughout
the trial. Harris cites to five passages from the trial transcript to support its contention
that reversal is warranted.
On the fourth day of trial, during Pedersdotter’s cross-examination of Bonar, the
judge suggested she point out the paragraph rather than have Bonar read the entire
subcontract; told her how to mark a defense exhibit; advised her to “forget all the chatter
here and just ask questions and go on or we’ll be here all day chattering about things”;
asked if there was “a question in there someplace” as she was making speeches; and
again told her to refer to the specific provision in the subcontract she wanted Bonar to
review. Thereafter, outside the jury’s presence, Pedersdotter told the judge she felt his
instructions to her were excessive, belittling, and undermined her authority in front of the
jurors. The judge said he was not belittling her in front of the jury and explained he was
trying to get her to do what she was supposed to do, such as to ask direct questions and
not make speeches or chatter, and even when he made suggestions, she did not correct the
problems. The judge denied berating her or being mad at her; instead, he was doing his
job of stopping improper questioning.
31.
On the sixth day of trial, a conference was held outside the jury’s presence at
Pedersdotter’s request. Pedersdotter was concerned about the tenor of the judge’s
communications with her and her client versus opposing counsel and his client. She
complained that the judge had openly expressed “tremendous impatience and
unhappiness” with her; when her client was on the stand that day, the judge interrupted
him and “chastised him”; she and her clients were concerned the judge was
communicating something to the jury; the judge was quick to “cite numerous reasons”
why defense exhibits should be kept out in a “greatly unpleasant” way; and she was
concerned the totality of these instances, and what she and her client perceived to be the
“growing animosity” toward Harris, threatened to undermine Harris’s right to a fair trial.
Spencer’s counsel said he disagreed with everything Pedersdotter said.
The judge then asked Harris’s witness, Tim Marsh, whether he thought the court
was chastising him when it made a comment to him during his testimony; Marsh
answered “No. I’m new with this.” The judge admitted having a difficult time with
Pedersdotter due to her speeches, gratuitous comments, leading of witnesses, and her
inability to accept the judge’s ruling excluding expert testimony and the instruction to the
jury on the no-damages-for-delay clause, both of which she kept trying to get around.
Pedersdotter responded it was obvious the judge disliked how she conducted herself in
the courtroom and she believed his personal feelings were coming out in front of the jury.
Pedersdotter said she would try not to commit more infractions and insisted the judge
express his criticisms and dislike outside the jury’s presence. The judge responded that
he had been fair to her and her client, and the transgressions she was talking about were
hers.
At the beginning of trial the following day outside the jury’s presence,
Pedersdotter reargued the effect of the ruling excluding expert testimony. The judge
pointed out she was relying on an overruled case. Pedersdotter said she could cite other
cases and asked if she could finish. The judge said she could. Pedersdotter responded,
32.
“But you’re shrugging your shoulders and you are exhibiting – as I typically see, you
announce your impatience and your lack of interest in whatever I have to say. So
please –” The judge interjected, “I find you to be very discourteous, but go ahead. Go
ahead. I’m listening to you.” Pedersdotter complained that the rulings on expert
testimony had taken away Harris’s ability to defend itself. She further complained that
her client was convinced there was a double standard in the case as to the court’s rulings
and asked how this could be a fair trial. She said “three client persons” who were in the
courtroom the previous day all observed that when the judge began to “dress me down in
front of them, the jury began laughing.” The judge responded that this was not the first
time she had argued this, he was confident of his ruling on the expert witness issue, and
no further argument was required because he was not going to change his mind.
Pedersdotter moved for a mistrial, which the judge denied.
At the lunch break on the tenth day of trial, which the judge set aside to discuss
with counsel his proposal to sever Spencer’s case, Pedersdotter explained her opposition
to the proposal. She then began to reargue the expert testimony issue. The judge
interrupted her, stating they were not there to discuss that issue, which had been
discussed at least ten times. When Pedersdotter said she understood that, he told her to
“be quiet about that.” Pedersdotter continued to argue on the subject; the judge warned
her, “Counsel, we’re done on that. We’re done. Be quiet. Be quiet. I’ll hold you in
contempt. I don’t want to do that. But when I tell you to be quiet, be quiet. We have
other issues we’ve got to decide. We’re not going to go back to decide every issue that’s
ever occurred in this case – ” When Pedersdotter interrupted to ask if she could have “60
seconds[,]” the judge responded, “Be quiet. I don’t want to hold you in contempt, but I
will if you don’t start obeying. You disobeyed every order I’ve given in this case.”
Judicial misconduct merits reversal of a civil judgment when it has been shown to
be prejudicial as a miscarriage of justice, or intentional and sufficiently heinous to
warrant reversal as a punishment or because it reveals bias on the part of the court.
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(Mathew Zaheri Corp. v. New Motor Vehicle Bd. (1997) 55 Cal.App.4th 1305, 1314-
1315.) Harris contends the above passages show the trial court was overly critical of its
trial counsel and conveyed that bias to the jury. While these passages, the majority of
which occurred outside the jury’s presence, show the court was exasperated with defense
counsel, it appears the genesis of the court’s actions and comments was defense counsel’s
failure to follow the court’s rulings and directions. As Spencer points out, the record
shows the trial court, in acting as it did, was exercising reasonable control over the
presentation of evidence to provide the orderly conduct of the proceedings. (Code Civ.
Proc., § 128, subd. (a)(3); Evid. Code, § 765.)
Harris has not established a miscarriage of justice, intentional or heinous
misconduct, or partiality or bias on the part of the trial court. Nor does the record in this
case reveal conduct comparable to the criminal cases on which it relies, People v. Brock
(1967) 66 Cal.2d 645, 649, 655-656 [trial judge instructed jury that, in his opinion, the
defendant’s guilt was established beyond a reasonable doubt], overruled on another point
by People v. Cook (1983) 33 Cal.3d 400, 413 fn. 13, People v. Perkins (2003)
109 Cal.App.4th 1562, 1567 [trial judge’s examination of the defendant was intemperate,
the judge acted as though he sided with the People and he prejudicially interfered with
the defense], and People v. Flores (1971) 17 Cal.App.3d 579, 583-585 [court erred in
making comments to jury, when advised the jury was divided, regarding the evidence, the
credibility of witnesses and its convictions as to the defendant’s guilt].
Finally, absent exceptional circumstances, comments of the trial judge will not
amount to reversible error, particularly where the jury was admonished to disregard the
comment. (Aguayo v. Crompton & Knowles Corp. (1986) 183 Cal.App.3d 1032, 1043;
Mercado v. Hoefler (1961) 190 Cal.App.2d 12, 23-24 [no prejudice from trial judge’s
comment during trial that the appellants were partners where the judge admonished the
jury that his statement did not constitute evidence and they were to consider only the
witnesses’ testimony, and instructed the jury that it was the sole trier of fact].) Here, the
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judge specifically instructed with CACI No. 5000, which states in part: “You must decide
what the facts are. You must consider all the evidence and then decide what you think
happened. You must decide the facts based on the evidence admitted in this trial. . . . [¶]
In reaching your verdict, do not guess what I think your verdict should be from
something I may have said or done.” The conduct of the trial judge does not warrant
reversal.
IV. Damages
Harris contends the trial court erred by denying Harris’s motion for new trial, or
alternatively remittitur, on the issue of damages. Harris argues the court should have
granted a new trial on damages or issued a remittitur under Code of Civil Procedure
section 662.5, subdivision (b) reducing the judgment from $1,000,000 to $803,000,
because Spencer “admitted at trial” that its delay and impact damages were $803,000.
Harris asserts these admissions were made by Spencer’s expert, who quantified the delay
damages as $803,000, and its president, Bonar, who testified Spencer was “sticking with”
the expert’s figure of $803,000. Without citation to any relevant authority, Harris asserts
Spencer’s admission that the impact claim was $803,000 is “binding substantial
evidence” that requires reduction of the judgment to that amount pursuant to Code of
Civil Procedure section 662.5, subdivision (b).16
If a trial court grants a new trial on the ground of excessive damages, it has
discretion to issue an order conditionally granting the new trial unless the party in whose
favor the verdict was rendered consents to a reduction of damages. (Code Civ. Proc.,
16 The sole case Harris cites in this section of its opening brief, Horsford v. Board
of Trustees of California State University (2005) 132 Cal.App.4th 359, provides no
guidance on an appeal from a denial of a motion for new trial on excessive damages, as
Horsford involved an appeal from an order conditionally granting a new trial unless the
plaintiffs consented to a remittitur of excessive damages; the decision did not address
appellate review of denials of new trial motions based on excessive damages or whether
testimony at trial constitutes a binding admission. (Id. at pp. 372, 379, 386-390.)
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§ 662.5, subd. (a)(2).)17 On a motion for new trial claiming excessive damages or
insufficient evidence (Code Civ. Proc., § 657, subds. 5-6), the trial court sits as an
independent trier of fact. (Lane v. Hughes Aircraft Co. (2000) 22 Cal.4th 405, 412.) If
the motion is granted, we apply a “highly deferential standard” (id. at p. 409), upholding
all factual determinations with “the same deference that an appellate court would
ordinarily accord a jury’s factual determinations” (id. at p. 412); pertinent evidentiary
conflicts place the new trial order “beyond review” (id. at p. 416). A denial of the
motion, on the other hand, requires deference to the jury verdict, as in any claim of
insufficient evidence. We affirm if any substantial evidence, contradicted or
uncontradicted, supports the judgment. (Western States Petroleum Assn. v. Superior
Court (1995) 9 Cal.4th 559, 571 (Western States).)
In our review of the evidence: “‘[A]ll conflicts must be resolved in favor of the
[prevailing party], and all legitimate and reasonable inferences indulged in to uphold the
[finding] if possible. It is an elementary, but often overlooked principle of law, that when
a [finding] is attacked as being unsupported, the power of the appellate court begins and
ends with a determination as to whether there is any substantial evidence, contradicted or
uncontradicted, which will support the [finding]. When two or more inferences can be
reasonably deduced from the facts, the reviewing court is without power to substitute its
deductions for those of the trial court.’” (Western States, supra, 9 Cal.4th at p. 571,
quoting Crawford v. Southern Pac. Co. (1935) 3 Cal.2d 427, 429.) The same is true for a
damages award; we affirm if the record, viewed most favorably to the award, discloses
17 In its argument, Harris cites to Code of Civil Procedure section 662.5,
subdivision (b), rather than section 662.5, subdivision (a)(2). Section 662.5, subdivision
(b) provides: “If a deadline for acceptance or rejection of the addition or reduction of
damages is not set forth in the conditional order, the deadline is 30 days from the date the
conditional order is served by the clerk of the court. Failure to respond to the order in
accordance with this section shall be deemed a rejection of the addition or reduction of
damages and a new trial limited to the issue of damages shall be granted automatically.”
36.
substantial evidence to support it. (Fassberg Construction Co. v. Housing Authority of
City of Los Angeles (2007) 152 Cal.App.4th 720, 746.)
This review necessarily places a burden on an appellant: “‘[A] reviewing court
must presume that the record contains evidence to support every finding of fact, and an
appellant who contends that some particular finding is not supported is required to set
forth in his brief a summary of the material evidence upon that issue. Unless this is done,
the error assigned is deemed to be waived. [Citation.] It is incumbent upon appellants to
state fully, with transcript references, the evidence which is claimed to be insufficient to
support the findings.’” (In re Marriage of Fink (1979) 25 Cal.3d 877, 887.) A recitation
of only the appellant’s evidence does not suffice. (Foreman & Clark Corp. v. Fallon
(1971) 3 Cal.3d 875, 881 (Foreman & Clark Corp.).) An attack on the evidence without
such briefing is entitled to no consideration when it is apparent that a substantial amount
of evidence was received on a respondent’s behalf. (Nwosu v. Uba (2004) 122
Cal.App.4th 1229, 1246.) “It is neither practical nor appropriate for us to comb the
record on [an appellant’s] behalf.” (In re Marriage of Fink, supra, 25 Cal.3d at p. 888.)
Harris attacks the damages award on the basis of the trial testimony of Spencer’s
president, expert and CEO regarding the amount of delay damages. Harris asserts
Spencer is bound by testimony that it was seeking $803,000 in delay damages at trial.
Harris, however, cites absolutely no legal authority in support of its contention that such
trial testimony constitutes what it terms “binding substantial evidence” that requires
reduction of the damage award from $1 million to $803,000. By failing to cite any legal
authority, Harris has not satisfied its appellate burden to present adequate argument and
legal authority, and we may summarily reject its claim of error. (Stanley, supra,
10 Cal.4th at p. 793; Guthrey, supra, 63 Cal.App.4th at p. 1115; Muega, supra,
50 Cal.App.4th at p. 877.)
Moreover, as Spencer points out, the testimony Harris points to does not constitute
binding judicial admissions. A “judicial admission” – generally distinguished from an
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“evidentiary admission” – is an admission of fact by a party that is treated as a “‘waiver
of proof,’” in that the admission is taken to establish the fact conclusively. (Valerio v.
Andrew Youngquist Construction (2002) 103 Cal.App.4th 1264, 1271-1272; see also
Troche v. Daley (1990) 217 Cal.App.3d 403, 409 [a “‘“judicial admission is not merely
evidence of a fact; it is a conclusive concession of the truth of a matter which has the
effect of removing it from the issues. . . . ”’”]; Walker v. Dorn (1966) 240 Cal.App.2d
118, 120.) The testimony to which Harris cites, such as Anderson’s calculation of delay
damages at $803,113 and Bonar’s testimony that he calculated delay damages of
$870,000, are not clear concessions that Spencer was entitled to recover only $803,000.
Instead, Bonar testified that Spencer’s damages were much greater than the $803,000 in
delay damages Anderson calculated and the $870,000 it asked Harris for before filing this
lawsuit. It is apparent from the trial testimony on damages that Spencer, through its
witnesses, was telling the jury that while its damages exceeded $1 million, it was asking
only that the jury award the lower figure. In no way was the testimony of Spencer’s
witnesses a judicial admission that its delay damages totaled only $803,000.
Harris contends that because the $1 million jury award exceeded the amount of
delay damages testified to by Bonar ($870,000) and Anderson ($803,000), it necessarily
included an award for the unpaid change orders that were severed from this trial. In
making this argument, Harris essentially is contending the delay damages the jury
awarded are not supported by substantial evidence. Harris, however, fails to recite all of
the material evidence on delay damages, thereby forfeiting review of the purported error.
(Foreman & Clark Corp., supra, 3 Cal.3d at p. 881.)
Alternatively, our review of the record shows there was substantial evidence to
support the jury’s award of $1 million for Spencer’s delay and impact damages. As
Spencer’s counsel explained during closing argument, there were three different ways to
calculate the delay damages in the case, all of which had been presented to the jury:
(1) Anderson’s calculation of $803,113, (2) Bonar’s calculation of $870,000, and
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(3) $1,112,018, which is what Anderson calculated Spencer paid out of pocket for labor,
materials and subcontractors, which was exclusive of any markup Spencer planned to
make on the Project. There was testimony to support each of these figures. The jury was
instructed that if it found Harris “impacted and delayed” Spencer’ s work on the project,
it was required to determine whether that delay caused Spencer “to incur costs that it
would not otherwise have incurred except for the delay.” In deciding the value of the
additional costs Spencer incurred due the impacts of Harris’s delays, the jury chose to
award Spencer $1 million, which is close to the out-of-pocket loss of $1,112,018 less the
$120,787 Bonar testified Spencer was owed on the change orders. Harris does not argue
that out-of-pocket cost is an incorrect measure of delay damages. Substantial evidence
supports the jury’s determination that Spencer’s delay damages, without regard to the
change order claim, were $1 million.
It is true, as Harris points out, that an appellate court may reverse an award of
damages “[w]hen the award, as a matter of law appears excessive, or where the recovery
is so grossly disproportionate as to raise a presumption that it is the result of passion or
prejudice, . . . ” (Cunningham v. Simpson (1969) 1 Cal.3d 301, 308-309.) Here, the
award was not excessive or disproportionate to the claimed delay damages, and therefore
does not raise a presumption the award resulted from passion or prejudice. (Little v.
Stuyvesant Life Ins. Co. (1977) 67 Cal.App.3d 451, 465-466.)
V. Prejudgment Interest
In granting Spencer’s post-trial motion for prejudgment interest, the trial court
awarded Spencer prejudgment interest pursuant to section 3287, subdivision (a), which
provides, in pertinent part: “A person who is entitled to recover damages certain, or
capable of being made certain by calculation, and the right to recover which is vested in
the person upon a particular day, is entitled also to recover interest thereon from that
day . . .”. Prejudgment interest is allowable under section 3287, subdivision (a), “‘where
the amount due plaintiff is fixed by the terms of the contract, or is readily ascertainable
39.
by reference to well-established market values. [Citations.] On the other hand, interest is
not allowable where the amount of the damages depends upon a judicial determination
based on conflicting evidence.’” (Great Western Drywall, Inc. v. Roel Construction Co.,
Inc. (2008) 166 Cal.App.4th 761, 767.) Prejudgment interest is an element of
compensatory damages, which compensates the injured party for loss of use of the money
during the prejudgment period. (Id. at pp. 767-768.)
Although Harris did not file an opposition to Spencer’s motion, it raised the
propriety of the award under this subdivision in its motion for a new trial, which the trial
court denied. On appeal, Harris contends the trial court erred in awarding prejudgment
interest under this subdivision because Spencer’s delay damages both were uncertain and
incapable of being made certain by calculation.
We first address Spencer’s contention that Harris does not have “standing” to
contest the ruling because it did not oppose the motion or seek reconsideration. Without
citation to authority, Spencer contends Harris “forfeited and waived” its opportunity to
contest the award of prejudgment interest. We disagree, as Harris raised the issue of the
amount of the award in its motion for a new trial. Since prejudgment interest is an
element of damages and may be sought as part of a motion for new trial on the ground of
inadequate damages, it follows the award of prejudgment interest may be challenged in a
motion for new trial on the ground of excessive damages. (See North Oakland Medical
Clinic v. Rogers (1998) 65 Cal.App.4th 824, 830; Code Civ. Proc., § 657, subd. 5.) That
is precisely what Harris requested in its new trial motion, namely reduction of the
prejudgment interest previously awarded.
Whether section 3287, subdivision (a) applies to a particular action is a question of
law that we review de novo. (Utility Audit Co., Inc. v. City of Los Angeles (2003)
112 Cal.App.4th 950, 956.) However, where the facts are in dispute as to whether
damages are “liquidated” so as to entitle a party to prejudgment interest under that
section, we review the court’s determination under the substantial evidence standard of
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review. (SFPP v. Burlington Northern & Santa Fe Ry. Co. (2004) 121 Cal.App.4th 452,
462.)
Here, Spencer sought prejudgment interest under section 3287, subdivision (a) on
the ground that its delay and impact costs were certain or capable of being made certain
by calculation when Spencer submitted to Harris its claim for payment in the amount of
$870,969.20 on December 21, 2006. In granting the motion based on subdivision (a), the
trial court impliedly agreed. This implied finding, however, is not supported by
substantial evidence.
“‘The test for recovery of prejudgment interest under [Civil Code] section 3287,
subdivision (a) is whether defendant actually know[s] the amount owed or from
reasonably available information could the defendant have computed that amount.
[Citation.]’ [Citations.] ‘The statute [Civil Code section 3287] does not authorize
prejudgment interest where the amount of damage, as opposed to the determination of
liability, “depends upon a judicial determination based upon conflicting evidence and is
not ascertainable from truthful data supplied by the claimant to his debtor.” [Citations.]’
[Citation.] Thus, where the amount of damages cannot be resolved except by verdict or
judgment, prejudgment interest is not appropriate.” (Wisper Corp. v. Cal. Commerce
Bank (1996) 49 Cal.App.4th 948, 960 (Wisper Corp.).)
The evidence in this case shows that the delay damages claimed in Bonar’s
December 2006 letter were an estimate, and the damages were uncertain and incapable of
being made certain within the meaning of section 3287, subdivision (a). Bonar testified
that he sent Harris the December 21, 2006 letter to update Harris on Spencer’s estimated
costs incurred due to the delays. When asked how he arrived at his first estimate of delay
costs in June 2006, Bonar explained that how he came up with the number was not an
“exact science”; he took the hourly cost for certain managers and a superintendent, along
with fixed costs, and extended them out 120 days, and then used an “efficiency factor[,]”
to reach a very conservative number. In determining the December 2006 number, Bonar
41.
started with the June 2006 estimate, changed the number of workers to reflect what
actually happened and added punch list items.
Bonar admitted the December 2006 number was an estimate, explaining that it is
“very, very difficult in a time extension claim or impact claim to determine exactly the
number of extra hours that you spent. It’s virtually impossible.” Bonar further explained
the calculation was based on an estimate of the impact of the time and the access of the
out-of-sequence work. It was not based on the number of hours spent on the project, as
this “was not a total cost claim.”
Spencer’s expert, Anderson, testified he believed Bonar’s December 2006 claim
was “reasonable and adequate for the purposes of setting forth their damages.” He also
believed the number was an estimate. Anderson explained it fell within seven percent of
his calculations and “[i]f you sat four other experts down here in this seat, they would
have four different other numbers. You’re not going to come to the same number.”
Thus the testimony of Bonar and Anderson establishes that the December 2006
delay damage figure was an estimate, it was “virtually impossible” to quantify the extra
hours upon which the figure was based, and no two people would come up with the same
figure. The letter itself shows the uncertainty of the amount claimed, as it states it is an
estimate which was based on a “conservative method,” Bonar encouraged Harris to call
to discuss rather than to demand it to pay a sum certain, and the figure was not fixed, as
Bonar stated Spencer had incurred costs due to “lack of flow” and “efficiency factors,”
which would follow.
Where damages cannot be ascertained by calculation, prejudgment interest may
not be awarded under section 3287, subdivision (a). (MacIsaac & Menke Co. v. Cardox
Corp. (1961) 193 Cal.App.2d 661, 673 (MacIsaac).) MacIsaac is instructive. There, a
subcontractor was not paid for extra work it performed on a project pursuant to an oral
modification of the original subcontract. (Id. at pp. 664-665.) After finding that the
contractor was liable to the subcontractor for the extra work, the trial court awarded the
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subcontractor the reasonable cost of the work actually performed under the existing
circumstances and conditions. (Id. at p. 671.) The trial court ultimately determined the
subcontractor was not entitled to prejudgment interest on the unpaid amount. (Id. at
p. 672.)
The Court of Appeal affirmed, noting that the additional work was not performed
under normal conditions, as there were delays, changes and deviations that substantially
increased the cost of performance and were not subject to computation. (MacIsaac,
supra, 193 Cal.App.2d at p. 673.) The appellate court further explained the extent to
which the delays and interruptions added to the cost of the work could only be
ascertained by a judicial determination, arrived at from a consideration of all the
conditions under which the work was done. (Id. at p. 673.) Since the amount of damages
awarded did not represent what the work would have cost under normal conditions, the
cost of the work could not be ascertained by computation and rendered section 3287,
subdivision (a) inapplicable. (Id. at p. 673.) Similarly, in Macomber v. State of
California (1967) 250 Cal.App.2d 391, where the plaintiff was entitled only to the
reasonable value of the extra work performed, before trial the value was based only on
the plaintiff’s estimate, and the details of the cost breakdown could only be determined
after cross-examination, prejudgment interest was improper because damages could only
be ascertained by the trial court after consideration of conflicting evidence. (Id. at p.
401.)
Here, the evidence showed that the delay damages Spencer claimed in Bonar’s
December 2006 letter could not be ascertained by computation as they were based on
estimates the accuracy of which was “virtually impossible” to determine. Spencer
contends the delay damages were capable of being made certain because the letter
supplied the data necessary for Harris to determine the amount due, citing Maurice L.
Bein, Inc. v. Housing Authority of the City of Los Angeles (1958) 157 Cal.App.2d 670(Bein). In Bein, a general contractor who had contracted with the Housing Authority to
43.
build a low-rent housing complex sued for damages arising from a delay caused by the
Housing Authority. (Bein, supra, 157 Cal.App.2d at pp. 674-675, 678.) The Court of
Appeal held the contractor was entitled to prejudgment interest because, from the
inception of its claim for damages, it had supplied the Housing Authority with detailed
statements of the data necessary to determine the amount due and the Housing Authority
never actually denied the damages claimed. (Id. at pp. 686-687.)
In contrast to Bein, in this case Spencer did not supply Harris with invoices from
which it could calculate the delay damages. Instead, it submitted Bonar’s estimation of
its delay damages, which he admitted was not an “exact science” and it was “virtually
impossible” to determine the extra hours since the claim was not a total cost claim.
Spencer asserts Harris did not dispute its calculation of the delay damages because it did
not present any testimony rebutting Bonar’s and Anderson’s computations. Harris,
however, did urge the jury in its closing statement to reject both Anderson’s calculation
as unreliable and Bonar’s estimate as Harris was never provided backup to substantiate
the amount claimed in the December 2006 letter. Spencer does not point to any invoices
or other documents it submitted to Harris from which Harris could itself determine by
calculation the delay damages. For that reason, Spencer’s reliance on Bien is misplaced.
The policy underlying the requirement for prejudgment interest “is that in
situations where the defendant could have timely paid that amount and has thus deprived
the plaintiff of the economic benefit of those funds, the defendant should therefore
compensate with appropriate interest.” (Wisper Corp., supra, 49 Cal.App.4th at p. 962.)
This is not such a case. Spencer did not present a clear and unequivocal statement of
damages and Spencer’s own expert tested that no two experts would come to the same
valuation as his. Given these facts, we conclude that the court erred in determining that
Spencer’s damages were certain or capable of being made certain prior to the jury’s
determination. The trial court should have granted a new trial on the issue of
prejudgment interest.
44.
The issue, then, is the remedy. In moving for prejudgment interest in the trial
court, Spencer alternatively requested the court exercise its discretion to award
prejudgment interest under section 3287, subdivision (b), which provides “[e]very person
who is entitled under any judgment to receive damages based upon a cause of action in
contract where the claim was unliquidated, may also recover interest thereon from a date
prior to the entry of judgment as the court may, in its discretion, fix, but in no event
earlier than the date the action was filed.” Subdivision (b) creates “a limited exception to
the prevailing general rule that prejudgment interest is not allowed on unliquidated
obligations.” (Lewis C. Nelson & Sons, supra, 90 Cal.App.4th at p. 69.) By its terms,
subdivision (b) “was designed to allow trial courts flexibility in circumstances . . . where
the exact amount of damage is in dispute.” (A & M Produce Co. v. FMC Corp. (1982)
135 Cal.App.3d 473, 496.) Spencer asked the court to award prejudgment interest under
this subdivision on the one million dollar jury verdict from the date the complaint was
filed to May 2011.
Harris contends Spencer is barred from recovering prejudgment interest under
subdivision (b) because the trial court specifically denied Spencer’s request for
prejudgment interest under subdivision (b) in its order granting the motion under
subdivision (a). The record, however, does not support this assertion, as the court’s
minute order does not specify under what subdivision the motion was granted and its
written order, while stating that Spencer’s “motion for an order awarding it prejudgment
interest is granted in the amount of $384,678[,]” does not state that it denied, or would
have denied, the motion under subdivision (b).
Spencer contends the trial court could have awarded $341,667 in prejudgment
interest under subdivision (b), calculated on the jury’s verdict from the date of complaint.
Significantly, in moving for a new trial on prejudgment interest, Harris did not argue that
prejudgment interest should not be awarded at all. Instead, Harris argued, citing
subdivision (b) and Lewis C. Nelson & Sons, that Spencer only was entitled to
45.
prejudgment interest from the date the complaint was filed, as the damages were
unliquidated. Harris presented no argument below, and makes none in its opening brief
on appeal, that Spencer should not be awarded prejudgment interest under subdivision
(b). While Harris makes a passing statement in its reply brief that there is no basis to
award interest, it presents no argument and cites no authority in support of this assertion.
Since Harris essentially conceded that the trial court should award prejudgment interest
under subdivision (b), we will order the prejudgment interest in the judgment be reduced
from $384,678 to $341,667.
VI. Attorney Fees
Harris challenges the amount of attorney fees the trial court awarded. Specifically,
Harris asserts the trial court (1) was required to reduce the fees of Spencer’s attorneys,
Flynn Williams, because the majority of their bills contained block billing, (2) should
have stricken fees requested from September 13 to November 9 based on the parties’
settlement agreement regarding the change order claims, and (3) should have disallowed
fees for Spencer’s prior counsel, McInerney, because their time records were incomplete
and not supported by a declaration.
The standard of review of an award of attorney fees after trial is abuse of
discretion. (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175.) The trial
judge is considered the best assessor of the value of professional services in his or her
court. (Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140, 148.) As a
result, the decision will not be disturbed unless it is shown that it is clearly wrong or is
inconsistent with applicable legal principles. (Ibid.) “In challenging attorney fees as
excessive because too many hours of work are claimed, it is the burden of the challenging
party to point to the specific items challenged, with a sufficient argument and citations to
the evidence. General arguments that fees claimed are excessive, duplicative, or
unrelated do not suffice.” (Premier Medical Management Systems, Inc. v. California Ins.
Guarantee Assn. (2008) 163 Cal.App.4th 550, 564.)
46.
An appellate court will reverse an award of attorney fees as excessive only where
there has been a manifest abuse of discretion. (EnPalm, LCC v. Teitler Family Trust
(2008) 162 Cal.App.4th 770, 774.) Reasonable attorney fees authorized by contract shall
be awarded to the prevailing party as “fixed by the court,” giving the trial court broad
discretion to determine the amount considered reasonable, governed by equitable
principles. (Ibid.) The pleadings, pretrial motions, and other evidence of actual work
performed by Spencer’s attorneys are before the court, and upon this evidence, the court
alone has the discretion to set the fee award. (Melnyk v. Robledo (1976) 64 Cal.App.3d
618, 624.)
In some instances, an award of attorney fees may be made solely on the basis of
the experience and knowledge of the trial judge without the need to consider any
evidence. (Fed-Mart Corp. v. Pell Enterprises, Inc. (1980) 111 Cal.App.3d 215, 226.)
Moreover, it is well established detailed billing records are not required to affirm an
attorney fees award. “In California, an attorney need not submit contemporaneous time
records in order to recover attorney fees .... Testimony of an attorney as to the number of
hours worked on a particular case is sufficient evidence to support an award of attorney
fees, even in the absence of detailed time records.” (Martino v. Denevi (1986)
182 Cal.App.3d 553, 559; see also Steiny & Co., Inc. v. California Electric Supply Co.
(2000) 79 Cal.App.4th 285, 293.)
We begin with the block billing. Many of the billing statements from the law firm
Flynn Williams that Spencer submitted as part of its supporting evidence were in block or
daily billing format. If an attorney performed multiple tasks on the case on a single day,
the billing statement lists the tasks performed and the total time spent by the attorney on
all legal services performed on that day, but does not specify the time spent on each task.
According to Harris’s expert, David A. Robinson, Esq., whose declaration it submitted in
opposition to the attorney fees motion, block billing accounted for 88 percent of the time
entries.
47.
Harris contends block billing is “improper” because it “obscure[s] the nature of the
work claimed,” and asserts that where an attorney’s bill is dominated by block billing,
trial courts will apply a 10 to 30 percent reduction to the entire bill. Harris argues
reduction of the Flynn Williams fees was mandated here because the time records were
“woefully inadequate” due to the block billing and the failure to record time records in
anything less than .2 of an hour. Harris urges us not to give deference to the trial court’s
ruling due to its failure to account for the block billing in the attorney fees award, and
asks us to reverse the award and remand the matter to the trial court to rule on the
reasonableness of the block billing.
As one appellate court has explained, block billing “is not objectionable ‘per se,’
though it certainly does increase the risk that the trial court, in a reasonable exercise of its
discretion, will discount a fee request.” (Jaramillo v. County of Orange (2011) 200
Cal.App.4th 811, 830 (Jaramillo).) “Blockbilling is particularly problematic in cases
where there is a need to separate out work that qualifies for compensation under
[Government Code] section 1021.5 from work that doesn’t. (See Bell v. Vista Unified
School Dist. (2000) 82 Cal.App.4th 672, 689 (Bell) [blockbilling made it ‘virtually
impossible’ to separate out compensable Brown Act violation work from other work].)”
(Jaramillo, supra, 200 Cal.App.4th at p. 830.) In Nightingale v. Hyundai Motor America
(1994) 31 Cal.App.4th 99, the appellate court upheld the reasonableness of a fee award
supported in part by block billed entries, explaining that the trial court was in a position
to determine whether the tasks described in the statements reasonably required the total
amount of time billed each month. (Id. at pp. 102-103.)
Harris cites no California case or statutory authority prohibiting block billing. The
cases it does cite are either ones where, like Bell, block billing rendered it impossible to
apportion attorney fees between claims on which attorney fees could or could not be
awarded, or in which the appellate court found no abuse of discretion in reducing fees
due to block billing. (See Track Mortgage Group, Inc. v. Crusader Ins. Co. (2002)
48.
98 Cal.App.4th 857, 867-868 [finding no abuse of discretion in trial court’s reduction of
attorney fees where, due to the attorney’s billing system, it was nearly impossible to
segregate fees between claim upon which attorney fees was recoverable and claims on
which fees were not]; ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1020
[after appellate court determined defendants were entitled to recover attorney fees and
costs in moving to strike some, but not all, of the plaintiff’s claims, it noted that on
remand, it was defendants’ burden to produce records sufficient to provide a basis for
determining how much time was spent on particular claims and the court properly could
reduce compensation for any failure to maintain appropriate time records]; Lahiri v.
Universal Music and Video Distribution Corp. (9th Cir. 2010) 606 F.3d 1216, 1222-1223
[trial court did not abuse its discretion in reducing block billed fees by 30 percent].)
Here, unlike Bell and the other cases upon which Harris relies, there was no need
to separate out covered from uncovered work. While trial courts retain discretion to
penalize block billing when the practice prevents them from discerning which tasks are
compensable and which are not (Christian Research Institute v. Alnor (2008) 165
Cal.App.4th 1315, 1324–1325; Bell, supra, 82 Cal.App.4th at p. 689), the trial court
identified no such problem here. Moreover, whatever form of billing is used, the
question is whether the billing provides the trial court with a reasonable basis for
awarding attorney fees. In this case, the trial court did reduce the Flynn Williams bills by
$20,865 where redactions “failed to provide the [c]ourt with a reasonable basis for
evaluating certain claimed fees[,]” and otherwise had no difficulty with Spencer’s
attorneys’ billings. We find no abuse of discretion in failing to further reduce the bills
due to block billing.
49.
Harris next contends the trial court improperly awarded Spencer $4,964 in fees for
the period of September 13 through November 3.18 As Spencer has explained, both
below and on appeal, these fees were not included in the total fees it sought. In a
declaration, Spencer’s attorney states that when his office generated the total fees, its
accounting database excluded any fees accrued between September 13 through
November 3, and while one of the invoices submitted in support of the motion contains
unredacted fee entries on November 1, 2 and 3, these fees were not included in the total
fees Spencer sought to recover. In reply, Harris asserts the trial court erred because it did
not indicate the fees were stricken in its order. The trial court, however, awarded Spencer
the fees it requested, less reductions for redacted work, which Spencer verified did not
include the prohibited fees. Since the trial court’s award did not include the prohibited
fees, it was not necessary for the trial court to state in its order that they were stricken.
Finally, Harris contends the trial court should have stricken the fees of Spencer’s
prior counsel, McInerney, because it was impossible to figure out what work was done
from the invoice submitted in support of the motion and the fees were not supported by a
declaration from a McInerney attorney. In its motion, Spencer requested $15,733 in fees
and costs for work performed by McInerney. In support, it submitted a declaration from
William J. McGahan, who performed work on the case, in which he stated that true and
correct copies of the McInerney attorney billing ledger containing the fees and costs
McInerney incurred in representing Spencer were attached to the declaration, and
explained that client bills were generated after time spent on all matters was entered into
the computer and summarized on the ledger. McGahan further stated that “[t]he
18 Although Harris uses November 9, 2011 in its appellate briefs, both Harris and
Spencer agree on appeal that, in settling the change order claim, Spencer released its
claim for attorney fees between September 13, 2011 and November 3, 2011, and
therefore the November 9 date that appears on one version of the settlement agreement is
incorrect.
50.
descriptive matter in the billing ledger has been redacted but will be made available
without the redactions for the Court’s in camera review, if necessary.” The attached
billing ledger shows that 57.60 hours were billed totaling $14,740. Spencer also
submitted an expert witness declaration from an attorney who reviewed McInerney’s
attorney fee billing ledger and opined the fees were reasonable under the circumstances.
In opposing the motion, Harris objected to the McInerney fees because the tasks
performed were redacted from the ledger. In reply, Spencer submitted a declaration from
Flynn Williams attorney Sloan C. Bailey, who stated that a true and correct unredacted
copy of McInerney’s invoice was attached as an exhibit, which reflected total attorney
fees of $14,740. The unredacted invoice, however, is not attached to Bailey’s declaration
in the clerk’s transcript and it does not appear to be included there, as neither party points
us to where it is located in the 12,585 page clerk’s transcript and we could not locate it.
Harris filed an objection to the invoice on the grounds that it was presented too
late and lacked a declaration from a McInerney attorney authenticating it. At oral
argument on the motion, Harris’s attorney again objected to the original McInerney bill
as unreasonable, and the new bill submitted with the reply as untimely and
unaccompanied by a declaration authenticating it. In response, Spencer’s attorney stated
the bill was not new, as it had been submitted several times with Spencer’s papers, and
the hours and fees had always been available for opposing counsel’s analysis. Spencer’s
attorney admitted that Bailey would not have personal knowledge of the work that
appeared on McInerney’s bill, but Bailey knew the bill was the same one McGahan had
declared under oath was accurate.
As appellant, Harris bears the burden of affirmatively demonstrating error.
(Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 631-632; Ketchum
v. Moses (2001) 24 Cal.4th 1122, 1140 (Ketchum).) Harris failed to include in the record
the McInerney invoice submitted with Bailey’s reply declaration that purportedly details
the work McInerney performed. While Harris contends McInerney’s invoices did not
51.
provide sufficient detail for the trial court to determine whether the fees claimed were
reasonable, we presume the invoice submitted with the reply brief provided the necessary
detail. On at least two occasions, our Supreme Court has articulated this principle, which
is particularly applicable here: “‘It is the burden of the party challenging the fee award on
appeal to provide an adequate record to assess error. [Citations.] Here, [Harris] should
have augmented the record with [the missing document]. [Citations.] Because [it] failed
to furnish an adequate record of the attorney fee proceedings, [Harris’s] claim must be
resolved against [it].’” (Ketchum, supra, 24 Cal.4th at pp. 1140–1141; Maria P. v. Riles
(1987) 43 Cal.3d 1281, 1295–1296.)
Harris complains that the McInerney invoice was not authenticated. Harris,
however, cites no authority to show that Bailey could not authenticate the unredacted
invoice as being the same redacted invoice McInerney attorney McGahan previously
authenticated. Therefore, Harris has not shown that the trial court abused its discretion in
admitting the unredacted invoice and relying upon it to determine the reasonableness of
the requested fees. (Nielsen, supra, 178 Cal.App.4th at p. 324; Badie, supra,
67 Cal.App.4th at pp. 784–785.)
In sum, Harris has not shown that the trial court erred in its award of attorney fees
to Spencer.
52.
DISPOSITION
The judgment against Harris is modified to reduce the award of prejudgment
interest from $384,678 to $341,667. As so modified, the judgment is affirmed. Costs on
appeal are awarded to Spencer.
_____________________
Gomes, Acting P.J.
WE CONCUR:
_____________________
Franson, J.
_____________________
Peña, J.
53.