Martin v. National Autopsy Experts, LLC CA4/1 ( 2023 )

Filed 5/16/23 Martin v. National Autopsy Experts, LLC CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
ANTHONY R. MARTIN, SR., D080031
Plaintiff and Respondent,
v. (Super. Ct. No. 37-2019-
00038385 CU-BC-CTL)
NATIONAL AUTOPSY EXPERTS,
LLC et al.,
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of San Diego County,
Kenneth Medel, Judge. Affirmed.
James Swiderski for Defendants and Appellants.
No appearance for Respondent.
In a jury trial, Anthony Martin prevailed on his claims against
National Autopsy Experts, LLC (NAE) and Julia McGrath (collectively,
defendants) for breach of contract, intentional misrepresentation, and
intentional concealment. The jury awarded Martin $8,350 in economic
damages for his breach of contract claim, $20,000 in non-economic damages
for his intentional misrepresentation claim, and $30,000 in non-economic
damages and $83.50 in punitive damages for his intentional concealment
claim. The jury found in favor of defendants on Martin’s other claims.
Defendants contend on appeal that (1) the economic loss rule bars
Martin’s intentional misrepresentation and intentional concealment claims;
(2) emotional distress damages are not recoverable under Martin’s fraud
claims because there was no proof of “substantial damages” apart from those
due to mental distress; and (3) the trial court erred in denying defendants’
motions for summary judgment.1
We conclude that the economic loss rule does not apply to Martin’s
fraud claims, and that he was entitled to recover damages for emotional
distress. We further conclude that defendants have forfeited their summary
judgment argument by failing to address prejudice, and alternatively, that
the argument fails on the merits for failure to demonstrate prejudice.
Accordingly, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Defendants have provided us with a settled statement in lieu of a
reporter’s transcript of the jury trial. Although the settled statement is
cursory at best, it was approved by the trial court. Accordingly, we will
decide the appeal based on the settled statement and trial exhibits.
In March 2018, Martin’s wife Betty died unexpectedly at the age of 69.
At the time, Betty had a serious heart condition and received at-home
nursing visits. The afternoon before her death, her nurse administered
medication intravenously and indicated she was giving Betty new medicine
authorized by her cardiologist. No autopsy was conducted after Betty’s
1 Because Martin filed no brief, we determine the appeal based on the
record provided and defendants’ opening brief. (Cal. Rules of Court, rule
8.220(a)(2).)
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death, and county authorities determined that her cause of death was cardiac
arrest.
Martin suspected that the new medication might have caused Betty’s
death, and he attempted, unsuccessfully, to persuade the hospital or public
medical authorities to conduct an autopsy. Martin then sought out private
autopsy services to determine her cause of death and provide him with
closure. His daughters introduced him to Julia McGrath, NAE’s sole owner
and employee, after they saw NAE’s website advertising its nationwide
autopsy services. Martin signed a contract with NAE in August 2018 and
paid the company $4,650 to conduct an autopsy and produce an autopsy
report, which NAE estimated would “take up to 120 days on average to
receive.” He also paid the funeral home $3,700 to exhume Betty’s body so
that, according to the contract, NAE could make “the usual customary
incision/s” and collect tissue samples and send them for testing.
Four months later, when Martin’s daughter contacted McGrath to ask
for the status of the report, McGrath told her that tissues from the autopsy
had been sent to the Mayo Clinic for analysis. In later communications,
McGrath represented that she had met with the assigned pathologist, who
purportedly told her that it was a “very, very difficult case because the
decomposition of tissues was extremely advanced[,]” requiring defendants to
“send samples to advanced labs.”
These statements by McGrath were not true. In fact, no tissue samples
were ever sent for analysis. Moreover, when NAE sent a technician to Betty’s
exhumation to collect tissue, the technician made no incisions to open her
body cavity or examine her organs, even though it was NAE’s standard
procedure to do so. NAE did not disclose this fact to Martin or his daughters.
3
Martin never received an autopsy report from NAE. Although
McGrath eventually offered Martin a partial refund of $1,000, Martin
declined to accept it. He ultimately hired another company, York Pathology,
to provide an autopsy report in January 2020. But doing so required him to
spend an additional $3,500 to re-exhume the body. York Pathology’s report
identified two likely causes of Betty’s death: pulmonary embolism and
sudden cardiac arrhythmia.
In the meantime, Martin retained a lawyer, who sent a letter in June
2019 on his behalf to defendants providing notice of claims under the
Consumer Legal Remedies Act (Civ. Code, § 1750 et seq. (CLRA)). The letter
stated that Martin had claims based on “alleged unlawful acts and omissions
in advertising, contracting for, and failing to perform autopsy and toxicology
services” for Martin and his family. Martin’s attorney proposed a settlement
amount consisting of the $4,650 Martin paid to NAE, the $3,700 he paid to
the funeral home to exhume Betty’s body, and $3,500 in legal fees, for a total
of $11,850. Defendants responded with a corrective offer (Civ. Code, § 1782,
subd. (b)) of $8,350 to reimburse Martin for the autopsy and exhumation fees,
but the offer excluded legal fees. Martin rejected the offer and filed suit in
July 2019, alleging: (1) violation of the CLRA; (2) fraud in the inducement of
contract; (3) breach of contract; and (4) bad faith breach of the implied
covenant of good faith and fair dealing.
Defendants moved for summary judgment before trial. The trial court
granted summary judgment solely in favor of McGrath as to the breach of
contract claim, but otherwise denied summary judgment on all claims.
Before trial, NAE stipulated to the fact that it breached its contract
with Martin. NAE also moved to exclude any evidence in support of
emotional distress damages, but the court allowed Martin to testify at trial
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that he suffered emotional distress because of defendants’ delay and failure
to perform the promised autopsy and toxicology testing. Martin also testified
that his suffering was aggravated by defendants’ dishonesty during the
process.
The verdict forms and pre-trial briefing reflect that at some point in
addressing the parties’ motions in limine, the trial court re-organized
Martin’s claims.2 The causes of action ultimately decided by the jury
consisted of the following: (1) breach of contract as to NAE only;
(2) intentional misrepresentation regarding NAE’s qualifications;
(3) concealment regarding NAE’s qualifications; (4) intentional
misrepresentation regarding the status of contract performance;
(5) concealment regarding the status of contract performance; and (6) unfair
or deceptive acts or practices.
The jury found in favor of Martin in his first cause of action for breach
of contract, awarding him $8,350 in economic damages. It also found in his
favor in his fourth cause of action for intentional misrepresentation regarding
contract performance status, awarding Martin $20,000 in non-economic
damages. Finally, in the fifth cause of action, the jury found that defendants
intentionally concealed facts regarding the status of contract performance,
and did so with malice, oppression, or fraud, and it awarded Martin $30,000
in non-economic damages and $83.50 in punitive damages.
For the second and third causes of action for fraud relating to NAE’s
qualifications, the jury found defendants not liable. And while the jury found
2 Defendants note in their brief that at a hearing on motions in limine,
the trial court ordered Martin to split his fraud claim into separate causes of
action. However, the only minute order included in the record that addresses
motions in limine does not include any reference to splitting up claims. We
presume, for our purposes, that the resulting verdict forms accurately reflect
the court’s orders.
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defendants liable for the sixth cause of action for unfair or deceptive acts, the
court later granted defendants’ post-trial request for judgment on that claim,
finding that defendants had an affirmative defense under the CLRA because
their corrective offer precluded liability. The court denied defendant’s
motions for judgment notwithstanding the verdict as to the fourth and fifth
causes of action for intentional misrepresentation and concealment relating
to contract performance. Defendants timely appealed.3
DISCUSSION
I
Defendants first argue that the economic loss rule barred Martin’s
fourth and fifth causes of action for intentional misrepresentation and
intentional concealment relating to contract performance. We disagree.
The economic loss rule bars a tort action, in some circumstances, in the
absence of personal injury or physical damage to other property. (Robinson
Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 984 (Robinson).)
The rule also generally bars claims that arise from, or are not independent of,
an underlying contract between the parties. (Sheen v. Wells Fargo Bank,
N.A. (2022) 12 Cal.5th 905, 923.) However, in Robinson, the Supreme Court
reiterated its prior holding in Erlich v. Menezes (1999) 21 Cal.4th 543, 553–
554 (Erlich), that tort damages are available in a case involving a breach of
contract when “ ‘(1) the breach is accompanied by a traditional common law
tort, such as fraud or conversion; (2) the means used to breach the contract
are tortious, involving deceit or undue coercion; or (3) one party intentionally
breaches the contract intending or knowing that such a breach will cause
severe, unmitigable harm in the form of mental anguish, personal hardship,
3 Martin also filed a notice of cross-appeal, but we later dismissed his
cross-appeal for failure to file a brief.
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or substantial consequential damages.’ [Citation.] Focusing on intentional
conduct gives substance to the proposition that a breach of contract is
tortious only when some independent duty arising from tort law is violated.
[Citation.]” (Robinson, at pp. 989–990, quoting Erlich, at pp. 553–554.)
At least two of these circumstances are present here. First, Martin’s
breach of contract claim was accompanied by independent causes of action for
fraud. (See Jahn v. Brickey (1985) 168 Cal.App.3d 399, 406 [emotional
distress damages recoverable in contract rescission action where rescission
“was only one of several causes of action and [plaintiff] also prevailed on the
tort theories of fraud and breach of fiduciary relationship[]”].) Martin’s
breach of contract claim was based on the fact that NAE did not perform its
contractual obligations and Martin never received the autopsy report he paid
for. Separately, Martin’s fraud claims were based on (1) McGrath’s false
representation that tissue samples were sent to the Mayo Clinic for testing
even though no one had sent them, and (2) the fact that defendants did not
disclose to Martin that NAE performed no surgical procedures to examine
Betty’s organs. Although the alleged fraud occurred during the performance
of the contract, defendants’ tortious conduct was independent from the breach
of contract itself. Thus, the fraud claims are not barred by the economic loss
rule.
The Supreme Court has recognized that public policy favors this result
in cases like Martin’s. “ ‘In pursuing a valid fraud action, a plaintiff advances
the public interest in punishing intentional misrepresentations and in
deterring such misrepresentations in the future. [Citation.] Because of the
extra measure of blameworthiness inhering in fraud, and because in fraud
cases we are not concerned about the need for “predictability about the cost of
contractual relationships” [citation], fraud plaintiffs may recover “out-of-
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pocket” damages in addition to benefit-of-the bargain damages.’ [Citation.]”
(Robinson, supra, 34 Cal.4th at p. 992.) “As one court stated, ‘Simply put, a
contract is not a license allowing one party to cheat or defraud the other.’
[Citation.]” (Ibid.) Allowing Martin’s claims for intentional
misrepresentation and intentional concealment “discourages such practices in
the future while encouraging a ‘business climate free of fraud and deceptive
practices.’ [Citation.]” (Ibid.)
Second, the record also supports a finding that defendants intentionally
breached the contract knowing that the breach would cause “severe,
unmitigable harm in the form of mental anguish” or “personal hardship.”
(See Robinson, supra, 34 Cal.4th at pp. 989–990, quoting Erlich, supra, 21
Cal.4th at p. 554.) Courts have long recognized the potentially devastating
nature of breaches in similar contexts involving the handling of remains.
(See, e.g., Christensen v. Superior Court (1991) 54 Cal.3d 868, 894–895
[“Even in the context of an action for breach of contract, where recovery of
damages solely for emotional distress resulting from a breach is not normally
allowed, the provision of services related to the disposition of human remains
has been distinguished because of the unique nature of the services.”]; Allen
v. Jones (1980) 104 Cal.App.3d 207, 214–215 [“Public policy requires that
mortuaries adhere to a high standard of care in view of the psychological
devastation likely to result from any mistake which upsets the expectations
of the decedent’s bereaved family.”].)
According to the evidence, defendants themselves recognized the
sensitivity of their autopsy services. In recognition of the personal hardship
that accompanies a death in the family, McGrath offered “sincere
condolences” in a letter to the “family of Betty” and wished them “comfort
during this most difficult time in [their] lives.” NAE’s website also
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acknowledged the sensitive nature of its business, stating that the company’s
“main concern is to provide answers and closure[,]” and that an autopsy “can
provide closure to unanswered questions.” NAE’s website acknowledged that
“[t]he sooner an autopsy is performed, more information can be discovered[]”
and that the passage of time “can compromise the tissue and toxicology
report due to decomposition.”
The jury found not only that NAE breached its contract with Martin,
but that McGrath intentionally misrepresented and concealed material facts.
The jury further found, by clear and convincing evidence, that McGrath’s
intentional concealment was done with malice, oppression, or fraud. Martin
testified that McGrath’s misrepresentations caused him to suffer hurt and
disappointment from being unduly delayed in discovering the cause of Betty’s
death, which ultimately required that her body be exhumed again. He also
testified about his feelings of betrayal from defendants’ fraud. If not for the
misrepresentation and concealment, Martin could have immediately engaged
another autopsy provider and gained some measure of closure sooner.
Because of the unique nature of the underlying contract for autopsy services,
and the high likelihood of mental anguish resulting from fraud in the
performance of the contract, this case falls squarely within the third Erlich
category of exceptions to the economic loss doctrine. (Erlich, supra, 21
Cal.4th at p. 554.)
Accordingly, we conclude that the economic loss rule did not foreclose
Martin’s fraud claims.
II
Defendants next argue that emotional distress damages are not
recoverable for Martin’s fraud claims because there was no proof of
“substantial damages” from the fraud, apart from those due to mental
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distress. Specifically, defendants contend that to recover damages for
emotional distress in connection with fraud, substantial economic damages
must have resulted directly from the misrepresentations and omissions
themselves, rather than from the related breach of contract. We disagree.
Not only do the cases defendants cite provide little support for their
position, but they actually support Martin’s entitlement to damages. In
Crisci v. Security Insurance Company of New Haven, Connecticut (1967) 66
Cal.2d 425 (Crisci), which defendants rely upon heavily, the Supreme Court
considered the propriety of awarding emotional distress damages in an
insured’s action against her insurer for failing to accept a settlement offer
within policy limits. (Id. at pp. 428–429.) The Court held that “a plaintiff
who as a result of a defendant’s tortious conduct loses his property and
suffers mental distress may recover not only for the pecuniary loss but also
for his mental distress.” (Id. at pp. 433–434.) The Court went on to state
that “[n]o substantial reason exists to distinguish the cases which have
permitted recovery for mental distress in actions for invasion of property
rights. The principal reason for limiting recovery of damages for mental
distress is that to permit recovery of such damages would open the door to
fictitious claims, to recovery for mere bad manners, and to litigation in the
field of trivialities. [Citation.]” (Id. at p. 434.) The Court referred to
situations where actionable claims result in “substantial damages apart from
mental distress” to point out that in such cases, “the danger of fictitious
claims is reduced,” and courts are “not concerned with mere bad manners or
trivialities but tortious conduct resulting in substantial invasions of clearly
protected interests.” (Ibid.)
Contrary to what defendants contend, Crisci does not require that a
fraud claim be accompanied by substantial economic damages flowing
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directly from the fraud for emotional distress damages to be recoverable.
Rather, Crisci merely recognized that the existence of substantial damages
apart from mental distress can serve as a hallmark of a valid claim for
emotional distress damages. This principle was confirmed in Gruenberg v.
Aetna Ins. Co. (1973) 9 Cal.3d 566, also cited by defendants, in which the
Supreme Court stated that Crisci limited recovery of damages for mental
distress to protect against fictitious claims. (Id. at p. 579.)
The Supreme Court made this point again in Molien v. Kaiser
Foundation Hospitals (1980) 27 Cal.3d 916 (Molien), when it observed that
courts have “devised various means of compensating for the infliction of
emotional distress, provided there is some assurance of the validity of the
claim. As we have seen, physical injury . . . provides one such guarantee.
[Citations.] Another arises when the plaintiff asserts an independent cause
of action apart from personal injury.” (Id. at pp. 926–927, italics added.) The
Court quoted the “substantial damages” language in Crisci, then went on to
conclude that requiring physical injury to prove that an emotional distress
claim is genuine was “no longer justifiable.” (Molien, at pp. 927–928.) The
Court’s concern in Molien, as in Crisci, was to screen for false claims while
also allowing for valid ones. (See Crisci, supra, 66 Cal.2d at p. 434; Molien, at
pp. 928–929.) Nowhere in these cases did the Court state that a plaintiff
alleging fraud must prove substantial economic damages flowed directly from
the fraudulent conduct alone before recovering for emotional distress.
Here, Martin’s fraud claims go beyond accusations of mere bad
manners or trivialities, and do not implicate the concern about fictitious
claims identified in Crisci and its progeny. (See Crisci, supra, 66 Cal.2d at
p. 434.) Not only did Martin suffer economic harm in the form of the contract
damages awarded by the jury, but he suffered substantial, non-trivial, non-
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economic harm from his discovery that defendants had been dishonest about
his deceased wife’s autopsy and their performance of the contract. As noted,
the jury found that defendants’ intentional misrepresentations and omissions
regarding their treatment of Betty’s remains caused significant injury to
Martin and awarded him $50,000 in non-economic damages—which
defendants do not claim is excessive. The jury credited Martin’s testimony
that he endured deep hurt, disappointment, feelings of betrayal, and lack of
closure from his wife’s death as a result of defendants’ tortious conduct, and
even awarded punitive damages. In light of governing case law and the
nature of Martin’s fraud allegations involving his wife’s remains, we conclude
that the award of emotional distress damages was proper. (See also Sprague
v. Frank J. Sanders Lincoln Mercury, Inc. (1981) 120 Cal.App.3d 412, 417
[“That general damages for mental pain and suffering are recoverable in a
tort action of deceit is established by the cases.”].)
III
Lastly, defendants contend that the trial court erred in denying their
motions for summary judgment as to Martin’s fraud claims relating to both
contract inducement and contract performance. We conclude that defendants
have forfeited this argument by making no attempt to demonstrate prejudice,
and alternatively, they would not be able to show prejudice anyway.
Although orders denying motions for summary judgment may be
reviewed on direct appeal from a judgment after trial, the appellant must
show the purported error was prejudicial and caused a miscarriage of justice.
(Federal Deposit Ins. Corp. v. Dintino (2008) 167 Cal.App.4th 333, 343
(FDIC), citing Waller v. TJD, Inc. (1993) 12 Cal.App.4th 830, 833 (Waller).)
Generally, an order denying a motion for summary judgment does not
constitute prejudicial error if the same question was subsequently decided
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adversely to the moving party after a trial on the merits. (FDIC, at p. 343.)
If the same question was not decided after trial, an appellant still bears the
burden of demonstrating that a miscarriage of justice has occurred. (Waller,
at p. 833 [“Prejudice is not presumed, and the burden is on the appealing
party to demonstrate that a miscarriage of justice has occurred.
[Citations.]”].) When considering whether a miscarriage of justice has
occurred, “we are not to look to the particular ruling complained of in
isolation, but rather must consider the full record in deciding whether a
judgment should be set aside. Since we are enjoined to presume that the trial
itself was fair and that the verdict in plaintiff[’s] favor was supported by the
evidence, we cannot find that an erroneous pretrial ruling based on
declarations and exhibits renders the ultimate result unjust.” (Ibid.)
Here, defendants fail to demonstrate how the court’s denial, if
erroneous, was prejudicial. Indeed, their brief is devoid of any discussion of
any prejudice they suffered from the denial of summary judgment. We must
assess prejudice “when and only when the appellant has fulfilled his duty to
tender a proper prejudice argument” by “spelling out in his brief exactly how
the error caused a miscarriage of justice.” (Paterno v. State of California
(1999) 74 Cal.App.4th 68, 106, italics added.) Our role is to evaluate “ ‘legal
argument with citation of authorities on the points made.’ ” (People v.
Stanley (1995) 10 Cal.4th 764, 793.) Because defendants have failed to make
proper arguments to demonstrate prejudice, they have forfeited their
summary judgment argument.
Even if defendants had adequately raised the issue, they would not be
able to demonstrate any prejudice from the court’s denial of their summary
judgment motion. As to Martin’s fraud claims relating to contract
inducement, the jury ultimately found in defendants’ favor. Even if the court
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had granted summary judgment on those two causes of action, defendants
would have had to proceed to trial on Martin’s surviving claims, and they
would still be faced with an adverse judgment. (Cf. Waller, supra, 12
Cal.App.4th at p. 833 [rejecting as insufficient defendant’s argument that it
was prejudiced because “if its summary judgment motion had been granted,
the matter would have been terminated in its favor at that point, there would
have been no trial and it would not now be faced with an adverse
judgment”].)
For Martin’s claims relating to fraud in the performance of the
contract, as discussed above, the economic loss doctrine did not bar those
claims and they were subsequently decided adversely to defendants after
trial. (See Waller, supra, 12 Cal.App.4th at p. 833; FDIC, supra, 167
Cal.App.4th at p. 343.) Defendants therefore can show no miscarriage of
justice resulting from the trial court’s denial of summary judgment as to
those causes of action. (See South Bay Chevrolet v. General Motors
Acceptance Corp. (1999) 72 Cal.App.4th 861, 908 [reversal unwarranted
where there was no indication in the record that the court’s denial of
summary judgment motions, “even if erroneous, rendered unjust the
judgment entered after full trial on the merits[]”].) Accordingly, we conclude
that the court did not prejudicially err in denying summary judgment.
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DISPOSITION
The judgment is affirmed. Martin is awarded his costs on appeal,
excluding costs associated with his abandoned cross-appeal.
BUCHANAN, J.
WE CONCUR:
HUFFMAN, Acting P. J.
O’ROURKE, J.
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