Morton v. Spotts CA4/1

• Court: California Court of Appeal
• Decided: May 31, 2013
• Docket: D058640
• Status: Unpublished

Opinion

Filed 5/31/13 Morton v. Spotts CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

KIM MELANIE MORTON, D058640

Plaintiff and Appellant

v. (Super. Ct. No. 37-2008-00099933- CU-OR-EC) DANA SPOTTS,

Defendant and Appellant.

APPEAL and cross-appeal from a judgment of the Superior Court of San Diego

County, Eddie C. Sturgeon, Judge. Affirmed.

The McMillan Law Firm, Scott A. McMillan and Evan A. Kalooky for Plaintiff

and Appellant.

Thomas/Lucas, Wayne D. Thomas, Timothy D. Lucas and A. Kerry Stack for

Defendant and Appellant. Plaintiff and appellant Kim Melanie Morton owns a dwelling in an older area of

La Mesa. Starting in 2007, when the adjacent homeowner, defendant and cross-appellant

Dana Spotts moved in, Morton and Spotts engaged in boundary and other disputes that

gave rise to Morton's November 2008 complaint filed against Spotts on theories of quiet

title, ejectment, trespass to land, slander of title, private nuisance, tortious interference

with contract, and intentional infliction of emotional distress. The trial court heard two

motions for summary adjudication on the quiet title issue, ultimately adjudicating in favor

of Spotts that she had made an adequate showing that she did not dispute the state of title

of Morton's property, thus effectively abandoning her previous judicial admission in her

answer that there was "currently" a boundary dispute. (Code Civ. Proc., § 437c; all

statutory references are to the Code of Civil Procedure unless otherwise indicated.) The

court also granted a preliminary injunction preventing Spotts from approaching Morton

on Morton's property or the immediate vicinity, except while on Spotts's own property or

public areas.

The matter went to jury trial on the remaining causes of action. Regarding the

claims for ejectment, slander of title, and tortious interference with contract (Morton's

construction contract for a fence), the trial court granted Spotts's motion for nonsuit after

Morton completed her case-in-chief. The jury then deliberated on three claims, and

awarded compensatory damages to Morton on her theories of trespass to land ($5,519

economic loss) and private nuisance ($7,500 noneconomic loss). No award was made for

her claim of intentional infliction of emotional distress. The jury further determined that

Spotts's actions had been conducted with oppression, fraud or malice, justifying an award

2 of punitive damages. (Civ. Code, § 3294.) At the next stage of the proceedings, the jury

awarded Morton $15,000 in punitive damages. Posttrial motions by both parties on these

subjects were denied.

Morton appeals from the judgment, contending (1) the trial court mistakenly

denied her motion for summary adjudication of the quiet title issue, while erroneously

granting the cross-motion brought by Spotts; (2) the trial court erroneously granted

Spotts's nonsuit requests on ejectment, slander of title, and tortious interference with

contract. As we will show, Morton's appellate claims have no merit.1

In her cross-appeal, Spotts appeals the portion of the judgment awarding Morton

punitive damages, asserting that insufficient evidence was presented to support a required

element for such an award, i.e., that her net worth was adequate to pay such an award.

(Civ. Code, § 3295, subds. (a)-(e).) We conclude the award of $15,000 punitive damages

in the judgment is supported by sufficient evidence, on net worth and proportionality

principles. (See Adams v. Murakami (1991) 54 Cal.3d 105, 110 (Adams); Simon v. San

Paolo U.S. Holding Co., Inc. (2005) 35 Cal.4th 1159, 1187 (Simon).) The judgment will

be affirmed.

FACTUAL AND PROCEDURAL BACKGROUND

In her appeal, Morton does not challenge the amounts of the compensatory and

punitive damages awards in the jury verdict, nor the finding against her on the emotional

1 The quiet title claim was alleged against both Spotts and her lender, Countrywide Home Loans, Inc., with the remaining claims only against Spotts. Defendant Countrywide's successor was dismissed and is not a party to this appeal. 3 distress claim, nor the denial of a permanent injunction. Instead, she claims error only on

the summary adjudication and nonsuit rulings, as they are reflected in the judgment. It is

also important to note that in her respondent's brief, Spotts acknowledges that she has had

her day in court, and she accepts the jury's verdict on the trespass and nuisance theories,

only cross-appealing to challenge the punitive damages award as excessive in light of the

evidence presented about her net worth.

Accordingly, this statement of facts will provide a somewhat abbreviated timeline

to explain the issues argued on appeal, concerning the rulings on the motions for

summary adjudication, the nonsuit motions, and the validity of the challenged portion of

the judgment awarding punitive damages. More facts will be added as appropriate in the

discussion portion of this opinion.

A. Events Leading to Filing of Complaint; "License" to Utilize Land is Granted and Disputed; Fence is Built

In January 2007, Spotts, a registered nurse and single mother, her two teenage

sons and her young daughter moved into the house she bought at 4566 Acacia Avenue,

La Mesa, California, immediately adjacent and alongside to Morton's house. Morton is a

high school English teacher who has lived alone in her house at 4572 Acacia Avenue

since 1997, with her three cocker spaniels. Shortly, the parties started to have difficulties

in sharing the narrow side yard, common concrete planter box (the planter box) and the

boundary between the two houses, which was partially marked by a white picket fence.

The two driveways are side-by-side and branch off of a common apron and parkway.

4 In early 2007, Spotts placed her trash cans and other items on Morton's property.

At times, Spotts parked her car in front of Morton's property and garage and crossed

Morton's driveway.

On August 9, 2007, Morton wrote and Spotts signed a letter (the "license") in

which Morton allowed Spotts to build a lattice fence on the property line, and store her

trash cans on a portion of Morton's side yard property. Morton then told Spotts the lattice

fence poles were slightly inside the Morton property line, and asked her to move them,

but she did not. Morton objected when Spotts rototilled the side yard, when Spotts

overwatered plants in the planter box, and when Spotts's house's downspout let water

flow onto Morton's property. Spotts complained about and/or threatened Morton's dogs.

The parties argued over the lattice fence location and that of a yellow string being used to

mark the boundary.

In January 2008, Morton sent a notarized letter to Spotts, telling her she could

leave the lattice fence on Morton's property if, within four weeks, she removed the soil

that she had added to the planter box. This was not done, and Morton sent another letter

dated February 19, 2008: "You need to remove all of your effects, specifically trash

cans, lattice panels and wooden posts, from my property. If you have not done so within

two weeks, I will have your effects removed." The parties continued to disagree over

plant care and whose plants were on whose property. Morton asked Spotts to tell her

children not to throw objects into her yard and garage.

5 On March 17, 2008, Morton found that a concrete pillar marking the southern

property line had been moved and rotated in such a way as to indicate that Morton's land

lost about a foot along the border.

In March 2008, Morton hired Perry Construction Company (PCC) to construct a

French drain and a wooden fence on her property. On March 17, 2008, PCC started the

work, but stopped after Spotts's son told her the workers were on her property, and Spotts

called the PCC office to complain. Spotts told PCC that the construction workers were

trespassing on her land, and she threatened to call the police and sue the workers. After

the work stopped, the gravel pile that had already been delivered sat in front of Morton's

house for three months.

In April 2008, Morton hired a licensed surveyor, Karl Cebe (Surveyor Cebe), to

locate and map the property line location, so the work could be finished. He placed

boundary markers in the parties' shared side yard, and found the line Morton had been

using was off by less than one inch. Surveyor Cebe showed Spotts the location of the

boundaries and the markers, and she got upset, saying she thought her property went up

to Morton's garage. Somebody moved one of the markers. The parties argued over

things Spotts left around the boundary line areas (trash, plants, and stepping stones).

Morton renegotiated the PCC contract to comply with the survey results, without

incurring further charges. In June 2008, Surveyor Cebe replaced a concrete and iron

rebar survey marker that had been removed. Morton's counsel wrote to Spotts on

6 June 11, 2008, notifying her of the renewed fence building activity and offering to

discuss the process and Morton's requests that Spotts move her plants.2

When PCC went back to work on June 16, 2008, Spotts again complained to the

PCC office that the work permits were improper, and she parked her car in Morton's

driveway, partially blocking the work. Spotts called the police, complaining she and her

neighbor had a property line dispute. The fence was duly completed in June 2008, and

PCC did not charge Morton extra for the delay.

Problems continued. On June 26, 2008, Ms. Morton discovered a crack in the new

fence, and saw Spotts had glued some wooden objects (bees) onto the fence. On the

evening of July 1, 2008, somebody threw a rock through Morton's kitchen window (10

2 Spotts argued in her summary adjudication opposition and in her brief that the cordial tone of this letter suggests that the license Morton granted to her was ongoing up to and beyond the time of the fence building. The first summary adjudication was denied on that basis, but the next such motion was granted, and ultimately, the jury found no permitted access had continued, as shown by the trespass and nuisance verdicts for damages. 7 yards from Spotts's house).3 On July 14, 2008, somebody threw a brick at the wall near

Morton's same kitchen window.4

On September 14, 2008, Spotts attached a string trellis to "her side" of the fence

with screws, and painted Halloween decorations there. Morton objected and Spotts said

she could use her own side of the fence, but she painted over the decorations.

On September 17, 2008, Surveyor Cebe replaced a boundary marker that

somebody had removed, but somebody then bent the 18-inch piece of rebar that was

embedded in concrete, and redirected it favorably to Spotts. The parties argued about the

plants growing over the boundary, and Spotts called Morton names and suggested she

stay inside if Morton did not "learn how to behave." Spotts's teenage son made rude and

threatening gestures at Morton and her dogs, such as pointing an air gun into her yard.

In November 2008, somebody shot out Morton's backyard surveillance camera

with an air rifle.

In November 2008, Morton filed her complaint against Spotts to quiet title and for

other relief, seeking an injunction and compensatory and punitive damages. Morton

3 On July 2, 2008, Morton obtained a temporary restraining order (TRO) against Spotts in a civil harassment petition. (Morton v. Spotts, San Diego Super. Ct., 2008, No. 37-2008-00065066-CU-HR-EC.) (§ 527.6.) This record contains the petition and the trial transcript of that hearing, and relief was denied. Spotts separately obtained a TRO against Morton's counsel, but further relief was denied. Evidence about both harassment TRO's was excluded at trial through rulings on motions in limine.

4 The jury verdict did not identify which incidents of nuisance or trespass Spotts had committed, but impliedly found at least one of each had been committed by her. She does not contest the compensatory damages awards on appeal. Here, we need not and do not attempt to identify who the "somebody" was, who was doing which alleged or proven acts of nuisance or trespass, as it is not necessary to our analysis. 8 alleged that before, during and after the fence construction, Spotts disputed title to both

sides of the boundary line by doing such things as rototilling a portion of Morton's side

yard over her objections, blocking access to Morton's property, moving boundary

markers, and objecting to the fence work and boundary line used by the contractor PCC.

In January 2009, somebody shot out the lights and globe over Morton's front porch

and patio, leaving broken glass and a BB on the front steps.

On January 10, 2009, somebody stuck an axe into Morton's fence. Morton noticed

the same type of axe was next to Spotts's garage the next day.

B. Answer and Amended Answer Filed; Preliminary Injunction Granted

In propria persona, Spotts filed a verified answer on December 2, 2008, stating:

"Defendant generally and specifically denies the property line is clear. Defendant admits

that the property line is currently disputed."

Still acting in pro per in February 2009, Spotts filed an amended answer, again

admitting that the property line was currently disputed. She responded to Morton's

discovery requests, in relevant part by denying a requested admission that she "never had

a valid claim of adverse possession as to any portion of the MORTON PROPERTY."

Shortly thereafter, Spotts retained an attorney and he discussed with Morton's

attorney whether they could stipulate that Spotts would adhere to the boundary

determination made by Surveyor Cebe. Spotts's attorney went on vacation and no

stipulation was filed. Morton filed her summary adjudication motion on the quiet title

issues on April 2, 2009.

9 In June 2009, Spotts put her trash cans and other belongings in the driveway and

got in the way of the garage door, and Morton objected she was blocking it and called a

friend for help. On June 16, Spotts painted a small yellow mark on the driveway curb.

At trial, Spotts explained she painted this line after consulting with the city planning

department, and said it was a navigation aid for parking her car. Somebody threw eggs at

Morton's garage and yard and damaged the fence. On June 23, 2009, Morton sought and

obtained a temporary restraining order against harassing conduct by Spotts.

On July 28, 2009, the trial court issued a preliminary injunction restraining Spotts

from (1) entering onto Morton's property, (2) entering "upon the public property

extending 18 feet immediately to the east-northeast of the property of plaintiff," i.e., the

sidewalk and utility strip at the front of Morton's property, and a band of the Acacia

Avenue roadway, a width of eight feet from the curb toward the center of the road and

running parallel to the boundary of Morton's property. In summary, the preliminary

injunction requires Spotts to refrain from parking, placing objects, standing, or

intentionally causing any matter or substance to flow in front of Morton's property, and

from using the sidewalk in front of the property, or placing any objects in that space, or

blocking the driveway of Morton's property, although Spotts was allowed to travel

immediately to or from her own property.

C. First Motion for Summary Adjudication: Morton

Although the attorneys for the parties had discussed in March 2009 whether Spotts

would stipulate to Surveyor Cebe's boundary line being correct, no stipulation or

amended answer was filed. In July 2009, Morton's motion for summary adjudication on

10 her quiet title claim was heard, arguing that Spotts was making an adverse claim, as

admitted in her verified answer and discovery responses, but it was baseless. Morton

filed her own declaration, an attorney declaration, and requests for judicial notice of the

responses to the requests for admissions.

In opposition, Spotts argued there were triable issues about the scope of the license

she had been granted to use Morton's property, and her declaration claimed she had been

mistaken in making her verified answer and responses to discovery, about the state of the

boundary dispute, because she did not understand the pleading process.

On July 10, 2009, the trial court denied Morton's motion for summary

adjudication, due to triable issues remaining about the scope of the license Spotts had

been granted to use Morton's property.

On September 18, 2009, this court summarily denied Morton's petition for a writ

of mandate to reverse that ruling. (Morton v. Superior Court (Sept. 18, 2009, D055651).)

D. Second Motion for Summary Adjudication: Spotts

On December 31, 2009, Spotts filed her own motion for summary adjudication as

to the quiet title claim. Spotts argued that Morton had failed to adequately identify what

type of adverse claim that Spotts was making. In her declaration, Spotts stated that the

only use she had made of the side yard had been permissive, according to her

understanding of the license granted, so she did not understand what claim to title or

adverse possession of Morton's property was being pursued. Spotts had not paid any

property taxes for Morton or allegedly done anything other than minor, periodic, or

transitory trespasses.

11 Spotts lodged amended discovery responses she had served in March and July

2009, that admitted that she did not have a valid claim of ownership as to the Morton

property, but also stated that investigation and discovery were continuing. Similarly,

these amended responses stated that she did not dispute the boundary Surveyor Cebe had

established, although again, "investigation and discovery were continuing."

In Morton's opposition and separate statement, she provided declarations from

Surveyor Cebe and an expert surveyor, Michael Pallamary, stating they had visited the

site in February and March 2010, and found a boundary marker had been moved. Morton

provided her own declaration with approximately 100 pages of photographic evidence

about various stages of the dispute (dirt runoff on driveway, etc.). Morton filed a

declaration from a representative of PCC, about the three-month delay in the fence

construction project that occurred due to Spotts's telephoned objections. Morton also

provided declarations from a real estate broker and a title expert, giving their opinions

that her property might have lost value due to this litigation and boundary dispute. She

sought judicial notice of Spotts's earlier discovery responses that failed to admit, as

requested, that there was no current dispute about the location of the boundary line, and

she objected to the later ones being provided, as contradictory.

In her separate statement, Morton admitted that she never pursued any adverse

possession theory against Spotts, and that their earlier disputes about where the fence

should be placed were essentially mooted by the work of Surveyor Cebe (i.e., since the

previously "licensed area" is no longer accessible and is now blocked by the wooden

fence, her title should be quieted as it now stands).

12 Morton claimed there were still triable issues on title, due to the lack of any

confirmed stipulation to further amend Spotts's answers or responses, such as

acknowledging that under section 761.030, subdivision (b), Spotts was formally

disclaiming any title to Morton's property.5

On March 19, 2010, the trial court orally ruled upon the extensive evidentiary

objections brought by Spotts to the declarations and audio-visual evidence of Morton and

her experts (sustaining over 100 of the 138 brought). Morton had filed numerous

evidentiary objections to Spotts's evidence, and most were overruled and some were

sustained.

At the hearing, the judge emphasized that all of the evidence failed to show the

current state of Morton's title was still being disputed, and Morton was not being

prevented from going to trial on the claim for damages for trespass. The court granted

Spotts's motion for summary adjudication.

E. Jury Trial, Nonsuit and Compensatory Damages Verdict

Jury trial began on June 28, 2010. Morton presented extensive testimony,

including her own and Surveyor Cebe's, and testimony from La Mesa police personnel

indicating there had been at least three calls to the site (although documentary evidence

about the calls log was not admitted). Morton had no plans to sell, but feared her

property had lost value due to the dispute. After a hearing under Evidence Code section

5 Section 761.030, subdivision (b) provides: "If the defendant disclaims in the answer any claim, or suffers judgment to be taken without answer, the plaintiff shall not recover costs." 13 402, the trial court excluded expert evidence of potential diminution in value of Morton's

property, as offered by her real estate broker witness, Kay LeMenager.

On July 7, 2010, Morton rested her case. Spotts moved for nonsuit as to the

claims for ejectment, slander of title, and tortious interference with contract. The trial

court discussed the relationship of the summarily adjudicated quiet title claim, with those

three causes of action, since none of them actually alleged there had been any formal

challenge to Morton's title in the nature of a deed or other instrument that affected title.

All three nonsuit motions were granted, and evidence of the attorney fees incurred by

Morton was stricken, due to the lack of a cause of action to support them.

During trial, Spotts testified she did not understand the meaning of the answers or

the discovery responses that she had filed while in propria persona, and as of July 2009,

when her amended response to the requests for admissions were made, she now

understood and accepted the boundary established by Surveyor Cebe. Spotts gave her

version of the disputes, such as saying she could no longer clean up dirt from the planter

box that leaked onto Morton's property, since she was told to stay away, and admitting

that she owned a BB gun and might have been the only person in her house when

Morton's light was shot out.

On July 12, 2010, the jury returned its verdict, awarding Morton $13,019 in

compensatory damages on the claims of trespass and private nuisance, and making a

finding that Spotts had acted with malice, oppression, or fraud.

That evening Spotts was deposed about her financial condition, to update partial

information she had given in a February 2010 deposition about her bank accounts. The

14 next afternoon, when trial resumed, Spotts brought additional documents to court,

including her paystub for the past five months, a rental receipt from a tenant of a

condominium that she owned, bills for the condominium mortgage and HOA dues, and

other financial data.

F. Punitive Damages Verdict; Denial of Permanent Injunction; Appeal

At the punitive damage phase of trial on the afternoon of July 13, 2010, both

parties testified, as did Morton's real estate broker, who gave her opinions about the value

of the condominium property owned by Spotts. Following a day of deliberations, the jury

awarded Morton $15,000 in punitive damages.

Next, Morton requested that the trial court extend the preliminary injunction

already granted into a permanent injunction. According to Spotts's attorney, she was

moving out shortly, due to her house being in foreclosure. On July 22, 2010, Morton's

request for a permanent injunction was denied.

Each party filed motions for new trial, for judgment notwithstanding the verdict,

or for remittitur. Morton filed a motion to vacate the court's equitable judgment that

denied her a permanent injunction. Morton raised the issue of whether, since trial, Spotts

had recently moved back into the house and cured the default on her loan, as suggested

15 by a copy of a rescission of the notice of default on Spotts's property, attached to an

attorney's declaration.6

Each and every posttrial motion was denied as they relate to these issues, and they

are not separately argued in this appeal and cross-appeal. Morton timely filed her notice

of appeal, and lodged her trial exhibits with the record. Spotts filed a notice of cross-

appeal.

DISCUSSION

We will set forth the applicable standards of review in turn, as we discuss the

propriety of the judgment and its underlying orders on summary adjudication and

nonsuit. We then address the cross-appeal's challenges to the validity of the judgment for

punitive damages. (Pt. III, post.)

I

QUIET TITLE

A. Introduction and Contentions

To prevail on a motion for summary adjudication, a moving party defendant must

establish that the plaintiff's cause of action is without merit, by negating one of its

essential elements or by establishing a complete defense. (Westlye v. Look Sports, Inc.

(1993) 17 Cal.App.4th 1715, 1726-1727.) The converse is also true, that a plaintiff must

establish that all essential elements of the claim can be proven and no defenses apply.

6 In their briefs on appeal, the parties continued to dispute whether Spotts is currently living in the same house. No such issues are currently before us and we decline to address any issues going beyond the current record, which ends at the posttrial motions, when that issue was still unresolved. 16 (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) Summary judgment

rulings are reviewed de novo. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763,

767.) We also review de novo the interpretation given to any statutes in the rulings.

(California Teachers Assn. v. San Diego Community College Dist. (1981) 28 Cal.3d 692,

699.) To evaluate Morton's claims that the trial court's rulings on evidentiary objections

were erroneous and prejudicial, we apply an abuse of discretion standard. (Carnes v.

Superior Court (2005) 126 Cal.App.4th 688, 694.)

In July 2009, the court denied Morton's motion to summarily adjudicate her cause

of action to quiet title in her favor, because the court determined there were remaining

triable issues about the scope of the license that she had granted to Spotts to use some of

the boundary area.

By the time the second such motion, brought by Spotts, was ruled upon in March

2010, the court agreed with Spotts that Morton's title was not being placed at issue,

despite her previous amended answer and discovery responses originally stating that the

property line was in dispute. More recently, Spotts's amended discovery responses and

declaration had formally disclaimed any title to Morton's property, although she still did

not seek leave to amend her answer.

Based on the entire record, the trial court declined to find that Spotts's activities, as

shown by Morton's declarations about her observations, amounted to making an

"adverse" claim on title. In part, the court was relying upon the declaration Spotts filed in

December 2009, stating that she accepted the Cebe boundary. The Spotts declaration

claimed that her admission of an earlier "adverse interest" was actually a reference to the

17 license she was permissively granted, so that her amended answer otherwise was

mistaken.

At argument on the motion, Spotts's attorney told the court "we have conceded on

the issue of the boundary line." The court stated, "I don't look just to the complaint. I

look at the evidence . . . [a]nd I have a right to look at the evidence beyond it."

On appeal, Morton argues the trial court failed to recognize that Spotts had made

binding judicial admissions in her answer and discovery responses, that she was disputing

the property line between the two houses, and her later declaration stating that she no

longer contested the boundary line as drawn by Surveyor Cebe was insufficient to

overcome those judicial admissions.

Morton further argues, "section 761.020 allows an owner such as Ms. Morton to

quiet title to property where there is any concern that an adverse claim may exist. Ms.

Morton merely sought a judicial decree that her property . . . was bounded according to

the legal description in her grant deed . . . . Ms. Morton possessed a valid, properly

recorded deed to the property . . . . Nobody, with the exception of Dana Spotts -- who

lacked any evidence to back her wild claims, has disputed that the record of survey

prepared by [Surveyor Cebe] accurately identifies the location of the boundaries in Ms.

Morton's grant deed. No suggestion has been made that Ms. Morton's legal description of

her property conflicts with Ms. Spotts' legal description in any manner. . . . Yet, Ms.

Spotts was allowed to refute her prior verified pleadings and verified admissions and

contradict her prior claims -- to obtain the court's order of summary adjudication."

(Italics added.)

18 In response on appeal, Spotts argues that the trial court correctly determined that

the type of activities that Spotts had admittedly conducted concerning the boundary

dispute did not amount to actual challenges to title, and she had since conceded the Cebe

boundary line was proper. She argues she did not pursue an adverse claim within the

meaning of section 760.010 et seq.

To analyze the merits of these questions of law, as raised in each of the summary

adjudication motions, we will outline the relevant statutory provisions and apply them to

this record.

B. Applicable Legal Principles

In this statutory scheme, section 760.010, subdivision (a) defines "claim" as

including "a legal or equitable right, title, estate, lien, or interest in property or cloud

upon title." "When two or more persons have adverse claims to the same property, any of

the claimants may initiate a quiet title action. The purpose of the action is to eliminate an

adverse claim and to establish, perfect or 'quiet' the title of the property in one or more of

the claimants. The action is brought to determine adverse claims to land and not to

declare the location of a boundary." (12 Miller & Starr, Cal. Real Estate (3d ed. 2011)

§ 34:103, p. 34-367.)

Many such title disputes arise from loan documents, easements, inheritance, or

otherwise competing documentary claims to title. "Actions to quiet title in the sense of

removing a cloud are usually brought in the form of an action to cancel an instrument.

The statutory quiet title remedy is cumulative and not exclusive of any other remedy,

form or right of action, or proceeding provided by law for establishing or quieting title to

19 property." (53 Cal.Jur.3d. (2012) Quieting Title, § 1, p. 382, fns. omitted.) An

instrument that creates an apparent or actual cloud on title may take the form of a note

and trust deed reflecting an alleged obligation, a lien or mortgage, a tax deed, or a

building restriction. (Id. at §§ 13-19, pp. 392-397, fns. omitted; see 5 Witkin, Cal.

Procedure (5th ed. 2008) Pleading, § 654, p. 81.) The term "adverse" is one of art in this

context. Adverse title claims do not usually consist of somebody's physically laying

claim to a boundary portion of a neighboring property, unless adverse possession

elements are also present. (See 12 Witkin, Summary of Cal. Law (10th ed. 2005) Real

Property, § 212, p. 270.)7

In resolving a quiet title action, a matter of considerable significance to the parties,

the trial court clearly acts as a fact finder and adjudicates issues, and it may be required to

perform the function of a gatekeeper, such as resolving evidentiary objections. (Harbour

Vista, LLC v. HSBC Mortgage Services Inc. (2011) 201 Cal.App.4th 1496, 1507-1508.)

In order to recover in a quiet title action, the plaintiff must prove his or her title, as well

as the existence of an "adverse" claim by the defendant. (§ 761.020, subd. (b); Pacific

States Sav. & Loan Co. v. Warden (1941) 18 Cal.2d 757, 759; Twain Harte Homeowners

Ass'n v. Patterson (1987) 193 Cal.App.3d 184, 188.)

"Title is not quieted as to boundaries, moving or otherwise; it is quieted as to legal

interests in property. 'Such an action is brought, as authorized by the statute, "for the

7 "The action to quiet title is a proceeding in equity and there is no right to a jury trial. The proceeding becomes a legal action when it takes the character of an action in ejectment to recover possession of the property." (12 Miller & Starr, supra, Cal. Real Estate, § 34:105, p. 34-374.) We will discuss the ejectment theory in part II.B, post. 20 purpose of determining" any adverse claim that may be asserted therein by a defendant to

the land in controversy; and this does not mean that the court is simply to ascertain, as

against a plaintiff shown to have a legal interest, whether or not such defendant has some

interest, but also that the court shall declare and define the interest held by the defendant,

if any, so that the plaintiff may have a decree finally adjudicating the extent of his own

interest in the property in controversy. The object of the action is to finally settle and

determine, as between the parties, all conflicting claims to the property in controversy,

and to decree to each such interest or estate therein as he may be entitled to. Of course, if

the plaintiff fails to show any legal interest in the property in controversy, and as to

which he asserts title, he must fail altogether, and could not complain of a judgment of

nonsuit, but where he shows any legal interest, he is entitled to have that interest declared

by the court. [Citations.]' (Peterson v. Gibbs (1905) 147 Cal. 1, 5.)" (Lechuza Villas

West v. California Coastal Commission (1997) 60 Cal.App.4th 218, 242.)

C. State of the Record

In support of her motion and in opposition to Spotts's motion, Morton provided a

copy of her grant deed, supplemented by her declaration, and a declaration by Surveyor

Cebe. Morton's complaint alleges that Spotts's actions, especially during the fence

building controversy, constituted an "adverse" claim to title of the boundary strip,

although Spotts did not offer a contrary property survey. However, Morton's separate

statement admitted that the earlier dispute about where the fence should be placed is now

essentially mooted by the work of Surveyor Cebe, in that the previously "licensed area" is

no longer accessible and is now blocked by the wooden fence, so she requested that the

21 existing paper title should be confirmed in this action. Morton points to expert

declarations she provided from a title expert, a surveying expert, and a real estate agent,

that title disputes can devalue property.

In her briefs on appeal, Morton acknowledges that to the extent Spotts used the

land by license, it was not an "adverse" interest. Notwithstanding any concessions, the

record shows that even after the wooden fence was built in June 2008, many ongoing

disputes between the parties existed, mainly concerning the driveway access issue. The

record suggests that some portion of the driveway apron is public, as shown by language

in the preliminary injunction stating that Spotts was allowed to travel immediately to or

from her own property, but she shall not enter "upon the public property extending 18

feet immediately to the east-northeast of the property of plaintiff," i.e., the sidewalk and

utility strip at the front of Morton's property, or the roadway eight feet out from the curb,

running parallel to the boundary of Morton's property. Spotts was to refrain from

parking, placing objects, standing or using the sidewalk in front of the property, or

blocking Morton's driveway, etc. After trial, the court declined to make this preliminary

injunction permanent, although the record is unclear if Spotts ever moved out, as she

planned.

We therefore turn to the question of whether this record discloses, as an open

question of fact or law, that Spotts (a) is bound by judicial admissions that she disputed

the boundary area and therefore Morton's title to it, or (b) has otherwise asserted a claim

that is legally and factually equivalent to a title challenge.

22 D. Judicial Admissions

Spotts's February 2009 amended answer states, "Defendant generally and

specifically denies that the property line is clear. Defendant admits that the property line

is currently disputed." A judicial admission in a pleading, such as the amended answer,

"is entirely different from an evidentiary admission. The judicial admission is not merely

evidence of a fact; it is a conclusive concession of the truth of a matter and has the effect

of removing it from the issues. Nor is a judicial admission treated procedurally as

evidence; the particular pleading or allegation is not formally offered in evidence but may

nevertheless be relied upon and treated in argument as part of the case." (1 Witkin, Cal.

Evidence (5th ed. 2012) Hearsay, § 98, p. 922; Heater v. Southwood Psychiatric Center

(1996) 42 Cal.App.4th 1068, 1079-1080, fn. 10.)

On behalf of a client, an attorney can make a judicial admission or a concession

for only one party, as in a brief or argument on appeal, even short of a stipulation or any

formal agreement. (See 1 Witkin, Cal. Evidence, supra, Hearsay, § 101, pp. 925-927;

9 Witkin, Cal. Procedure, supra, Appeal, § 704, pp. 773-774.) "And the same is true of a

concession by counsel in the trial." (1 Witkin, Cal. Evidence, supra, Hearsay, § 101,

p. 926.) Under the above definitions, after July 2009, Spotts arguably made additional

judicial admissions in her moving papers and declaration and in her supplemental

responses to requests for admissions, that unilaterally conceded the Cebe boundary line

applies, and her attorney confirmed that position at the hearing.

The gist of this quiet title dispute seems to be whether the overall course of

conduct by Spotts amounted to an adverse claim that denigrated Morton's title status. For

23 example, Spotts painted the yellow line on the curb in June 2009, and "somebody"

damaged the fence on June 26, 2009. Declarations from the two surveyors say that they

saw a survey boundary marker had been damaged in March 2010. Very little happened

between the parties after the preliminary injunction was in place. We cannot condone the

alarming conduct that took place, such as shooting and vandalism, but note that the jury

did not clearly determine that Spotts was directly responsible for all of it.

It is an incomplete view of the record for Morton to focus solely upon the original

February 2009 answer, amended answer and responses. Morton contends that the

"phantom stipulation" counsel offered before the first summary adjudication motion, to

abide by the line, was never finalized, and it was inadmissible as some kind of settlement

offer. Even if this dispute does not qualify as an adverse possession case or one based

upon any documentary title claims, Morton still argues that Spotts, as "one who makes

use of another's property in derogation of the property owner's rights is, by definition, an

adverse user." (Italics added.) She points out that the July 2009 amended answers stated

they were subject to "further investigation." Her objections to that evidence were

overruled at the motion hearing, which she claims was prejudicial error.

Spotts responds in her brief on appeal that she no longer disputes the property line

drawn by Surveyor Cebe. Under the rules outlined above, this may amount to a binding

judicial admission. However, the issues about any judicial admissions by Spotts, made

after the motion hearing, have not been briefed, and we do not base our decision on that

factor. We next address the evidentiary objections argued by Morton.

24 E. Evidentiary Rulings Effect; Analysis

In its ruling, the court sustained many of Spotts's 138 objections to Morton's

evidence, as based on "speculation, imaginations, guess work, or mere possibilities," or

lacking relevance, or unduly cumulative. (See Doe v. Salesian Society (2008) 159

Cal.App.4th 474, 481; Evid. Code, §§ 350, 352, 765.) Many statements in Morton's and

her witnesses' declarations about first hand observations of Spotts's conduct (arguing,

blocking driveway, flooding property), as well as audio-visual evidence of confrontations

at the site, were excluded, as irrelevant to the quiet title claim.

Morton also filed numerous evidentiary objections to Spotts's evidence, and some

were sustained and some overruled. Morton now argues that (1) all pleadings should

have been considered, including her verified complaint, and (2) even if her excluded

evidence was not necessary to prevail on the quiet title issue, it should still have been

admitted in order to bolster and clarify other evidence she was offering on other theories.

At the summary adjudication stage of the proceeding, the trial court correctly

understood that entitlement to relief under section 760.010 et seq. requires a different

kind of an adverse claim than was being shown in this case, and that Morton was not

facing any cognizable challenges to her own established title. The court had discretion to

resolve the evidentiary objections in determining whether triable issues existed, in a

gatekeeper function in these motion proceedings. (See Harbour Vista, supra, 201

Cal.App.4th 1496, 1507-1508.)

We find no abuse of discretion in the rulings sustaining the objections to most of

the evidence that Morton provided, which was mainly cumulative evidence about

25 confrontations or speculation about possible future devaluation of her own property from

such "adverse" claims. Such evidence was apparently intended to controvert Spotts's

more recent admissions that the boundary line had been established. However, the court

could properly evaluate all of the judicial admissions and evidence together and

determine that Morton had failed to show that a concrete, legally cognizable, potentially

harmful title claim was still being asserted by Spotts. Particularly in view of the

equitable nature of the quiet title issues, the trial court did not abuse its discretion in

sustaining the objections to her evidence.

This record does not demonstrate that an additional judicial declaration of title was

necessary or proper, in view of the issues framed by the pleadings, the current state of

title, and the types of actions that Spotts allegedly and/or actually conducted, which,

although obnoxious, did not amount to an ongoing adverse or hostile claim of ownership

of a boundary strip of Morton's land, as of March 2010 when the summary adjudication

issues were heard. (See 1 Witkin, Cal. Evidence, supra, § 101, pp. 925-927.) The trial

court was justified in narrowing the title issues presented, and the summary adjudication

terminating the quiet title claim was correct as a matter of law.

II

NONSUIT

After Morton concluded her presentation of evidence, the trial court granted

Spotts's motions for nonsuit on the grounds Morton had failed to establish the elements of

three of her causes of action: ejectment, slander of title and tortious interference with

contract. Morton challenges these rulings, contending the trial court erroneously failed to

26 recognize that she had presented sufficient expert opinion and nonexpert evidence from

which a trier of fact could have found liability and damages.

We first set forth applicable nonsuit standards and then address the three sets of

arguments separately.

A. Standard of Review

When a trial court rules upon a motion for nonsuit, and determines whether a

plaintiff's evidence is sufficient, " 'the court may not weigh the evidence or consider the

credibility of witnesses. Instead, the evidence most favorable to plaintiff must be

accepted as true and conflicting evidence must be disregarded. The court must give "to

the plaintiff ['s] evidence all the value to which it is legally entitled, . . . indulging every

legitimate inference which may be drawn from the evidence in plaintiff ['s] favor." '

[Citation.] A mere 'scintilla of evidence' does not create a conflict for the jury's

resolution; 'there must be substantial evidence to create the necessary conflict.'

[Citation.]" (Nally v. Grace Community Church (1988) 47 Cal.3d 278, 291 (Nally).)

In evaluating the record on appeal, the test for reviewing a nonsuit order "is

whether, if all legitimate inferences favorable to plaintiff are made, the evidence is

sufficient to support [the challenged] claim. . . ." (Campbell v. General Motors Corp.

(1982) 32 Cal.3d 112, 118 (Campbell); Nally, supra, 47 Cal.3d at p. 291.) "The plaintiff

must be given an opportunity to present all the facts he expects to prove before a nonsuit

is proper." (Loral Corp. v. Moyes (1985) 174 Cal.App.3d 268, 273; Castaneda v. Olsher

(2007) 41 Cal.4th 1205, 1214.)

27 " 'It is not incumbent upon a plaintiff to show that an inference in his favor is the

only one that may be reasonably drawn from the evidence; he need only show that the

material fact to be proved may logically and reasonably be inferred from the

circumstantial evidence.' " (Campbell, supra, 32 Cal.3d 112, 121.)

B. Ejectment

1. Applicable Legal Principles

Classically, the theory of ejectment requires proof of "seizin, entry and ouster,"

such that limited or temporary trespasses by the defendant do not suffice. (Wilson v.

Diche (1961) 192 Cal.App.2d 312, 314-315; see Abar v. Rogers (1972) 23 Cal.App.3d

506, 514-515.) However, if the trespasses are of a continuing nature, they can establish

that the defendant ousted the plaintiff of possession, by withholding a portion of the

plaintiff 's property. (Ibid.; Frazier v. Lynch (1893) 97 Cal. 370, 373.)

2. Morton's Evidence

Morton relied on evidence of Spotts's activities before the fence was built, such as

placing trash cans in the border area, and afterwards, such as overwatering plants and

allowing water to flow from a downspout onto Morton's property. Morton admits that

Spotts did not oust her from the entirety of Morton's property, and argues she made out a

prima facie case of Spotts's unlawful occupation of some portions of her land, damaging

her.

In argument on the motion, defense counsel pointed out that the undisputed

evidence showed that as of the time the lawsuit was filed, Spotts was not in possession of

28 any part of Morton's property, and therefore, any occasional, transitory trespasses shown

did not justify sending the case to the jury on the ejectment theory.

3. Ruling; Application of Standard of Review

The trial court concluded that on the state of the evidence, Spotts was entitled to

nonsuit. The type of evidence on which Morton was relying properly went to the trespass

theory, or some less severe interference with her possessory rights.

The trial court correctly analyzed the undisputed evidence as failing to show that

Spotts had consistently and substantially entered the property in a way that actually

possessed it, to the exclusion of Morton from her part of the boundary area. (Wilson v.

Diche, supra, 192 Cal.App.2d 312, 314-315.) On this record, the court was justified in

not sending the ejectment claim to the jury.

C. Slander of Title

"Slander or disparagement of title occurs when a person, without a privilege to do

so, publishes a false statement that disparages title to property and causes the owner

thereof ' "some special pecuniary loss or damage." ' [Citation.] The elements of the tort

are (1) a publication, (2) without privilege or justification, (3) falsity, and (4) direct

pecuniary loss. [Citations.] If the publication is reasonably understood to cast doubt

upon the existence or extent of another's interest in land, it is disparaging to the latter's

title. [Citation.] The main thrust of the cause of action is protection from injury to the

salability of property [citation], which is ordinarily indicated by the loss of a particular

sale, impaired marketability or depreciation in value [citations]." (Sumner Hill

29 Homeowners' Assn., Inc. v. Rio Mesa Holdings, LLC (2012) 205 Cal.App.4th 999, 1030

(Sumner Hill) [where plaintiff's title was disparaged in a recorded instrument].)

" ' "Pecuniary loss" ' is an essential element of a slander of title cause of action." (Ibid.)

In Appel v. Burman (1984) 159 Cal.App.3d 1209, 1214-1215, the appellate court

found that the trial court's judgment was supported by substantial evidence, that the

defendants had falsely and maliciously published to third parties their own claim of an

"agreed upon boundary," but only as an excuse to prevent the plaintiffs from constructing

their improvements for as long as possible, and "without any sincere belief that

[defendants/appellants] had any right, title or interest in the [plaintiffs/respondents']

property." (Id. at p. 1214.) One of the third parties, the public agency department of

water and power, consequently refused to move a power pole, which resulted in damages

being incurred by the plaintiffs and others. "Since the publication of this falsehood was

found to be with malice, it could not be privileged. As discussed, infra, the malicious

publication did result in pecuniary loss," from the plaintiffs' consequent inability to

proceed with their improvements. (Id. at p. 1215.) The loss from the two-year delay in

the plaintiffs' construction of their project, that was attributable to the disparagement,

amounted to $34,901. (Ibid.)

Morton relied on evidence of Spotts's communications to the PCC owners, both in

March and June 2008, complaining that its workers were trespassing upon Spotts's

property, and claiming that its license should be revoked. Morton argues there was

circumstantial evidence that it was Spotts who parked in the driveway or moved

30 boundary markers, thus attempting to claim Morton's property, at least through July 2009,

when she finally accepted the property line. Morton thus contends that she has shown the

required elements of publications that disparaged title but were false and unprivileged.8

As proof of her pecuniary loss, she cites to evidence of her attorney fees and the three-

month delay in completing the fence, after she incurred expenses in hiring Surveyor

Cebe. She also suggests that her house may have lost value due to the boundary dispute,

although evidence of appraisals was excluded.

In argument on the motion, Spotts's attorney argued that there had been no false

claims of assertions of title to Morton's property, insofar as Spotts had complained to

PCC workers and owners that they were trespassing upon the Spotts property. Spotts

therefore contended that was a true and defensible claim of trespass against her.

Likewise, Spotts argues that none of her publications made to the PCC owners or to the

surveyor were shown to be a disparaging attack on Morton's title, but rather amounted to

a defense against incursions upon her own property. Spotts further argued that the

previous summary adjudication ruling was proper, it established there was no title

dispute, and therefore there was no slander of title dispute sufficiently proven to go to the

jury.

8 Morton's brief asserts, without support, that the trial court adopted the reasoning offered by Spotts that she might be entitled to some qualified privilege defense under Civil Code section 47, subdivision (c). Although the parties discussed at the time the motions were heard whether Spotts might be offering jury instructions on privilege, the court's nonsuit ruling does not show any reliance on privilege contentions. We need not address any privilege issues here, in view of the failure of proof on other elements of the slander of title claim. 31 3. Ruling; Application of Standard of Review

In making its ruling, the court distinguished the case of Appel v. Burman, supra,

159 Cal.App.3d 1209, relied on by Morton, by stating that it involved a more extensive

disparaging publication to a third party governmental agency, that directly invoked a title

challenge and caused the plaintiff pecuniary loss from a two-year delay in construction.

The trial court concluded Spotts was entitled to nonsuit, because Morton's evidence did

not adequately establish the elements of a false or harmful publication to third parties that

caused her pecuniary loss. There was no challenge in the nature of a deed or other

instrument that otherwise affected title, as previously established in the ruling granting

summary adjudication.

This analysis was correct. Morton's evidence failed to show that the publications

made by Spotts could be "reasonably" understood as casting doubt upon the existence of

Morton's interest in her own side yard. (Sumner Hill, supra, 205 Cal.App.4th 999, 1030.)

The circumstantial evidence Morton presented did not "show that the material fact to be

proved may logically and reasonably be inferred from" that evidence. (See Campbell,

supra, 32 Cal.3d 112, 121.) On this record, the jury was not required to make a decision

upon the asserted facts about alleged false and unprivileged slanders directed at Morton's

title.

D. Tortious Interference with Contract

To establish a case for the tort of intentional interference with a contract, a

plaintiff must prove the existence of "(1) a valid contract between plaintiff and a third

32 party; (2) defendant's knowledge of this contract; (3) defendant's intentional acts designed

to induce a breach or disruption of the contractual relationship; (4) actual breach or

disruption of the contractual relationship; and (5) resulting damage." (Quelimane Co. v.

Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 55 (Quelimane).) The tort of

intentional interference with performance of a contract does not require that the actor's

"primary purpose" be disruption of the contract. (Id. at p. 56.)

In Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1155,

footnote 7 (Korea Supply), the court adhered to the analytical approach set out in

Quelimane, for the current state of the law concerning the intent requirement for the tort

of interference with contract. Specifically, Quelimane, supra, 19 Cal.4th at page 56

determined "that intentional interference with contract does not contain a specific intent

requirement." (Korea Supply, supra, at p. 1155, fn. 7.)

Korea Supply further states that the intent requirement is the same for the torts of

intentional interference with contract and intentional interference with prospective

economic advantage, but those torts nevertheless remain distinct: " '[o]ur courts

should . . . firmly distinguish the two kinds of business contexts, bringing a greater

solicitude to those relationships that have ripened into agreements, while recognizing that

relationships short of that subsist in a zone where the rewards and risks of competition

are dominant.' " (Korea Supply, supra, 29 Cal.4th 1134, 1157, quoting Della Penna v.

Toyota Motor Sales U.S.A., Inc. (1995) 11 Cal.4th 376, 392.)

33 2. Morton's Evidence

Morton's evidence addressed whether Spotts had intentionally committed acts to

disrupt Morton's contractual relationship with PCC, causing her damage. It was not

disputed that Spotts had twice called PCC owners to complain about the fence project,

nor that there was a three-month delay in completion, nor that Surveyor Cebe was hired

to clarify the situation. As damages, Morton cites to the evidence that she "had to suffer

with gravel in her front yard for three months," and "in order to avoid further conflict

with Ms. Spotts, the workers excavated the area by hand and built the fence backwards,

which increased the hours it took to complete the project once work re-commenced." She

argues the jury should have been allowed to determine the weight of the inferences, from

such evidence, of intentional interference and harm.9

In making its ruling, the trial court referred to previous arguments heard on the

same type of issue, and then concluded that Spotts was entitled to nonsuit. Morton could

not show the element of damage to her from Spotts's threats toward PCC of potential

legal actions for trespass or license revocation (which never occurred and did not harm

Morton). Morton was not charged extra for the moderate delay in performance of the

contract, which was done according to the correct boundary line, and she could not show

9 The majority in Korea Supply, supra, 29 Cal.4th 1134 at pages 1155 to 1156, declined to rely on Seaman's Direct Buying Service, Inc. v. Standard Oil Co. (1984) 36 Cal.3d 752 (overruled on other grounds in Freeman & Mills, Inc. v. Belcher Oil Co. (1995) 11 Cal.4th 85, 88), as authority for establishing the intent requirement for the tort of intentional interference with contract. Morton cannot persuasively rely on Seaman's authority in this context to claim she adequately proved the necessary bad intent. 34 how the mere existence of delay, such as the gravel pile on her driveway, damaged her.

The record demonstrates that even if Morton's evidence is accepted and viewed in the

light most favorable to her, the plaintiff, and if every inference is indulged, it still lacks

essential elements of this particular claim. (Castaneda v. Olsher, supra, 41 Cal.4th 1205,

1214.)

In conclusion, we agree with the trial court that the evidence produced by Morton

was insufficient to justify the necessary reasonable or logical inferences of causation of

damage from Spotts's activities, on these three theories, and the nonsuit ruling was

proper. The trial court conscientiously addressed each and every argument about the

elements of these claims, and we cannot find any error in the grant of nonsuit on these

theories.

III

CROSS-APPEAL: PUNITIVE DAMAGES AWARD

Morton was awarded $13,019 in compensatory damages on the claims of trespass

and private nuisance. Once the jury determined that Spotts had acted with malice,

oppression, or fraud, trial was adjourned for financial discovery to take place, and the

bifurcated punitive damages phase resumed the next day. Apparently, no detailed

discovery had been attempted previously, in light of in limine rulings restricting evidence

of Spotts's financial condition, and the restrictions of Civil Code section 3295, which

35 limit the circumstances under which evidence of a defendant's financial condition may be

discovered and admitted.10

In her cross-appeal, Spotts argues that the $15,000 award of punitive damages was

excessive in light of the evidence presented about her financial condition. She claimed at

trial she had a negative net worth, due to her various ongoing obligations. We examine

this argument in light of accepted rules for reviewing punitive damages awards.

A. Applicable Legal Principles

Generally, a contention of insufficient evidence to support a punitive damages

award is considered under a substantial evidence standard of review. (Kelly v. Haag

(2006) 145 Cal.App.4th 910, 916 (Kelly).) "[A]ll presumptions favor the trial court's

findings and we view the record in the light most favorable to the judgment." (Ibid.;

Vallbona v. Springer (1996) 43 Cal.App.4th 1525, 1536, fn. 10 (Vallbona).) We should

reverse " ' "only those judgments which the entire record . . . indicates were rendered as

the result of passion and prejudice. . . ." ' " (Kelly, supra, at p. 916; Neal v. Farmers

Insurance Exchange (1978) 21 Cal.3d 910, 927-928 (Neal).)

Punitive damages awards must take into account the reprehensibility of the

defendant's conduct, and bear a reasonable relationship to the jury's findings on the harm

suffered by the plaintiff. (State Farm v. Campbell (2003) 538 U.S. 408, 418 (State

Farm); BMW of North America, Inc. v. Gore (1996) 517 U.S. 559, 575; Simon, supra, 35

10 Spotts was deposed in February 2010 and gave some testimony about her bank accounts and credit card accounts and assets. However, there was apparently no pretrial request for leave to conduct further financial discovery under Civil Code section 3295. 36 Cal.4th at p. 1172.) As most relevant here, an award of punitive damages must comport

with the evidence presented about the defendant's financial condition, to represent "the

amount necessary to punish him or her and discourage future wrongful conduct." (Kelly,

supra, 145 Cal.App.4th 910, 914.)

The "most important question is whether the amount of the punitive damages

award will have deterrent effect--without being excessive." (Adams, supra, 54 Cal.3d at

p. 111.) Such an award must be in a reasonable range with respect to both the nature of

the misconduct and the amount of compensatory damages, and it may not be so

disproportionate to the defendant's ability to pay that the award becomes constitutionally

excessive. (Ibid.; Neal, supra, 21 Cal.3d 910 at pp. 927-928.) There is no bright line rule

that sets the proper ratio of compensatory to punitive damages, but this ratio "should

generally be no higher than four to one and almost never more than nine to one." (Gober

v. Ralphs Grocery Co. (2006) 137 Cal.App.4th 204, 213 (Gober), citing State Farm,

supra, 538 U.S. at p. 425.)

The plaintiff has the burden to establish the defendant's financial condition, by

introducing evidence to support an award of punitive damages that is appropriate in

amount and not excessive "in light of the central goal of deterrence." (Adams, supra, 54

Cal.3d at p. 120.) The courts acknowledge that it "is inherently prejudicial to require a

defendant to introduce evidence of personal finances." (Ibid.; see Kelly, supra, 145

Cal.App.4th 910, 920.)

In light of these rules, it is essential for a plaintiff to present actual evidence of the

defendant's financial condition as of the time of trial. (Kelly, supra, 145 Cal.App.4th at

37 p. 915; Adams, supra, 54 Cal.3d at p. 116, fn. 7, 119; Zhadan v. Downtown Los Angeles

Motor Distributors, Inc. (1979) 100 Cal.App.3d 821, 839; Washington v. Farlice (1991)

1 Cal.App.4th 766, 777.) In Kelly, we alluded to the concept expressed in Lara v. Cadag

(1993) 13 Cal.App.4th 1061, 1065, footnote 3 (Lara), that " '[n]et worth' is subject to

easy manipulation and, in our view, it should not be the only permissible standard."

(Kelly, supra, at pp. 915.) For example, in Vallbona, supra, 43 Cal.App.4th 1525, it was

sufficient that the defendant made certain admissions about his financial condition, and

further testified about real estate ownership and net value, as well as other assets. (Id. at

p. 1539.)

Thus, any examination of assets in this context without adding an examination of

liabilities would be inadequate. (Kenly v. Ukegawa (1993) 16 Cal.App.4th 49, 57.)

"Without evidence of the entire financial picture," there was a risk of "crippling or

destroying the defendant." (Ibid.) Even if a defendant is wealthy, his or her debts may

be high, and cannot be ignored. (Id. at p. 58.)

B. Morton's Evidentiary Showing

The evening after the first jury verdicts were rendered, Spotts submitted to an

hour-long deposition about her financial condition. The next afternoon, when trial

resumed, Morton's counsel made an opening statement requesting treble damages over

the $13,000-plus compensatory damages award. He stated that the evidence would

demonstrate Spotts had at least $200,000 in assets and, as a registered nurse, she was

capable of earning at least $70,000 per year.

38 At trial, Spotts testified about her income and expense statements and settlement

documents in her 2006 dissolution of marriage (her third), which had been litigated over

the past few years. She had received over $150,000 in assets and $34,000 of her

children's college accounts, as well as a final $62,000 settlement in 2010. Spotts

previously had a $100,000 investment account from her third marriage. She testified it

was all gone now. She had spent about $220,000 in attorney fees during the divorce

litigation. She was receiving $707 per month from her second husband's pension. She

had a tax refund coming in the amount of $2,500.

Spotts testified that she owned a condominium in La Mesa that she rented out, and

she currently owed approximately $144,000 on it. She received below market rent on it,

to accommodate the financial needs of her tenant. Its market value was estimated at

$140,000 by Spotts, and at $175,000 by Morton's real estate broker and witness, Kay

LeMenager.

Since 2007, Spotts had been working full time or per diem or part-time as a

registered nurse, making about $1,250 per week. As of her previous deposition in

February 2010, she was working sporadically, but at the time of trial, she could no longer

do so, because of debt.

Morton's counsel asked Spotts about permits she had obtained and paid for,

involving a planned renovation of her current home, which had been designated as a

historic residence, but she stated that she was no longer pursuing it because of lack of

finances. She was living in a rental house in Mission Hills for $2,000 per month, because

she did not want to displace her La Mesa renter.

39 Spotts's own attorney then questioned her about the additional documents she had

just brought to court, including a pay stub for the past five months, which showed she

was paying $400 monthly child support for her teenager. It showed she had earned about

$27,000 gross year-to-date, and her net pay was approximately $3,520 monthly. She had

approximately $200 in each of two credit union accounts. Her investment account now

had $1.41 in it. Her bank statements showed she had about $5,000 in a savings account

as of July 12, 2010.

Spotts testified that the subject Acacia residence was currently in foreclosure and

was to be sold at auction the next month, and the mortgage amount due was currently

$360,000. It was valued at $250,000. Her La Mesa condominium had a mortgage

balance of $140,000 with a monthly payment of $1,001 per month, and she was

underwater on both properties. She also paid homeowners' association dues, property

taxes and insurance for the condominium, and the rent she received did not cover those

amounts. She supplied her cell phone bill for work ($222 per month), and stated her

monthly expenses also included $300 for utilities and $400 for food for herself and any

visits from her children. She owned a car for which she paid $5,000 in cash, and she

spent about $200 per month on car expenses. She testified she had a negative cash flow

every month.

On cross-examination, Morton's counsel asked Spotts why she had not disclosed

the newly produced material previously, and she said she did not understand the

deposition questions. She was receiving compensation for her mileage driven for work

and had high seniority at work, so she could get jobs before her less senior colleagues

40 could. Her compensation was "complicated" and she made different amounts for

meetings, as opposed to other kinds of work. The court did not allow Morton's attorney

to inquire into Spotts's personal insurance coverage that might apply to the compensatory

damages award against her.

Morton's real estate broker witness gave her opinions about the rental value of the

condominium property owned by Spotts, i.e., about $500 more than Spotts was charging

her tenant.

Morton testified about the money she had spent on this litigation and how Spotts

had mocked her on that topic and others. Morton's attorney explained to the jury that

more discovery had not been done earlier because of financial privacy concerns, and that

until the essential jury finding of liability for punitive damages had been made, Spotts's

deposition had to be delayed. He said he had obtained as much information as he could,

once the verdict was presented.

In argument on the punitive damages issues, Morton's attorney said Spotts's net

worth was about $351,000 and a $39,000-$40,000 punitive damages award would be

proper and would not wipe her out, and would send her and the community a message

about how not to act. On appeal, Morton contends the evidence showed Spotts had at

least $264,000 in assets.

Spotts's counsel argued to the jury that she had shown she had a negative cash

flow, of $5,300 per month in expenses and about $4,000 per month in income. The

Acacia property was currently worth about $250,000, and overall, Spotts's financial

condition was poor and she did not need to be taught a lesson.

41 The jury deliberated for a day and awarded $15,000 in punitive damages.

C. Analysis

The concept of " '[n]et worth' is subject to easy manipulation.' " (Lara, supra,

13 Cal.App.4th at p. 1065, fn. 3.) This concept is also discussed in terms of financial

condition or a "defendant's ability to pay." (Adams, supra, 54 Cal.3d at pp. 110-116.)

Whatever terminology is used, we are persuaded that substantial evidence was presented

to present a fairly complete picture, in the punitive damages context, of Spotts's assets,

liabilities, and ability to earn. Even though she repeatedly asserted she had a negative net

worth, in terms of monthly cash flow, she also revealed that she had assets that were not

being fully utilized. The financial choices that she had made could reasonably have been

evaluated by the jury as failing to maximize her net worth or to improve her financial

condition. More than just Spotts's divorce financial settlement information was shown at

trial. Counsel argued and the jury was instructed on the relevant factors to apply.

This is not a case in which the jury lacked any information about liabilities, or was

presented with only one side of the financial ledger sheet. (Kelly, supra, 145 Cal.App.4th

at p. 920; Kenly v. Ukegawa, supra, 16 Cal.App.4th 49, 57.) Rather, Spotts had the

opportunity to explain her monthly income and outgo as they affected her financial

condition, and she also testified about her real estate ownership and its net value, as well

as her other assets, income, and obligations. (Vallbona, supra, 43 Cal.App.4th at p.

1539.)

This jury was given an adequate basis to award punitive damages, and it did not do

so in a disproportionate manner that suggests only passion or prejudice could have been

42 its rationale. (Neal, supra, 21 Cal.3d 910 at pp. 927-928.) This record supports the

award and amount of punitive damages in the judgment, as well as the underlying

liability findings and legal rulings.

DISPOSITION

The judgment is affirmed. Each party shall bear her own costs on appeal.

HUFFMAN, J.

WE CONCUR:

BENKE, Acting P. J.

IRION, J.