Filed 3/17/22 The Twelve Tribes of Israel v. Barnum CA2/4

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication 

or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

THE TWELVE TRIBES OF 

ISRAEL, U.S.A., INC.,

Plaintiff and Respondent,

v.

KATRINA BARNUM, 

Defendant and Appellant.

 B299838

 (Los Angeles County

 Super. Ct. No. BC574481)

APPEAL from a judgment of the Superior Court of Los Angeles 

County, Holly E. Kendig, Judge. Affirmed in part and Reversed in part.

Kerendian & Associates, Inc., Shab Kerendian and Edrin Shamtob

for Defendant and Appellant.

Westwood Lawyers and Lottie Cohen for Plaintiff and 

Respondent.

____________________________
2

Defendant and appellant Katrina Barnum appeals a judgment in 

favor of plaintiff and respondent, The Twelve Tribes of Israel, U.S.A., 

Inc. (the Tribe) for promissory fraud and breach of an oral settlement 

agreement.1 The instant action arose out of promises Barnum made to 

the Tribe, while selling a property owned by her husband, Wilhelm 

Grafrath, and used by the Tribe as its headquarters. Grafrath, the 

leader of the Tribe, purchased the property in 1997, taking title in his 

own name, and Barnum quitclaimed any interest in the property. The 

Tribe subsequently paid the mortgage payments and used the property 

as its headquarters, believing that once the mortgage was paid off

Grafrath would transfer title to the Twelve Tribes organization. 

In 2006, Grafrath was deported to Germany, following a felony 

conviction, where he remains to this day. After Grafrath’s departure, 

the Tribe continued to use the property as its headquarters and pay the 

monthly mortgage payments. 

In 2014, Barnum quietly put up the property up for sale, pursuant 

to a power of attorney executed by Grafrath. When the Tribe found out 

about the sale, the Tribe filed suit against both Barnum and Grafrath 

seeking to halt the sale on the grounds that the Tribe had equitable 

rights to the property and/or the right to recoup their payments. 

Barnum subsequently accepted an offer on the property, but the 

pending lawsuit threatened to derail the closing. Barnum met with a 

1 No disrespect is intended by not repeating the full name of a party or 

individuals each time they are addressed. (See ENA North Beach, Inc. v. 524 

Union Street (2019) 43 Cal.App.5th 195, 198, fn. 1.) 
3

group of Tribe members, and promised that she would transfer the net 

proceeds of the sale to the Tribe, in exchange for their dismissal of the 

pending lawsuit. The Tribe dismissed the pending lawsuit and escrow 

successfully closed on the property. Barnum, however, paid none of the 

proceeds to the Tribe and instead pocketed the proceeds for her own 

use, including the payment of delinquent taxes on separate properties 

facing imminent foreclosure. 

After unsuccessfully seeking to reopen their lawsuit, the Tribe 

filed the instant action, which eventually proceeded to a bench trial

with only Barnum as defendant. The trial court found in favor of the 

Tribe on its actions for promissory fraud and breach of 

contract/settlement agreement; the court awarded the Tribe $375,000 in 

compensatory damages and $180,000 in punitive damages. 

On appeal, Barnum challenges the trial court’s judgment on four 

grounds, contending that: (1) the promissory fraud claim is barred by 

the litigation privilege (Civ. Code, § 47, subd. (b)(2)), which prohibits 

derivative tort actions based on statements made in connection with 

litigation; (2) the breach of oral settlement/contract claim is barred by 

the statute of frauds (Civ. Code, § 1624, subd. (c)) which requires that 

an agreement for the sale or transfer of property, be in writing; 

(3) Barnum, in her capacity as Grafrath’s agent, cannot be held liable 

for actions taken on Grafrath’s behalf; and (4) the trial court erred in 

refusing to dismiss the action on the grounds that Grafrath was an 

indispensable party.

We agree that the promissory fraud claim is barred by the 

litigation privilege, but find no reversible error in Barnum’s remaining 
4

contentions. We therefore reverse the trial court’s judgment with 

respect to the promissory fraud cause of action (and the associated 

punitive damages award), but otherwise affirm.

FACTUAL AND PROCEDURAL BACKGROUND

A. Factual History2

1. The Tribe’s Move to California

In 1985, a group of members of the Twelve Tribes of Israel, U.S.A., 

Inc. of New York, moved to California and formed the Twelve Tribes of 

Israel in Los Angeles. Wilhelm Grafrath was the church leader or 

“Overseer” of the group and Katrina Barnum was then, and currently 

is, his wife. Initially, the Tribe was an unincorporated religious 

organization, guided by the rules set up by the headquarters in New 

York. The Tribe formally incorporated in California in 1998.

2. Acquisition of the Furness Avenue Property in 1997, and 

Use of Property as the Tribe’s Headquarters

In 1997, a year before the tribe formally incorporated, Grafrath 

purchased a property located at 238 Furness Avenue in Highland Park, 

California (“Furness property” or “the Property”). Grafrath obtained a 

loan from Delta Credit Corporation in the amount of $52,850 to finance 

2 Our factual summary is based on the parties’ stipulated statements, 

exhibits, and the trial court’s statement of decision. (See Western Bagel Co., 

Inc. v. Superior Court (2021) 66 Cal. App. 5th 649, 655, fn. 2; Baxter v. State 

Teachers’ Retirement System (2017) 18 Cal.App.5th 340, 349, fn. 2; see also 

fn. 9, post.) 
5

the purchase of the property, which was secured by a deed of trust 

recorded against the property in February 5, 1997. Barnum 

quitclaimed any interest she may have had in the property to Grafrath, 

and Grafrath took title via grant deed, as “a married man as his sole & 

separate property.” 

The Tribe, however, paid the subsequent mortgage payments, and 

used the property as its headquarters and place of worship. 

3. Conviction and Deportation of Overseer Grafrath in 2006

In 2003, Grafrath was arrested for molesting one of the children in 

the congregation of the Tribe and subsequently suffered a felony 

conviction. In 2006, he was deported to Germany, his country of origin, 

where he continues to live to this day. 

At some point around the time of Grafrath’s arrest, he executed a 

general power of attorney, authorizing Barnum to handle his matters in 

Los Angeles.

After Grafrath was deported, the Tribe continued to use the 

property for its congregational functions and continued to pay the 

mortgage. 

4. Sale of Property, and Prior Lawsuit filed in 2014

In January 2014, Barnum secretly placed the property up for sale. 

Barnum brought a real estate agent to organizational events, but did 

not introduce the agent as a real estate agent, and there was no “for 

sale” sign on the property. 
6

On March 3, 2014, after learning that Barnum was selling the 

property, the Tribe filed an action against both Barnum and Grafrath, 

seeking to halt the sale. The complaint pled actions for breach of oral 

contract, negligence per se, and unfair business practices, and alleged 

that in 1998, the parties verbally agreed that Grafrath would sign the 

Deed of Trust on behalf of the Tribe, that the Tribe would make the 

monthly mortgage payments on the property, and that the property 

would not be sold out from under the Tribe. The complaint further 

alleged that Barnum had refused the Tribe’s demands to stop the sale of 

the property. The Tribe requested cancellation of the sale and/or 

damages for harm suffered, including their contributions to the 

mortgage on the property. 

5. Dismissal of 2014 Lawsuit After Barnum Promises Tribe 

Proceeds from Pending Sale

In mid-March 2014, Barnum entered into escrow to sell the 

property for $215,000.3 However, the title company would not issue 

title insurance as long as the lawsuit involving the Property continued. 

Faced with this obstacle, Barnum met with the Tribe and promised that 

once she sold the property, she would give the net monetary proceeds to 

the Twelve Tribes Corporation. Barnum made these promises to the 

3 In April 2014, Grafrath executed another general power of attorney, 

authorizing Barnum to act as Grafrath’s agent with respect to several 

categories, including real estate, as well as a specific power of attorney, 

authorizing Barnum to act as his agent with regard to the Furness property. 

An updated power of attorney was required by the title company to close the 

sale of the Property. 
7

Board members as a group, and individually, stating she would transfer 

the proceeds after paying any taxes due. In exchange for her promise, 

the Tribe agreed to dismiss the lawsuit. 

On July 21, 2014, the Tribe filed a request for dismissal of the 

action without prejudice, which was entered the same day.4 Escrow 

closed on the property on July 24, 2014, and Barnes received a wire 

transfer of the funds into her account on the following day. Barnum 

never sent any part of the proceeds from the sale of the Furness 

Property to Grafrath. Instead, she diverted and converted all of the 

funds for her own use. 

After escrow had closed, Barnum continued to promise the Tribe 

that she would provide the net sale proceeds to them. The Tribe moved 

out of the property, opened a bank account, and sought new 

headquarters for the Tribe. 

On January 21, 2015, the Tribe filed a motion to re-open the prior 

lawsuit on the grounds that Barnum breached an oral agreement by 

failing to deliver half of the proceeds of the sale of the Property. The 

court denied the motion on the grounds that a non-profit organization 

was attempting to appear in pro per. 

B. Procedural History

1. Initial Complaints Filed by Tribe and Court Rulings

On March 9, 2015, a member of the Tribe filed the first complaint 

in this action, pleading a single claim against Barnum for breach of 

4 Prior to the lawsuit, Barnum had received all-cash offers as high as 

$350,000. 
8

contract. The complaint alleged that Barnum orally agreed to provide 

the Tribe “half of the proceeds” from the sale of the property, in

exchange for the dismissal of the prior lawsuit by the Tribe.

On October 23, 2015, the Tribe filed a first amended complaint, 

replacing the named plaintiff in the case. The complaint alleged that 

Barnum had verbally promised to pay the Tribe the net sale proceeds, 

and alleged four causes of action: (1) breach of oral contract; (2) money 

had and received; (3) breach of fiduciary duty; and (4) fraud. 

Barnum filed a motion for judgment on the pleadings, alleging, 

inter alia, that the statute of frauds barred the first two claims, and 

that her capacity as an agent precluded liability on the remaining 

claims. The trial court granted Barnum’s motion for judgment on the 

pleadings on the first three causes of action, but denied the motion as 

the Tribe’s fraud claim.

The Tribe filed a second amended complaint (SAC), and then a 

third amended complaint (TAC), attempting to correct the infirmities of 

the complaint, but both complaints resulted in the trial court again 

sustaining the demurrer to the first three causes of action. In 

sustaining the demurrer to the TAC, the trial court did so without leave 

to amend, thereby leaving only the fraud claim as the sole surviving 

claim set for trial.5

5 Although the Tribe added Grafrath to the SAC, resulting in a default 

judgment against him, the default judgment was subsequently set aside due 

to noncompliant service. The Tribe subsequently dismissed Grafrath as a 

defendant from the TAC. 

The trial judge who issued the ruling on the TAC, Judge Robert Hess, 

recused himself following a motion for peremptory challenge under Civil Code 
9

2. Bench Trial and Final Amendment to Complaint

In April 2018, prior to trial, Barnum filed a motion to dismiss the 

action for the Tribe’s failure to join Grafrath as an indispensable party, 

contending that complete relief could not be accorded among the then 

parties because Grafrath was the sole record title holder of the Property 

and Barnum was merely functioning as Grafrath’s agent with respect to 

the sale of the Property. The trial court denied the motion.

The trial court subsequently bifurcated the case into a two-phase 

bench trial, with phase one for liability, and phase two for punitive 

damages. Phase One began on August 6, 2018, upon the Tribe’s only 

remaining cause of action for Fraud in the TAC. In lieu of utilizing a 

court reporter to transcribe testimony provided by various witnesses, 

the parties elected to utilize settled statements. Testimony was given 

during an eleven day trial by various witnesses between August 6, 2018 

and October 24, 2018. 

a. Motion to Amend TAC, and Subsequent Filing of FAC

On August 14, 2018, the Tribe moved to amend the TAC to add a 

second cause of action for “Enforcement of Settlement Agreement.” On 

November 6, 2018, the court granted the Tribe’s motion and allowed the 

Tribe to file its fourth amended complaint (FAC)—the operative 

complaint in this case. The court found the amendment was “based on 

the same facts as the first cause of action for promissory fraud.” The 

of Procedure 170.6; the matter was then transferred to Judge Kendig, who 

presided over the instant bench trial. 
10

court further noted that “the breach of contract claim which [the Tribe] 

seeks to add by amendment now is a different breach of contract claim 

from that in the original complaint, which was dismissed on demurrer 

by a different court” and “relates to a slightly different legal theory.”

6

b. Trial Court’s Statement of Decision

On December 11, 2018, the trial court issued a tentative 

statement of decision on phase one of the trial, finding in favor of the 

Tribe and against Barnum on each cause of action. and awarded the 

Tribe $375,000 in compensatory damages. 

Barnum objected to the proposed statement of decision, 

contending it did not sufficiently address the controverted issues at 

trial, and failed to provide the appellate court with sufficient 

information regarding the factual or legal bases for the trial court’s 

ruling. Barnum requested the trial court explain its reasoning on the 

principal issues in the following four categories: (1) the court’s denial of 

Barnum’s litigation privilege defense to the promissory fraud claim; (2) 

the court’s denial of Barnum’s statute of frauds defense to the breach of 

oral settlement claim; (3) the court’s determination of ownership of the 

6 The breach of contract claim in the TAC did include allegations that 

Barnum, while the 2014 lawsuit was pending, verbally promised to the Tribe 

that she would sell the property and give the net proceeds to the Tribe, in 

exchange for dismissal of the lawsuit. However, the TAC was against both 

Barnum and Grafrath, at the time of the prior court’s ruling, and also 

included a series of allegations regarding the Tribe’s “100% equitable 

interest” in the property and Grafrath’s designation as “nominee straw 

person” who controlled “the bare legal title to the religious corporation’s real 

property.”
11

property without Grafrath’s inclusion or participation as an 

indispensable party; and (4) the court’s failure to explain its finding of 

liability against Barnum on each claim, while she was acting as 

Grafrath’s attorney-in fact under the specific and general powers of 

attorney. 

On January 4, 2019, the trial court filed its final statement of 

decision, with minor changes to its tentative statement of decision. The 

court awarded the Tribe a constructive trust over Barnum’s bank 

account and four real properties, into which she diverted the net 

proceeds of the sale. Lastly, the court found Barnum had acted with 

malice, oppression, and fraud—a precursory finding for a future 

punitive damages award in phase two of the trial. On April 22, 2019, 

after a three day bench trial, the court issued its final statement of 

decision on phase two of the trial, and awarded the Tribe $180,000 in 

punitive damages. 

On May 23, 2019, the trial court entered its final judgment in this 

action, and Barnum timely appealed. 

DISCUSSION

“In reviewing a judgment based upon a statement of decision 

following a bench trial, we review questions of law de novo. [Citation.] 

We apply a substantial evidence standard of review to the trial court’s 

findings of fact. [Citation.] Under this deferential standard of review, 

findings of fact are liberally construed to support the judgment and we 

consider the evidence in the light most favorable to the prevailing party, 
12

drawing all reasonable inferences in support of the findings. 

[Citation.]” (Thompson v. Asimos (2016) 6 Cal.App.5th 970, 981.)7

Barnum contends that (1) the promissory fraud claim is barred by 

the litigation privilege; (2) the breach of oral settlement 

agreement/contract claim is barred by the statute of frauds; (3) Barnum 

cannot be held liable for any promises made while acting as Grafrath’s 

agent; and (4) Grafrath is an indispensable party to this action. For the 

reasons we discuss, we agree that the promissory fraud claim is barred 

by the litigation privilege, but find no error in Barnum’s remaining 

claims. We address the promissory fraud and breach of contract claims 

first, as some our discussion regarding these claims forms the basis for 

our disposition of the latter two contentions.

I. The Promissory Fraud Claim

Promissory fraud is a subspecies of fraud, and an action may lie 

where a defendant fraudulently induces the plaintiff to enter into a 

contract, by making promises she does not intend to keep. (Lazar v. 

Superior Court (1996) 12 Cal.4th 631, 638.) The elements of fraud are 

misrepresentation, knowledge of falsity, intent to induce reliance on the 

misrepresentation, justifiable reliance on the misrepresentation, and 

resulting damages. (Ibid.) Here, the trial court found the Tribe had 

established its action for fraud by false promises by clear and 

convincing evidence. Specifically, and as relevant to our discussion 

7 Barnum states that the facts decisive to this appeal are undisputed. As 

indicated by our opinion, we largely agree, but note where it is otherwise. 
13

below, the court found that Barnum promised Tribe members on several 

occasions that when she sold the property, she would give the proceeds 

to the Tribe. Barnum made this promise to a group of Tribe Board 

members during the pendency of the lawsuit, and continued to reaffirm 

this promise to individual Tribe members Michael Whyte and Arlene

Andrade in August, after the lawsuit had been dismissed by the Tribe. 

The court further found that Barnum clearly intended for the 

Tribe to rely on her promise and dismiss the lawsuit, which they did, as 

Barnum was “in a big hurry” to close escrow on the property and 

“pocket the proceeds.” The court found additional reliance on the part 

of the Tribe in their willingness to cooperatively move out of the 

property, foregoing the filing of a lis pendens, and willingness to wait 

for the funds to be paid out by Barnum after taxes were calculated. 

The trial court rejected Barnum’s assertion that the claim was 

barred by the litigation privilege. This was error. 

A. Relevant Law

Civil Code, section 47, subdivision (b)(2), makes privileged any 

publication or broadcast made in a judicial proceeding. Originally 

designed to provide a privilege in defamation situations, the section 

now applies to any communication, not just a publication, and bars all 

state tort suits premised on such communications, save malicious 

prosecution actions. (Silberg v. Anderson (1990) 50 Cal.3d 205, 211, 

213–216 (Silberg) [noting litigation privilege operates as a defense to 

tort liability and serves as an absolute bar].) 
14

“The usual formulation is that the privilege applies to any 

communication (1) made in judicial or quasi-judicial proceedings; (2) by 

litigants or other participants authorized by law; (3) to achieve the 

objects of the litigation; and (4) that have some connection or logical 

relation to the action. [Citations.]” (Silberg, supra, 50 Cal.3d at p. 212.) 

The privilege has been given broad application to further the public 

policies it is designed to serve—i.e., affording litigants freedom of access 

to courts and open channels of communication. (Id. at pp. 213–216.) As 

such, it applies to any communication made “‘to achieve the objects of 

the litigation, even though the publication is made outside the 

courtroom and no function of the court or its officers is involved’”

(Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1057 (Rusheen)), and “is not 

limited to statements made during a trial or other proceedings, but may 

extend to steps taken prior thereto, or afterwards.” (Rusheen, supra, 37 

Cal.4th at p. 1057.) “Any doubt as to whether the privilege applies is 

resolved in favor of applying it. [Citations.]” (Adams v. Superior Court

(1992) 2 Cal.App.4th 521, 529 (Adams).) 

B. The Promissory Fraud Claim is Barred By the Litigation 

Privilege

Barnum’s promises to the Tribe fall squarely within the the scope 

of the litigation privilege. (Civ. Code, § 47, subd. (b); Silberg, supra, 50 

Cal.3d at p. 212.)

First, numerous courts have held that statements relating to 

settlements also fall within the privilege, including those made during 
15

settlement negotiations. (See, e.g., Navarro v. IHOP Properties, Inc.

(2005) 134 Cal.App.4th 834, 843–844 (Navarro); Home Ins. Co. v. Zurich 

Ins. Co. (2002) 96 Cal.App.4th 17, 23–24 (Home); Joseph A. Saunders, 

P.C. v. Weissburg & Aronson (1999) 74 Cal.App.4th 869, 875 

[“absolutely privileged”]; Rosenthal v. Irell & Manella (1982) 135 

Cal.App.3d 121, 126–128 (Rosenthal).) 

For example, in Rosenthal, supra, 135 Cal.App.3d 121, attorneys 

for a judgment creditor allegedly induced the debtor’s insurance carrier 

to settle in breach of a provision in the insurance contract requiring the 

insured’s consent to settlement. The appellate court concluded that the 

statements by the attorneys urging settlement were privileged 

publications and hence a cause of action for inducing a breach of 

contract (along with tort actions for intentional interference with 

prospective economic advantage and intentional infliction of emotional 

distress, premised on these same communications) was entirely barred: 

“Rosenthal’s complaint alleges that defendants published certain 

undescribed statements to the Insurer Group, which induced that group 

to breach its contract with Rosenthal by settling without his consent. 

Patently those publications were closely related to judicial proceedings 

and the insurer group were persons with a direct interest in the action. 

Further, these publications clearly were in the interest of achieving the 

objects of the underlying litigation.” (Rosenthal, supra, 135 Cal.App.3d 

at p. 126.)

The same result was reached in Navarro, supra, 34 Cal.App.4th at 

pages 837–838, wherein the plaintiff, a franchisee, sued IHOP 
16

Properties, alleging a single cause of action for promissory fraud. 

Plaintiff alleged that to induce her to settle an unlawful detainer action, 

IHOP agreed to stay execution of judgment and (falsely) promised to 

consider offers to buy her franchise rights “without undue delay.” IHOP 

then intentionally delayed consideration of purchase offers until the 

deadline to sell her rights had passed. (Id. at pp. 837–838.) 

On appeal, the court found the claim entirely barred by the 

litigation privilege, stating that “[t]he case law supports IHOP’s 

contention that statements made during settlement negotiations, such 

as those at issue here, are protected by the litigation privilege” and 

rejected attempts by the plaintiff to “dismiss[] these cases by stating 

that they did not relate to claims for fraud.” (Navarro, supra, 134 

Cal.App.4th at p. 844.)

The reasoning in Navarro and Rosenthal is equally applicable 

here. During the pendency of the 2014 lawsuit Barnum promised the 

Tribe that when she sold the property she would tender the proceeds to 

the Tribe. Barnum made these promises to induce the Tribe into 

dismissing the suit. Barnum’s statements “clearly were in the interest 

of achieving the objects of the underlying litigation” and thus protected 

under the privilege. (Rosenthal, supra, 135 Cal.App.3d at p. 126; see 

also Rusheen, supra, 37 Cal.4th at p. 1057.)

To the extent Barnum affirmed her promises after the dismissal of 

the lawsuit, this does not change the result. First, the lawsuit was 

dismissed without prejudice, meaning that Barnum remained under 

threat of litigation. (See Rosenthal, supra, 135 Cal.App.3d at p. 126 

[stating that “the privilege has been applied to publications which were 
17

private communications between parties and which communications 

were related not only to actual but potential court actions”], italics 

added; Rusheen, supra, 37 Cal.4th at p. 1057 [privilege not limited to 

statements made during legal proceedings, but may extend to steps 

taken before or after litigation].) 

Second, the Tribe dismissed the lawsuit shortly before escrow 

closed at the end of July 2014. In its statement of decision, the trial 

court noted that Barnum affirmed her promise to pay the proceeds to 

Tribe members Michael Whyte and Arlene Andrade after dismissal of 

the suit, and prior to August 17, 2014. Although the court did not 

explain the significance of the August 17, 2014 date, the testimony 

given by Whyte indicates that the Tribe formulated a letter to send to 

Barnum on August 17, 2014, documenting statements she made to the 

Tribe, and sent it via email the following day. Whyte further testified 

that in his personal meetings with Barnum in August and September, 

they discussed the 2014 lawsuit, and that the Tribe was trying to collect 

the money owed in August. 

Given that the lawsuit was dismissed without prejudice, that the 

Tribe made efforts to collect the money owed, and that the Tribe did in 

fact seek to reopen the litigation after Barnum failed to abide by her 

promises, any communications made by Barnum shortly after dismissal 

of the suit were akin to communications relating to potential court 

actions or made in anticipation of litigation—which are protected by the 

litigation privilege. (Rosenthal, supra, 135 Cal.App.3d at p. 126; see 

also Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal.App.4th 

1532, 1541 [litigation privilege applies to prelitigation demand letters]; 
18

Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 

1115 [“‘communications preparatory to or in anticipation of the bringing 

of an action or other official proceeding are within the protection of the 

litigation privilege’”].)

To the extent the court sought to separate out the three-week 

period between the dismissal of the 2014 lawsuit, and the Tribe’s letter 

to Barnum on August 17, we find no basis for such a narrow and 

artificial extraction. Instead, we remain guided by the principle that 

“[a]ny doubt as to whether the privilege applies is resolved in favor of 

applying it. [Citations.]” (Adams, supra, 2 Cal.App.4th at p. 529.)8 

8 In its final statement of decision—and after Barnum objected to the 

court’s tentative statement of decision by arguing the court had failed to 

explain its reasons for rejection of application of the privilege—the trial court 

added a footnote stating that the false promises were made “on multiple 

occasions before the litigation, during settlement discussions while the 

litigation was pending, and also after the litigation was dismissed.”

In its respondent’s brief, the Tribe repeatedly asserts that Barnum told 

the Tribe’s Executive Board in 2012 she was going to sell the property and 

give the Tribe the proceeds. The Tribe, however, cites to no specific portion of 

the trial record to support this assertion. Barnum points out that the only 

actionable conduct found by the trial court on the promissory estoppel 

claim—i.e., that which induced the reliance and caused the injury—was 

based on promises she made after the Tribe filed the 2014 lawsuit. Therefore, 

the 2012 allegation makes no difference. 

While we agree with defendant, we also note the following: When the 

Tribe filed its 2014 lawsuit to halt Barnum’s sale of the property, the 

complaint expressly alleged that neither Grafrath nor Barnum ever met with 

the Tribe to discuss their plan to sell the property, and that Barnum was now 

refusing the Tribe’s demands to stop the sale of the property. With regard to 

the instant lawsuit, the first four complaints solely alleged that Barnum 

made promises to turn over the proceeds of the sale during the pendency of 

the 2014 litigation. 

After the parties started the instant trial in 2018, and defendant raised 

the litigation privilege, the Tribe moved to amend its complaint to allege an 
19

On appeal, the Tribe also argues that the privilege does not apply 

because Barnum’s conduct of selling the Furness property and keeping 

the sale proceeds was a tortious “course of conduct.” While it is true 

that the litigation privilege encompasses only communicative acts and 

does not privilege tortious courses of conduct (Kimmel v. Goland (1990) 

51 Cal.3d 202, 211), “the key in determining whether the privilege 

applies is whether the injury allegedly resulted from an act that was 

communicative in its essential nature” (Rusheen, supra, 37 Cal.4th at p. 

1058). 

Here, the only actionable fraud committed by Barnum was her 

false promise to the Tribe that she would transfer the net proceeds to 

action for breach of oral settlement agreement. In that same motion, the 

Tribe also stated its intent to add the following factual allegations—which it 

subsequently added to the promissory fraud claim: (1) “Starting in 2012, 

which was prior to the March 3, 2014 date Lawsuit #1 was filed, Defendant 

started promising that she would give [the Tribe] the net proceeds of the sale of 

the Furness real property she wanted to sell because her husband wanted the 

title and mortgage out of his name” and (2) “After Lawsuit #1 was dismissed 

without prejudice on July 21, 2014, by the Plaintiff, Defendant Katrina 

Barnum promised that now that she had closed escrow, the net proceeds from 

the sale of the Furness real property would soon thereafter be given to [the 

Tribe].”

The trial court granted the Tribe’s motion to amend the complaint in its 

entirety, stating it merely sought to add a new legal theory based on the 

same facts alleged for the promissory fraud claim. While defendant objected 

to the amendment several times asserting, inter alia, that the amendment 

amounted to a sham complaint in that it was seeking to plead around the 

litigation privilege defendant does not renew that issue here on appeal. 

While we agree that the only actionable promises found by the trial court 

were based on promises made after filing of the Tribe’s lawsuit (thereby 

supporting application of the litigation privilege as outlined above (see 

Navellier v. Sletten (2003) 106 Cal.App.4th 763, 771–772 (Navellier)), we 

would be remiss if we did not at least acknowledge this state of the record. 
20

Tribe after the sale had closed, in order to induce the Tribe’s dismissal 

of the lawsuit and compliance with the sale. As such, the court’s 

findings on the promissory fraud claim exclusively hinged on the 

communicative statements made by Barnum.9 (Navellier, supra, 106 

Cal.App.4th at pp. 771–772 [harm arose from communicative act, and 

thus litigation privilege barred fraud action]; see also Rusheen, supra, 

37 Cal.4th at at p. 1065 [“[U]nless it is demonstrated that an 

independent, noncommunicative, wrongful act was the gravamen of the 

action, the litigation privilege applies”].)

Finally, the Tribe argues that the litigation privilege does not 

apply because Barnum’s promises constitute unprotected “extrinsic

fraud.” The same argument was made by the plaintiff in Navarro, 

supra, 134 Cal.App.4th 834 and well-addressed by the court as follows: 

“Extrinsic fraud does not occur, as [plaintiff] suggests, when one party 

lies to another, leading to litigation. ‘Extrinsic fraud occurs when a 

party is deprived of the opportunity to present his claim or defense to 

the court; where he was kept ignorant or, other than from his own 

negligence, fraudulently prevented from fully participating in the 

proceeding. [Citation.] Examples of extrinsic fraud are: concealment of 

the existence of a community property asset, failure to give notice of the 

action to the other party, and convincing the other party not to obtain 

9 Indeed, in its motion to amend the complaint and add a claim for 

breach of settlement, the Tribe expressly acknowledged that the first cause of 

action was one for promissory fraud, a subspecies of fraud and deceit—and 

based on Barnum’s verbal promise that she would give the Tribe the net 

proceeds from the sale of the property. 
21

counsel because the matter will not proceed (and then it does proceed). 

[Citation.] The essence of extrinsic fraud is one party’s preventing the 

other from having his day in court.’ (City and County of San Francisco 

v. Cartagena (1995) 35 Cal.App.4th 1061, 1067.) ‘By contrast, fraud is 

intrinsic and not a valid ground for setting aside a judgment when the 

party has been given notice of the action and has had an opportunity to 

present his case and to protect himself from any mistake or fraud of his 

adversary but has unreasonably neglected to do so. [Citation.]’ (Ibid.) 

The type of fraud [plaintiff] alleges is intrinsic. She claims she was lied 

to about IHOP’s intentions with regard to the settlement terms, and 

had the opportunity to negotiate terms that would have been more 

favorable (e.g., not dependent on IHOP’s intent) or to reject the 

settlement altogether. She was not prevented from participating in the 

proceedings.” (Navarro, supra, 134 Cal.App.4th at p. 844.) 

The same holds true here. The Tribe was not deprived of 

participating in any proceedings or having its day in court. Instead, it 

accepted a verbal offer of settlement and reserved its right to refile the 

lawsuit. (Silberg, supra, 50 Cal.3d at p. 214 [“For our justice system to 

function, it is necessary that litigants assume responsibility for the 

complete litigation of their cause during the proceedings”].) Moreover, 

even where extrinsic fraud occurs, the remedy is to set aside the 

affected judgment. (Navarro, supra, 134 Cal.App.4th at p. 845; cf. 

Home, supra, 96 Cal.App.4th at p. 26 [explaining that where civil 

judgment is procured by extrinsic fraud, the normal remedy is to seek 

equitable relief from the judgment, not to sue in tort].) Here, as noted 
22

in our factual background, the Tribe sought to reopen the prior 

litigation, but did so in a procedurally defective manner. Regardless, 

the Tribe’s perception of “extrinsic fraud” is contrary to the caselaw 

which holds statements made during settlement negotiations cannot 

form the basis for tort actions—including fraud—due to the litigation 

privilege. (See Navarro, supra, 134 Cal.App.4th at p. 845 [so noting].)

Accordingly, we conclude the Tribe’s cause of action for fraud is 

barred by the litigation privilege, and reverse the trial court’s judgment 

in favor of the Tribe on this cause of action.10

II. The Breach of Oral Settlement Agreement/Contract Claim

The Trial court found the Tribe “established that there was a 

settlement agreement between [the Tribe] and Defendant Barnum, 

whereby [the Tribe] agreed to dismiss its lawsuit against Barnum in 

exchange for Barnum’s agreement to pay [the Tribe] the proceeds of the 

sale of the Furness Property after calculating and paying any related 

taxes.”

On appeal, defendant does not argue that the elements of the 

breach of contract/settlement agreement claim were not met. Instead,

10 Defendant Barnum does not argue that the litigation privilege also bars 

the Tribe’s non-tort claim for breach of settlement agreement. (See Navellier, 

supra, 106 Cal.App.4th at p. 773 [noting that the litigation privilege “is 

generally described as one that precludes liability in tort, not liability for 

breach of contract” and concluding, in action arising from defendant’s breach 

of a release agreement reached in a prior lawsuit, that the litigation privilege 

did not bar separate claim for breach of contract, and we discern no reason to 

so conclude].)
23

she argues that the statute of frauds bars the claim because the 

contract involved the sale of property.11 We disagree. 

A. The Statute of Frauds Does Not Bar the Claim

First, although defendant states that the trial court did not make 

any findings or rulings on her statute of frauds defense, the trial court 

stated the following at the outset of its statement of decision: “[The 

Tribe] in this case is seeking the funds from the Defendant’s sale of the 

property. [The Tribe] is not seeking legal title. Defendant Barnum 

already sold the property to a third party. This case concerns false 

promises made by Defendant Barnum and her failure to turn over the 

proceeds of any property sale to the religious organization, the Twelve 

Tribes, as she had promised.”

12

Unless a writing is required by the statute of frauds, oral 

settlement agreements are enforceable in the same manner as oral 

agreements in general. (Gorman v. Holte (1985) 164 Cal.App.3d 984, 

11 Barnum also argues that the claim is barred because she was acting on 

behalf of a disclosed principal (Grafrath) and the statute of frauds requires 

that a promise to answer for the debt of another must be in writing. (Civ. 

Code, § 1624, subd. (a)(2).) We address defendant’s agency argument in the 

next section. (See, post, Discussion, Section III.) 

12 We note that notwithstanding the trial court’s prefatory statement, the 

court’s statement of decision contains several statements and/or findings that 

the Tribe was the “100 % equitable owner” of the property, while Wilhelm 

Grafrath was merely the “strawman” or “bare” title holder of the property. 

Whether the Tribe had a viable equitable interest in the property, however, 

was not squarely before the court in the instant action and we express no 

opinion on that issue. 
24

988–989.) Civil Code section 1624, subdivision (a), states: “The 

following contracts are invalid, unless they, or some note or 

memorandum thereof, are in writing and subscribed by the party to be 

charged or by the party’s agent: [¶] . . . [¶] (3) An agreement . . . for 

the sale of real property, or of an interest therein.” As our Supreme 

Court has observed, “We must, of course, apply the California statute of 

frauds to a situation which is precisely covered by the language of the 

statute. If the extent of coverage is unclear, however, we know of no 

policy reasons which compel a resolution of the ambiguity in favor of its 

wide application.” (Sunset-Sternau Food Co. v. Bonzi (1964) 60 Cal.2d 

834, 838 (Sunset-Sternau).)

Here, the agreement between defendant and the Tribe was not for 

the “sale” of the property, or for an interest therein. Indeed, the 2014 

lawsuit filed by the Tribe expressly alleged that Barnum had refused 

their demands to halt the sale of the property. Nor did Barnum agree 

to transfer any interest in the property to the Tribe. Instead, the 

agreement here was that Barnum would give the Tribe the net cash 

proceeds she obtained from the sale, in exchange for their dismissal of 

the lawsuit. Thus, in the strictest sense, the agreement here is not 

covered by the language of the statute. (Sunset-Sternau, supra, 60 

Cal.2d at p. 838.) 

The only cases cited by defendant Barnum in her terse argument 

on the issue are Texaco, Inc. v. Ponsoldt (9th Cir. 1991) 939 F.2d 794 

(Texaco, Inc.) and Nicholson v. Barab (1991) 233 Cal.App.3d 1671 

(Nicholson). Texaco, Inc., however, involved a settlement agreement 

between a buyer and seller of real property, wherein the buyer agreed 
25

to close escrow on the property. (Texaco Inc., supra, 939 F.2d at pp. 

800–801.) Nicholson also involved an agreement between a potential 

buyer and seller—albeit a more complex one—wherein the parties 

agreed to cancel the existing escrow, to have the buyer purchase the 

property from defendants for a specified amount, and then resell it for 

no less than a specified amount in order to share in the proceeds with a 

second buyer involved in the litigation. (Id. at pp. 1676–1682.) In 

finding the settlement agreement barred by the statute of frauds, the 

Nicholson court stated: “[I]t is clear that the settlement agreement is an 

agreement for the sale of real property and not merely an agreement to 

pay damages to settle a lawsuit involving real property.” (Id. at p. 1683, 

italics added.) Here, the agreement was closer to the latter in that it 

did not call for the transfer of property between the two settling parties, 

but solely provided for the payment of cash proceeds to settle the 

lawsuit. 

B. The Doctrine of Estoppel Provides an Alternate Basis 

Upon Which to Affirm the Judgment

The doctrine of estoppel, to preclude reliance on the statute of 

frauds, has been consistently applied by the courts of this state to 

prevent fraud that would result from refusal to enforce oral contracts in 

certain circumstances. (Monarco v. Lo Greco (1950) 35 Cal.2d 621, 623.) 

Thus, estoppel may be applied where necessary to prevent either 

unconscionable injury or unjust enrichment (ibid.) and justify the 

imposition of a constructive trust. (Mazzera v. Wolf (1947) 30 Cal.2d 
26

531, 535.) In light of the trial court’s findings on the issue of fraud, and 

imposition of a constructive trust to avoid unjust enrichment, we find 

this doctrine to be an additional ground justifying affirmance of the 

trial court’s finding in favor of the Tribe on its contract cause of action.13

III. Agency and Indispensable Party

Barnum contends the trial court erred in holding Barnum liable 

for breach of the oral settlement agreement because Barnum was 

functioning solely as Grafrath’s agent, and an agent cannot be held 

liable for a contract executed on behalf of his or her principal. Barnum 

further contends the trial court committed reversible error by failing to 

dismiss the action for want of joinder of Grafrath, an indispensable

party to the action. We find no merit in either contention.14

First, “[t]he existence of an agency relationship and the extent of 

the authority of an agent are questions of fact[,]” (California Viking 

13 In her reply brief, defendant Barnum states in passing that the prior 

court’s dismissal of the oral contract claim in the TAC “constitutes res 

judicata, which should have barred the ressurection [sic] of the [breach of oral 

settlement] cause of action.” (Cf. fn. 8, ante.) Defendant did not argue this 

issue in her opening brief, and we do not consider matters raised for the first 

time in the reply brief. (Neighbours v. Buzz Oates Enterprises (1990) 217 

Cal.App.3d 325, 335.)

14 In her opening brief, Barnum also argues that the statute of frauds 

prevents her from answering for the debt of another, absent a written 

agreement, and that the question of whether there was an intention to keep 

the promises made to the Tribe, was solely within Grafrath’s control. Our 

resolution of the agency/indispensable party issues raised above is equally 

dispositive of these arguments. 
27

Sprinkler Co. v. Pacific Indem. Co. (1963) 213 Cal.App.2d 844, 850), 

reviewed for substantial evidence on appeal (Inglewood Teachers Assn.

v. Public Employment Relations Bd. (1991) 227 Cal.App.3d 767, 780–

781). Second, “[w]hether a party is necessary and/or indispensable is a 

matter of trial court discretion in which the court weighs ‘factors of 

practical realities and other considerations.’” (Hayes v. State Dept. of 

Developmental Services (2006) 138 Cal.App.4th 1523, 1529; Bianka M. 

v. Superior Court (2018) 5 Cal.5th 1004, 1022–1023.) 

Here, Barnum’s agency argument is solely premised on the fact 

that Grafrath executed powers of attorney granting Barnum authority 

to conduct transactions involving his property. Similarly, Barnum’s 

contention that Grafrath was an indispensable party to this action, is 

premised on the assertion that Grafrath was the legal title holder, and 

thus sole principal, in any transactions related to the property. 

However, the powers of attorney and Grafrath’s status as legal title 

holder are not dispositive of the issues. 

In concluding that Grafrath was not an indispensable party, the 

trial court pointed out that the “sole[]” question before it “involve[d] . . . 

Barnum’s promise to pay the proceeds to [the Tribe].”

15 (Italics added.) 

To the extent Barnum argues that there was no additional 

determination that she exceeded her authority under any of the powers 

of attorney, we disagree.

15 To the extent Barnum criticizes additional reasons put forth in the trial 

court’s order, we review the correctness of the court’s decision, not its 

rationale. (See Gilbert v. State of California (1990) 218 Cal.App.3d 234, 240, 

fn. 4.)
28

First, the trial court here found Barnum personally liable on both 

causes of action, and imposed a constructive trust on the property into 

which she funneled proceeds of the property sale. Second, the trial 

court made explicit findings that: (1) Barnum converted all of the 

proceeds of the sale “for herself only and her own use,” despite the fact 

that she had quitclaimed any legal interest in the property in 1997;

(2) that she rejected a check made out to Grafrath by escrow and 

directed them to instead wire the funds into her bank account;16 (3) that 

she made the promises to the Tribe so that they would dismiss the 

lawsuit and she could quickly close escrow to pay delinquent taxes on 

two properties she owned that were facing imminent foreclosure; 

(4) that the same day she received the funds from escrow she wrote 

checks to pay the property taxes on her two properties set for tax 

collector auctions and (5) that she rapidly sold the property for less than 

market value, so that she could “pocket the proceeds.”

In making these findings, the trial court essentially found that 

Barnum’s actions vis-à-vis the oral promises/settlement agreement were 

undertaken for her own personal benefit. In the absence of any specific 

and controlling evidence to the contrary, this ultimate finding is 

supported by substantial evidence. (Cf. Lee v. Helmco, Inc. (1962) 199 

Cal.App.2d 820, 833 [“‘[T]he testimony of an agent at the trial is 

16 Although the bank account was in in the name of both Barnum and 

Grafrath, the trial court pointed out that Barnum admitted she never 

transferred any of the funds to Grafrath. The court also noted that Barnum 

could not point to a single instance in which she had either sent Grafrath 

money from this “joint account” or in which Grafrath had himself withdrawn 

any money from that account. 
29

admissible to prove either the fact of agency or the extent of the 

authority’”]; Dandini v. Dandini (1947) 82 Cal.App.2d 263, 269 [“If a 

finding made is supported by competent and substantial evidence it 

must stand. It is not enough to say that equally competent and 

substantial evidence in the record would just as adequately, or from a 

consideration of mere lifeless words even more adequately, support a 

contrary finding”].) 

Similarly, the trial court’s finding that Barnum was personally 

liable to the Tribe for the promises made, along with an imposition of a 

constructive trust upon properties into which she funneled the proceeds 

of the sale, leads us to conclude that the trial court’s nonjoinder/indispensable party finding was an appropriate exercise of its 

discretion. (Countrywide Home Loans, Inc. v. Superior Court (1999) 69 

Cal.App.4th 785, 794 [in determining whether a party is necessary, and 

whether “complete relief” can be granted in the absence of joinder, key 

question is whether relief can be granted between the extant parties, 

not as between a party and the absent person whose joinder is sought]; 

see also County of San Joaquin v. State Water Resources Control Bd. 

(1997) 54 Cal.App.4th 1144, 1149 [in determining whether the action 

should proceed among the parties before it “no factor is determinative 

or necessarily more important than another”].)17 

17 Towards the end of her opening brief, in a two-paragraph argument, 

Barnum also asserts that the trial court committed “legal error” in its 

decision because California Evidence Code section 1152, subdivision (a) 

precludes the use of offers to settle or compromise as evidence of a party’s 

liability. We deem any argument on this point waived.
30

IV. Punitive Damages

Because the litigation privilege bars the Tribe’s promissory fraud 

claim, the Tribe was not entitled to damages on that cause of action. 

However, the promissory fraud and breach of contract awards were 

duplicative and since we uphold the latter claim on appeal, the award of 

$375,000 cannot be disturbed. We must, however, reverse the $180,000 

in punitive damages awarded to the Tribe.

Punitive damages are permissible only in connection with “an 

action for the breach of an obligation not arising from [a] contract.” (Civ. 

Code, § 3294, subd. (a); Tomaselli v. Transamerica Ins. Co. (1994) 25 

Cal.App.4th 1269, 1286.) In this case, the only viable theory of liability 

was premised on a contract. As such, punitive damages are not 

available. (Cf. Vivian v. Labrucherie (2013) 214 Cal.App.4th 267, 272 

First, evidentiary rulings are reviewed for abuse of discretion (Evans v. 

Gordon (2019) 41 Cal.App.5th 1094, 1102), and second, Evidence Code section 

353 bars relief for the admission of evidence unless “[t]here appears of record 

an objection to or a motion to exclude or to strike the evidence that was 

timely made and so stated as to make clear the specific ground of the 

objection or motion.” (Evid. Code, § 353, subd. (a); Casella v. SouthWest 

Dealer Services, Inc. (2007) 157 Cal.App.4th 1127, 1146, fn. 5.) 

Here, Barnum has failed to point to any part of the record showing that 

she raised this evidentiary objection in the trial court. (See Guthrey v. State 

of California (1998) 63 Cal.App.4th 1108, 1115 [“It is the duty of counsel to 

refer the reviewing court to the portion of the record which supports 

appellant’s contentions on appeal” and “[i]f no citation ‘is furnished on a 

particular point, the court may treat it as waived’”].)
31

[equating breach of contract claim with breach of settlement 

agreement].)18

DISPOSITION

The judgment is reversed with respect to the promissory fraud 

claim and the award of punitive damages. The judgment is affirmed in 

all other respects. 

The parties shall bear their own costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

WILLHITE, Acting P. J.

We concur:

COLLINS, J.

CURREY, J.

18 In its motion to amend their complaint to add the breach of settlement 

claim, the Tribe expressly stated that the proof of such an action “is the same 

as proving a breach of oral contract” and cited to CACI No. 303 (Breach of 

Contract) to set out the elements.