Filed 1/23/24 Archer v. Johnson CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions 

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has not been certified for publication or ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

JOHN S. ARCHER, et al.,

 Plaintiffs and Appellants,

v.

AARON LEMAR JOHNSON, et 

al.,

 Defendants and Respondents.

2d Civil No. B322083

(Super. Ct. No. 56-2019-

00533922-CU-NP-VTA)

(Ventura County)

John S. Archer and Richard Ongania (appellants) appeal 

from the judgment following a court trial. Appellants and 

respondent entered into an oral partnership agreement to create 

a computer software system used in home inspections.

Appellants filed a complaint against respondent and his limited 

liability company, AaceSystems LLC, alleging, inter alia, causes 

of action for breach of an oral partnership agreement, declaratory 
2

relief, and for an accounting.1 They allege respondent sold the 

software to users without sharing profits with them.

The trial court found in favor of appellants on the breach of 

oral agreement cause of action, awarded nominal damages, and 

ordered that partnership law would apply from that point 

forward. It denied appellants’ cause of action for an accounting.

Appellants contend the trial court erred in ruling that

partnership law only applied to the partnership “‘moving 

forward’” and refusing to order an accounting. We affirm. 

Factual and Procedural Background

Appellants are certified home inspectors. Prior to 2010, 

they used an inspection software called “System 2000.” The 

system allowed users to collect and manage data, including

narratives from home inspectors such as appellants. Those 

narratives, otherwise referred to in the industry as “comments,”

were then used to generate inspection reports.

The software was outdated, cumbersome, and not userfriendly. In 2010, appellants hired respondent to modernize

System 2000, including adding new features and incorporating

the vast library of comments appellants had created over the 

years into System 2000’s existing library of comments. The 

modernized version of System 2000 was named, “Spectacular.” 

By March 2011, an operable version of Spectacular was 

ready for use. Appellants believed Spectacular was so good that 

they could sell the software to fellow home inspectors. 

Although appellants possessed industry-specific experience, 

they lacked the technical capability to modify and further develop

the software. Appellants contacted respondent and offered him a 

1 AaceSystems LLC defaulted in the underlying case and is 

not a party to this appeal. 
3

three-way partnership for ownership and operation of 

Spectacular. Respondent agreed and the parties consummated 

their agreement with a handshake.

Pursuant to their partnership agreement, appellants were

responsible for instructing respondent on the layout and form of 

the software to improve usability. They were also responsible for 

providing the comments, conducting field testing, and for

marketing Spectacular to fellow home inspectors at conferences. 

Respondent was responsible for developing the software as the 

code writer. 

Appellants and respondent met with a legal consultant who 

advised them to create a limited liability company to hold 

ownership of the software and the business. The parties agreed 

to use respondent’s previously formed company, AaceSystems 

LLC. 

Throughout 2011 and 2012, appellants and respondent 

worked together to improve the functionality of the software. 

When Spectacular was ready for sale to home inspectors,

appellants and respondent marketed the software at home 

inspector meetings and conventions.

Appellants and respondent held themselves out as 

“partners” and routinely used collective language such as “we” 

and “us” in their internal communications, particularly when 

referring to Spectacular business and future profits. Appellants 

also exercised control over the day to day business operations, 

including setting the price for Spectacular’s licenses and 

determining user content.

In August 2018, respondent gave a presentation at a home 

inspector meeting where appellants were also present. When an 

audience member inquired about the number of Spectacular 
4

sales, respondent stated that he had sold 1500 units. Appellants 

were shocked because respondent had indicated to them that 

business was slow and things were not selling that well. 

In October 2018, the parties met at a local café. Mr. Archer 

informed respondent that he wanted to fund his trust with his 

one-third ownership interest in Spectacular and asked 

respondent to give him a copy of the LLC agreement with his 

name on it to include in the trust. Respondent denied that 

appellants had any ownership in Spectacular and subsequently

terminated their access to Spectacular.

In September 2019, appellants filed a complaint against 

respondent and AaceSystems LLC, alleging among other claims, 

breach of an oral agreement. Appellants requested declaratory 

relief and an accounting. 

No evidence was produced at trial as to how many units of 

Spectacular were sold. Following a court trial, the trial court 

issued an oral tentative decision. The trial court found in favor of 

appellants on their claim for breach of oral agreement, finding 

“the evidence is very strong that there was some sort of informal 

formal agreement . . . that they would be partners in this 

business.” 

The trial court found the evidence of damages to be “very 

spartan” and awarded only nominal damages of $100. As the 

trial court explained, “I certainly don’t have evidence that 1500 

units were sold at $599 per unit, and it would really be 

speculation as to what the appropriate damages would be.” 

The trial court denied appellant’s cause of action for an 

accounting. As the trial court explained:

“There isn’t sufficient evidence to rely on to order an 

accounting of - - I mean, I don’t know what has been done 
5

in the past, and we really didn’t establish the damages 

other than, as I said, nominal damages. So I am not going 

to order an accounting to be done. So what we are left with 

is the declaratory relief request, which I’m granting, and 

that is that a partnership does exist. It’s a third, a third, a 

third partnership. Partnership law will apply from this 

point forward.” 

Discussion2

Appellants contend the trial court should have ordered that 

the partnership was created in 2011 or 2012 when the parties 

made their handshake agreement. Appellants also contend the 

trial court should have sustained the cause of action for an 

accounting and ordered respondent to account for the profits and 

losses he derived from Spectacular from the time of the 

partnership’s formation. As we shall explain, appellants’ 

contentions are without merit. 

“A judgment or order of a lower court is presumed to be 

correct on appeal, and all intendments and presumptions are 

indulged in favor of its correctness. [Citations.]” (In re Marriage 

of Arceneaux (1990) 51 Cal.3d 1130, 1133 (Arceneaux).) 

We review the trial court’s findings of fact for substantial 

evidence and its denial of an accounting for abuse of discretion. 

(People v. Cromer (2001) 24 Cal.4th 889, 893-894; Heller v. 

Pillsbury Madison & Sutro (1996) 50 Cal.App.4th 1367, 1392

(Heller).)

2 No respondent’s brief was filed. Accordingly, the appeal 

is submitted on appellants’ opening brief, the record, and any oral 

argument by appellants. (Cal. Rules of Court, rule 8.220(a)(2).)
6

Trial Court’s Order Partnership Law Governs Moving Forward

Appellants do not challenge the trial court’s finding of a 

three-way partnership for the ownership and sale of Spectacular. 

However, they contend the trial court erred when it found that 

the partnership only began to exist for profit division purposes as 

of the time of trial. Appellants contend this finding was 

“unsupported by evidence and defies common sense” where “[a]ll 

of the acts, words and conduct that the trial court relied on as 

evidencing an agreement occurred years prior, culminating in a 

handshake between the parties in 2011 or 2012.” 

Here, the trial court issued its oral tentative decision

pursuant to California Rules of Court, rule 3.1590(c). The

tentative decision expressly stated, “[p]artnership law will apply 

from this point forward.” The trial court instructed the parties 

that the tentative decision would become the statement of 

decision unless, within 10 days, a party specifies those principal 

controverted issues as to which the party is requesting a 

statement of decision or makes proposals not included in the 

tentative decision. (Id., subd, (c)(4).) 

Appellants did not file any response or object to the trial 

court’s tentative decision. Consequently, they have forfeited their 

right to raise the issue now. (See Arceneaux, supra, 51 Cal.3d at 

pp. 1133-1134.) 

The forfeiture rule applies with special force when the 

appealing party received the judge’s tentative ruling and raised 

no objection to it. “It is axiomatic that a party may not complain 

on appeal of rulings to which it acquiesced in the lower court. . . . 

It is unfair to the trial judge and the adverse party to attempt to 

take advantage of an alleged error or omission on appeal when 

the error or omission could have been, but was not, brought to the 
7

attention of the trial court in the first instance. [Citation.] . . . . 

[¶] It follows that when a trial court announces a tentative 

decision, a party who failed to bring any deficiencies or omissions 

therein to the trial court’s attention forfeits the right to raise 

such defects or omissions on appeal.” (Porterville Citizens for 

Responsible Hillside Development v. City of Porterville (2007) 157 

Cal.App.4th 885, 912, citing Arceneaux, supra, 51 Cal.3d at p. 

1134.) 

Even if we were to reach the merits on this issue, 

appellants fail to show that the alleged error resulted in a 

miscarriage of justice. (See Lundy v. Ford Motor Co. (2001) 87 

Cal.App.4th 472, 479; Cal. Const., art. VI, § 13.) 

Here, there is no evidence that appellants are entitled to 

two-thirds of the profits going back to 2011 or 2012. Rather, the 

evidence shows that appellants intended for respondent to keep 

at least some of the profits as compensation for his work on 

Spectacular. As Mr. Archer explained during his testimony, “We 

never asked for a cut . . . Richard and I, considered us three-way 

partners from the onset. And we never asked for money because 

[respondent was] developing the product as it progressed. So . . . 

any profits that were made, we just figured we would let 

[respondent] keep because of [his] work.” When respondent quit 

his job to focus on Spectacular full time, appellants continued to 

allow him to keep the profits of Spectacular sales to “compensate 

him for the amount of income that he was foregoing by giving up 

his job.” 

We conclude reversal is not warranted on this issue.

Action for an Accounting

As we have indicated, we review the trial court’s denial of 

an accounting for an abuse of discretion. (Heller, supra, 50 
8

Cal.App.4th at p. 1392.) “‘“The term [judicial discretion] implies 

the absence of arbitrary determination, capricious disposition or 

whimsical thinking. It imports the exercise of discriminating 

judgment within the bounds of reason. . . .”’” (Estate of Gilkison

(1998) 65 Cal.App.4th 1443, 1448-1449.) A “‘showing on appeal is 

wholly insufficient if it presents a state of facts, a consideration of 

which, for the purpose of judicial action, merely affords an 

opportunity for a difference of opinion. An appellate tribunal is 

neither authorized nor warranted in substituting its judgment for 

the judgment of the trial judge. . . .’” (Ibid.) 

“A cause of action for an accounting requires a showing 

that a relationship exists between the plaintiff and defendant 

that requires an accounting, and that some balance is due the 

plaintiff that can only be ascertained by an accounting. 

[Citations.]” (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 

179; Sass v. Cohen (2020) 10 Cal.5th 861, 869 (Sass).) It is a 

“‘species of disclosure predicated upon the plaintiff’s legal 

inability to determine how much money, if any, is due.’” (Teselle, 

at p. 180, italics added.) 

Here, the trial court expressly found there was insufficient 

evidence to rely on to order an accounting. As the trial court

explained in its tentative decision, “I don’t know what has been 

done in the past, and we really didn’t establish the damages 

other than . . . nominal damages.” 

Appellants contend the trial court applied the wrong legal 

standard because “[n]either knowledge of what was ‘done in the 

past’ nor prospective establishment of damages, are recognized as 

necessary elements to establish appellants’ entitlement to an 

accounting.” Instead, they contend all they had to show was (1) a

relationship between the parties requiring an accounting, and (2)
9

some balance is due to them that “‘can only be ascertained by an 

accounting.’” (Citing Sass, supra, 10 Cal.5th at p. 869 and Corp. 

Code, § 16405, subd. (b).) 

But appellants have not sufficiently demonstrated that any

balance was due or that it could only be ascertained by an 

accounting and not through some other ordinary means of 

discovery. To be sure, appellants had the opportunity to conduct 

discovery to develop the evidence of damages or “some balance 

due.” The record reflects that appellants filed a motion to compel 

discovery and requested sanctions, however, it is unclear how the 

trial court resolved the matter and on what basis. Appellants’

appendix does not include the motion to compel discovery, the 

opposition filed by respondent, or the trial court’s ruling. 

“The burden of demonstrating error rests on the appellant. 

[Citation.]” (Winograd v. American Broadcasting Co. (1998) 68 

Cal.App.4th 624, 632.) To meet this burden, the appellant must 

provide an adequate appellate record to assess error. “Failure to 

provide an adequate record on an issue requires that the issue be 

resolved against” the appellant. (Hernandez v. California 

Hospital Medical Center (2000) 78 Cal.App.4th 498, 502.)

Notwithstanding any discovery dispute, appellants had the 

opportunity to examine respondent under oath. They presented 

evidence that at least some units of Spectacular were sold. But, 

Spectacular can be bought for a day, a single use, a month, the 

entire year, or as a renewal at a discounted price. 

Like the trial court, we have no evidence as to how many 

units of Spectacular were sold, or in what form, and at what 

price. Appellants are not now entitled to an accounting based on 

their own failure to carry their burden of proof in the first 

instance. (See Evid. Code, §500 [a party has burden of proof as to 
10

facts essential to his or her claim for relief]; 1 Witkin, Cal. 

Evidence (6th ed. 2023) Burden of Proof and Presumptions, § 10, 

p. 166 [same].) 

The trial court considered all of the evidence presented, 

found it “very spartan” and insufficient to show that any “past 

damages” occurred. It was not an abuse of discretion for the trial 

court to then conclude that appellants’ failure to prove past 

damages necessarily precluded them from demonstrating some 

balance was due. 

Disposition

The judgment is affirmed.

NOT TO BE PUBLISHED.

YEGAN, Acting P. J.

We concur:

BALTODANO, J.

CODY, J.
Benjamin F. Coats, Judge

Superior Court County of Ventura

______________________________

Ferguson Case Orr Paterson and Joshua S. Hopstone,

Morgan T. Lynch, for Plaintiffs and Appellants.

No appearance for Respondents.