1

Filed 11/26/13 Umpqua Bank v. Circle H CA3

NOT TO BE PUBLISHED

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 This opinion has not been certified for publication or ordered published for 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

THIRD APPELLATE DISTRICT

(Sutter)

----

UMPQUA BANK,

Plaintiff and Respondent,

v.

CIRCLE H, LLC, et al.,

Defendants and Appellants.

C069830

(Super. Ct. No. CVCS102006)

Following a court trial of its action to recover monies due under a commercial loan 

agreement and written guaranties, plaintiff Umpqua Bank (the Bank) obtained judgment 

against the three guarantors of Circle H, LLC’s loan obligation to the Bank: Brian C. 

Hamman, Kory H. Hamman, and Howard B. Hamman (the Hammans). 

The Hammans contend the trial court erred in failing to “apply the sham guaranty

defense” and erred in excluding the testimony of one witness as to the value of the 

collateral. But they have elected to proceed on a clerk’s transcript (Cal. Rules of Court, 

rule 8.121), and the appellate record does not include a reporter’s transcript of the trial. 
2

(Allen v. Toten (1985) 172 Cal.App.3d 1079, 1082-1083; Krueger v. Bank of America

(1983) 145 Cal.App.3d 204, 207.) On the face of the limited record, the Hammans have 

failed to establish trial court error. Accordingly, we affirm the judgment.

BACKGROUND

This is an appeal on the judgment roll because the Hammans did not provide a 

reporter’s transcript of the court trial. “In a judgment roll appeal based on a clerk’s 

transcript, every presumption is in favor of the validity of the judgment and all facts 

consistent with its validity will be presumed to have existed. The sufficiency of the 

evidence is not open to review. The trial court’s findings of fact and conclusions of law 

are presumed to be supported by substantial evidence and are binding on the appellate 

court, unless reversible error appears on the record.” (Bond v. Pulsar Video Productions

(1996) 50 Cal.App.4th 918, 924.) In light of this standard of review, we take our factual 

summary chiefly from the exhibits introduced at trial. (See ibid.) 

In July 2004, Circle H, a limited liability company, entered into an agreement with 

Feather River State Bank1to borrow $1.67 million (the 2004 loan).2 The purpose of the 

loan was to purchase an apartment building in Yuba City. On behalf of Circle H, each of 

the Hammans signed the 2004 loan agreement, promissory note, and deed of trust in 

favor of the Bank. The Hammans each also executed a “Commercial Guaranty” in favor 

of the Bank, in which each individually promised unconditionally to satisfy Circle H’s 

indebtedness to the Bank, which indebtedness was defined as the amount of the note, all 

 

1 Umpqua Bank is the successor by merger to Feather River State Bank. We refer 

to both entities as the Bank. 

2 For the purposes of this recitation, the amounts are approximate.
3

interest, all late charges, all loan fees and charges, and all collection costs and expenses 

relating to the note or any collateral for the note (the 2004 guaranties). 

In April 2005, Circle H applied for and received another commercial loan from the 

Bank in the amount of $600,000 (the 2005 loan). In connection with that loan, each of 

the Hammans executed a “Commercial Guaranty” promising unconditionally to repay 

Circle H’s indebtedness to the Bank (the 2005 guaranties). Like the 2004 guaranties, the 

2005 guaranties contain waiver provisions by which each guarantor waives any right to 

require the Bank to proceed first against Circle H or against the collateral. But in another 

respect, the terms of the 2005 guaranties were much broader than the 2004 guaranties: 

the amount guaranteed was “without limitation,” and each of the Hammans promised to 

repay any and all of Circle H’s indebtedness to the Bank “now existing or hereinafter 

incurred or created.” 

The 2005 loan was repaid as agreed. 

The 2004 loan was not. It was twice modified by written agreement, in 2007 and 

2009. Neither modification purported to affect the guaranties signed by the Hammans. 

In 2010, the 2004 loan was in default. Circle H and the Hammans asked the Bank 

to restructure the 2004 loan, but the parties failed to reach an agreement. 

The Bank then filed the instant complaint against Circle H and the Hammans, 

seeking (among others) damages from the Hammans for their breach of the 2004 and 

2005 guaranties. Shortly thereafter, the Bank also began a non-judicial foreclosure on the 

collateral for the 2004 loan, although the sale had not occurred by the time of trial. 

All the defendants answered the complaint and cross-complained against the Bank 

for breach of the implied covenant of good faith and fair dealing for its alleged failure to 

negotiate in good faith regarding the 2004 loan. 
4

Court trial of this matter spanned three days. There is no reporter’s transcript of 

the trial in the record on appeal, but the minutes of the trial proceedings indicate the 

Hammans testified and more than 200 pages of exhibits were introduced at trial. 

At the close of trial, the trial court found the Bank entitled to judgment in its favor 

against all defendants in the amount of $1.73 million.

DISCUSSION

I

Standard of Review

It is the burden of the party challenging a judgment to provide an adequate record 

to assess claims of error. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1140-1141.) When 

an appeal is “on the judgment roll” (Allen v. Toten, supra, 172 Cal.App.3d at pp. 1082-

1083), we must conclusively presume evidence was presented that is sufficient to support 

the court’s findings. (Ehrler v. Ehrler (1981) 126 Cal.App.3d 147, 154; Bond v. Pulsar 

Video Productions, supra, 50 Cal.App.4th at p. 924.) Our review is limited to 

determining whether any error “appears on the face of the record.” (National Secretarial 

Service, Inc. v. Froehlich (1989) 210 Cal.App.3d 510, 521; Cal. Rules of Court, 

rule 8.163.) Absent a showing to the contrary, we must presume the trial court’s 

judgment is correct (Denham v. Superior Court (1970) 2 Cal.3d 557, 564) and we must 

adopt all inferences in favor of the judgment, unless the record expressly contradicts 

them. (See Brewer v. Simpson (1960) 53 Cal.2d 567, 583.)

II

The Hammans Have Not Shown the Trial Court Erred

in Rejecting a “Sham Guaranty” Defense

Under California law, “[a] surety or guarantor is one who promises to answer for 

the debt, default, or miscarriage of another, or hypothecates property as security 
5

therefor.” (Civ. Code, § 2787.) That is precisely what the Hammans here promised to do 

by signing the commercial guaranties: they unconditionally promised to pay all of Circle 

H’s indebtedness to the Bank. A lender is entitled to judgment on a breach of guaranty 

claim based upon evidence that (1) there is a valid guaranty, (2) the borrower has 

defaulted, and (3) the guarantor failed to perform under the guaranty. (Gray1 CPB, LLC 

v. Kolokotronis (2011) 202 Cal.App.4th 480, 491; Torrey Pines Bank v. Superior Court

(1989) 216 Cal.App.3d 813, 819.) 

The Hammans assert on appeal that their guaranties are invalid, unenforceable 

“sham guaranties” because the Bank looked to them individually -- not Circle H -- as the 

primary obligors. Because a “guarantor is one who promises to answer for the debt, 

default, or miscarriage of another” (Civ. Code, § 2787), a guaranty is a sham when the 

guarantors are also the primary obligors on the loan. (See River Bank Am. v. Diller

(1995) 38 Cal.App.4th 1400, 1420.) If the guarantor is actually the principal obligor, the 

guaranty is a sham, and the guarantor is entitled to the unwaivable protection of the 

antideficiency statutes, which prohibit a deficiency judgment after non-judicial 

foreclosure of real property under a power of sale. (See id. at p. 1420.)

Whether a person is “a true guarantor or a principal obligor in guarantor’s guise” 

is a question of fact. (River Bank Am. v. Diller, supra, 38 Cal.App.4th at p. 1422.)

Absent a reporter’s transcript of the trial, of course, we must defer to the trial 

court’s determination of what findings of fact are required and its determination of 

whether the evidence supports those findings. The Hammans’ claim the trial court erred 

in “fail[ing] to apply” the sham guaranty defense implies such a defense was raised at 

trial. But nothing in the appellate record indicates the Hammans raised this defense in the 

court trial: there is no transcript of the trial proceedings; the minutes of trial do not 

disclose the nature of defenses (if any) raised by the Hammans; no trial brief or motions 
6

in limine filed by the Hammans (if any) are in the appellate record; and the trial brief and 

motions in limine filed by the Bank suggest it did not anticipate a sham guaranty defense. 

Absent a reporter’s transcript of the trial, we presume official duties have been regularly 

performed (Evid. Code, § 664), and this presumption applies to the actions of trial judges. 

(People v. Duran (2002) 97 Cal.App.4th 1448, 1462, fn. 5; Olivia v. Suglio (1956) 

139 Cal.App.2d 7, 9 [“If the invalidity does not appear on the face of the record, it will be 

presumed that what ought to have been done was not only done but rightly done”].) 

Under these circumstances, we presume the trial court considered all properly raised 

defenses supported by the evidence. 

Even if a sham guaranty defense had been raised at trial, nothing on the face of the 

record on appeal compels the conclusion the court erred in rejecting it. (See National 

Secretarial Service, Inc. v. Froehlich, supra, 210 Cal.App.3d at p. 521.) While the record 

supports the conclusion the three guarantors were partners in Circle H, it does not compel 

the conclusion that “the supposed guarantors [are] nothing more than the principal 

obligors under another name.” (Torrey Pines Bank v. Hoffman (1991) 231

Cal.App.3d 308, 320.) 

If, rather, the Hammans did not raise the sham guaranty defense at trial, they may 

not raise it now, as new theories of defense may not be raised for the first time on appeal 

(Bardis v. Oates (2004) 119 Cal.App.4th 1, 13–14, fn. 6) when the defense theory raises 

questions of fact. (See River Bank Am. v. Diller, supra, 38 Cal.App.4th at p. 1422; cf. 

Fort Bragg Unified School Dist. v. Colonial American Casualty and Surety Co. (2011) 

194 Cal.App.4th 891, 907 [considering defense raised for the first time on appeal because 

it poses “pure question of law”].)
7

III 

The Hammans Have Not Shown the Trial Court Abused its Discretion in Excluding 

the Testimony of an Expert Witness

The Bank moved in limine to exclude the testimony of Scott Hamm as an expert to 

testify as to the value of the real property collateral. The Hammans purported to disclose 

and designate Hamm as an expert by way of “supplemental” expert witness disclosure, on 

the grounds the applicable statute permits designation of a supplemental expert witness 

only when the party supplementing its expert witness list has not previously retained an 

expert to testify on that subject. (Code Civ. Proc., § 2034.280, subd. (a).)3 The 

Hammans had previously designated Kory H. Hamman as an expert to testify as to the 

value of the real property collateral. 

The minutes of the trial proceedings indicate the court excluded Scott Hamm from 

testifying as an expert “for failure to disclose [him] as an expert.” 

On appeal, the Hammans claim the court’s decision on this point was error 

because, although they had designated Kory H. Hamman as a valuation expert on a 

previous expert witness list, they had not retained him, presumably because he is also a 

party. We find no reversible error.

The Code of Civil Procedure provides for a simultaneous exchange of expert 

witnesses. (§ 2034.210.) The exchange is designed to permit the parties to select experts 

 

3 Undesignated statutory references are to the Code of Civil Procedure. Section 

2034.280, subdivision (a), states: “Within 20 days after the exchange described in 

Section 2034.260, any party who engaged in the exchange may submit a supplemental 

expert witness list containing the name and address of any experts who will express an 

opinion on a subject to be covered by an expert designated by an adverse party to the 

exchange, if the party supplementing an expert witness list has not previously retained an 

expert to testify on that subject.”
8

who can respond to opposing experts in a particular subject area. (Bonds v. Roy (1999) 

20 Cal.4th 140, 146-147.) To achieve that goal, the parties may submit a supplemental 

expert witness list “of any experts who will express an opinion on a subject to be covered 

by an expert designated by an adverse party,” but only “if the party supplementing an 

expert witness list has not previously retained an expert to testify on that subject.” 

(§ 2034.280, subd. (a).) A party may not use a supplemental designation to substitute a 

new expert to testify on the same subject as a previously-designated expert. (Basham v. 

Babcock (1996) 44 Cal.App.4th 1717, 1723.)

A trial court’s determination on the admissibility of expert testimony is reviewed 

for an abuse of discretion. (Summers v. A. L. Gilbert Co. (1999) 69 Cal.App.4th 

1155, 1168.) 

Here, the Hammans have not shown the trial court abused its discretion in refusing 

to allow the expert testimony of Scott Hamm. First, without a reporter’s transcript, we 

cannot evaluate the reason for the court’s decision, and we presume the trial court 

properly exercised its discretion in excluding Hamm’s testimony. (See Olivia v. Suglio, 

supra, 139 Cal.App.2d at p. 9.) Second, on its face, we cannot say the trial court’s 

decision was erroneous. In the initial exchange of expert witness lists, the Hammans 

designated Kory H. Hamman as an expert who would testify as to the value of the real 

property collateral. They later attempted to designate a different expert witness on the 

same topic. This maneuver appears intended to defeat the statutory requirement for the 

parties to simultaneously exchange expert witness designations. The trial court would 

not have abused its discretion to have concluded the Hammans belatedly sought to 

augment their witness list with an additional valuation expert. (See Fairfax v. Lords

(2006) 138 Cal.App.4th 1019, 1026-1027.) The Hammans have cited no authority for the 
9

proposition Kory H. Hamman’s status as a party relieved the Hammans of their 

obligation to simultaneously exchange witness names, and we are aware of none. 

DISPOSITION

The judgment is affirmed. Umpqua Bank is awarded its costs on appeal. (Cal. 

Rules of Court, rule 8.278(a)(2).)

 HOCH , J.

We concur:

 RAYE , P. J.

 MURRAY , J.