Filed 9/28/20 Stearns v. Chiang CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS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). Th is opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

RICHARD STEARNS,
Plaintiff and Respondent,

v. CHARLES CHIANG,

Def endant and Appellant

. D075810

(Super. Ct. No. 37

- 2016

- 00025595

- CU

- BC

- CTL)

APPEAL from a judgment of the Superior Court of San Diego Coun ty, Timothy B. Taylor, Judge. Affirmed

. Small Law and William F. Small for Defendant and Appellant. No ap pearance for Plaintiff and Respondent.
I INTRODUCTION Plaintiff Richard Stearns and Defendant Charles Chiang entered into an oral agreement requiring Stearns t o refer a financial lender to Chiang in

return for a finder ’ s fee

. Stearns referred a suitable l ender to Chiang, but Chiang did not pay the promised finder ’ s fee to Stearns . Stearns filed suit2

against Chiang for breach of contract and, after a one

- day bench trial, the
trial court entered judgment in favor of Stearns. Chiang appeals the judgment

. He asserts Stearns acted at all times relevant to the dispute as an agent of Stearns ’ s company , Thornton & Stearns, Inc. dba Carmel Valley Capital (Carmel Valley Capital)

. Because Stearns allegedly acted as a mere agent of Carmel Valley Capital , Chiang

c ontends Stearns was not a real party in interest with standing to pursue the breach of contract cause of action against Chiang

. We reject Chiang ’ s contention and affirm the judgment.
II BACKGROUND
Stearns and co
- plaintiff Jason Kishaba filed a single cau se of action for breach of contract against Chiang and related corporate entities

. They alleged the d efendants desired to refinance commercial real estate in or about
November 2015 . The parties alleged ly entered into an oral agreement whereby the plainti ffs would seek out and refer funding sources to the
d efendants in exchange for a specified percentage of any refinancing loan the
d efendants obtained as a result of the plaintiffs ’ efforts. According to the

p laintiffs, they referred a funding source to th e defendants and the
d efendants obtain ed a refinancing loan from the funding source ; however, the
d efendants never paid the plaintiffs the agreed

- upon finder ’ s fee.
The case proceeded to a one

- day bench trial. After the p laintiffs ’ case in chief , the d e fendants moved for judgment of nonsuit under Code of Civil
Procedure section 581c , 1 or, in the alternative, for judgment under
section 631.8. They argued the p laintiffs were not real parties in interest with standing to sue because “ all actions they took were on behalf of their

1 All further statutory references are to the Code of Civil Procedure.3

employers .... ” Stearns was the sole employee and sole principal of his

company, Carmel Valley Capital . Kishaba was an employee of a separate company called Got Mortgage, Inc. The trial court deferred resolution of the
d efendants ’ motion.
A fter trial , the court issued a minute order finding in favor of Stearns

as to his claim against Chiang

. The minute order states in pertinent part as follows: “ The court finds that the evidence preponderates in favor of a finding that Stearns w as the procuring cause of the loan ultimately made by [the
l e nder] in the amount of $1.5 million . [Citation.] The court finds that the evidence preponderates in favor of a finding that Charles Chiang individually promised to pay a brokerage commission of at least 2% to Stearns.
Mr. Stearns so testified, and the court believed his testimony. Mr. Chiang did not come to court to deny it, and it is unlikely he actually believed
Mr. Stearns would do the work he did and use the lender contacts he had develope d and deliver a ready, willing, and able lender ... all for nothing in terms of recompense. ” In its minute order, the court also denied the d efendants ’ motion for judgment of nonsuit or, in the alternat ive, motion for judgment , as applied to Stearns . The court found Stearns provided credible and unrebutted testimony that he was the sole principal of Carmel Valley Capital and,

“ [w]hile his decision to sue in his own name may have been improvident in terms of his tax liability or in terms of maintaining corp orate formalities, ” Stearns nonetheless had standing to sue for breach of contract. 2

2 The court denied recovery to co

- plaintiff Kishaba because the court found Kishaba failed “ to carry his burden to prove an entitlement to a commission ” or to “ establi sh he (as opposed to Got Mortgage, his former employer) was the real party in interest. ” The court also found that liability attached only to Chiang and not to his corporate entity.4

The trial court designated the minute order as its statement of decision
under section 632 and entered judgment in favor of Stearns.
III DISCUSSION Chiang contends we mus t reverse the judgment because Stearns was
not the real party in interest entitled to sue for breach of the oral agreement

. Stearns did not file a respondent ’ s brief. W e do not treat Stearns ’ s failure to file a respondent ’ s brief as an admission of error ; rather, we consider the record and Chiang ’ s arguments to determine whether reversal of the judgment is required. ( In re Marriage of Rifkin & Carty (2015) 234 Cal.App.4th 1339, 1342, fn. 1; Cal. Rules of Court, rule 8.220(a)(2).) In general, an “ actio n must be prosecuted in the nam e of the real party in interest .... ” ( § 367.) The purpose of this rule is “ to protect a defendant from harassment by other claimants on the same demand. ” ( Redevelopment Agency of San Diego v. San Diego Gas & Electric Co. (2 003) 111 Cal.App.4th 912, 921.) “ ‘ “ A real party in interest ordinarily is defined as the person possessing the right sued upon by reason of the substantive law, ” ’ ” which in this case is contract law. ( Doe v. Lincoln Unified Dist. ( 2010) 188 Cal.App.4 th 758, 765; Turner v. Seterus, Inc. (2018) 27 Cal.App.5th 516, 525 [ “ ‘ The real party in interest has “ ‘ an actual and substantial interest in the subject matter of the action, ’ and stands to be ‘ benefited or injured ’ by a judgment in
the action. ” ’ ” ].) Chiang contends Stearns was not the real party in interest with standing to sue because Stearns allegedly acted as an agent of Carmel Valley Capital

. ( See Cohen v. TNP 2008 Participating Notes Program (2019) 31 Cal.App.5th 840, 856 ( Cohen ) [ “ ‘ a n agent for a party to a contract not made with or in the name of the agent is not a real party in interest with stand ing5

to sue on the contract ’ ” ].) Chiang argues Stearns ’ s alleged agency is apparent from an excerpt in the settled statement, which provides as follows: “[ Stearns ] testified that he is the only principal of [ Carmel Valley Capital ]”
and “ all work he did was on behalf of that entity. ” Chiang argues the agency
is also evident based on certain trial exhibits that reference Carmel Valley Capital in p assing , including an executive loan summary and conditional loan quote allegedly prepared by Stearns and a letter of intent allegedly prepared by the lender.
W e are not convince d the judgment must be reversed

. According to the
settled statement , Stearns testified he performed his “ work ” on behalf of Carmel Valley Capital , evidence from which the court might reasonably have found the existence of an agency relationship . However, Stearns ’ s testimony , the trial exhibits identified by Chiang, and the statem ent of decision do not
indicate that Carmel Valley Cap ital

— as opposed to Stearns

— was the party
that entered the oral agreement with Chiang. The identity of the contracting parties matters for purposes of determining standing because even an agent

may “ sue on a contract which has been entered into in his own name .... ” ( Earl Fruit Co. v. Herman (1928) 90 Cal.App. 640, 644

– 645 ( Earl Fruit ) .)
W hen the “ agent contracts directly with a third person, the law allows the agent, treated as a principal, to sue on th e contract in his own name ...

. ” ( Id. at p. 645; 4 Witkin , Cal. Procedure (5th ed. 2020 ) Pleading, § 141 [ “ Where the contract is actually made in the agent ’ s name as a promisee, the agent may sue even though he or she has no beneficial interest and is under no li ability to the principal. ” ].) Thus, Stearns would have standing to sue, even as an agent, if he entered the oral agreement in his own name. As noted, the statement of decision was silent as to the identity of the contracting parties, but conclude d that Stearns had standing to sue in his6

own name

. To the extent Chiang suggests there is a defect or ambiguity in the statement of decision, we are required to draw all inferences in favor of
Stearns

— i.e., to infer Stearns entered the oral agreement in hi s own name

— because there is no indication in the record that Chiang objected to the statement of decision . ( Uz y el v. Kadisha (2010) 188 Cal.App.4th 866, 896 [ “ If an omission is not brought to the trial court ’ s attention as provided under the
statute

... the reviewing court will resolve the omission by inferring findings in favor of the prevailing party on that issue. ” ].) Our inference that Stearns entered the oral agreement in his own name is a sufficient basis for us to affirm the judgment. (See Earl Frui t , supra , 90 Cal.App. at pp. 644

– 645.) Even if Stearns entered the oral agreement as an agent of Carmel Valley Capital and in the name of Carmel Valley Capital , Stearns would have standing to sue

. In the statement of decision, the trial court found that

“ Charles Chiang individually promised to pay a brokerage commission of at
least 2% to Stearns

. ” (Italics added.) It did not find that Chiang promised to

pay a brokerage commission to Carmel Valley Capital. 3
The trial court ’ s finding that Chiang promised to pay a brokerage commission to Stearns establishes that Stearns stood to realize a direct financial gain from the oral agreement. Based on this finding, we conclude
the trial court appropriately determined that Stearns had a beneficial
interest in the litigation entitling him to sue for breach of contract

. ( Civ. Code, § 1559 [ “ A contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescind it. ” ];
4 Witkin , Cal. Procedure (5th ed. 2020) Pleading, § 141 [ “ If the plaintiff, though an agent acting on behalf of a principal, actually has some beneficial

3 In his opening brief, Chiang recites the general standard of review

a pplicable to our review of factual determinations, but does not challenge the sufficiency of the evidence supporting any of the trial court ’ s factual findings.7

interest in the subject matter, he or she is allowed to sue. ” ] ; accord, Cohen , supra , 31 Cal.App.5th at p. 856 [ “ An agent acting on behalf of a principal might have standing to sue ... if the agent ‘ has some beneficial interest in the subject matter. ’ ” ]

. )
IV DISPOSITION The judgment is affirmed

. The parties are to bear their own costs on appeal.

McCONNELL, P. J.

WE CONCUR:

HUFFMAN, J.

O ’ ROURKE, J.