Filed 10/14/20 Vernon v. Culotti CA2/7

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

JENNIFER VERNON,

Plaintiff and Appellant,

v.

ELAINE CULOTTI,

Defendant and Appellant.

 B294867

 (Los Angeles County

 Super. Ct. No. SC120578)

APPEAL from a judgment of the Superior Court of 

Los Angeles County, Nancy L. Newman, Judge. Affirmed in part; 

reversed in part with directions.

Law Offices of Steven Glaser and Steven Glaser for 

Plaintiff and Appellant.

Keleti Law and S. Martin Keleti for Defendant and 

Appellant.

__________________________
2

Elaine Culotti appeals from a judgment after a bench trial 

entered in favor of her former business partner Jennifer Vernon. 

Culotti and Vernon each owned 50 percent of the membership 

interests in House of Rock, LLC (HOR), a marketing company 

that promoted home furnishings by showcasing them in luxury 

homes owned by Briles-Culotti Partnership (BCP), in which 

Culotti was a partner. Culotti contends the trial court erred in 

finding she breached her fiduciary duties to Vernon by refusing to 

pay for furnishings donated by HOR’s clients, instead claiming 

the furnishings were the property of BCP. Culotti argues further

the judgment was based on inadmissible evidence and failed to 

include an offset for the rental value to HOR of the showcase 

home. Vernon also appeals from the judgment, contending the 

trial court erred in denying her request for prejudgment interest. 

We agree the trial court erred in denying Vernon’s request for 

prejudgment interest. We reverse the judgment as to 

prejudgment interest and otherwise affirm.

FACTUAL AND PROCEDURAL BACKGROUND

A. BCP Acquires the La Mesa Property

Culotti is an interior designer and real estate developer 

experienced in renovating high-end residential properties for 

resale.1 In October 2010 Culotti, her husband Gary,

2 and Greg 

Briles formed BCP to purchase, remodel, and sell a large estate 

1 The background facts are taken from undisputed facts in 

the trial court’s statement of decision and trial court exhibits, 

except as noted.

2 Because he shares a last name with Culotti, we refer to 

Gary Culotti by his first name.
3

located on La Mesa Drive in Santa Monica (La Mesa property). 

Their partnership agreement recognized Briles would contribute 

more than $7.8 million dollars toward the purchase of the La 

Mesa property, while the Culottis would contribute their efforts

to design and manage the renovation. The Culottis would receive 

25 percent of the profits from the sale of the property after 

payment of expenses and interest on Briles’s investment.

Culotti and Briles testified the partners understood Culotti 

intended to use the renovated La Mesa property as a showcase

for designers and manufacturers to display their furnishings and 

fixtures in a high-end setting in coordination with BCP’s listing 

of the property. Culotti believed staging the house as a designer

showcase would lead to a faster sale at a higher price than

comparable properties. Renovations began in the summer of 

2011 and were completed approximately one year later.

B. Culotti and Vernon Form HOR

Culotti and Vernon met at a party in September 2011. At 

the time Vernon was a senior vice-president for national 

sponsorships at Live Nation, a large events promotion company, 

and she had experience in sales, marketing, branding, 

sponsorship, and event services. Culotti and Vernon agreed to 

form a partnership that would use Culotti’s showcase concept as 

a marketing platform to attract third party sponsorships. They 

named the business House of Rock because they initially planned

to design the La Mesa property showcase with a rock and roll 

theme in a promotional partnership with Rolling Stone magazine.

Vernon and Culotti formed HOR as a limited liability 

company in January 2012, with each of them owning 50 percent 

of the membership interests. The HOR operating agreement 
4

specified, “Culotti is to manage the banking and finances of the 

[c]ompany and to secure, purchase, design, remodel or build 

completely the residence being used for each show house,” while 

“Vernon is to be the capital raising partner for any and all 

sponsors or partners of the [c]ompany or its events. . . . All 

advertisement, sales, and promotional packages shall be 

cultivated and vetted through . . . Vernon.” The operating 

agreement provided the profits earned each fiscal year would be 

allocated to the members in proportion to their interest. In early 

2012 Vernon quit her job at Live Nation, where she was earning 

a base salary of $600,000 per year, to focus on HOR.

HOR successfully secured sponsorships and promotional 

consideration from several dozen manufacturers and vendors, as 

well as event sponsors, who agreed either to pay cash to HOR or 

contribute goods and services for the decoration of the La Mesa 

property.3 In exchange for their contributions, the vendors 

expected to receive promotion of their products and services 

through parties and charitable events held at the La Mesa 

property, as well as media and Internet exposure from those 

events and showings of the home.

HOR’s standard agreements with the vendors provided any 

in-kind contributions from the vendors would “become the 

permanent property of Owner.” “Owner” was defined as HOR in 

the first sentence of the agreements, but the agreements also 

stated, “Owner, as owner of the house located [on Mesa Drive] 

(the “House”), will extensively renovate, improve and decorate 

the House and will allow the House to be used for social events 

3 For simplicity, we refer to the companies that made in-kind 

contributions as vendors.
5

and promotions . . . .” Elsewhere the agreements provided, 

“Owner is entering into separate arrangements with various 

vendors to provide goods and services to Owner in connection 

with the House.” Yet BCP was not a party to any of the vendor 

agreements, which were all made with HOR. Each vendor was 

required to state the “approximate cash/retail value” of its inkind contribution in an attachment to its agreement.

The in-kind contributions secured by HOR included

bathroom plumbing and fixtures, home automation devices, 

ceramic tile, chandeliers, wood and stone flooring, and 

electronics. After the completion of the renovation, HOR hosted 

approximately 20 events at the La Mesa property between 

September 15 and December 6, 2012.

C. Vernon Sues Culotti, BCP, and Its Partners

Vernon filed this action on April 13, 2013. The operative 

second amended complaint asserted 14 causes of action against 

Culotti, Gary, Briles, BCP, and HOR. Three causes of action 

proceeded to trial and are the subject of this appeal: a cause of 

action for breach of fiduciary duties against Culotti, and causes of 

action for unjust enrichment and quantum meruit against all 

defendants.4

The complaint alleged in relevant part that prior to forming 

HOR, Culotti failed to disclose to Vernon that Culotti was not the 

sole owner of the La Mesa property and Culotti’s primary purpose 

in forming HOR was to increase the sales price of the La Mesa 

property to benefit BCP. As alleged, all of the goods and services 

4 Vernon’s other causes of action were either dismissed on 

summary adjudication, abandoned prior to trial (including 

derivative claims on behalf of HOR), or withdrawn at trial.
6

contributed by vendors became the assets of HOR, but on 

October 2, 2012 Culotti provided public testimony in which she 

acknowledged the purpose of HOR was to “flip” the La Mesa 

property and for BCP’s partners to profit from the HOR assets. 

Vernon’s prayer sought, among other things, a declaration 

Vernon was entitled to a share of the HOR assets consistent with 

her ownership interest in HOR, damages according to proof,5 and 

“interest at the maximum legal rate.” At the time the first 

amended complaint was filed, the La Mesa property was listed 

for sale for $18.9 million.

6

D. Briles’s Cross-complaint

On April 16, 2015 Briles and BCP filed a cross-complaint

against Vernon, the Culottis, and HOR.7 Briles’s operative first 

amended cross-complaint asserted causes of action for breach of 

5 Although the complaint did not specify Vernon’s monetary

damages, it alleged HOR sustained damages in excess of 

$1.5 million as a result of Culotti’s misconduct and conversion of 

HOR’s assets.

6 There is no evidence in the record when, if ever, the La 

Mesa property was sold.

7 After relations among the BCP partners broke down, 

multiple lawsuits were filed. On August 27, 2014 Culotti filed a 

lawsuit against Briles and BCP. (Culotti v. Briles et al. (Super.

Ct. L.A. County, 2016, No. SC123035) (Culotti v. Briles).) On 

April 10, 2015 Briles filed a lawsuit against the Culottis. 

(Briles v. Culotti et al. (Super. Ct. L.A. County, No. BC578528).) 

Both actions were deemed related to this action and assigned to 

Judge Newman. The court ordered the Culotti v. Briles action to 

arbitration, and on March 4, 2016 the court affirmed the 

arbitration award.
7

an oral or implied contract, fraudulent misrepresentation, 

equitable, comparative, and contractual indemnity, and 

contribution. The cross-complaint alleged Culotti and HOR 

entered into an agreement with BCP to use the La Mesa property

for showcase events. Further, the cross-complaint alleged Culotti 

and HOR promised they would arrange for the installation of 

furnishings, decorations, and fixtures on the La Mesa property 

without cost to BCP, and those goods would be donations for 

which BCP had no financial obligation. The increased value to 

BCP from these improvements constituted consideration for BCP 

allowing HOR to use the La Mesa property rent free.

On April 27, 2017 Culotti filed a motion for summary

adjudication as to Briles’s cross-complaint, which the court later 

granted in part.

8 The motion was supported by Culotti’s 

declaration in which she testified as to the Culotti v. Briles

arbitration: “I previously asserted in an arbitration brief, filed in 

the La Mesa arbitration that I had ‘made a $1,113,646 [“]inkind[”] contribution through fixtures provided by [HOR]. These 

contributions consisted of electronics, plumbing, fixtures, and 

other personal property contributed by third parties to the project 

that are now fixtures to be sold with the house, which have 

greatly enhanced the value of the [p]roperty. . . . Even if [Culotti] 

is not granted full credit for this [“]in-kind[”] contribution, at the 

very least, [Culotti] should be granted a 50% credit as she was a 

8 The trial court granted summary adjudication in favor of 

Culotti on Briles’s cross-claims for breach of contract and 

fraudulent misrepresentation. The court had earlier granted a 

motion for summary adjudication in favor of Culotti on Briles’s 

cross-claim for contribution. Only Briles’s indemnity claims 

proceeded to trial.
8

50% partner in HOR; accordingly, at a minimum, the in-kind 

contribution would be worth $556,823’.” Culotti continued, 

“Except for the mathematical calculations contained within it, 

that statement . . . was based on my own personal knowledge, as 

to the types of ‘in-kind’ fixture contributions made by third 

parties, and upon my experience as a developer and interior 

designer as to the value such fixtures added to the La Mesa 

[p]roperty.”

The $1,113,646 amount of “‘[“]in kind[”]’ contributions”

Culotti stated in her declaration was the value of the products 

installed at the La Mesa property. The amount matched exactly 

the stated cost basis of HOR’s assets in a draft depreciation 

schedule Vernon directed HOR’s accountants to prepare in early 

2013 in connection with the company’s 2012 tax returns.

9

E. The Evidence at Trial

A bench trial was held on March 26 and 27, 2018. Vernon 

and Culotti testified, and portions of Briles’s deposition testimony 

were read into the record. The primary dispute at trial concerned 

ownership of the vendors’ in-kind contributions.

1. Vernon’s testimony

Vernon testified that in the fall of 2011, during Vernon’s 

initial discussions with Culotti about the HOR concept, they 

discussed at length how vendors would provide both products and 

cash in exchange for access to the showcase home, and HOR 

would benefit from both types of promotional consideration. 

9 Ultimately HOR did not file a tax return in 2013, and the 

depreciation schedule was never filed. 
9

According to Vernon, Culotti represented during these 

discussions, prior to forming HOR, that HOR would be paid for 

the in-kind product contributions. Vernon admitted she and 

Culotti did not discuss the source of payment that would be made 

to HOR for the donated products (Vernon believed at the time

Culotti was the sole owner of the property), when the payments 

would be made, or whether the payments would be made in a 

lump sum or from the proceeds of the sale of the La Mesa 

property. Vernon was asked, “[I]n terms of the timing of the 

payment, did that matter to you very much?” She responded, “It 

didn’t.”

After the HOR operating agreement was executed in 

January 2012, Vernon was largely responsible for obtaining the 

vendor sponsorships. Vernon testified her understanding was 

that under the agreements the vendor contributions would belong 

to HOR and be a source of revenue for the company. Vernon 

stated the reason the vendors were required to specify the value 

of their contributions in the vendor agreements is that “[w]e 

wanted to account for each vendor product in the value so that we 

could be reimbursed by the owner . . . [¶] . . . [¶] [of] the house.” 

Vernon, who did not draw a salary from HOR, was responsible for 

creating an HOR magazine and Web site to showcase the rooms 

and products at the La Mesa property. By March or April 2012 

Vernon was working on the marketing program and creating a 

sales kit for sponsors. She also began planning approximately 20 

events at the property and coordinating sponsors.

Around September 15, 2012, just after HOR’s opening 

event, Vernon said to Culotti, “[W]e really need to start looking at 

settling . . . the value for the in-kind products. We need to . . . get 

paid for those goods. When are we gonna do that?” Culotti 
10

responded, “Those are goods that myself and Briles and our 

partnership will have the value for, not House of Rock. You will 

not receive any value for those goods.” Vernon responded, “that’s

not right,” and explained she found it “incredible” that Culotti 

would take this “egregious” position. Vernon claimed she first 

made a demand to Culotti for payment for the value of 

contributions in an e-mail on November 12, 2012.10

At trial Vernon claimed she was entitled to at least 

$550,000 for the in-kind contributions, based on a total valuation 

of the products of $1,113,646 as stated in Culotti’s declaration 

and HOR’s 2012 draft depreciation schedule.11 On cross10 On November 12, 2012, Culotti sent an e-mail to Vernon in 

which she stated, “What I don’t understand is the claim to 

installed inventory to the house as anything more than we agreed 

to in the beginning.” She added, “The wall paper, tile, plumbing, 

lighting and things acquired [b]y me thru our concept require a 

pay back of 3 photos, the journal and [t]he opening event. No 

other commitments were made to the vendors or to the 

development co. [N]o fees back for involvement or commissions.” 

She concluded, “The HOR not making money this season does not 

mean that we have the right to go to the development company 

[(BCP)] to cut our losses.” Vernon responded, “We aren’t in 

agreement on HOR assets being given to the development 

company in exchange for rent. I have communicated this since 

you mentioned it. . . . We should look at the overall business and 

discuss.” Culotti disputed that this e-mail constituted a demand 

for payment for the in-kind contributions, arguing Vernon’s first 

demand was not until March 7, 2013, when Vernon’s lawyer sent 

a formal demand letter to Culotti.

11 Vernon testified that in early 2013 she provided the tax 

accountants with the vendor agreements, which contained 
11

examination, Vernon admitted patio furniture from one vendor 

totaling $27,000 was returned to the vendor, and she would not 

seek compensation for an outdoor kitchen worth $22,903 that was 

never installed permanently at the La Mesa property.

12

2. Culotti’s testimony

Culotti testified it was always her intent the in-kind 

product contributions belonged to BCP in exchange for rent-free 

use of the La Mesa property as a showcase, although she also 

admitted her showcase concept was intended to help the La Mesa 

property sell more quickly and at a higher price. She testified

BCP “would trade rent for its location based on the contributions 

that would remain installed. That was the contribution of HOR 

to [BCP].” She added, “That was always my intent.” When asked

whether she ever had a discussion with Vernon during the period 

from when they just met until the fall of 2012 when they started 

to have issues about payment for the contributions, Culotti 

responded, “No.” Culotti viewed the products installed on the 

property as leasehold assets, and she stated it would make no 

sense for Vernon and Culotti to have agreed the La Mesa 

property would have to be torn apart to remove the installations. 

estimated retail values for the in-kind contributions, for the 

accountants to use in generating the depreciation schedule.

12 Culotti also objected to inclusion of $150,000 for electronics 

contributed by Sony and $12,000 for Farley interlocking paving 

stones because Vernon could not find and produce vendor 

agreements or receipts documenting the value of those 

contributions. However, the court did not deduct the value of 

these items from its award, and Culotti does not assert this as an 

issue on appeal.
12

According to Culotti, she told Vernon from “day one,” before 

entering into the HOR operating agreement, that the in-kind 

contributions would be leasehold assets. Culotti stated her 

design company, Porta Bella, procured 90 to 95 percent of the inkind contributions. HOR’s business plan was never about 

making money from the vendors’ in-kind contributions; rather, it 

was about building an online marketing business that would 

ultimately allow consumers to purchase showcase products 

through the HOR Web site.

Culotti was examined about the declaration she submitted 

in connection with her summary adjudication motion. Culotti 

was asked with respect to the statement in her declaration as to 

the value of the vendors’ in-kind contributions, “[B]ased on your 

own personal experience as an interior designer and a home

remodeler, you are standing by that $1,113,646 valuation stated 

in line 11?” Culotti responded, “As a retail value, yes.” Contrary 

to what she stated in her declaration, however, Culotti testified 

she did not recall taking a position in the arbitration that she 

was entitled to recover from BCP 50 percent of the in-kind 

contributions, and she denied asking the arbitrator to award her

this category of damages.

3. Briles’s deposition testimony

In the portions of his deposition testimony admitted at 

trial, Briles stated he and Culotti discussed her concept of a 

Rolling Stone showcase home at the time BCP purchased the 

property. Culotti told him any in-kind contributions to the La 

Mesa property would be “pure donations” that would remain in 

the home at the time of sale. Culotti never told Briles that BCP 

would have to pay for the contributions, although he never had 
13

any further discussions on that topic after BCP was formed in 

2010. Briles initially met Vernon socially, and he may have seen 

her one or two times after that, but they never discussed HOR 

business.

F. Statement of Decision

The parties filed written closing arguments following trial, 

and on June 22, 2018 the trial court issued a proposed statement 

of decision. After considering the parties’ written objections and 

responses, the court issued a 13-page statement of decision on 

October 3, 2018.

The trial court found Culotti breached her fiduciary duties 

of loyalty and care to HOR by permitting the in-kind

contributions to be given to BCP without compensation for HOR. 

The court recognized there was contradictory testimony as to how 

the in-kind contributions would be handled: Vernon testified 

Culotti represented to her HOR would be paid for the value of the 

products, whereas Culotti testified they never discussed the 

issue. However, the court found “Culotti to be a less credible 

witness than Vernon,” and although there was no written 

agreement regarding payment for the contributions, “the court 

believes Vernon’s representations that she and Culotti had such 

an agreement.”

The court found Culotti’s position HOR was not the owner

of the vendors’ in-kind contributions was contradicted by Culotti’s 

declaration in support of her motion for summary adjudication, in 

which Culotti testified she had asserted a position in her 

arbitration against Briles that the value of products, or at least 

half that value, should be credited to Culotti in the unwinding of 

BCP because they constituted a contribution by her (as a 50 
14

percent owner of HOR) to the partnership.

13 The trial court took 

judicial notice that the arbitrator in the Culotti v. Briles

arbitration awarded Culotti $531,860 for her 50 percent interest 

in the in-kind contributions she had asserted were the property of 

HOR.

Further, the court found Culotti’s testimony that HOR’s 

primary business model was to earn money by building online 

showrooms to sell home furnishings, not by receiving the value of

contributed products, was not supported by any evidence or 

language in the HOR operating agreement. Further, there was 

no evidence supporting Culotti’s testimony that 90 to 95 percent

of the in-kind contributions were procured by Porta Bella. To the 

contrary, Porta Bella was not a party to or identified in any of 

HOR’s vendor agreements.

The court also ruled in favor of Vernon on her claim for 

quantum meruit against BCP and the Culottis.

14 The court found 

the vendors made in-kind contributions in consideration for

promotional and marketing exposure created by HOR, and the 

donated products and the HOR showcase itself increased the 

market value of the La Mesa property and enriched BCP.

13 The trial court noted Culotti’s contrary position in the 

arbitration and her assertion of that position to seek adjudication 

of Briles’s cross-claim in this action might be subject to judicial 

estoppel, but “[e]ven if the theory of judicial estoppel, which is to 

be used sparingly, does not apply, Culotti has been impeached 

and her credibility has been diminished.”

14 The court found Briles had no individual liability for the inkind contributions. The court awarded Biles on his indemnity 

cross-claims against the Culottis a 25 percent contribution for his 

portion of BCP’s damages pursuant to an indemnity provision in 

the BCP partnership agreement.
15

Accordingly, “it would be unjust to permit the BCP to retain the 

benefit of the vendor product contributions without paying HOR 

for procuring the goods from sponsors.”

The trial court awarded Vernon damages of $531,871 

against Culotti, based on a total valuation of the vendor 

contributions of $1,063,742. That amount was based on the 

$1,113,646 aggregate retail value of the vendor contributions 

listed in the draft depreciation schedule and stated in Culotti’s

declaration in support of her summary adjudication motion, less 

the value of the outdoor furniture and kitchen that did not 

remain at the La Mesa property. The court awarded the same 

amount as damages on Vernon’s quantum meruit claim, but 

clarified Vernon was entitled only to a single recovery.

The court denied Vernon’s request for prejudgment 

interest, finding there was no agreement for HOR to be paid for 

the in-kind contributions by a date certain, and therefore the 

damages were not sufficiently ascertainable to support 

prejudgment interest. The court rejected as arbitrary Vernon’s 

position damages were ascertainable on November 1, 2012, when 

all of the products had been installed at the La Mesa property.

The trial court entered judgment on November 5, 2018. 

Vernon timely appealed the award of prejudgment interest in the 

judgment. Culotti timely cross-appealed from the judgment.15

15 Vernon states in her opening brief she settled with Briles, 

BCP, and Gary, and they are not parties to the appeal.
16

DISCUSSION

A. Standard of Review

“‘“In general, in reviewing a judgment based upon a 

statement of decision following a bench trial, ‘any conflict in the 

evidence or reasonable inferences to be drawn from the facts will 

be resolved in support of the determination of the trial court 

decision. [Citations.]’ [Citation.] In a substantial evidence 

challenge to a judgment, the appellate court will ‘consider all of 

the evidence in the light most favorable to the prevailing party, 

giving it the benefit of every reasonable inference, and resolving 

conflicts in support of the [findings]. [Citations.]’ [Citation.] We 

may not reweigh the evidence and are bound by the trial court’s 

credibility determinations. [Citations.] Moreover, findings of fact 

are liberally construed to support the judgment.”’” (Tribeca 

Companies, LLC v. First American Title Ins. Co. (2015) 

239 Cal.App.4th 1088, 1102 (Tribeca); accord, Sav-On Drug 

Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 334 (Sav-On 

Drug Stores) [“‘[Q]uestions as to the weight and sufficiency of the 

evidence, the construction to be put upon it, the inferences to be 

drawn therefrom, the credibility of witnesses . . . and the 

determination of [any] conflicts and inconsistencies in their 

testimony are matters for the trial court to resolve.’”]; see 

Vasquez v. LBS Financial Credit Union (2020) 52 Cal.App.5th 97, 

109 [substantial evidence standard of review applies to express 

and implied findings of fact made by the superior court in its 

statement of decision rendered after a bench trial]; Thompson v. 

Asimos (2016) 6 Cal.App.5th 970, 981 [same].)

However, “‘[i]n reviewing a judgment based upon a 

statement of decision following a bench trial, we review questions 
17

of law de novo.’” (Veiseh v. Stapp (2019) 35 Cal.App.5th 1099, 

1104; accord, Thompson v. Asimos, supra, 6 Cal.App.5th at

p. 981; see Feresi v. The Livery, LLC (2014) 232 Cal.App.4th 419, 

425 (Feresi) [questions concerning the scope of the fiduciary 

duties imposed by law on partners is a legal issue subject to de 

novo review].)

Finally, “[w]e apply the abuse of discretion standard of 

review to any ruling by the trial court on admissibility of 

evidence, including requests for judicial notice.” (Center for 

Biological Diversity v. Department of Conservation, etc. (2019) 

36 Cal.App.5th 210, 227; accord, In re Social Services Payment 

Cases (2008) 166 Cal.App.4th 1249, 1271.)16

B. Substantial Evidence Supports the Trial Court’s Finding 

Culotti Breached Her Fiduciary Duties to Vernon17

A member of a member-managed limited liability company 

owes fiduciary duties of loyalty and care to the company and its 

16 Culotti contends her appeal raises mixed questions of law 

and fact and the judgment should therefore be reviewed de novo. 

But the gravamen of Culotti’s appeal is that the evidence does 

not support the trial court’s finding the parties orally agreed the 

in-kind contributions belonged to HOR. We therefore review the 

judgment for substantial evidence. With respect to Culotti’s 

contention the trial court erred in relying on inadmissible 

evidence to calculate damages, we review the court’s evidentiary 

determinations for an abuse of discretion.

17 Because we affirm the trial court’s finding that Culotti 

breached her fiduciary duties, we do not reach Culotti’s challenge 

to the trial court’s holding as to Vernon’s causes of action for 

quantum meruit and unjust enrichment, for which the court 

ordered duplicative recovery.
18

other members. (Corp. Code, § 17704.09, subd. (a).) A member 

has a duty “[t]o account to the . . . company and hold as trustee 

for it any property, profit, or benefit derived by the member in 

the conduct . . . of the activities of [the] company or derived from 

a use by the member of [company] property, including the 

appropriation of a . . . company opportunity” (id., subd. (b)(1)); 

“[t]o refrain from dealing with the . . . company . . . as or on 

behalf of a person having an interest adverse to the . . . company” 

(id., subd. (b)(2)); and to “discharge the duties to [the] company 

and the other members . . . and exercise any rights consistent 

with the obligation of good faith and fair dealing” (id., subd. (d)). 

(Feresi, supra, 232 Cal.App.4th at p. 425 [A member is “obligated 

to act with the utmost loyalty and in the highest good faith when 

dealing with any member of the LLC, . . . [The member] may not 

obtain any advantage over [plaintiff] (or any other member of the 

LLC) by even the slightest misrepresentation or concealment.”].)

The trial court found Culotti breached her fiduciary duties of 

loyalty and care to Vernon and HOR by claiming the in-kind 

contributions were the property of BCP although they were 

owned by HOR pursuant to Culotti’s agreement with Vernon.

Culotti contends the in-kind contributions never belonged 

to HOR. But the trial court credited Vernon’s testimony the 

parties had an oral agreement HOR would make money from the 

vendor contributions by owning the contributed goods, and it

found Culotti’s testimony the parties never discussed the issue

yet always understood BCP would receive the contributions not 

credible. We defer to the trial court’s credibility findings. 

(Sav-On Drug Stores, supra, 34 Cal.4th at p. 334; Tribeca, supra, 

239 Cal.App.4th at p. 1102.) Further, the court’s credibility 

determination was supported by Culotti’s admission in her
19

declaration in support of summary adjudication that she had 

taken the position in her arbitration with Briles that the in-kind 

contributions were a donation from HOR to BCP for which she 

was entitled to reimbursement from BCP. Moreover, there was 

no evidence supporting Culotti’s assertion HOR’s anticipated 

source of revenue was profits from an online catalog and 

shopping portal. To the contrary, there was substantial evidence 

Vernon, who gave up a large salary in events marketing and 

promotions to join HOR, focused her efforts on securing sponsors 

and product contributions for the La Mesa property and events

held there to generate income for HOR and its partners.

Culotti contends it would make no sense for BCP to agree 

HOR could keep the benefit of the vendors’ in-kind contributions 

because BCP would then receive no consideration for allowing 

HOR to use the La Mesa property rent free as a showcase to 

launch HOR’s brand. But Culotti testified she expected the HOR 

concept would generate publicity and buyer interest in the 

La Mesa property and accelerate a sale at a higher price than 

comparable homes.

18

Substantial evidence therefore supported Vernon’s position 

the parties agreed HOR was entitled to the value of the in-kind 

18 Culotti also contends if she had agreed HOR would own the 

in-kind contributions, this would have required BCP to rip out 

fixtures and return them to HOR. But there is no evidence the 

agreement required BCP to tear out the fixtures instead of 

paying for their value. Nor does the language in the vendor 

agreements defining the “owner” of the fixtures support Culotti’s 

position. Although the agreements provide the “owner” would 

keep the in-kind contributions, and they define “owner” to mean 

the owner of the La Mesa property, the first sentence of the 

agreements defines the “owner” to mean HOR.
20

contributions. The fact there is evidence on which the trial court 

could have found in favor of Culotti does not support a contrary 

result because we “view[] the evidence and resolv[e] all 

evidentiary conflicts in favor of the prevailing party and indulg[e]

all reasonable inferences to uphold the judgment.” (Vasquez v. 

LBS Financial Credit Union, supra, 52 Cal.App.5th at p. 109; 

accord, Tribeca, supra, 239 Cal.App.4th at p. 1102.)

C. Substantial Evidence Supports the Damages Award

Culotti contends the trial court erred in calculating 

Vernon’s damages because it relied on the draft depreciation 

schedule and the arbitrator’s award in the Culotti v. Briles action 

to establish the value of the in-kind contributions. Culotti also 

argues the court failed to offset its award by the La Mesa 

property’s rental value. Both contentions lack merit.

In calculating damages, the trial court relied principally on 

Culotti’s declaration in support of her summary adjudication 

motion filed in this action, in which she testified she had 

previously asserted in the arbitration that she “‘made a 

$1,113,646 [“]in-kind[”] contribution [to BCP] through fixtures 

provided by [HOR].”’” Culotti testified as to her declaration that, 

except for the mathematical calculations, the statement “was 

based on my own personal knowledge . . . as to the value such 

fixtures added to the La Mesa [p]roperty.” At trial, Culotti 

admitted $1,113,646 was an accurate appraisal of the retail value 

of the in-kind contributions.19 Culotti’s admissions were 

19 Culotti contends the declaration contained an important 

qualification in stating the damages estimate was based on 

Culotti’s personal knowledge “[e]xcept for the mathematical 
21

sufficient to establish the retail value of the in-kind 

contributions.

Further, the trial court did not abuse its discretion by

admitting the draft depreciation schedule, for which a sufficient 

foundation was provided. Although the schedule was stamped 

“draft” and was never filed with the tax authorities, Vernon

testified the schedule listed the retail value of each in-kind 

contribution based on the figures provided in the respective 

vendor agreements. Moreover, Culotti did not present any

evidence showing the schedule was inaccurate or failed to reflect 

the amounts in the vendor agreements, and the trial court 

reduced the total amount of vendor contributions by the value of 

the items Culotti showed BCP did not retain.

Culotti also contends the trial court abused its discretion in

taking judicial notice of the fact the arbitrator in the Culotti v. 

Briles action awarded Culotti 50 percent of the $1,113,646 total

vendor contributions. But any abuse of discretion was harmless 

because this evidence was cumulative of the ample evidence 

supporting the trial court’s damages calculation, and there is no 

indication the court relied on this fact in calculating the award.

20

calculations within it.” But Culotti fails to point to any error in 

the mathematical calculations.

20 Culotti’s contention the court improperly applied issue or 

claim preclusion likewise lacks merit. Culotti was not precluded 

from litigating damages in this action based on her inconsistent 

position in the arbitration. Instead, the court calculated damages 

based on Culotti’s declaration and trial testimony, and the court 

properly considered Culotti’s inconsistent arbitration position to

impeach her credibility.
22

Finally, Culotti contends the trial court erred by refusing to 

offset Vernon’s damages with the value received by HOR for the 

rent-free use of the La Mesa property as a showcase. But as 

discussed, there was substantial evidence Culotti and Briles 

intended and understood that BCP would benefit significantly 

from the HOR showcase through a more lucrative sale of the 

La Mesa property.

D. The Trial Court Erred in Denying Prejudgment Interest

Under Civil Code section 3287, subdivision (a),21 a plaintiff 

is entitled to an award of prejudgment interest where damages 

are “certain, or capable of being made certain by calculation, and 

the right to recover [the damages] is vested in the [plaintiff] upon 

a particular day . . . .” The Supreme Court has interpreted this 

language to establish three conditions for the recovery of 

prejudgment interest: “(1) There must be an underlying 

monetary obligation; (2) the recovery must be certain or capable 

of being made certain by calculation; and (3) the right to recovery 

must vest on a particular day.” (Tripp v. Swoap (1976) 17 Cal.3d 

671, 682 (Tripp) [applying three factors in mandamus action], 

disapproved on another ground in Frink v. Prod (1982) 31 Cal.3d 

166, 180.) “‘“The statute . . . does not authorize prejudgment 

interest where the amount of damage, as opposed to the 

determination of liability, ‘depends upon a judicial determination 

based upon conflicting evidence and it is not ascertainable from 

truthful data supplied by the claimant to his debtor.’ 

[Citations.]” [Citation.] Thus, where the amount of damages 

cannot be resolved except by verdict or judgment, prejudgment 

21 All further statutory references are to the Civil Code.
23

interest is not appropriate.” (Children’s Hospital & Medical 

Center v. Bontá (2002) 97 Cal.App.4th 740, 774; see Olson v. Cory

(1983) 35 Cal.3d 390, 402 [“Generally, the certainty required of 

Civil Code section 3287, subdivision (a), is absent when the 

amounts due turn on disputed facts, but not when the dispute is 

confined to the rules governing liability.”].)

“[O]ne purpose of section 3287, and of prejudgment interest 

in general, is to provide just compensation to the injured party 

for loss of use of the award during the prejudgment period—in 

other words, to make the plaintiff whole as of the date of the 

injury.” (Lakin v. Watkins Associated Industries (1993) 6 Cal.4th 

644, 663; accord, Howard v. American National Fire Ins. Co.

(2010) 187 Cal.App.4th 498, 535; see Watson Bowman Acme 

Corp. v. RGW Construction, Inc. (2016) 2 Cal.App.5th 279, 293 

[“prejudgment interest compensates for the loss of the use of the 

money during the period between the assertion of the claim and 

the rendition of judgment”].) “Courts generally apply a liberal 

construction in determining whether a claim is certain, or 

liquidated.” (Howard, at p. 535; accord, State of California v. 

Continental Ins. Co. (2017) 15 Cal.App.5th 1017, 1038.)

Similarly, an award of prejudgment interest under 

section 3287, subdivision (a), is not authorized when there is a 

factual dispute whether “plaintiff was entitled to interest from 

any particular date prior to the verdict.” (Happoldt v. Guardian 

Life Ins. Co. of America (1949) 90 Cal.App.2d 386, 405 [trial court 

erred in awarding prejudgment interest accruing from the date 

plaintiff served a claim on defendant carrier under an accidental 

death insurance policy because there was no evidence showing 

when the insured notified the carrier the insured’s death was 

accidental, which was a condition for payment on the claim]; see 
24

Cox v. McLaughlin (1881) 76 Cal. 60, 70 [affirming denial of 

prejudgment interest where plaintiff’s “services and the material 

furnished by him were uncertain as to amount, character, value, 

and time of payment, until fixed by a verdict or findings of the 

court”].)

“‘“On appeal, we independently determine whether 

damages were ascertainable for purposes of the statute, absent a 

factual dispute as to what information was known or available to

the defendant at the time” [citation].’” (State of California v. 

Continental Ins. Co., supra, 15 Cal.App.5th at p. 1038; accord, 

Collins v. City of Los Angeles (2012) 205 Cal.App.4th 140, 151.)

Vernon contends she was entitled to prejudgment interest 

as of November 12, 2012, the date on which Vernon sent an 

e-mail to Culotti objecting to Culotti’s assertion BCP owned the 

in-kind contributions, or as of March 7, 2013, the date on which 

Vernon’s lawyer sent a demand letter to Culotti for payment. 

Vernon argues damages—the dollar value of the total in-kind 

contributions listed in the vendor agreements—were 

ascertainable by either date and Culotti’s obligation to pay had 

accrued as a result of her breach of fiduciary duties on 

September 15, 2012, when Culotti first claimed the in-kind 

contributions belonged to BCP. Culotti asserts both the amount 

of the damages and the date by which payment was due were 

uncertain, and therefore the trial court properly denied 

prejudgment interest.22 We agree with Vernon that by the time 

22 Culotti also contends Vernon waived her right to seek 

prejudgment interest because she did not include it in her prayer 

for relief in the operative second amended complaint and did not 

argue for prejudgment interest in her initial written closing 
25

of Vernon’s March 7, 2013 demand letter, the amount of the 

damages and date by which payment was owed were certain.

As discussed, the vendor agreements listed the retail value 

of the in-kind contributions, which Culotti could have used as 

early as September 2012 (when Culotti first claimed BCP owned 

the in-kind contributions) to calculate the total value of the inkind contributions. However, as of that date Vernon had not 

specifically demanded payment from Culotti for the 

contributions; instead, she stated more generally, “[W]e really 

need to start looking at settling . . . the value for the in-kind 

products. We need to . . . get paid for those goods. When are we 

gonna do that?” As of September 2012, it was thus uncertain by 

when BCP needed to pay for the contributions and whether BCP 

argument. As to the first contention, the second amended 

complaint included a prayer for “interest at the maximum legal 

rate” and sought “such other and further relief as the Court may 

deem just and proper.” “A general prayer in the complaint is 

adequate to support an award of prejudgment interest. ‘No 

specific request for interest need be included in the complaint; a 

prayer seeking “such other and further relief as may be proper” is 

sufficient for the court to invoke its power to award prejudgment 

interest.’” (North Oakland Medical Clinic v. Rogers (1998) 

65 Cal.App.4th 824, 829.) Here, Vernon specifically requested 

interest in her prayer for relief. As to Culotti’s second contention, 

she is correct Vernon did not address prejudgment interest in her 

initial closing brief, but she did in her May 11, 2018 response to 

Culotti’s closing argument, and Culotti responded to this 

argument in her sur-reply brief filed on May 18, 2018. Both 

briefs were filed before the trial court issued its proposed 

statement of decision on June 22, 2018. Because the parties were 

afforded an opportunity to address this issue in the trial court, 

we decline to find waiver.
26

could return the fixtures and furnishings HOR claimed it owned 

in lieu of payment. Indeed, some of the furnishings were at some 

point returned to the vendors, as shown by the trial court’s 

deduction from the damages award for the patio furniture valued 

at $27,000 returned to one vendor and the reduction of $22,903 

for an outdoor kitchen that was not “permanently” installed at 

the La Mesa property. In addition, the record does not reflect by 

when all of the in-kind contributions listed in the vendor 

agreements were installed at the La Mesa property. In posttrial 

briefing, Vernon asserted all the in-kind contributions were 

installed at the La Mesa property by November 1, 2012, when the 

La Mesa renovation was complete and “the HOR events were 

taking place.” But there was no evidence to support this 

assertion.

Vernon argues the damages were at least ascertainable by 

November 12, 2012, when she made her first demand for 

payment in her e-mail to Culotti, in which she stated she and 

Culotti “aren’t in agreement on HOR assets being given to the 

development company [BCP] in exchange for rent.” But this email was no more a demand for payment for the in-kind 

contributions than the September 2012 discussion, in which 

Vernon and Culotti disagreed as to whether HOR or BCP owned 

the in-kind contributions.

However, the March 7, 2013 letter from Vernon’s attorney 

to Culotti made clear the value of the claimed contributions 

($1,093,242) and a demand Culotti agree to payment for the 

value of the in-kind contributions by liquidating HOR and 

“divid[ing] the remaining funds [after paying liabilities] evenly 

between you and . . . Vernon pursuant to the [operating] 

Agreement,” or face a lawsuit for breach of her fiduciary duties 
27

and fraud. Further, by this date, the last showing of the La Mesa 

property had occurred,23 so it is a reasonable assumption the inkind contributions had been placed in the La Mesa property, and 

there was no evidence any contributions were returned to HOR. 

Thus, as of the date of the demand, Vernon’s damages were 

“certain, or capable of being made certain by calculation.” 

(§ 3287, subd. (a); accord, Tripp, supra, 17 Cal.3d at p. 682.)

Likewise, the “right to recover [was] vested” in Vernon

when Culotti refused to pay for the in-kind contributions upon a 

demand from Vernon. (§ 3287, subd. (a); Tripp, at p. 682.) 

Although, as the trial court found, there was no initial agreement 

by Vernon and Culotti as to the date Culotti (and BCP) would pay 

for the in-kind contributions, the court found Culotti had 

breached her fiduciary duties at the time of her September 15, 

2012 conversation with Vernon in which she claimed a right to 

the in-kind contributions. Had the initial agreement between 

Vernon and Culotti set a precise future date for payment for the 

in-kind contributions, then arguably the right to recover might 

have vested at a future date. But in the absence of any 

agreement as to a future date of payment, once Culotti breached 

her fiduciary duties on September 15, 2012, upon a demand for 

payment, the right to payment was vested in Vernon. Finally, an 

award of prejudgment interest from March 7, 2013, after which 

the La Mesa property was no longer being used for HOR events, 

would serve the purpose of section 3287, subdivision (a), “to 

provide just compensation to the injured party for loss of use of 

the award during the prejudgment period.” (Lakin v. Watkins 

23 Vernon testified HOR hosted events at the La Mesa 

property from September 15 to December 6, 2012.
28

Associated Industries, supra, 6 Cal.4th at p. 663; accord, Howard 

v. American National Fire Ins. Co., supra, 187 Cal.App.4th at

p. 535.)

DISPOSITION

The judgment is reversed as to the denial of prejudgment 

interest. The matter is remanded for further proceedings as to 

the determination of prejudgment interest. In all other respects, 

the judgment is affirmed. Vernon is to recover her costs on 

appeal.

FEUER, J.

We concur:

PERLUSS, P. J.

RICHARDSON, J.*

* Judge of the Los Angeles Superior Court, assigned by the 

Chief Justice pursuant to article VI, section 6 of the California 

Constitution.