Filed 5/2/16 Grandmaison v. Rosa CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

ALICIA G. GRANDMAISON, as Trustee, 

etc.,

Plaintiff and Respondent,

v.

ANGELO L. ROSA,

Defendant and Appellant.

 B264954

 (Los Angeles County

 Super. Ct. BC514954)

APPEAL from a judgment of the Superior Court of Los Angeles County, 

Richard L. Fruin, Jr., Judge. Reversed and remanded.

Marsh Rosa and Gary L. Marsh for Defendant and Appellant.

Law Offices of Richard A. Marcus and Richard A. Marcus for Plaintiff and 

Respondent.

_______________________________
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INTRODUCTION

In order to prevail on a cause of action for promissory fraud, “‘something more 

than nonperformance is required to prove the defendant’s intent not to perform his 

promise.’” (Tenzer v. Superscope, Inc. (1985) 39 Cal.3d 18, 30 (Tenzer).) In this case, 

there was a little more, but not much. Was it enough? Not quite. Therefore, we reverse. 

FACTUAL AND PROCEDURAL BACKGROUND

In October 2008 Samuel Grandmaison loaned $200,000 to New Earth Systems, 

Inc., a company in which he had previously invested, pursuant to a written promissory 

note. At the same time, Angelo Rosa, the company’s Chief Executive Officer and an 

attorney, signed a personal guaranty of the loan. 

Grandmaison made the loan at Rosa’s urging, after declining to make a further

investment in the company. Rosa induced Grandmaison to make the loan by representing 

that he had the financial ability to repay the loan if New Earth Systems did not because 

“he owned law practices generating substantial fees in Idaho and Utah.” Rosa also told 

Grandmaison that “he was a very successful lawyer,” “had substantial earning capacity 

through his law practices,” and the company “was on the path to marketing its product.” 

Grandmaison made the loan based on Rosa’s promises. 

New Earth Systems defaulted in January 2009, and counsel for Grandmaison sent 

a demand letter to Rosa in July 2009. In August 2010 Rosa wrote: “I have told both you 

and [your attorney] that I do not have any money to pay you with. I do not have any 

disposable income and do not expect to have any for some time to come.” 

Grandmaison filed this action in July 2013, which, according to the trial court, was

“more than four years after” New Earth Systems failed to make the first payment due 

under the terms of the promissory note in January 2009, but “within three years from the 

date Rosa told [Grandmaison] he had no money and that he could not perform his 

obligations under” the guaranty in August 2010. Grandmaison alleged causes of action 
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for breach of guaranty, fraud, and negligent misrepresentation. In his fraud cause of 

action, Grandmaison alleged that Rosa falsely represented he “was a successful and 

affluent attorney who had the financial means available to personally guaranty the 

obligations of New Earth Systems” and that Grandmaison “had no reason to worry 

about” any default by New Earth Systems because Rosa was guarantying the company’s 

obligations. Grandmaison alleged that “Rosa misrepresented his financial condition and 

ability to personal[ly] guaranty the obligations of New Earth Systems,” and that Rosa 

“did not have the financial resources or assets necessary to effectively personally 

guaranty the obligations” he was guarantying. 

The case proceeded to a court trial. Grandmaison appeared with his attorney and 

testified. Rosa’s attorney appeared at the trial, but Rosa did not.

1

 There was no court 

reporter for the trial. The court received into evidence eight exhibits, including 

paragraphs 24-32 of an unidentified declaration by Grandmaison, but, other than the 

promissory note and guaranty (which were attached to the complaint), none of the 

exhibits is in the record on appeal. 

In its statement of decision, the court found that the four-year statute of limitations 

barred Grandmaison’s cause of action for breach of the written guaranty. Grandmaison 

has not appealed that ruling.

On the fraud cause of action, the court concluded that Grandmaison’s evidence 

was “sufficient to support the inference that Rosa did not have the ability to pay the 

obligation when he signed the [guaranty] and he, therefore, did not have the intent of 

performing . . . when he signed it.” The court stated that Grandmaison testified that, to 

induce him to make the loan, Rosa told him “he was receiving substantial fees from his 

 

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In a declaration apologizing for not appearing at, but not requesting a continuance 

of, the trial, Rosa explained that he had only recently learned of the trial date and had 

“prior litigation commitments” in Minnesota, Montana, and New York. Rosa stated that 

the depositions at which he had to appear were “critical to my clients’ interests and I 

would be failing in my duties as counsel if I were to not appear,” and “I have always 

placed my clients’ interests at the forefront of my actions . . . .” 
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law practices that he represented to be very successful.” The court found that “22 months 

later Rosa stated that he had no money or ability to honor” the guaranty. The court stated 

that it “infer[red] from this uncontradicted evidence that Rosa misrepresented to 

[Grandmaison] in October, 2008 that he had sufficient assets and an earning capacity as a 

lawyer from which he could and would re-pay” the loan if the company failed to do so. 

The court found “Rosa was motivated to make such representations because he would 

benefit personally, as an investor in [New Earth Systems], and, in fact, as its Chief 

Executive Officer . . . .” The court also found that Grandmaison “relied on Rosa’s 

representations – indeed it was, as he told Rosa, the only basis on which he would make a 

loan to [New Earth Systems]. [Grandmaison’s] reliance on Rosa’s promise to guaranty 

the company’s repayment was reasonable because Rosa told him he was a successful 

lawyer, generating income from law practices in two states, and because Rosa, as an 

insider at [New Earth Systems], was in a position to represent to [Grandmaison] that his 

guaranty would present ‘no problem’ because [the company] would be able to repay the 

loan.” The court also noted that Rosa had prepared the promissory note and the 

guaranty. 

The court inferred from Rosa’s August 2010 letter “that when Rosa said in 

October 2008 he had flourishing law practices in two states that generated substantial 

fees from which he could pay (and would pay) any [New Earth Systems] obligation owed 

to [Grandmaison] his representation was not true and that he had knowledge it was not 

true. No evidence was offered to overcome that inference. That is, no evidence was 

offered that Rosa had successful, income-generating law practices in Idaho and Utah in 

October, 2008 but that [his] law practices collapsed between then and August, 2010 so 

that he had no ability to pay on his guaranty. The court concludes that the trial record 

establishes that [Grandmaison] proved all elements that are needed to prove Rosa liable 

for promissory fraud.” The court also found that Grandmaison’s fraud cause of action 

was not barred by the applicable three-year statute of limitations because he filed this 

action within three years of discovering the fraud in August 2010 when he received 

Rosa’s letter saying he had no money to pay the guaranty. 
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The court entered judgment on May 18, 2015 in the amount of $333,344.44. Rosa 

filed a timely notice of appeal. Grandmaison died during the pendency of this appeal. 

On April 26, 2016 this court granted a motion by Alicia Grandmaison, as trustee of the 

Grandmaison Trust dated October 26, 2011 (the trustee), to substitute into the case as the 

respondent.

DISCUSSION

Rosa argues that the trial court erred in ruling that his August 2010 letter was 

sufficient to prove promissory fraud. Rosa does not dispute any of the facts surrounding 

the letter, including that he wrote it, when he sent it, or what it says. Rosa argues that his 

statement that he had no money or disposable income to pay Grandmaison in August 

2010 is not enough, without more, to prove that he had no intent or ability to perform his 

obligations under the guaranty in October 2008. And that there is no more.

A. Standard of Review

“In a nonjury trial the appellant preserves the record by requesting and obtaining 

from the trial court a statement of decision pursuant to California Code of Civil 

Procedure section 632. The statement of decision provides the trial court’s reasoning on 

disputed issues and is our touchstone to determine whether or not the trial court’s 

decision is supported by the facts and the law.” (Slavin v. Borinstein (1994) 25 

Cal.App.4th 713, 718; see In re Marriage of Sellers (2003) 110 Cal.App.4th 1007, 1010

[“[a] statement of decision is as much, or more, for the benefit of the Court of Appeal as 

for the parties”].) “Under the general rules applicable to a trial court’s statement of 

decision, an appellate court independently reviews questions of law and applies the 

substantial evidence standard to findings of fact.” (Central Valley General Hospital v. 

Smith (2008) 162 Cal.App.4th 501, 513; see M & F Fishing, Inc. v. Sea-Pac Ins. 

Managers, Inc. (2012) 202 Cal.App.4th 1509, 1519, fn. 12.) 
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B. The Trial Court Erred in Ruling Grandmaison Prevailed on His 

Promissory Fraud Claim

“‘“Promissory fraud” is a subspecies of fraud and deceit. A promise to do 

something necessarily implies the intention to perform; hence, where a promise is made 

without such intention, there is an implied misrepresentation of fact that may be 

actionable fraud. [Citations.] [¶] An action for promissory fraud may lie where a 

defendant fraudulently induces the plaintiff to enter into a contract.’ [Citation.] The 

elements of fraud that will give rise to a tort action for deceit are: ‘“(a) misrepresentation 

(false representation, concealment, or nondisclosure); (b) knowledge of falsity (or 

‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) 

resulting damage.”’” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 

951, 973-974; see Rossberg v. Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 

1498.)

To establish liability for promissory fraud based on a failure to perform a 

contractual obligation, “‘something more than nonperformance is required to prove the 

defendant’s intent not to perform his promise.’” (Tenzer, supra, 39 Cal.3d at p. 30.) For 

example, fraudulent intent may be inferred “from such circumstances as defendant’s 

insolvency, his hasty repudiation of the promise, his failure even to attempt performance, 

or his continued assurances after it was clear he would not perform. [Citation.] 

However, if plaintiff adduces no further evidence of fraudulent intent than proof of 

nonperformance of an oral promise, he will never reach a jury.” (Id. at pp. 30-31, citing 

Prosser, Torts (5th ed. 1984) § 109, pp. 764-765; see Riverisland Cold Storage, Inc. v. 

Fresno-Madera Production Credit Assn. (2013) 55 Cal.4th 1169, 1183 [“the intent 

element of promissory fraud entails more than proof of an unkept promise or mere failure 

of performance”]; Conrad v. Bank of America (1996) 45 Cal.App.4th 133, 156-157 [“a 

claim of fraud cannot be permitted to serve simply as an alternative cause of action 

whenever an enforceable contract is not formed”].)
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In concluding that Grandmaison proved the elements of promissory fraud, the trial 

court determined that Rosa did not intend to perform the guaranty when he signed it in 

October 2008 based on a finding that Rosa did not have the ability to pay the obligation 

at that time. The latter finding the court inferred exclusively from Rosa’s statement in 

August 2010 that he did not have the means to honor the guaranty. The court also 

inferred from Rosa’s August 2010 statement “that Rosa was similarly without funds or an 

ability to generate funds needed to honor his [guaranty] in October, 2008 and that his 

representations to the contrary were misrepresentations of fact.” 

The trial court’s inferences were unreasonable. Specifically, it was not reasonable 

to infer Rosa’s inability to pay in October 2008 solely from evidence that he could not 

pay almost two years later, in August 2010. The fact that Rosa could not pay in August 

2010 does not prove, even inferentially, that he could not pay in October 2008. (See

Conrad v. Bank of America, supra, 45 Cal.App.4th at p. 157 [failure to perform at a later 

time does not establish fraudulent intent at the time of the promise]; see, e.g., Fluorine 

On Call, Ltd. v. Fluorgas Ltd. (5th Cir. 2004) 380 F.3d 849, 853, 859 [evidence that 

contracting party intended to terminate the contract by December 2000 was “not evidence 

that [the contracting party] entered the contract without intending to perform” in August 

2000]; Asbury Square, L.L.C. v. Amoco Oil Co. (S.D.Iowa 2003) 218 F.R.D. 183, 193 

[2002 environmental report showing oil company’s promised remediation plan was 

inadequate, “without more, provides little factual notice of evidence that [the oil 

company] did not intend to fulfill its promises at the time they were made in 1998”]; see 

also U.S. ex rel. Garst v. Lockheed-Martin Corp. (7th Cir. 2003) 328 F.3d 374, 378

[“there is no ‘fraud by hindsight’”].) The trial court did not cite to any other evidence to 

support the court’s inference that Rosa did not have the ability to pay the guaranty in 

October 2008. Thus, the trial court’s ruling in its statement of decision that Grandmaison 

had proven promissory fraud rested on a factual finding that is not supported by the

evidence the court cited. 
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Citing the “cardinal rule of appellate review” that an appellate court will presume 

that a judgment or order of the trial court is correct (Foust v. San Jose Construction Co., 

Inc. (2011) 198 Cal.App.4th 181, 186), the trustee contends that, because there is no 

reporter’s transcript to establish what evidence the parties introduced at trial, we must 

presume that there was substantial evidence to support the court’s factual determinations. 

The trustee makes this contention in various ways, including that Rosa “waived his right 

to review by not providing a sufficient record of the oral proceedings,” “the absence of a 

record concerning what actually occurred at trial precludes a determination that the trial 

court erred,” and “failure to provide an adequate record of the oral proceedings bars 

[Rosa] from claiming the evidence was insufficient” to support the trial court’s rulings. 

This cardinal rule does not apply here. An appellate court will indulge 

presumptions to support the trial court’s judgment only “on matters as to which the 

record is silent.” (Denham v. Superior Court (1970) 2 Cal.3d 557, 564; see Chalmers v. 

Hirschkop (2013) 213 Cal.App.4th 289, 299 [“if the record is silent we indulge all 

reasonable inferences in support of the judgment or order,” italics added]; Foust, supra, 

198 Cal.App.4th at pp. 186-187 [“‘[i]n the absence of a contrary showing in the record, 

all presumptions in favor of the trial court’s action will be made by the appellate court,’” 

italics added]; Border Business Park, Inc. v. City of San Diego (2006) 142 Cal.App.4th 

1538, 1550 (Border) [presumption of correctness “applies only on a silent record”]; 

Steuri v. Junkin (1938) 27 Cal.App.2d 758, 760 [“legal presumptions do not come to the 

aid of the record except as to acts or facts touching which the record is silent”].) On the 

other hand, “[w]hen the record clearly demonstrates what the trial court did, we will not 

presume it did something different.” (Lafayette Morehouse, Inc. v. Chronicle Publishing 

Co. (1995) 39 Cal.App.4th 1379, 1384; accord, Border, at p. 1550; see Mt. Holyoke 

Homes, L.P. v. Jeffer Mangels Butler & Mitchell, LLP (2013) 219 Cal.App.4th 1299, 

1315, fn. 7 [“if the record clearly discloses the reasons for the trial court’s ruling, we will 

not presume that the court relied on a different reason”].) 
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Here, the record is not silent. The presumption of correctness does not apply 

because the statement of decision clearly and adequately demonstrates the trial court’s 

error. The statement of decision states that the court based its decision on Grandmaison’s 

promissory fraud claim on one factual finding: Rosa did not have the ability to pay the 

guaranty in October 2008. The court inferred this fact exclusively from evidence that 

Rosa did not have the ability to pay the guaranty in August 2010, an inference that was 

not reasonable. Thus, the record demonstrates that the trial court’s ruling rested on an 

error, and leaves no room to presume otherwise. (See Border, supra, 142 Cal.App.4th at 

1550; cf. Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 132 [where trial 

court stated that its factual finding was “‘based on evidence observed during the trial,’” 

lack of reporter’s transcript of the trial left appellants unable to argue that insufficient 

evidence supported the finding].) The trial court’s error was “an error that ‘appears on 

the face of the record.’” (Kucker v. Kucker (2011) 192 Cal.App.4th 90, 94; see Cooper v. 

County of Los Angeles (1975) 49 Cal.App.3d 34, 40 [even where there is no reporter’s 

transcript, “error which is manifest on the face of the record . . . requires reversal”].)

Finally, citing California Rules of Court, rule 8.120(b), the trustee argues that

Rosa waived his right to appellate review of the trial court’s ruling because there is no 

reporter’s transcript of the trial. (See Cal. Rules of Court, rule 8.120(b) [“[i]f an 

appellant intends to raise any issue that requires consideration of the oral proceedings in 

the superior court, the record on appeal must include a record of these oral 

proceedings”].) California Rules of Court, rule 8.163, however, provides, that “[t]he 

reviewing court will presume that the record in an appeal includes all matters material to 

deciding the issues raised. If the appeal proceeds without a reporter’s transcript, this 

presumption applies only if the claimed error appears on the face of the record.” (Cal. 

Rules of Court, rule 8.163; see National Secretarial Service, Inc. v. Froehlich (1989) 210 

Cal.App.3d 510, 521.) Because the trial court’s error appears on the face of the record, 

we presume the record includes all matters material to our decision, and Rosa did not 

waive his right to appellate review. Indeed, because the court’s error appears on the face 

of the record, it was the trustee’s obligation to provide a respondent’s appendix that 
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included exhibits, documents, transcripts, or a settled statement to refute the error. (See

Lankster v. Alpha Beta Co. (1993) 15 Cal.App.4th 678, 684; Stauffacher v. Stauffacher

(1964) 227 Cal.App.2d 735, 737 [discussing predecessor to Cal. Rules of Court, rule 

8.163].)2

DISPOSITION

The judgment is reversed and remanded with directions to enter judgment in favor 

of Rosa. (See Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 289.) Rosa

is to recover his costs on appeal. 

SEGAL, J.

We concur:

ZELON, Acting P. J.

BLUMENFELD, J.*

 

2

The trustee also suggests that Rosa waived his right to challenge the court’s 

finding that Rosa did not intend to pay the guaranty in October 2008 by failing to present 

all the material evidence on that point. The trial court’s statement of decision, however, 

contains all of the evidence the trustee asserts Rosa failed to present. 

*

Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to 

article VI, section 6 of the California Constitution.