Filed 11/13/13 Kirk v. Dimitri 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS 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 This opinion has not been certified for publication 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 

MARK B. KIRK, 

 Plaintiff, Cross-complainant and 

 Appellant, 

 v. 

GUIDO DIMITRI, Individually and as 

Trustee, etc. et al., 

 Defendants, Cross-complainants and 

 Appellants; 

DIMITRI, DIFFENDALE & KIRK, LLC, 

 Cross-defendant and Appellant; 

MARK B. KIRK, INC., 

 Cross-defendant and Respondent. 

 D058758 

 (Super. Ct. No. 

 37-2007-00052678-CU-CO-NC) 

 

MARK B. KIRK, 

 Plaintiff, Cross-defendant and 

 Appellant, 

 v. 

 D059539 

 (Super. Ct. No. 

 37-2007-00052678-CU-CO-NC) 
2 

GUIDO DIMITRI, Individually and as 

Trustee, etc. et al., 

 Defendants, Cross-complainants and 

 Appellants; 

DIMITRI, DIFFENDALE & KIRK, LLC, 

 Cross-defendant and Appellant. 

 CONSOLIDATED APPEALS from a judgment and postjudgment orders of the 

Superior Court of San Diego County, Earl H. Maas, III, Judge. Reversed in part, 

affirmed in part, and remanded with directions. 

 Friedhofer PC, James E. Friedhofer; Rowe Allen Mullen and Martin J. Mullen for 

Plaintiff, Cross-complainant, Cross-defendant and Appellant Mark B. Kirk. 

 Horvitz & Levy, H. Thomas Watson, S. Thomas Todd; Wayne Thomas & 

Associates, Timothy D. Lucas; Anderson & Anderson and Steven A. Micheli for 

Defendants, Cross-complainants and Appellants Guido Dimitri et al. 

 No appearance for Cross-defendant and Appellant Dimitri, Diffendale & Kirk, 

LLC. 

 Steven L. Stern and Deborah L. Zoller for Cross-defendant and Respondent Mark 

B. Kirk, Inc. 

 This case arises from a failed real estate venture in Fallbrook, California. The 

parties appeal the judgment and various court orders following a jury trial on breach of 
3 

contract and tort claims, a bench trial on equitable claims, and postverdict and 

postjudgment motions. 

FACTUAL BACKGROUND 

 Plaintiff and cross-defendant Mark Kirk, owner of licensed general contractor and 

cross-defendant Mark B. Kirk, Inc. (MBK), met Guido Dimitri and his wife Paula in late 

2003. Dimitri owned a lot in Fallbrook and contacted Kirk about building a custom home 

on his property after seeing one of Kirk's projects in the area. Early in their conversations 

about building that custom home, they began to discuss the possibility that Dimitri and 

his son-in-law, George Diffendale, would invest in other residential development projects 

with Kirk. At the time he met Dimitri, Kirk had development projects under construction 

with three other investors, including the project Dimitri had seen in Fallbrook. 

 In December 2003, Kirk entered into a purchase agreement for six neighboring 

lots, which eventually became known as the Rod Street project. In January 2004, Kirk 

met with Dimitri and Diffendale to discuss potential development ventures, including the 

Rod Street project. At this meeting, Dimitri and Diffendale expressed a strong interest in 

investing with Kirk, and shortly thereafter the men formed Dimitri, Diffendale & Kirk 

LLC (DDK) for the purpose of developing real property in Fallbrook. Dimitri then 

loaned DDK $700,000 to finance the purchase and land improvements of four of the six 

Rod Street lots. Kirk bought one of the remaining two lots individually, and the last was 

not purchased. In the same time frame, Dimitri purchased another group of four lots in 

Fallbrook, the Monserate Hill project, to be developed by DDK. 
4 

 DDK contracted with MBK to improve the land and build homes on the four Rod 

Street lots. Home construction costs were funded by bank loans and the homes 

ultimately sold in 2005 and 2006 for prices ranging from $950,000 to $1,155,000. DDK 

repaid Dimitri's initial loan and the bank loans, and the DDK members received fees as 

provided in the company's operating agreement, but no profits were distributed to its 

members. 

 The initial land purchase for the Monserate Hill project by DDK was financed 

with a $980,238 loan from Dimitri, through his family trust, and another $175,000 loan 

from Diffendale. The four lots that comprised the project consisted of a 24-acre avocado 

grove. After the lots were purchased, the DDK members agreed to pursue grading 

permits to prepare the three smallest of the four lots for development and to begin 

marketing those lots immediately. With respect to the fourth, larger parcel (totaling 10 

acres) the DDK members agreed to subdivide the parcel into four lots. The subdivision 

required DDK to obtain tentative and final parcel maps from the County of San Diego, 

which Kirk estimated would take between 19 and 21 months. DDK planned to begin 

marketing the subdivided lots within the first year after some of the initial development 

of the property was complete. As with the Rod Street project, DDK contracted with 

MBK for the construction work on the project. At the outset, the DDK members agreed 

the properties should be developed and sold as quickly as possible to take advantage of 

the favorable real estate market. 
5 

 The terms of the initial loans by Dimitri and Diffendale to DDK were set forth in 

the operating agreement for DDK. The parties also entered into another agreement, the 

Capital Contribution Agreement (CCA), memorializing a $50,000 capital contribution by 

Kirk to DDK. In exchange for this contribution, Dimitri and Diffendale explicitly agreed 

to be "responsible for the total investment capital for the [Monserate Hill] Project, 

including but not limited to purchase of the land, all improvement costs, and the costs of 

carrying the [Monserate Hill] Project until the Project is completed and sold." Dimitri 

and Diffendale further guaranteed "that the development of the [Monserate Hill] project 

will not be held up for lack of funds" and that "[i]n the event that the [Monserate Hill] 

project is delayed for lack of funds or any other reason caused by [Dimitri or Diffendale], 

then [Dimitri and Diffendale] agree[] to pay all related interest charges during the time 

that the project is delayed and any other losses or damages which may be incurred during 

the times caused by said delays." 

 In early 2005, Diffendale's wife (Dimitri's daughter) filed for divorce. This 

precipitated the buyout of Diffendale's DDK membership interest and the beginning of 

tensions between Dimitri and Kirk. During the long and hostile buyout negotiation, Kirk 

became the middleman between the other two DDK members. Over Kirk's disapproval, 

Dimitri rejected offers on lots from both the Rod Street and Monserate Hill projects to 

prevent an increase in the value of Diffendale's membership interest in DDK. To force 

Kirk to go along, Dimitri held the threat of foreclosure and termination of the Monserate 

Hill project over him. Dimitri rejected an offer of $1,050,000 on one of the Rod Street 
6 

lots that later sold for $965,000, and two offers on the smaller Monserate Hill lots, one 

for $800,000 and one for $775,000, which remained unsold at the time of trial. The 

buyout was finalized by the sale of Diffendale's interest in DDK to Dimitri on December 

31, 2005. The parties had agreed DDK would repurchase Diffendale's interest but the 

deal was modified at the last minute, without Kirk's knowledge, so that Dimitri became 

the purchaser of the interest. 

 In addition to financing the project, and against Kirk's recommendation, Dimitri 

also insisted on managing the avocado grove on the property. Kirk and Diffendale 

believed DDK would be better served by hiring a professional grove management 

company. Dimitri, however, predicted the grove would earn revenues of $100,000 per 

year under his management. To address Kirk's and Diffendale's concerns, Dimitri 

guaranteed the grove would run at a profit and that he would cover any losses suffered by 

DDK on the grove. This promise was made explicit in the CCA: "[Dimitri] guarantees 

that under the grove management of Guido Dimitri that the grove will be profitable after 

the first year and that fruit sales from the [Monserate Hill] Project will pay the entire 

costs of operating the grove. Any losses associated with the Grove will be borne by 

[Dimitri] after the first year." Kirk's fears turned out to be well-founded. He presented 

expert testimony at trial showing losses on the operation of the grove from 2005 to 2008 

of more than $243,000. 

 After Diffendale's departure from DDK, the relationship between Kirk and Dimitri 

continued to sour. Kirk took steps to move the project forward to sell the Monserate Hill 
7 

lots and Dimitri moved to gain control of the Monserate Hill property and end his 

relationship with Kirk. Other than Dimitri's and Diffendale's initial loans, the 

development of the Monserate Hill project was financed primarily by bank loans. Over 

Kirk's objections, however, in 2006 Dimitri paid off the bank loans and became the sole 

lender for all purposes, through his family trust, gaining more control over DDK. In 

addition to rejecting viable and profitable offers on various lots, Dimitri managed the 

avocado grove in a way that harmed DDK's ability to obtain required approvals and a 

tentative parcel map from the County. Dimitri's work on the grove left the property in 

disarray, making showing the property to potential buyers difficult. After agreeing to 

hire engineers to complete the parcel map project in July 2006, in November Dimitri 

changed course, unilaterally firing them. Around the same time, Dimitri withdrew all 

remaining funds from DDK's bank account, stalling all progress on the development. 

Dimitri told Kirk he was forcing Kirk out and he would get nothing. 

 To continue to move the Monserate Hill project forward and create value in the 

property, Kirk, without Dimitri's involvement, rehired the engineer and paid fees with his 

own funds to arrange meetings with the County on the parcel map in the first half of 

2007. On June 29, 2007, before the map was approved, Dimitri sent a letter to the 

County demanding it cease all work. A similar cease and desist letter was sent to Kirk by 

Dimitri's counsel. All direct communication between Kirk and Dimitri terminated, and 

the relationship was relegated to their attorneys. 
8 

 In April 2009, the parties authorized the County to restart its work on the 

subdivision of the 10-acre Monserate Hill lot. The following October the County 

preliminarily denied a tentative parcel map based on lack of secondary access in the event 

of a wildfire, and sought a fire protection plan from DDK to remedy the denial. 

Additional facts are set forth in the opinion where relevant to a particular issue. 

PROCEDURAL BACKGROUND 

 Kirk brought suit individually, and derivatively on behalf of DDK, against Dimitri 

and Paula. Kirk's complaint included claims for breach of contract, defamation and other 

intentional torts, negligence, and equitable claims for specific performance and 

reformation of various notes held by Dimitri. Dimitri countersued Kirk and MBK, 

individually and derivatively on behalf of DDK, alleging breach of the DDK operating 

agreement based on allegations that Kirk and MBK overcharged DDK for construction 

work. Dimitri's cross-complaint also sought declaratory relief and included claims for 

misrepresentation and breach of fiduciary duty. MBK then countersued DDK for breach 

of the construction management agreement on the Monserate Hill project. 

 All the parties' claims, except equitable claims for specific performance and 

reformation, were tried to a jury beginning on December 14, 2009. Before the close of 

evidence Dimitri filed a document titled "Memorandum of Points and Authorities in 

Support of Motion for Directed Verdict on the Cross Complaint of Mark B. Kirk, Inc." 

The day jury deliberations began, the court heard arguments on this request. At this 

hearing Dimitri made an additional oral motion for a directed verdict that the CCA was 
9 

not valid. The court declined to rule on either request, stating its preference to see the 

jury's verdict first. 

 The jury returned a unanimous special verdict on liability and nonpunitive 

damages. The verdict was contained on a series of special verdict forms, one each for 

Kirk's complaint, Dimitri's cross-complaint, and MBK's cross-complaint. On DDK and 

Kirk's breach of contract claims, the jury found Dimitri liable and awarded DDK 

damages of $3,085,000 and Kirk damages of $10,000. The jury also found Dimitri liable 

for (1) money had and received, awarding $362,000 to DDK; (2) intentional 

misrepresentation, awarding $243,000 to DDK and $1 to Kirk; (3) conversion, awarding 

$20,740 to DDK; and (4) breach of fiduciary duty, awarding $1 in damages to both DDK 

and Kirk. The jury found in favor of MBK, and against DDK, on its breach of contract 

claim and awarded MBK compensatory damages of $300,000. The jury found for 

Dimitri on one of his claims, a derivative cause of action for breach of fiduciary duty, and 

awarded DDK $1 in damages against Kirk. On DDK and Kirk's punitive damages claim, 

the jury found Dimitri guilty of intentional fraud, oppression or malice, leading to a 

second trial phase on February 3, 2010. This phase resulted in a unanimous verdict 

against Dimitri awarding punitive damages of $2.5 million. The jury was discharged 

after it returned its punitive damages verdict. 

 During trial, the parties' equitable claims were submitted to the court for decision. 

After the jury returned its verdict, the court invited briefing on Kirk's equitable claim of 

reformation. In his posttrial brief Kirk sought equitable reformation of three loans made 
10 

by Dimitri to DDK to reduce the interest rates to conform to the original agreement of the 

parties. Kirk also requested a ruling on his claim for specific performance of Dimitri's 

obligation to continue to fund the development of the Monserate Hill project. Dimitri 

sought a judicial declaration terminating his obligation to fund the project. Dimitri's 

posttrial brief also raised his claim of setoff (or offset), set forth as an affirmative defense 

in his answer to Kirk's complaint, seeking reduction of any award against him by the 

amount of principal and interest owed to him by DDK. Dimitri's brief did not identify a 

specific amount of offset, but stated Dimitri would "identify those obligations owed to 

him which he will choose to offset against the judgment." 

 In addition to addressing these equitable issues, Dimitri also asked the court to 

modify the jury's verdicts in a number of respects, labeling these requests "motions for 

directed verdict." Dimitri renewed his request for a directed verdict on MBK's breach of 

contract claim, asking the court to overturn the jury's verdict on this claim. Dimitri also 

asked the court to overturn the jury's verdict on DDK's intentional misrepresentation 

claim, to "correct" the damages awarded to DDK for Kirk's money had and received 

claim, and to eliminate or reduce the jury's punitive damages award. 

 On May 10, 2010, the court issued a "Ruling and Verdict on Issues Submitted to 

the Court," finding for Dimitri on his claim for declaratory relief to discontinue his 

funding obligation to DDK on the Monserate Hill project and against Kirk's request for 

specific performance. The court also ruled against Kirk on his request for reformation of 

the various notes. With respect to Dimitri's request for offset, the court "allow[ed] the 
11 

requested offset against the judgment for amounts due under the pending notes," and 

ordered the parties to calculate the amount and include "such findings in the judgment." 

 Over Kirk's procedural objections, the court also ruled on Dimitri's directed 

verdict motions. Recognizing a procedural problem, the court stated it would rule on the 

posttrial motions, despite being "potentially premature," to "avoid duplicity of 

hearings."1 The order denied Dimitri's motion for directed verdict on the contract award 

in favor of MBK, Inc., granted Dimitri's request to reduce the verdict on the " 'money 

paid/had' cause of action to $95,607.72," struck the jury's damages award on Kirk's 

intentional misrepresentation claim, and reduced the punitive damages award to 

$100,000. The order also directed Kirk to prepare a judgment and submit it to the court 

within 20 days. 

 Kirk unsuccessfully moved the court to reconsider its ruling on Dimitri's directed 

verdict motions on the ground that the order constituted an "unforeseeable de facto grant 

of a Motion for New Trial and/or Motion for [Judgment Notwithstanding The Verdict 

(JNOV)] . . . ." Thereafter, the parties submitted competing judgments and supporting 

briefs seeking a ruling from the court on the disputed issue of the amount of offset. Kirk 

 

1 The procedural problem with Dimitri's motion was also recognized by the court at 

the April 30, 2010, hearing on the equitable claims, at least with respect to the request to 

reduce the punitive damages award. The court stated: "I'm willing to make a decision on 

[punitive damages] now, but I don't want to make a decision on that if either party's going 

to stand on, 'well, wasn't the right time, had to be done later.' [¶] I do think probably 

technically [Kirk is] correct, that it should be something that's done [postjudgment], but 

the court has spent all the time with your file, so my preference would be to do it 

whenever I'm going to do it now or when I finish this." The court then sought (and 

received) Kirk's consent to rule on Dimitri's request to eliminate or reduce the punitive 

damages award. 
12 

argued no offset was warranted because there had been no adjudication by the jury or 

court as to the amount owed by DDK to Dimitri. Kirk also pointed to specific elements 

of Dimitri's claimed offset that he believed should be deducted, including a $225,000 

loan related to the Diffendale buyout, a $20,000 note related to grove management fees, 

and portions of the amount of accrued interest on all the other notes. 

 On September 1, 2010, the court notified the parties by letter that it would accept 

Dimitri's proposed judgment, with the modifications that interest on the offsetting notes 

should be calculated through May 10, 2010 (not the date of the entry of judgment as 

proposed by Dimitri), and the offset should not include the note related to grove 

management fees. Dimitri submitted a revised judgment entered by the court on 

September 16, 2010. Both parties subsequently filed motions for JNOV and new trial, 

and Dimitri also filed a motion to amend the judgment. These motions were denied. 

 In October 2010, Kirk filed a motion seeking attorney fees as the prevailing party 

on his breach of contract claims under Civil Code section 1717 and the attorney fee 

provision in the DDK operating agreement. After briefing, the court issued a minute 

order requiring Kirk "to provide additional information apportioning [attorney] fees 

between the contract and tort causes of action and between Kirk and DD&K." Both 

parties filed briefs on the allocation of fees and the Dimitris each filed motions seeking 

attorney fees under section 1717 and under the prevailing party fee provision in various 

notes between their family trust and DDK. 
13 

 Oral argument on the fee motions took place on January 13, 2011. On January 27, 

2011, the court issued a "Ruling Regarding Attorney[] Fees" subsequently modified to 

award: (1) Dimitri $120,000 against Kirk and DDK, jointly and severally; (2) $120,000 

to Paula against Kirk; (3) $350,000 to Kirk against DDK; and (4) $108,541.55 to MBK 

against DDK. The parties appealed the judgment (and postverdict orders for directed 

verdict) and later the court's order awarding attorney fees. We consolidated the appeals 

on our own motion for review. 

DISCUSSION 

 Kirk's appeal challenges the trial court's rulings on Dimitri's request for a directed 

verdict modifying the jury's verdict before the entry of judgment, the court's rulings on 

the parties' equitable claims, and various aspects of the court's attorney fee award. Kirk 

challenges the directed verdict rulings on both procedural and substantive grounds. 

Dimitri appeals the judgment against him on Kirk's breach of contract claims, MBK's 

breach of contract claim, DDK's claim for money had and received, DDK's conversion 

claim, and one aspect of the court's attorney fee award. 

I 

DIMITRI'S POSTVERDICT REQUESTS FOR DIRECTED VERDICT 

 Kirk contends the timing of the trial court's ruling on Dimitri's request for a 

directed verdict, after the issues were decided by the jury and the jury was discharged, 

mandates reversal. He argues a directed verdict may not be granted after the jury has 

been discharged except in the limited circumstance, not applicable here, in which the jury 
14 

has not yet rendered a verdict. Kirk further contends the court's rulings were defective 

because Dimitri's requests for directed verdict lacked merit. We conclude the trial court 

erred by granting Dimitri's motion for directed verdict on both procedural and substantive 

grounds. 

 A. Procedural Error 

 The Code of Civil Procedure sets forth three mechanisms for seeking a ruling on 

the legal sufficiency of the evidence proffered or presented by the opposing party at 

various times during trial. First, the defendant may move for nonsuit after the plaintiff's 

opening statement or at the close of the plaintiff's evidence. (Code Civ. Proc., § 581c, 

subd. (a).) Second, any party may move for a directed verdict after all parties have 

completed their presentation of evidence. (Code of Civ. Proc., § 630.)2 Third, a party, or 

the court on its own motion, may move for JNOV after judgment or after a verdict has 

been rendered, but before judgment has been entered on the verdict. (§§ 629, 659.) 

 The function of all three of "these motions is to prevent the moving defendant 

from the necessity of undergoing any further exposure to legal liability when there is 

insufficient evidence for an adverse verdict." (Fountain Valley Chateau Blanc 

Homeowner's Assn. v. Department of Veterans Affairs (1998) 67 Cal.App.4th 743, 750.) 

Each motion may be granted " 'only if it appears from the evidence, viewed in the light 

most favorable to the party securing the verdict, that there is no substantial evidence in 

support.' " (Cabral v. Ralphs Grocery Co. (2011) 51 Cal.4th 764, 770, quoting Sweatman 

 

2 All further statutory references are to the Code of Civil Procedure unless otherwise 

specified. 
15 

v. Department of Veterans Affairs (2001) 25 Cal.4th 62, 68.) We review the trial court's 

ruling on each of these motions by applying that same standard. (Fountain Valley, at 

p. 750.) 

 Dimitri's motion for directed verdict after the verdict was rendered and the jury 

had been dismissed was procedurally unsound. Although not explicitly mandated by the 

directed verdict statute (§ 630), directed verdict motions are typically made after the 

presentation of evidence is complete and before the verdict is rendered. (See Fountain 

Valley Chateau Blanc Homeowner's Assn. v. Department of Veterans Affairs, supra, 67 

Cal.App.4th 743.) Section 630 provides an exception permitting the court to order 

judgment in favor of a party after the jury is discharged only when the jury is discharged 

without rendering a verdict. (§ 630, subd. (f).) This exception and the JNOV procedure 

set forth in section 629 are meaningless if a party can bring a motion for directed verdict 

after the jury has rendered its verdict. (See People v. Aguilar (1997) 16 Cal.4th 1023, 

1030 ["We . . . generally avoid a reading that renders any part of a statute superfluous."].) 

 Additionally, unlike a JNOV motion, a party opposing a motion for directed 

verdict is afforded the opportunity to seek leave to reopen evidence to remedy any defect 

raised by the moving party. (Sanchez v. Bay General Hosp. (1981) 116 Cal.App.3d 776, 

793.) To the extent Dimitri's directed verdict motion had merit, Kirk should have been 

afforded his right to petition the court to reopen the trial to present any additional 

evidence that supported his claims. The procedure used in this case foreclosed Kirk from 

exercising this right. The court erred by ruling on Dimitri's directed verdict motion after 
16 

the jury rendered its verdict. To treat Dimitri's directed verdict requests as a motion for 

JNOV on its own motion, the court was required to provide the parties with five days' 

written notice. (Webb v. Special Electric Company, Inc., 214 Cal.App.4th at p. 609.) 

The trial court here did not provide notice of an intention to grant the JNOV motion and, 

therefore, lacked the statutory authority to do so. (Ibid.) 

 B. Dimitri's Requests for Directed Verdict 

 Disregarding the court's procedural error, the portions of the order granting 

Dimitri's posttrial motions for directed verdict cannot be upheld. A motion for directed 

verdict is in the nature of a demurrer to the evidence. (Estate of Lances (1932) 216 Cal. 

397, 400-401; Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 629.) "In 

determining such a motion, the trial court has no power to weigh the evidence, and may 

not consider the credibility of witnesses. It may not grant a directed verdict where there 

is any substantial conflict in the evidence. [Citation.] A directed verdict may be granted 

only when, disregarding conflicting evidence, giving the evidence of the party against 

whom the motion is directed all the value to which it is legally entitled, and indulging 

every legitimate inference from such evidence in favor of that party, the court nonetheless 

determines there is no evidence of sufficient substantiality to support the claim or defense 

of the party opposing the motion, or a verdict in favor of that party." (Howard, at 

pp. 629-630.) 

 We review the court's grant of a directed verdict de novo, " 'guided by the same 

rule requiring evaluation of the evidence in the light most favorable to the plaintiff.' 
17 

[Citation.] We will not sustain the judgment ' "unless interpreting the evidence most 

favorably to [the] plaintiff's case and most strongly against the defendant and resolving 

all presumptions, inferences and doubts in favor of the plaintiff a judgment for the 

defendant is required as a matter of law." ' " (Nally v. Grace Community Church (1988) 

47 Cal.3d 278, 291; Saunders v. Taylor (1996) 42 Cal.App.4th 1538, 1541.) 

 Applying these standards, a directed verdict was properly granted only if the 

evidence was insufficient to support a verdict in Kirk's favor. (Estate of Lances, supra, 

216 Cal. at p. 400; Hauter v. Zogarts (1975) 14 Cal.3d 104, 110 ["The trial judge's power 

to grant a judgment notwithstanding the verdict is identical to his power to grant a 

directed verdict."].) 

 1. Intentional Misrepresentation

 Dimitri argued in his motion for directed verdict the $243,000 award in favor of 

DDK for intentional misrepresentation should be stricken because Kirk did not bring this 

claim derivatively on behalf of DDK and because, as a member of DDK, it was 

impossible for Dimitri to make a misrepresentation to himself. The court ruled "[t]he 2nd

Amended Complaint states a cause of action on behalf of Kirk, only. Further, as both the 

alleged 'misrepresenter' and a manager of DD&K, this finding would require Dimitri to 

intentionally misrepresent something to himself." 

 Kirk challenged this ruling in unsuccessful motions for JNOV and new trial. At 

the hearing on these posttrial motions, the court explicitly acknowledged there was 

sufficient evidence to support the jury's $243,000 award for intentional misrepresentation 
18 

and that its ruling striking those damages may have been wrong. Unsurprisingly, Kirk 

appeals, arguing sufficient evidence supported the jury's verdict. In response, Dimitri 

abandons the arguments he made in the trial court that the derivative nature of the claim 

was not adequately pleaded and, as a member of DDK, Dimitri could not be held liable to 

DDK for intentional misrepresentation. Instead, Dimitri contends the evidence was 

insufficient to find him liable for intentional misrepresentation or, alternatively, the 

evidence only supported an award of $34,888. 

 At trial, Kirk's expert on the profitability of the grove testified the grove had a 

cumulative loss of $243,108 from 2005 to 2008, substantially matching the jury's award 

of $243,000 on Kirk's claim for intentional misrepresentation. Consequently, the parties 

presume the jury's verdict for intentional misrepresentation was based on Dimitri's 

promise he would reimburse DDK for any losses it suffered as a result of his 

management of the avocado grove. 

 Actionable fraudulent misrepresentation based on a promise requires evidence of 

the promisor's intent not to perform on the promise at the time it was made. (Lazar v. 

Superior Court (1996) 12 Cal.4th 631, 638.) Dimitri contends his promise cannot 

support the jury's verdict because Kirk did not show Dimitri did not intend to run the 

grove profitably. However, the question here is not, as Dimitri poses, whether Dimitri 

intended to run the grove profitably. Instead, the appropriate question is whether Dimitri 

intended to cover the losses, as he promised, if the grove was not profitable. As the trial 
19 

court noted, there was sufficient evidence from which the jury could infer Dimitri never 

intended to reimburse DDK for losses on the management of the avocado grove. 

 Dimitri's adamant denial during trial of ever making the promise was strong 

circumstantial evidence that his intent at the time he made the promise was not to honor 

it. (See Tenzer v. Superscope, Inc. (1985) 39 Cal.3d 18, 30 [noting fraudulent intent can 

be shown by defendant's "hasty repudiation of the promise, his failure even to attempt 

performance, or his continued assurances after it was clear he would not perform"].) 

After the jury found the promise was made, it could infer from Dimitri's denials that he 

did not intend to cover the losses. 

 Dimitri also contends his promise "of 'profitability' was too vague, as a matter of 

law, to support the intentional misrepresentation verdict." As noted, the promise forming 

the basis of Kirk's claim (on behalf of DDK) was not that the grove would be profitable, 

but that Dimitri would reimburse DDK for any losses it sustained while Dimitri managed 

it. To support a claim for promissory fraud, the promise must " 'provide a basis for 

determining the existence of a breach and for giving an appropriate remedy.' " 

(Bustamonte v. Intuit, Inc. (2006) 141 Cal.App.4th 199, 209.) Dimitri's promise to cover 

losses on the grove met this threshold. 

 Sufficient evidence also supported the amount of damages for intentional 

misrepresentation awarded by the jury. Dimitri claims there was no evidence to support 

measuring profitability of the grove on an annual basis. The CCA, however, referred to 

profitability "after the first year," the construction management agreement between DDK 
20 

and MBK referred to yearly periods, and Dimitri himself estimated the grove would 

provide profits of $100,000 a year. As to the amount of damages, Kirk testified he 

estimated the grove sustained losses of between $250,000 and $300,000 and his expert 

showed losses of $243,108. The jury was free to accept these figures and reject Dimitri's 

expert's conflicting testimony that the grove did not sustain any losses. (See Johnson v. 

Pratt & Whitney Canada, Inc. (1994) 28 Cal.App.4th 613, 623 [when " 'the evidence 

gives rise to conflicting reasonable inferences, one of which supports the findings of the 

trial court, the trial court's finding is conclusive on appeal' "].) We reverse the judgment 

on this claim and reinstate the jury's verdict for Dimitri's intentional misrepresentation of 

$243,000 in favor of DDK and $1 in favor of Kirk. 

 2. Money Had and Received

 In addition to the improper timing of Dimitri's directed verdict motion, the court's 

reduction of the damages awarded to Kirk on behalf of DDK on his claim of money had 

and received was procedurally defective for another reason. "The Legislature has 

provided an exclusive remedy for a trial court to employ where some damages are 

properly awarded, but the amount is excessive. That is through a remittitur pursuant to 

Code of Civil Procedure section 662.5." (Teitel v. First Los Angeles Bank (1991) 231 

Cal.App.3d 1593, 1604-1605, fn. omitted.) "[T]he legislative system as enacted makes it 

plain that damages, except those which may be determined as a matter of law, are to be 

fixed by the trier of fact and, if erroneous in amount, subject to the reduction or new trial 

procedure specified in" section 662.5, subdivision (a)(2). (Teitel, at p. 1605.) By ruling 
21 

on Dimitri's "directed verdict" motion to reduce the amount of damages awarded, the 

court improperly bypassed the remittitur procedure. However, the procedure followed by 

the appellate court in Teitel--reversing the order granting JNOV and remanding with 

directions to reconsider the new trial motion simultaneously filed with defendant's motion 

for JNOV--is not available in this case. (Id. at pp. 1606-1607.) Because the court 

reduced damages on the directed verdict motion, Dimitri did not file either a motion for 

JNOV or new trial motion on this issue. 

 Dimitri argued the jury's award on Kirk's claim for money had and received was 

excessive because the only claim in the operative complaint that could be considered a 

claim for money had and received was its 23d cause of action, titled "Money Paid by 

Mark Kirk against Guido Dimitri." The claim sought the return of $95,000 mistakenly 

paid to Dimitri. In response to Dimitri's motion, Kirk argued the amount of the award 

above $95,000 was supported by evidence of excessive interest Dimitri charged DDK 

over the years "based upon the financial leverage and undue influence [Dimitri] 

possessed over" DDK. The evidence included Kirk's testimony DDK paid Dimitri more 

interest, or owed more accrued interest, than the amount agreed to by the parties on 

certain loans. Kirk's expert calculated this excessive interest to be approximately 

$268,000. 

 Kirk makes the same argument here, adding that in addition to the excessive 

interest, evidence of other damages DDK suffered as a result of Dimitri's fraud and 

exercise of undue influence supported the jury's award. Dimitri contends the reduction 
22 

should be upheld because the excessive interest had not been paid at the time of trial, but 

instead was awarded to him as an offset after the fact. Further, Dimitri argues the cause 

of action for "Money Paid" in Kirk's complaint limited the available damages to $95,000. 

 " '[A]n action for money had and received will lie to recover money paid by 

mistake, under duress, oppression, or where an undue advantage was taken of plaintiffs' 

situation whereby money was exacted to which the defendant had no legal right.' " (J. C. 

Peacock, Inc. v. Hasko (1961) 196 Cal.App.2d 353, 361.) "However, 'no recovery for 

money had and received can be had against a defendant who never received any part of 

the money or equivalent thing sued for. [Citation.]' " (First Interstate Bank v. State of 

California (1987) 197 Cal.App.3d 627, 635.) We agree with Kirk there was sufficient 

evidence presented at trial to support the jury's award of $362,000. The evidence 

included both the check for $95,607.72 that was the subject of the "Money Paid" cause of 

action, and evidence Dimitri charged DDK excessive interest, a portion of which had 

been paid to Dimitri at the time of trial. 

 We are not persuaded by Dimitri's contention the excessive interest could not be 

awarded to Kirk because DDK "never actually paid any of this supposedly excessive 

interest to Dimitri." He relies on Rotea v. Izuel (1939) 14 Cal.2d 605 and Rains v. Arnett

(1961) 189 Cal.App.2d 337 to argue recovery for money had and received "is denied in 

such cases unless the defendant himself has actually received the money." (Rotea, at 

p. 611.) Rotea and Rains involved payments by plaintiffs to third parties, not the 

defendants. Both courts held a claim for money had and received could not be upheld 
23 

when the defendant had no obligation to pay back the money to the plaintiff. (Rotea, at 

pp. 611-612 [payment of medical expenses for decedent's sister]; Rains, at p. 344 

[payments by plaintiff lessee to third party for repairs on defendant lessor's equipment].) 

In a third case cited by Dimitri, First Interstate Bank v. State of California, supra, 197 

Cal.App.3d 627, the court similarly denied a claim for money had and received where the 

defendant was not a party to the contract sued on and there was no allegation defendant 

had any "right, claim or interest in or to" the disputed sum. (Id. at p. 635.) 

 Here, a portion of the excessive interest, $23,145, was paid to Dimitri. With 

respect to the interest accrued, unlike Rotea, Rains and First Interstate, in which the 

plaintiff paid money to a third party and not the defendant, Dimitri had a contractual 

right to the interest Kirk claimed was excessive. This right was confirmed by the court's 

ruling on Dimitri's request for equitable offset, which accelerated the notes and awarded 

Dimitri the amounts owed under those notes, including the $245,046 in accrued interest 

the jury awarded on the claim for money had and received.3

 Dimitri's argument that the allegations contained in Kirk's complaint bar the entry 

of judgment for the total jury award is also not persuasive. Although the amount of 

damages stated in a demand limits the damages recoverable on a default judgment, the 

amount requested does not limit the amount recoverable at trial. (§ 580.) In a contested 

 

3 As we will discuss, however, we are remanding the trial court's offset ruling with 

directions to reexamine the amount of interest allowed as an offset considering the jury's 

factual findings. If the trial court determines on remand Dimitri is not entitled to offset 

the $245,046 awarded by the jury to DDK on the money had and received claim, he 

would no longer have a contractual right to the interest. In that event, we direct the trial 

court to reduce the award for this claim by $245,046. 
24 

action the court may grant a plaintiff any relief "consistent with the case made by the 

complaint and embraced within the issue." (Ibid.) "Under general rules of pleading and 

practice, the plaintiff is not limited to the damages specified in his complaint when he 

proceeds to trial." (Damele v. Mack Trucks, Inc. (1990) 219 Cal.App.3d 29, 38.) "[T]he 

'well settled' rule is that a plaintiff may secure relief different from or greater than that 

demanded in the complaint." (Id. at p. 39.) In addition, although not controlling in a 

noncontested action, Kirk's prayer seeks "such other and further relief as this court deems 

just and proper." 

 Here, the amount of damages awarded by the jury on the money had and received 

claim was consistent with evidence presented at trial concerning Dimitri's ability to 

charge excessive interest through his misconduct. Although the award exceeded the 

$95,000 set forth in the specific claim for "Money Had," it was not inconsistent with the 

issues set forth in the complaint or the evidence admitted at trial. "The parties thus 

actually tried the issues of damages in amounts above the limits set forth in" Kirk's 23d 

cause of action. (Castaic Clay Manufacturing Co. v. Dedes (1987) 195 Cal.App.3d 444, 

450.) The jury's verdict on the claim of money had and received could not have come as 

a surprise to Dimitri "and was the source of no prejudice to him since no additional time 

or effort by him was required to meet those issues." (Ibid.) 

 Dimitri cites Wozniak v. Lucutz (2002) 102 Cal.App.4th 1031 for the proposition 

that " 'in the absence of an amendment to the complaint to conform to proof, a court may 

not award the plaintiff a sum in excess of the amount of damages he claims to have 
25 

sustained.' " (Id. at p. 1044.) Wozniak, however, concerned the limitation of damages in 

a limited civil case in which the jury returned a verdict that exceeded the jurisdictional 

limit of $25,000. (Id. at p. 1036.) The plaintiff in Wozniak brought his claim in the 

former municipal court in Los Angeles County. During the pendency of the case, before 

the defendant answered, the trial courts in the county were unified and the case 

maintained its status as a limited civil case. The court found the plaintiff, who filed suit in 

the (former) municipal court, could not have expected damages on his claim exceeding 

the jurisdictional maximum and that absent a " 'specific enumerated demand for an 

amount in excess of [that amount], his pleadings should be construed as seeking the relief 

. . . it is within the jurisdiction of the court to give.' " (Id. at p. 1044.) Contrasting the 

case before it to a situation like that presented here, the court held an "award of damages 

in an amount greater than set forth in the complaint nevertheless has been affirmed 

[where] the parties had voluntarily submitted and actually tried the issue and there was no 

prejudice or surprise to the defendant." (Id. at p. 1045.) 

 In addition, the money had and received section of the special verdict form 

prepared by the parties bore no specific relationship to the facts alleged under the 23d 

cause of action. The form asked jurors: "Did GUIDO DIMITRI obtain money or 

property from DIMITRI, DIFFENDALE &KIRK LLC by fraud or the exercise of undue 

influence?" The jury answered "yes," leading to the next question: "Do you find that in 

fairness that GUIDO DIMITRI is obligated to pay to DIMITRI, DIFFENDALE & KIRK 

LLC, money that was obtained improperly?" Again, the jury responded "yes," leading to 
26 

the final question: "What is the amount of money which in fairness should be paid to 

DIMITRI, DIFFENDALE & KIRK LLC by GUIDO DIMITRI?" The jury returned a 

unanimous answer of $362,000. 

 Nothing in the special verdict form connected the claim of money had and 

received to the specific issue of the $95,000 payment to Dimitri outlined in the "Money 

Paid" cause of action. Instead, the jury was asked to make a general finding concerning 

money or property obtained by Dimitri from DDK by fraud or the exercise of undue 

influence. This explanation of what the claim required certainly could include the 

excessive interest Kirk showed Dimitri charged as a result of his "undue influence." Had 

Dimitri believed the claim for money had and received was limited in the way he now 

argues, the error was invited by the manner in which the claim was presented to the jury. 

(See In re Marriage of Broderick (1989) 209 Cal.App.3d 489, 501 ["an appellant waives 

his right to attack error by expressly or implicitly agreeing or acquiescing at trial to the 

ruling or procedure objected to on appeal."].) We conclude the court's reduction of the 

verdict on the claim of money had and received was error and reverse that reduction. 

 3. Punitive Damages Award

 Because we determine the jury's verdict on Kirk's claim for intentional 

misrepresentation must be reinstated, we also conclude the jury's award of punitive 

damages was within constitutional boundaries. 

 In the second phase of the trial, the jury awarded DDK punitive damages of $2.5 

million. Dimitri then brought his postverdict, prejudgment motion for "Directed Verdict 
27 

On The Punitive Damage Award." Dimitri argued the punitive damages award was 

unconstitutional because of the low degree of reprehensibility of his conduct. Kirk 

countered that Dimitri's motion was premature and, in any event, the award, representing 

a ratio of 9.5 to 1 between punitive and compensatory damages, was not outside the 

constitutional boundary. 

 After eliminating the intentional misrepresentation damages entirely, the court 

reduced the punitive damages award to $100,000, finding "the jury's award was not 

supported by the evidence, and that the amount was inconsistent with both California's 

and Federal cases regarding the size of the award." The court went on to state it had 

"considered the degree of reprehensibility of Dimitri's misconduct, the disparity of the 

actual harm suffered and the punitive damage award, the fact that the actual damages 

awarded are significant, the fact that the parties are all 'sophisticated businessmen,' and 

the fact that the actions taken were primarily financial in nature, as opposed to physical. 

The [c]ourt further considered all of the evidence admitted during trial and [found a 

$100,000 award] to be appropriate in light of those considerations." 

 On appeal, Kirk argues that if the damages for intentional misrepresentation are 

reinstated, the jury's punitive damages verdict is within constitutional limits and should 

also be reinstated. Dimitri responds that just $3,000 of the jury's compensatory damages 

award can be appropriately considered as a basis for the punitive damages award.4 

 

4 In addition to contending the court's elimination of damages on Kirk's claim for 

intentional misrepresentation was proper, Dimitri argues in his appeal that sufficient 
28 

Therefore, the trial court's reduction of the jury's punitive damages award to $100,000, 

equaling a ratio of punitive to compensatory damages of 13.33 to 1, is the constitutional 

maximum this court may uphold. 

 We determine de novo whether an award of punitive damages is unconstitutionally 

excessive and make an independent assessment of (1) the reprehensibility of the 

defendant's conduct, (2) the relationship between the punitive and compensatory 

damages, and (3) any civil penalties for comparable conduct. (Simon v. San Paolo U.S. 

Holding Co., Inc. (2005) 35 Cal.4th 1159, 1172.) However, we defer to any findings of 

historical fact made by the trial court that are supported by substantial evidence. (Ibid.) 

In reviewing the constitutionality of a punitive damages award, we determine only the 

constitutionally permissible maximum amount. (Id. at p. 1188.) We do not decide what 

particular amount we believe should have been awarded on the facts and circumstances 

of the case. (Ibid.) 

 The parties focus their arguments primarily on the relationship between 

compensatory and punitive damages. A necessary starting point is a determination of the 

amount of compensatory tort damages at issue. Because we reinstate the jury's $243,000 

verdict on the claim for intentional misrepresentation and reject Dimitri's contention that 

only $3,000 of the $20,740 award for conversion is supported by the evidence, we 

conclude the harm to DDK is the jury's full award of compensatory damages on these tort 

claims, $263,740. 

 

evidence supported only $3,000 of the jury's award of $20,740 on Kirk's claim for 

conversion. 
29 

 There is no " ' "mathematical bright line between the constitutionally acceptable 

and the constitutionally unacceptable" ' " ratio. (BMW of North America, Inc. v. Gore

(1996) 517 U.S. 559, 583.) Instead, " ' "[a] general concer[n] of reasonableness . . . 

properly enter[s] into the constitutional calculus." ' " (Ibid.) "[F]ew awards exceeding a 

single-digit ratio between punitive and compensatory damages, to a significant degree, 

will satisfy due process." (State Farm Mut. Auto. Ins. Co. v. Campbell (2003) 538 U.S. 

408, 425.) As noted, Dimitri presumes only $3,000 of the compensatory tort damages 

will be upheld and states the resulting ratio of 13.33 to 1 is the constitutional maximum. 

Because we reinstate the intentional misrepresentation damages and affirm the 

conversion damages, the jury's award of compensatory and punitive damages results in a 

ratio of 9.48 to 1 ($2.5 million to $263,740). This ratio is within the constitutional 

maximum conceded by Dimitri. 

 Further, the degree of reprehensibility of Dimitri's conduct as it related to Kirk's 

fraud and conversion claims supported the jury's award. Dimitri's conduct did not 

involve physical harm or an indifference to the health and safety of others, but it did 

evince the other factors justifying an award of punitive damages. (See State Farm Mut. 

Auto. Ins. Co. v. Campbell, supra, 538 U.S. at p. 419 ["We have instructed courts to 

determine the reprehensibility of a defendant by considering whether: the harm caused 

was physical as opposed to economic; the tortious conduct evinced an indifference to or a 

reckless disregard of the health or safety of others; the target of the conduct had financial 

vulnerability; the conduct involved repeated actions or was an isolated incident; and the 
30 

harm was the result of intentional malice, trickery, or deceit, or mere accident."].) 

Dimitri used DDK's financial vulnerability to coerce oppressive financial agreements and 

to try to push Kirk out of the business. (Ibid.) Dimitri's conduct also "involved repeated 

actions," including repeatedly falsely assuring Kirk he would reimburse DDK for losses 

caused by his management of the avocado grove, diverting proceeds from the grove, 

using company assets and equipment for his personal benefit, and coercing kickbacks 

from field workers paid by DDK. (Ibid.) The harm caused by Dimitri was not 

accidental, but was "the result of intentional . . . deceit." (Ibid.) For these reasons we 

reverse the judgment and reinstate the punitive damages awarded by the jury. 

II 

EQUITABLE ISSUES TRIED BY THE COURT 

 A. Offset 

 The court allowed the parties to file briefing on the equitable issues that remained 

for the court's consideration after the jury returned its verdict. In his brief, Dimitri asked 

the court to allow him to offset the judgment that ultimately would be entered with the 

amounts owed to Dimitri by DDK under various notes. Kirk responded no offset should 

be allowed because Dimitri failed to carry his burden to establish the affirmative defense 

of offset. The court ruled it would "allow[] the requested offset against the judgment for 

amounts due under the pending notes" and instructed the parties to calculate the offset 

and include "such findings in the judgment." 
31 

 The parties then contested the amount of the offset by the submission of 

competing judgments and supporting briefs. Dimitri's version applied offsets of 

$3,301,348.72, consisting of interest and principal on various notes related to the 

Monserate Hill Project and $225,000 Dimitri loaned DDK to buy out Diffendale. Kirk 

argued in response "no offset should be applied against the jury's verdict" because there 

had "been no actual adjudication regarding the alleged amounts owing by [DDK] to 

Dimitri . . . ." Kirk's proposed judgment included an offset, but called for lower amounts 

of interest to satisfy the notes and excluded offsets for the loan related to the Diffendale 

buyout and another loan related to Dimitri's grove management fee. 

 In response to the parties' request for the court to determine the amount of offset, 

the court issued a letter stating it primarily agreed with Dimitri's version of the judgment, 

but set the date for calculating the interest to the date of its prior ruling (not the date of 

entry of judgment as proposed by Dimitri) and eliminated the offset for the loan related to 

the grove management fee. The letter instructed Dimitri to prepare and submit a revised 

judgment, which the court signed and entered on September 16, 2010. On appeal, Kirk 

argues the court-awarded offset was contrary to the jury's verdict and the offset of 

$225,000 related to the Diffendale buyout was not supported by the evidence. 

 The right to an equitable offset is founded on the "principle that 'either party to a 

transaction involving mutual debts and credits can strike a balance, holding himself 

owing or entitled only to the net difference . . . .' " (Granberry v. Islay Investments

(1995) 9 Cal.4th 738, 744.) " '[I]t is well settled that a court of equity will compel a[n 
32 

offset] when mutual demands are held under such circumstances that one of them should 

be applied against the other and only the balance recovered.' " (Fassberg Construction 

Co. v. Housing Authority of City of Los Angeles (2007) 152 Cal.App.4th 720, 762.) The 

issue of offset was properly raised by way of Dimitri's answer and request for an offset 

after the jury rendered its verdict. (See id. at pp. 762-763.) 

 "Consistent with the general rule imposing on a party the burden of proving the 

existence or nonexistence of each fact essential to a claim or defense (Evid. Code, § 500), 

'[a] defendant seeking an offset against a money judgment has the burden of proving the 

offset. [Citation.]' " (Textron Financial Corp. v. National Union Fire Ins. Co. (2004) 

118 Cal.App.4th 1061, 1077, disapproved on other grounds in Zhang v. Superior Court 

(2013) 57 Cal.4th 364, 382.) "Whether [an offset] is appropriate in equity is a question 

within the trial court's discretion. We review the court's decision under the abuse of 

discretion standard. [Citation.] An abuse of discretion occurs if, in light of the applicable 

law and considering all of the relevant circumstances, the court's decision exceeds the 

bounds of reason and results in a miscarriage of justice." (Fassberg Construction Co. v. 

Housing Authority of City of Los Angeles, supra, 152 Cal.App.4th at pp. 762-763.) 

 Further, the court's ruling on Dimitri's equitable offset defense is limited by the 

jury's factual findings. (See Hoopes v. Dolan (2008) 168 Cal.App.4th 146, 157 ["a jury's 

determination of legal issues may curtail or foreclose equitable issues"] (Hoopes).) 

"Where legal claims are first tried by a jury and equitable claims later tried by a judge, 

the trial court must follow the jury's factual determinations on common issues of fact." 
33 

(Id. at p. 158.) The trial court was entitled to make factual determinations of its own 

concerning Dimitri's offset defense only to the extent that "[n]othing in the jury's verdict 

resolve[d] the factual matter presented by the defense of" equitable offset. (Id. at p. 162.) 

 Like collateral estoppel, issues decided by the first finder of fact (here the jury) 

" 'become "conclusive on issues actually litigated between the parties." ' " (Hoopes, 

supra, 168 Cal.App.4th at p. 158.) "While the comparison to collateral estoppel is 

inexact [citation], there are solid policy reasons for giving one fact finder's 

determinations binding effect in a mixed trial of legal and equitable issues. The rule 

minimizes inconsistencies, and avoids giving one side two bites of the apple. [Citation.] 

The rule also prevents duplication of effort." (Ibid.) 

 The offset awarded by the court can be broken into three parts for purposes of our 

analysis: the principal portions of the various Monserate Hill project notes; the interest 

portions of those notes; and the $225,000 loan related to the Diffendale buyout. With 

respect to the notes' principal, Kirk argues the doctrine of unclean hands precluded the 

court from finding this obligation could be offset against the judgment. Kirk does not 

claim DDK did not owe these amounts, but contends the factual findings of the jury 

precluded the court from finding the doctrine inapplicable. The specific determinations 

of the jury he points to, however, do not concern the principal of the notes but relate only 

to the amount of interest owed. Thus, the court did not abuse its discretion by finding the 

doctrine of unclean hands inapplicable to the principal portion of the notes. (See 

Dickson, Carlson & Campillo v. Pole (2000) 83 Cal.App.4th 436, 447 ["The decision of 
34 

whether to apply the [doctrine of unclean hands] based on the facts is a matter within the 

trial court's discretion."].) 

 With respect to the interest portion of the notes, Kirk argues factual findings that 

preclude Dimitri from recovering all of the interest on the notes were implicit in the jury's 

verdict on his intentional misrepresentation and breach of contract claims. Kirk points to 

two such findings. First, he contends the jury implicitly found the CCA was enforceable 

by its verdict on Kirk's claim for intentional misrepresentation. He argues the jury must 

have found the CCA was enforceable because Dimitri's promise to pay grove losses was 

set forth in that agreement. Second, Kirk argues the verdict for breach of contract was 

based on the jury's factual finding that Dimitri's delay was a breach of his contractual 

obligations under the DDK operating agreement. In Kirk's view, because the jury found 

the CCA to be enforceable, the court was required to consider whether Dimitri's delay 

also breached the CCA and triggered his promise "to pay all related interest charges 

during the time that the project is delayed." Further, because the jury found the project 

would have been completed earlier had Dimitri not caused delay, the notes would have 

been paid off earlier, resulting in less interest owed. 

 Dimitri responds that the jury's intentional misrepresentation verdict did not 

require a finding the CCA was enforceable because oral promises he made to Kirk and 

Diffendale to reimburse DDK for grove losses independently supported the verdict. The 

record, however, does not support this argument. The trial testimony Dimitri points to 

underscores the CCA's written agreement to insure DDK against grove losses. It does not 
35 

evidence separate oral promises that would support the jury's intentional 

misrepresentation verdict absent the CCA. Dimitri concedes the jury found his actions 

delaying the project breached the DDK operating agreement, and does not address the 

impact of that finding on the court's offset award. 

 We agree with Kirk these factual findings were contrary to the court's allowance 

of offset for all interest owed from the inception of each note to the date of the court's 

ruling on equitable claims. The jury found Dimitri breached the operating agreement by 

his delay and the CCA was enforceable; the trial court was bound by these findings. 

(Hoopes, supra, 168 Cal.App.4th at p. 161.) Under the CCA, Dimitri was obligated to 

pay interest on DDK's loans if he breached his contractual obligation not to delay 

finalization of the project. To allow this interest as offset, then, the court needed to find 

either this provision of the CCA was not enforceable or Dimitri's delay was not a breach 

of the agreement.5 Either factual determination improperly contradicted the jury's 

findings and was error. (See Hoopes, supra, 168 Cal.App.4th at p. 161 ["The trial court 

erred in disregarding the jury's verdict when fashioning equitable relief founded on the 

same evidence and same operative facts as the verdict."].) The issue is remanded and the 

 

5 It does not appear the court considered these factual issues. Instead, it asked the 

parties to determine the appropriate amount of interest that could be offset against the 

jury's damages award. When the parties--unsurprisingly--could not agree, the court 

accepted Dimitri's calculation. 
36 

trial court is directed to determine what amount of interest Dimitri may collect as offset 

considering these factual findings.6

 Kirk argues there was no substantial evidence to support offset of the loan related 

to the Diffendale buyout. Unlike the offset for the other notes, however, he points to no 

jury finding that foreclosed the court from making its own finding as to whether this 

amount was owed to Dimitri. The parties introduced conflicting evidence on whether 

Dimitri was owed $225,000 as a result of the buyout. Kirk points to what he 

characterizes as admissions by Dimitri and his attorney that Dimitri was not owed this 

amount. 

 Other testimony and the documentation of the transaction presented at trial, 

however, showed Dimitri was owed these funds. Specifically, Dimitri returned $225,000 

in payments DDK made to him on certain notes after the Rod Street project sales were 

finalized so DDK could make a required profit distribution to Diffendale to finalize the 

buyout. This resulted in DDK owing Dimitri $225,000 in addition to Dimitri's 

assumption of Diffendale's loans to DDK (the consideration for Dimitri's purchase of 

Diffendale's interest). This evidence supported allowing $225,000 as offset and this 

portion of the ruling was not an abuse of discretion. 

 

6 As set forth in footnote 3 and in our disposition, to the extent the court determines 

on remand Dimitri is not entitled to an offset of the amount of accrued excessive interest 

the jury awarded on Kirk's claim for money had and received ($245,046), the trial court is 

directed to reduce the damages awarded on the claim for money had and received by that 

amount. This calculation will not affect the $95,607.72 that related to the separate 

payment to Dimitri or the amount of excessive interest paid by DDK at the time of trial 

($23,145) awarded to DDK on the money had and received claim. 
37 

 B. Specific Performance 

 Kirk's final contention on appeal is that the trial court erred by finding Dimitri was 

not required to continue funding the Monserate Hill project. In its ruling on this issue, 

the court noted, "[w]hile the parties have not included a cause of action for dissolution, 

there is no reasonable belief that further interaction between the parties would result in 

anything other than further litigation. Plaintiff and Cross[-c]omplainant have received an 

award of damages in this action, and an affirmative injunction would be duplicative and 

punitive." 

 "To obtain specific performance after a breach of contract, a plaintiff must 

generally show: '(1) the inadequacy of his legal remedy; (2) an underlying contract that is 

both reasonable and supported by adequate consideration; (3) the existence of a mutuality 

of remedies; (4) contractual terms which are sufficiently definite to enable the court to 

know what it is to enforce; and (5) a substantial similarity of the requested performance 

to that promised in the contract. [Citations.]' [Citations.] A grant or denial of specific 

performance is reviewed under an abuse of discretion standard." (Real Estate Analytics, 

LLC v. Vallas (2008) 160 Cal.App.4th 463, 472.) 

 Dimitri's argument that Kirk did not show the inadequacy of DDK's legal remedy 

is well taken. The jury found Dimitri breached his contractual obligations by delaying 

the development of the Monserate Hill Project. For this breach the jury awarded DDK 

damages of $3,085,000, the amount of profit Kirk contended DDK would have earned 

but for Dimitri's breach. Under this damage theory, the contract was effectively 
38 

terminated. DDK could not both obtain the profits it would have received by selling the 

properties, and require Dimitri to continue financing to obtain a later round of profits on 

the eventual sale of the lots. (See Paularena v. Superior Court (1965) 231 Cal.App.2d 

906, 915 ["Damages may not be recovered on the theory that the contract exists and 

additionally on the theory that the contract is at an end."]) As the trial court noted, such 

an injunction would be "duplicative and punitive." (See Mycogen Corp. v. Monsanto Co.

(2002) 28 Cal.4th 888, 905 ["a party may not obtain both specific performance and 

damages for the same breach of contract, either in single or multiple actions."] Likewise, 

the court's denial of Kirk's request for specific performance was not an impairment of his 

contractual rights. Kirk enforced his contractual rights and obtained a damages award for 

profits he would have received had the contract been fully performed. 

III 

DIMITRI'S APPEAL 

 Dimitri raises four issues on appeal: (1) whether the damages awarded to DDK for 

Dimitri's breach of contract should be reversed because they were not reasonably 

foreseeable; (2) whether MBK failed to prove it was a licensed contractor, necessitating 

reversal of its breach of contract claim; (3) whether sufficient evidence supported the 

portion of damages not reduced by the trial court on Kirk's claim for money had and 

received; and (4) whether sufficient evidence supported the damages awarded on DDK's 

claim for conversion. 
39 

 A. Breach of Contract Damages 

 Dimitri argues the $3,085,000 awarded by the jury against him on Kirk's 

derivative claims for breach of contract must be reversed because there was no proximate 

causation between those damages and Dimitri's breach. In support of this argument, 

Dimitri advances a broad rule that a "general decline in the market value of real estate" 

can never be causally related to a breach of contract because market value declines are 

not reasonably foreseeable. We conclude, under the facts of this case, the jury's award is 

supported by the record. 

 The measure of damages for breach of contract "is the amount which will 

compensate the party aggrieved for all the detriment proximately caused thereby, or 

which, in the ordinary course of things, would be likely to result therefrom." (Civ. Code, 

§ 3300.) The purpose is " 'to give the injured party the benefit of his bargain and insofar 

as possible to place him in the same position he would have been in had the promisor 

performed the contract.' " (Martin v. U-Haul Co. of Fresno (1988) 204 Cal.App.3d 396, 

409.) "This means that recoverable damages are those that could fairly and reasonably be 

seen as arising naturally from a breach. [Citation.] This includes those that should have

been reasonably contemplated or foreseen in light of all of the known facts or facts that 

the breaching party should have known, at the time of contracting. [Citations.] Thus, if 

the occurrence of these damages is sufficiently predictable to the parties when 

contracting, it can be assumed that the parties contemplated them." (Archdale v. 

American Internat. Specialty Lines Ins. Co. (2007) 154 Cal.App.4th 449, 469.) 
40 

 "[W]hile a plaintiff must show with reasonable certainty that he has suffered 

damages by reason of the wrongful act of defendant, once the cause and existence of 

damages have been so established, recovery will not be denied because the damages are 

difficult of ascertainment." (Dallman Co. v. Southern Heater Co. (1968) 262 Cal.App.2d 

582, 594.) Damages can be an approximation if a reasonable basis for computation is 

available. (Israel v. Campbell (1958) 163 Cal.App.2d 806, 816.) 

 The record does not establish exactly how the jury reached the amount of damages 

it awarded on the breach of contract claim. Kirk presented evidence concerning a 

number of different elements from which the damages could have been computed, 

including lost profits caused by Dimitri's delay for both the Monserate Hill lots and one 

of the Rod Street lots, the loss of value to the 10-acre Monserate Hill lot as a result of 

DDK's failure to subdivide, increased interest owed by DDK as a result of Dimitri's 

delay, the increased cost of development resulting from delay (specifically the 

requirement that a fire protection plan be submitted to the County), and losses DDK 

sustained on the avocado grove. 

 Dimitri argues the jury's award was based on lost profits presented in part by 

Kirk's appraisal expert, Randy Tagg, and contends these damages were too speculative to 

support the jury's award. The lost profit damages Dimitri challenges consist of the 

difference in either Tagg's valuation of the properties in February 2007, assuming the 10-

acre lot was split, or offers on the lots DDK rejected, and Tagg's valuation of the 

properties in September 2009. Tagg testified DDK lost profits of $475,000 on Monserate 
41 

Hill lot 5 (the difference between a rejected offer of $775,000 in March 2005 and the 

expert's valuation of $300,000 in 2009), $500,000 on Monserate Hill lot 6 (the difference 

between an $800,000 offer rejected in July 2006 and the expert's valuation of $300,000 in 

2009), $475,000 on Monserate Hill lot 7 (the difference between Tagg's appraisals of 

$900,000 in 2007 and $425,000 in 2009), and $1,550,000 in lost profits on the 10-acre 

Monserate Hill lot (the difference between Tagg's appraisals of $2,000,000, with the 

assumption the subdivision was completed, in 2007 and his appraisal of $450,000, as is, 

in 2009). Dimitri also points to lost profits of $85,000 on the Rod Street lot based on the 

$1,050,000 offer he rejected to prevent an increase in value to Diffendale's membership 

interest, versus the actual sales price of $965,000. The total of this lost profit evidence 

equals the jury's award of $3,085,000. 

 Dimitri relies on Safeco Ins. Co. v. J & D Painting (1993) 17 Cal.App.4th 1199 to 

support his argument that his conduct was not causally related to these damages. In 

Safeco, the plaintiff's house was damaged by a fire. In addition to the cost of repair, the 

plaintiff also sought to recover damages for the decline in the market value of the house 

while it was being repaired. (Id. at p. 1202.) The court held damages for the loss in 

value were not recoverable because they were not proximately caused by the defendant's 

negligent act of starting the fire. (Id. at pp. 1204-1205.) "A superseding cause utterly 

unrelated to the defendant's negligence breaks the chain of proximate causation and is a 

bar to recovery." (Id. at p. 1204.) The court noted: "This case is different from slander 

of title or wrongful attachment cases, in which plaintiffs have been awarded the 
42 

difference in market value between the time of imposition of a lien and the time of its 

lifting [citations] because in those cases the defendant acted intentionally to adversely 

affect the marketability of a property, and therefore the decline in market value may be 

seen as proximately related to the tort." (Id. at p. 1205, fn. omitted.) 

 Here, Dimitri's intentional delay in the development and sale of the properties, 

which he concedes the jury found to be a breach of his agreements with DDK, directly 

adversely affected the ability of DDK to sell the various properties. Dimitri was 

experienced in buying and selling real estate when he met Kirk and understood the 

importance of timing in the real estate market. At the time of contracting, Dimitri was 

aware of the favorable market conditions that existed and expressed his commitment to 

moving quickly on the Monserate Hill project to take advantage of those conditions. 

Unlike Safeco, in which the defendant's negligent conduct bore no direct relationship to 

the damages sought, Dimitri's delay had a direct relationship to the lost profits caused by 

declining real estate values in the time he delayed. 

 Dimitri contractually agreed not to delay development and sale of the properties 

and to pay damages to DDK if he did so. The anticipated profits from a timely sale of 

DDK's properties, as well as the risks posed by a decline in the market, were inherent in 

these promises. (See James v. Herbert (1957) 149 Cal.App.2d 741, 749 ["Profits are part 

and parcel of the contract itself . . . . They are presumed to have been taken into 

consideration and deliberated upon before the contract was made, and formed, perhaps, 

the only inducement to the arrangement."].) Damages would arise only if the market 
43 

declined. At the time Dimitri entered into the DDK agreements, lost profits resulting 

from a declining market were a reasonably foreseeable consequence of Dimitri's delay 

and were properly awarded by the jury. 

 None of the other cases Dimitri relies on foreclose this conclusion. In Movitz v. 

First Nat. Bank of Chicago (7th Cir. 1998) 148 F.3d 760, the plaintiff, purchaser of a 

commercial building, sued the bank that recommended the purchase, alleging the bank 

misrepresented the value of the building. (Id. at p. 762.) Shortly after the sale, the real 

estate market collapsed. (Ibid.) The jury award included the $2.2 million cost of the 

building plus another $800,000 paid in an unsuccessful attempt to avoid foreclosure. (Id.

at p. 761.) The Seventh Circuit, applying Illinois law, overturned the jury's verdict, 

holding the damages were not proximately caused by the bank's misrepresentations. 

Instead, the damages awarded were the result of a poor commercial real estate market at 

the time and no evidence supported the plaintiff's claim that the entire damages award 

was a result of the bank's conduct. (Id. at pp. 764-765.) In contrast, Dimitri was under a 

contractual duty not to unreasonably delay the development and sale of the properties, 

and the lost profit damages were directly caused by the breach of this duty. 

First Federal Sav. and Loan Ass'n of Rochester v. Charter Appraisal Company, 

Inc. (1999) 247 Conn. 597 involved a bank's claim against an appraiser who negligently 

issued an appraisal report on a residential property for an amount above its market value. 

The bank relied on the report in its underwriting determination. When the home 

mortgage was foreclosed and the house sold for less than the value of the mortgage, the 
44 

bank sought damages against the appraiser that included a general market decline since 

the time of his report. The court declined to award those damages. It held the appraiser 

had no duty to insure the bank against general market decline, but only for "costs that the 

bank would have avoided 'but for' the negligent appraisal." (Id. at p. 607.) "Put 

differently, a fall in market values was not within the scope of risk created by the 

negligently conducted appraisal." (Ibid.; see also Oregon Steel Mills, Inc. v. Coopers & 

Lybrand, LLP (2004) 336 Or. 329, 348 [defendant accountant in tort action brought by 

corporate client had no special duty to protect plaintiff against market fluctuations in 

plaintiff's stock price].) Here, Dimitri had a contractual duty to insure DDK against 

losses resulting from the market downturn during the time his conduct delayed the 

development and sale. The fall in market values was within the scope of risk created by 

Dimitri's breach. The jury's damages award on DDK's breach of contract claim was 

proper. 

 B. MBK's Breach of Contract Claim -- Contractor's License 

 The jury awarded MBK damages of $300,000 against DDK for breach of the 

construction management agreements for the development of the Rod Street and 

Monserate Hill projects. "When a contractor sues to recover compensation for work 

requiring a contractor's license, Business and Professions Code section 7031 requires the 

contractor to allege that he or she 'was a duly licensed contractor at all times during the 

performance of that act or contract.' ([Bus. & Prof. Code,] § 7031, subd. (a).)" (Advantec 

Group, Inc. v. Edwin's Plumbing Co., Inc. (2007) 153 Cal.App.4th 621, 624, fn. omitted 
45 

(Advantec).) If the issue of licensure is "controverted" by the defendant, then the 

contractor must prove licensure by producing a verified certificate from the Contractor's 

State License Board. (Bus. & Prof. Code, § 7031, subd. (d); Advantec, at p. 624.) "When 

licensure . . . is controverted, the burden of proof to establish licensure . . . shall be on the 

licensee." (Bus. & Prof. Code, § 7031, subd. (d).) Dimitri contends reversal of the 

judgment is required because MBK did not show it was licensed under Business and 

Professions Code section 7031. We agree with the trial court's finding MBK's licensure 

was not controverted and, therefore, no license showing was required. 

 MBK's cross-complaint against DDK alleged MBK was "a California general 

contractor, licensed at all times relevant herein by the State of California, Department of 

Consumer Affairs, License No. 764542." Dimitri answered on behalf of DDK in the 

form of a general denial, stating, "Cross-Defendant denies each and every allegation 

contained in the Cross-Complaint, and the whole thereof, and each and every alleged 

cause of action asserted against Cross-Defendant therein . . . ." However, Dimitri's crosscomplaint against MBK (and Kirk) for breach of the construction management 

agreements expressly alleged: "At all relevant times, MBK, INC[.,] was a licensed 

general building contractor, with [Kirk] registered as the responsible managing officer." 

 During discovery, MBK propounded form interrogatories to DDK, including a 

request for DDK to "identify each denial of a material allegation and each special or 

affirmative defense in your pleadings and for each, (a) state all facts upon which you base 

the denial . . . ." Dimitri's response on behalf of DDK stated it "denie[d] all of the 
46 

allegations in the Cross-Complaint," and provided specific facts explaining its denial of 

certain substantive allegations. No facts concerning its denial of MBK, Inc.'s allegation it 

was a licensed contractor at all relevant times were provided. 

 Dimitri raised MBK's licensure for the first time after the close of evidence by his 

submission of a "Memorandum of Points and Authorities in Support of Motion for 

Directed Verdict." Dimitri argued MBK did not meet its burden of proof under Business 

and Professions Code section 7031. At the hearing on Dimitri's motion, MBK's attorney 

stated she had the "verified certificate from the contractors license board . . . . [¶] . . . If 

the dispute had arisen in trial, this could have come in. And I have it in my hands." The 

court declined to rule on the request, but asked MBK's counsel whether, if the court 

allowed evidence to be reopened, she "would put in [her] proof of the contractor's 

license . . . ." Counsel responded that she would. 

 Dimitri renewed his request for a directed verdict on this issue in a postverdict 

motion for directed verdict. The trial court denied the request, finding "the issue was not 

'actually controverted' based upon the allegations in Dimitri's operative complaint and the 

discovery responses exchanged during [pretrial] discovery." Dimitri renews his argument 

here, relying on Advantec and the "strong public policy against recovery by an unlicensed 

contractor" (as he did in the trial court) for the proposition that his general denial of 

MBK's licensure allegation in its complaint was sufficient to controvert licensure. 

 The Advantec court affirmed the plaintiff's motion for nonsuit granted by the trial 

court based on the defendant/cross-complainant subcontractor's failure to prove his 
47 

licensure. (Advantec, supra, 153 Cal.App.4th at p. 632.) Advantec (a general contractor) 

answered the subcontractor's allegation that the subcontractor was licensed (therefore 

entitled to payment under his agreement with Advantec) by way of a general denial. (Id. 

at p. 625.) The subcontractor argued the general denial was insufficient to controvert his 

license. The court disagreed, holding the general denial was sufficient to controvert 

licensure and the subcontractor was, therefore, required to produce at trial a verified 

certificate of licensure from the Contractors' State License Board. (Id. at p. 627.) 

 Unlike MBK, the subcontractor in Advantec did not seek to clarify whether the 

plaintiff intended to contest licensure during discovery. (Advantec, supra, 153 

Cal.App.4th at p. 631 [subcontractor "could have clarified by way of contention 

interrogatories whether Advantec intended to contest the validity of its license, but it did 

[not]"].) MBK propounded interrogatories requesting the identification of each material 

allegation DDK denied and a statement of the facts on which the denial was based. In 

response, Dimitri did not identify MBK's licensure. 

 Further, Dimitri's cross-complaint, which alleged MBK was "[a]t all relevant 

times, a licensed general building contractor," directly contradicted his later contention 

MBK was not licensed. This allegation constituted a judicial admission, which negated 

MBK's obligation to prove its licensure. (See Thurman v. Bayshore Transit 

Management, Inc. (2012) 203 Cal.App.4th 1112, 1155 ["[T]he trial court may not ignore 

a judicial admission in a pleading, but must conclusively deem it true as against the 

pleader."].) Dimitri seeks to avoid the binding nature of this judicial admission in three 
48 

ways. He contends the allegation was not binding because it (1) was made on 

information and belief and was equivocal; (2) involved mixed questions of law and fact; 

and (3) was contested by way of MBK's answer in the form of a general denial. We are 

not persuaded by these arguments. 

 First, the allegation was not made on information and belief. In contrast to other 

allegations in Dimitri's cross-complaint, the allegation that MBK was a licensed 

contractor is not prefaced with "cross-complainant is informed and believes, and based 

thereon alleges . . . ." Further, the allegation is not equivocal in any way; it states a 

simple fact, capable of one meaning: MBK is licensed. (Cf. Stroud v. Tunzi (2008) 160 

Cal.App.4th 377, 385 [no binding judicial admission based on statement by party that 

could be construed in multiple ways, made at a hearing before initiation of lawsuit].) 

Second, and similarly, the allegation is factual, not legal, in nature. Although the truth of 

the fact has legal significance, it is not a legal assertion. 

 Third, we reject Dimitri's argument that MBK's general denial of the claims in the 

cross-complaint did not negate Dimitri's admission. In contrast to MBK's allegation it 

was licensed, essential to its claim against DDK for breach of contract, Dimitri's 

allegation MBK was licensed was not material to any of its claims. MBK's general 

denial did not controvert this nonmaterial allegation and, therefore, had no impact on 

Dimitri's admission MBK was licensed. (See Code Civ. Proc., § 431.30, subd. (d) ["a 

general denial is sufficient but only puts in issue the material allegations of the 

complaint"]; Advantec, 153 Cal.App.4th at p. 627 ["[t]he effect of a general denial is to 
49 

'put in issue the material allegations of the complaint' "].) Dimitri, on behalf of DDK, is 

not entitled to reversal of the judgment on MBK's breach of contract claim. 

 C. Money Had and Received 

 Dimitri argues the evidence is insufficient to support the $95,607.72 portion of the 

jury's verdict entered by the judgment against him on DDK's claim for money had and 

received. The record does not substantiate this argument. At trial, Kirk presented 

evidence the payment to Dimitri by DDK was a mistake resulting from Dimitri's 

confusion about a nullified provision of the DDK operating agreement. At the beginning 

of the relationship, Dimitri contemplated that DDK would purchase all six of the Rod 

Street lots Kirk had placed in escrow. Kirk wanted one of the lots, Lot 6, to develop for 

his own residence. In exchange for DDK's agreement to give Kirk Lot 6, Kirk agreed 

Dimitri would receive 100% of the profits on his choice of Lots one through four and this 

term was incorporated into the DDK operating agreement. Ultimately, DDK decided not 

to purchase Lot 6, and Kirk bought the property himself. As a result, the related term of 

the operating agreement was crossed out by Kirk and Dimitri in a subsequent version of 

the document. 

 Kirk testified the $95,607.72 check was issued to Dimitri at the request of 

Dimitri's accountant, Patrick Leone. The day DDK wrote Dimitri the check, Kirk 

questioned Leone about the transaction, but Leone did not provide a clear explanation, 

saying only "everything would balance itself out." Later, Kirk asked Dimitri what the 

check was for and Dimitri told him it was his share of profits on the Rod Street project. 
50 

Kirk testified he later came to understand Leone believed Dimitri was entitled to this 

amount as profit under the nullified provision of the operating agreement. After Kirk 

figured out this mistake he asked Dimitri to return the money, but Dimitri refused. 

Dimitri testified when he received the check in August 2006, he did not know what it was 

for, and thought it was a mistake. 

 To rebut this evidence, Dimitri presented e-mail communications between Leone 

and Kirk in April 2007, in which Leone asked Kirk to explain the crossed-out provision 

of the operating agreement. Kirk responded he agreed to Dimitri receiving 100 percent 

of the profits on one of the lots in exchange for Dimitri's and Diffendale's agreement that 

he be able to purchase lot 6. Dimitri argues this e-mail, written after the check was 

issued and the provision stricken on the document, contradicted Kirk's trial testimony that 

the provision had been abandoned by the parties. During his cross-examination of Kirk 

at trial, Dimitri's counsel pointed out the discrepancy but did not provide Kirk with an 

opportunity to explain. Kirk's counsel did not redirect Kirk on the point. 

 When an appellant asserts there is insufficient evidence to support the trial court's 

factual finding, we apply the substantial evidence standard of review. "Where findings of 

fact are challenged on a civil appeal, we are bound by the 'elementary, but often 

overlooked principle of law, that . . . the power of an appellate court begins and ends with 

a determination as to whether there is any substantial evidence, contradicted or 

uncontradicted,' to support the findings below. [Citation.] We must therefore view the 

evidence in the light most favorable to the prevailing party, giving it the benefit of every 
51 

reasonable inference and resolving all conflicts in its favor in accordance with the 

standard of review so long adhered to by this court." (Jessup Farms v. Baldwin (1983) 

33 Cal.3d 639, 660.) 

 Kirk showed the payment to Dimitri was made in error based on the nullified 

provision of the operating agreement. Although the e-mail and Leone's related testimony 

could support an inference Kirk believed Dimitri was entitled to the payment, no witness 

testified that the agreement had not been changed. At most, the evidence was conflicting. 

It did not negate Kirk's evidence, which we conclude was sufficient to support this 

portion of the judgment. (See Milton v. Perceptual Development Corp. (1997) 53 

Cal.App.4th 861, 867 ["If the evidence gives rise to conflicting inferences, one of which 

supports the trial court's findings, we must affirm."].) 

 D. Conversion 

 Dimitri argues for a reversal of $17,740 of the $20,240 awarded to DDK on Kirk's 

derivative conversion claims based on his contention that this portion of the judgment 

was not supported by substantial evidence. The damages awarded on the conversion 

claim consisted of (1) five checks written by West Pak to Dimitri, totaling $13,741, as 

payment for avocados it purchased from DDK, and (2) seven $1,000 kickback payments 

Dimitri received from DDK's landscaper, Arturo Aguirre. With respect to the $13,741 in 

West Pak checks, Dimitri contends there was no conversion because Kirk did not show 

he objected to Dimitri taking the proceeds of the avocado sales to West Pak. As for the 

remaining $4,000 he challenges, Dimitri does not deny Aguirre paid him $7,000 in 
52 

kickbacks. Instead, he argues one of the invoices was not actually padded and for three 

others (which were padded) the work underlying the kickback was unrelated to DDK. 

 Conversion is the wrongful exercise or command over the property of another. 

(Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 451.) The elements of a 

conversion action are: (1) the plaintiff's ownership or right to possession of the property 

at the time of conversion; (2) the defendant's conversion by a wrongful act or disposition 

of the property rights; and (3) damages. (Ibid.) The plaintiff must also prove it did not 

consent to the defendant's exercise of control. (Farrington v. A. Teichert & Son (1943) 

59 Cal.App.2d 468; see also CACI No. 2100 [listing plaintiff's lack of consent as an 

element of conversion]; Tavernier v. Maes (1966) 242 Cal.App.2d 532, 552 ["As to 

intentional invasions of the plaintiff's interests, his consent negatives the wrongful 

element of the defendant's act, and prevents the existence of a tort."].) 

 Dimitri's claim that Kirk consented to Dimitri taking the payments from West Pak 

is not supported by the record. Kirk testified he learned about the payments West Pak 

made directly to Dimitri only after he noticed the amount of fruit leaving the grove 

seemed to be greater than the amount for which DDK was being paid. When Kirk asked 

Dimitri to check with West Pak to ensure the payments were accurate, Dimitri responded 

he was watching things closely and there was no missing fruit. Shortly after that 

conversation, Dimitri brought checks from West Pak totaling $13,741 into DDK's office 

and allowed the office manager, Robin Peters, to make copies of the checks. Dimitri told 

Peters he was taking the proceeds from the checks for himself. Kirk testified he was 
53 

furious when he learned from Peters that Dimitri had taken this money. This evidence 

contradicts Dimitri's claim Kirk did not object to Dimitri's actions and was sufficient to 

support the jury's verdict awarding DDK damages for conversion of the West Pak 

payments. (See Wade v. Southwest Bank (1962) 211 Cal.App.2d 392, 406 [consent 

requires a " ' "a voluntary agreement" ' "; passive assent is insufficient].) 

 We also reject Dimitri's claim that $4,000 of the conversion award for kickbacks 

was not supported by the evidence. Aguirre testified he kicked back $1,000 to Dimitri on 

each of seven jobs Kirk hired him for. According to Aguirre, five of the jobs were on the 

Rod Street and Monserate Hill projects. Dimitri claims, without citation to the record, 

that only four of the jobs were related to Rod Street and Monserate Hill, and Aguirre did 

not pad the invoice for one of these jobs. He claims the three other kickbacks related to 

jobs that were not for DDK. 

 As noted, the record supports $5,000 of the conversion claim for the kickbacks 

Dimitri received on Aguirre's work on the Rod Street and Monserate Hill projects. As for 

the $2,000 in kickbacks on Kirk's projects outside of DDK, we agree the evidence 

showed Kirk (or his other development companies), not DDK, paid the kickbacks 

Aguirre gave to Dimitri. However, evidence concerning other money taken from DDK 

by Dimitri, including the payment of more than $2,000 in legal fees for work that 

benefitted Dimitri personally, supported the jury's award on DDK's conversion claim. 

Substantial evidence supports the portion of the judgment against Dimitri awarding 

damages to DDK for conversion. 
54 

IV 

ATTORNEY FEE AWARD 

 Kirk challenges various aspects of the court's attorney fee award. He argues the 

court abused its discretion by not finding DDK was a prevailing party against Dimitri and 

by ordering DDK, not Dimitri, to pay attorney fees to Kirk. Kirk also argues the court 

erred by awarding attorney fees and costs to Dimitri and Paula. Paula also appeals, 

contending the court abused its discretion by ordering Kirk alone, and not Kirk and DDK 

jointly and severally, to pay her attorney fees. 

 Kirk, Dimitri and Paula each brought motions seeking an award of attorney fees. 

Kirk's motion was based on the attorney fee provisions contained in the DDK operating 

agreement, while Dimitri's and Paula's motions were premised on attorney fee provisions 

contained in the agreements setting forth the terms of promissory notes between DDK 

and the Dimitri family trust. The parties agree these contract provisions support an award 

of attorney fees under Civil Code section 1717. 

 Under this statute, "upon notice and motion by a party, [the court must] determine 

who is the party prevailing on the contract . . . ." (Civ. Code, § 1717, subd. (b)(1).) 

"When a party obtains a simple, unqualified victory by completely prevailing on or 

defeating all contract claims in the action . . . , [Civil Code] section 1717 entitles [that] 

party to recover reasonable attorney fees incurred in prosecution or defense of those 

claims." (Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1109.) If no party "achieves a 

complete victory on all the contract claims, it is within the discretion of the trial court to 
55 

determine which party prevailed on the contract or whether, on balance, neither party 

prevailed sufficiently to justify an award of attorney fees." (Ibid.) To make this 

determination the trial court compares "the relief awarded on the contract . . . claims with 

the parties' demands on those same claims and their litigation objectives as disclosed by 

the pleadings, trial briefs, opening statements, and similar sources." (Hsu v. Abbara 

(1995) 9 Cal.4th 863, 876 (Hsu).) 

 "[I]n determining litigation success, courts should respect substance rather than 

form, and to this extent should be guided by 'equitable considerations.' For example, a 

party who is denied direct relief on a claim may nonetheless be found to be a prevailing 

party if it is clear that the party has otherwise achieved its main litigation objective." 

(Hsu, supra, 9 Cal.4th at p. 877.) We review a trial court's grant of attorney fees for 

abuse of discretion. "Discretion is abused whenever, in its exercise, the court exceeds the 

bounds of reason, all of the circumstances before it being considered. The burden is on 

the party complaining to establish an abuse of discretion, and unless a clear case of abuse 

is shown and unless there has been a miscarriage of justice a reviewing court will not 

substitute its opinion and thereby divest the trial court of its discretionary power." 

(Denham v. Superior Court (1970) 2 Cal.3d 557, 566.) 

 Here, after noting the case "involved multiple separate contract actions," the court 

found "[e]ach party was successful on some of the separate and distinct contract actions, 

which each had an attorney[] fees clause," but that it was "virtually, if not actually, 

[impossible] to break down which fees were incurred by which party, for which 
56 

contract." Despite this statement, the court awarded fees to MBK, Kirk, Paula and 

Dimitri. 

 Kirk contends the court erred by not identifying or analyzing "who was the 

'prevailing party' in this litigation," and by awarding fees arbitrarily. He argues that 

between Dimitri, Kirk and DDK, Kirk and DDK were prevailing parties entitled to 

attorney fees under Civil Code section 1717. Dimitri counters the awards should be 

affirmed on the grounds the court considered nine separate agreements and awarded 

attorney fees (or appropriately declined to do so) to the prevailing parties on each of 

those nine agreements. 

 With respect to the attorney fee award of $350,000 to Kirk against DDK, we 

conclude the record does not support the court's implied finding that Kirk was a 

prevailing party against DDK.7 Kirk did not bring any claims against DDK. He 

successfully brought claims against Dimitri on behalf of DDK. Dimitri points out that he 

brought claims on behalf of DDK against Kirk and that Kirk successfully defended 

against those claims. Accordingly, Dimitri argues, Kirk was a prevailing party against 

DDK and the court's award of fees to Kirk against DDK was mandatory. Kirk's motion 

for attorney fees, however, sought an award of fees solely against Dimitri. Kirk did not 

seek an award of fees against DDK; to the contrary, Kirk sought fees against Dimitri on 

behalf of DDK. We see no rational basis for the court's award of $350,000 in attorney 

 

7 The court's award does not specify who the prevailing party was as to the various 

agreements. 
57 

fees to Kirk against DDK and, therefore, find the award was an abuse of discretion. That 

award is reversed. 

 With respect to Kirk's challenge to the court not awarding any attorney fees to 

DDK, we agree DDK was a prevailing party under the applicable attorney fee provision. 

DDK was awarded $3,085,000 for its breach of contract claims against Dimitri. The jury 

found in Kirk's favor on all of Dimitri's breach of contract claims against him. On this 

record, DDK met its litigation objectives against Dimitri and indisputably "obtained the 

greater relief on the contract." (Silver Creek, LLC v. BlackRock Realty Advisors, Inc.

(2009) 173 Cal.App.4th 1533, 1541; see also id. at p. 1541 ["[a]lthough a trial court has 

broad discretion to determine the prevailing party in a mixed result case, its discretion is 

not unlimited"]; and Deane Gardenhome Assn. v. Denktas (1993) 13 Cal.App.4th 1394, 

1398 ["Typically, a determination of no prevailing party results when both parties seek 

relief, but neither prevails, or when the ostensibly prevailing party receives only a part of 

the relief sought."].) 

 The trial court recognized DDK's victory, stating in its ruling "one party did 

receive a substantial verdict on some of the claims." However, the court also stated the 

verdict "will be offset against the money owed by the [LLC] to Dimitri, resulting in a 

virtual wash according to Plaintiff's counsel." Kirk did not argue the offset resulted in a 

"wash" for purposes of determining the prevailing party under Civil Code section 1717 

on DDK's breach of contract claims. Rather, Kirk's offset arguments related to the merits 
58 

of his claim for specific performance of Dimitri's obligation to continue to fund the 

Monserate Hill project. 

 Further, in the trial court Dimitri did not dispute DDK was the prevailing party 

against him on its breach of contract claims. At oral argument on the attorney fee 

motions, Dimitri's counsel stated: "I don't think we're taking the position that as between 

[DDK] and Guido Dimitri individually, that Dimitri is the prevailing party. [¶] . . . [¶] 

From Mr. Dimitri's point of view it's not a zero recovery when he's giving up over $3 

million of his notes. . . . [¶] [I]n terms of determining who is the prevailing party as 

between [DDK] and Guido Dimitri, the offset doesn't affect that determination." 

Additionally, Dimitri's proposed judgment, entered by the court, awarded costs to DDK 

as the prevailing party against Dimitri. 

 Despite this concession, Dimitri now argues the court had discretion to find DDK 

was not a prevailing party because the offset award meant DDK only received mixed 

results on its contract claims. We are not persuaded. The offset award, now remanded, 

did not cancel DDK's litigation victory on its contract claims against Dimitri. Rather, as 

Dimitri's counsel recognized at the hearing, the offset transferred money DDK owed to 

Dimitri's family trust to Dimitri to settle his obligation to pay the damages awarded to 

DDK. 

 We decline to adopt Dimitri's strict dissection of the breach of contract claims 

related to the DDK operating agreement. (See Hsu, supra, 9 Cal.4th at p. 877 [declining 

to adopt an overly rigid prevailing party determination and holding courts "should be 
59 

guided by 'equitable considerations' "].) Dimitri agreed all breach of contract claims 

submitted to the jury would be resolved together using a special verdict form that did not 

distinguish between the various claims. Dimitri cannot separate claims at this stage to 

support his contention the results between Dimitri and DDK were mixed. (See Silver 

Creek, LLC v. Blackrock Realty Advisors, Inc., supra, 173 Cal.App.4th at p. 1540 [trial 

court "oversimplified its duties by counting the number of contract claims presented and 

essentially declaring a tie"].) The trial court's denial of Kirk's request for specific 

performance of Dimitri's obligation to continue to fund the Monserate Hill project 

pursuant to the DDK operation agreement also did not cancel DDK's victory. This relief 

would have been duplicative of the damages awarded. 

 On this record, it was error for the court to find DDK was not a prevailing party 

against Dimitri on its breach of contract claim. We remand the matter for the court to 

determine the amount of reasonable attorney fees to be awarded to Kirk, on behalf of 

DDK, against Dimitri on this claim. 

 Kirk also challenges the $120,000 attorney fee awards each to Dimitri and Paula. 

Dimitri argues these awards are supported because he and Paula were the prevailing 

parties on each of DDK's claims related to the promissory notes. Because each 

promissory note contained its own attorney fee provision, a separate prevailing party 

determination for the claims related to those notes was appropriate. (See Arntz 

Contracting Co. v. St. Paul Fire & Marine Ins. Co. (1996) 47 Cal.App.4th 464, 491 

["[w]hen an action involves multiple, independent contracts, each of which provides for 
60 

attorney fees, the prevailing party for purposes of Civil Code section 1717 must be 

determined as to each contract regardless of who prevails in the overall action"].) 

 Dimitri contends he and Paula were prevailing parties with respect to those 

provisions because the court rejected Kirk's claims for equitable reformation and allowed 

the principal and interest due on the notes to be offset against the jury's verdict. As 

discussed, we are remanding Dimitri's request for equitable offset to the trial court for a 

determination of the amount of interest on each promissory note that can be offset against 

the judgment considering the jury's factual findings. A finding on remand by the trial 

court that some or all of the interest is not appropriately awarded as offset to Dimitri 

necessarily will impact the prevailing party determination under the attorney fee 

provisions of the notes. (See Allen v. Smith (2002) 94 Cal.App.4th 1270, 1284 [an order 

awarding costs, including attorney fees, " 'falls with a reversal of the judgment on which 

it is based' "].) The attorney fee awards to Dimitri and Paula are reversed. Reversal 

moots Paula's appeal seeking to modify her attorney fee award to be against Kirk and 

DDK, jointly and severally. 

DISPOSITION 

 With respect to DDK's claim for intentional misrepresentation and punitive 

damages, the judgment is reversed and the trial court is directed to enter judgment in 

favor of DDK on these claims for $243,000 and $2.5 million, respectively, retroactively 

to May 10, 2010. With respect to the judgment awarding Dimitri an offset, the issue is 
61 

remanded with directions to determine the appropriate amount of interest that can be 

awarded to Dimitri, considering the jury's factual findings. 

 With respect to the portion of DDK's claim for money had and received reduced 

by the trial court on Dimitri's request for directed verdict, the judgment is reversed and 

increased to $362,000 retroactively to May 10, 2010. If, however, the court determines 

Dimitri is not entitled to offset the accrued interest of $245,046 the jury awarded DDK on 

its claim of money had and received, the judgment on this claim must be $116,954 

retroactively to May 10, 2010. 

 The court's awards of attorney fees to Kirk, Dimitri and Paula are reversed. On 

remand, the court is directed to determine the reasonable amount of attorney fees to 

award Kirk, on DDK's behalf, against Dimitri on the breach of contract claim. The 

judgment and attorney fee awards are otherwise affirmed. The parties shall bear their 

own costs on appeal. 

McDONALD, J. 

WE CONCUR: 

McCONNELL, P. J. 

AARON, J.