Court Opinion

ID: 9920894
Source: CourtListenerOpinion
Date Created: 2024-01-19 00:02:36.957272+00
Date Added: 2024-06-11T08:45:50.829206
License: Public Domain

Filed 1/18/24 Beal v. Beal CA1/4
                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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          IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                      FIRST APPELLATE DISTRICT

                                                  DIVISION FOUR

 DERK BEAL,
           Plaintiff and Appellant,
                                                                        A165234
 v.
 DEREK BEAL,                                                            (Contra Costa County
                                                                        Super. Ct. No. MSC16-01997)
           Defendant and Respondent.

         Plaintiff Derk Beal appeals a judgment entered in favor of his brother,
defendant Derek Beal,1 on Derk’s complaint for damages arising out of,
among other things, Derek’s alleged breach of oral agreements to
(1) reimburse Derk for funds he deposited in a bank account held in Derek’s
name but in which the brothers comingled funds and (2) to share the profits
from the sale of a house on which title was held solely in Derek’s name but
which the brothers allegedly purchased together for their mother. Derk
contends the trial court erred by concluding that the mediation
confidentiality statutes (Evid. Code § 1115 et seq.)2 barred his father’s
testimony regarding a meeting he had with the brothers to help them resolve

         1 Due to the parties’ shared surname, we refer to both by their first

name for the purpose of clarity.
         2 All statutory references are to the Evidence Code unless otherwise

noted.
their dispute, as well as the admission into evidence of a spreadsheet their
father prepared in connection with that meeting. Derk also contends the
court erred by applying the statute of frauds to bar his claim to a share of the
proceeds from the sale of the house. We find no error and affirm the
judgment.
                                BACKGROUND
      In January 2012, Derek opened the bank account over which the
dispute centers. While the parties disagree as to the purpose of the account,
it is undisputed that between 2012 and the closure of the account in 2015,
both brothers made deposits and withdrawals on the account.
      In August 2012, a house was purchased for the parties’ mother, the
down payment for which was made by check drawn on the shared bank
account. The house was sold in 2018 and Derek retained all proceeds from
the sale.
      In October 2016, Derk filed the present action against Derek. As
amended in January 2019, the complaint alleges, among other things, that
Derek breached the oral agreements to reimburse Derk for funds he
deposited in a bank account and to share with Derk the profits from the sale
of their mother’s home.
      In October 2017, Derek was granted leave to file a cross-complaint. As
amended, the cross-complaint alleged, among other things, that Derk
breached an oral agreement to reimburse Derek for taxes Derek had paid on
Derk’s behalf.
      Following a bench trial, the court found that neither brother had
substantiated his claims. The court described the dispute as “an insoluble
problem” and explained that “no one has prevailed in proving their case,
because the overall accounting was essentially nonexistent. It was done on

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the fly. I can’t give anyone any satisfaction, because . . . I could never figure
out who would get what.” A written proposed statement of decision was
issued by the court and subsequently adopted as the final statement of
decision. It does not appear on the record before us that a formal judgment
was entered. Nonetheless, we will treat the statement of decision, from
which Derk noticed his appeal, as the judgment on appeal. (Morgan v.
Imperial Irrigation Dist. (2014) 223 Cal.App.4th 892, 904 [appellate court has
discretion to treat statement of decision as appealable final judgment].)
Derek has not challenged the trial court’s adverse ruling on his cross-
complaint.
                                  DISCUSSION
I. Reimbursement of Funds Deposited in the Bank Account
      A. Background
      Prior to trial, Derek sought to exclude testimony by his father, Robert
Beal, about his attempts to mediate the dispute between Derk and Derek
regarding the funds deposited into the bank account and to preclude Derk
from admitting into evidence a spreadsheet Robert prepared as part of his
effort to resolve the dispute. In support of his motion, Derek testified that he
asked Robert to mediate the brothers’ financial dispute as a neutral party.
He submitted emails in which Robert confirmed that he agreed to act as a
neutral party. Derek testified that, as part of the mediation, they scheduled
a meeting in October 2014 at a hotel in Walnut Creek. A document entitled,
“Rules of Order for the Beal Family Meeting,” was sent by email to the
parties before the meeting. Under the rules, each brother would have an
opportunity to make an uninterrupted presentation on (1) the bank account,
“how it was supposed to function and where it stands now,” and (2) their
understanding of the agreement to purchase the house for their mother. The

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presentations would be followed by an “open debate” during which Robert
intended to help clarify any misunderstandings regarding what was
promised. Derek testified that, in connection with the mediation, Robert
received “raw data” from each party from which he prepared a new
reconciliation spreadsheet of the bank account, identifying and attributing
each transaction to either party.
      In opposition, Derk submitted a declaration claiming that the purpose
of the family meeting “was to make an attempt to put a stop to the various
name calling that was happening between [the brothers] both in person and
in emails.” Derk denied that they were “engaged in mediation. Nor were
there any spreadsheets or reconciliation charts provided for or created for
that family meeting.” Robert submitted a declaration similarly describing
the October meeting.
      The court granted the motion to exclude from evidence any
communication or writing that was made or prepared for the purpose of, or in
the course of, the mediation, including the spreadsheet Robert prepared in
connection with the mediation.
      At trial, Derk claimed that he was owed $107,000 for funds he had
deposited into the shared bank account that were withdrawn by Derek. His
counsel acknowledged that the evidence admitted at trial was “convoluted at
times.” Derk claimed, however, they did not need to go through the bank
account “line by line” because all of the funds deposited into the account
in 2013 and 2014 were from his income.
      Derek disagreed and argued that Derk had “failed to establish a sum
certain that is owed from the account.” Derek claimed that Derk “shifted the
goalpost at least nine times during the course of this litigation, making it
impossible to accurately calculate the outstanding amount from the [bank]

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account.” Derek argued that the amount to which Derk testified was “based
on his own understanding, without any substantial support behind it.”
      Ultimately, the court found, as set forth above, that Derk had not met
his burden of proof to support his claim for breach of the alleged oral
agreement to reimburse him for deposits to the bank account.
      B. Analysis
      Derk contends the court erred by excluding Robert’s spreadsheet under
section 1119. He argues that “there was simply no evidence that the
spreadsheet or any of the communications were created for the purpose of
legally sanctioned or recognized mediation.” To the contrary, they “were
simply created in attempt to solve the question that the Brothers had
regarding the . . . account and to hopefully garner peace in the family.” We
disagree.
      The California Legislature and the judicial branch have broadly
protected the confidentiality of information exchanged as part of a mediation.
(Rojas v. Superior Court (2004) 33 Cal.4th 407, 415; Wimsatt v. Superior
Court (2007) 152 Cal.App.4th 137, 150.) Statements, writings, or
communications “prepared for the purpose of, in the course of, or pursuant to,
a mediation” are not admissible at a civil trial and “shall remain
confidential.” (§ 1119.) In contrast, “[e]vidence otherwise admissible or
subject to discovery outside of a mediation or a mediation consultation” is not
“inadmissible or protected from disclosure solely by reason of its introduction
or use in a mediation or a mediation consultation.” (§ 1120.) “[T]hese
confidentiality provisions are clear and absolute. Except in rare
circumstances, they must be strictly applied and do not permit judicially
crafted exceptions or limitations, even where competing public policies may
be affected.” (Cassel v. Superior Court (2011) 51 Cal.4th 113, 118.)

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      Interpretation of the scope of the mediation confidentiality statutes
presents a question of law subject to independent review by this court.
(In re Tobacco II Cases (2009) 46 Cal.4th 298, 311 [the meaning of statutory
language presents a question of law that we review de novo].) The trial
court’s decision to exclude evidence on the ground that it was made in
connection with a mediation, however, is an evidentiary ruling subject to
review for abuse of discretion. (Caira v. Offner (2005) 126 Cal.App.4th 12, 32
[rulings on the admissibility of evidence are reviewed for abuse of
discretion].)
      The trial court did not err in concluding that the parties engaged in
mediation with Robert. Section 1115, subdivision (a), defines “mediation” as
“a process in which a neutral person or persons facilitate communication
between the disputants to assist them in reaching a mutually acceptable
agreement.” The Law Revision Commission Comment explains, “To
accommodate a wide range of mediation styles, the definition is broad,
without specific limitations on format. . . . The definition focuses on the
nature of a proceeding, not its label. A proceeding may be a ‘mediation’ for
purposes of this chapter, even though it is denominated differently.”
Section 1115, subdivision (b) defines a “mediator” as “a neutral person who
conducts a mediation.” According to the Law Revision Commission
Comment, “A ‘mediator’ may be an individual, group of individuals, or
entity. . . . The definition focuses on a person’s role, not the person’s title.” In
Travelers Casualty & Surety Co. v. Superior Court (2005) 126 Cal.App.4th
1131, 1139–1140, the court explained that a “neutral person” defined in
section 1115 refers not to the mediator’s mindset or subjective opinions, but
to his or her lack of authority to decide the case. Section 1115 does not
impose any limits on who may serve as a mediator. (See Knight et al., Cal.

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Practice Guide: Alternative Dispute Resolution (The Rutter Group 2023)
¶ 3:73 [“The parties may agree upon someone known to both sides or may
choose from panels of qualified persons recommended by various providers”].)
We note that even under California Rules of Court, rule 3.855, which applies
to court-ordered mediation, not the voluntary mediation at issue here, a
personal relationship between the mediator and a participant must be
disclosed, but the relationship does not require disqualification if no objection
is lodged. (Cal. Rules of Court, rule 3.855(c).)
       Substantial evidence establishes that Robert was asked to serve as a
neutral party to facilitate the brothers’ resolution of their financial dispute.
The parties agreed to meet at a neutral location and the mediation was to be
conducted in accordance with rules that were adopted to help ensure a
productive debate. Robert was not given authority to resolve the dispute for
the brothers. On these facts, the court reasonably concluded that the “family
meeting” constituted a mediation.
      The trial court also reasonably concluded that the spreadsheet was
prepared by Robert in connection with the mediation. Derek testified that
both he and Derk submitted “confidential information” to Robert and that
Robert prepared his own spreadsheet based on that information. Robert
described the spreadsheet as a “new tool” for resolving the dispute. The
emails submitted to the court between Derek and Robert supported this
testimony.
      To be clear, Derek expressly stated that he was not claiming that the
information the parties provided to Robert to make the spreadsheet should be
excluded at trial. The court agreed and excluded only the new spreadsheet.
The court confirmed that the “[u]nderlying data” was discoverable. For this
reason, any possible error with regard to the exclusion of the spreadsheet

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would also likely be harmless. Nothing in the court’s ruling stopped Derk
from attempting to substantiate his accounting based on the data submitted
to his father.
      Finally, Derk has made no attempt to demonstrate that, contrary to the
trial court’s finding, he satisfied his burden of proof based on the admissible
evidence. Accordingly, we affirm the judgment insofar as it finds in favor of
Derek on this claim.
II. Proceeds from the Sale of the House
      A. Background
      The undisputed facts establish the following: in 2012, a house was
purchased for the parties’ mother, title to the property was first held by
Derek and his wife and later transferred into their family trust, Derk never
held title to the house, and when the house was sold in 2018, Derek did not
share any of the proceeds from the sale with Derk. The down payment and
mortgage payments were drawn from the shared bank account. At trial, the
parties disputed whose funds were used for these payments. Derek testified
that he purchased the house for his mother and that he was solely
responsible for the $60,000 down payment. Derk testified that he and Derek
agreed to contribute equally to the purchase of their mother’s house and that
the down payment drawn on the shared bank account was his contribution.
He acknowledged that they agreed Derek would be the owner “on paper” but
that they also agreed that he would be a “silent partner” and he “would have
50 percent equity share in the property.”
      Both parties submitted emails purporting to support their claims. In
December 2014, Derek sent an email to Derk and Robert that reads in
relevant part, “Mom’s house is not for sale and she has no interest in selling.
Until that time, there is no action to take. Derk will continue receiving ½ the

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rent minus expenses until the house is sold or I’m in a cash position to pay
him back his down payment. There is no further need to go back and forth on
this matter.” A February 2015 email was also admitted, however, in which
Derk wrote to Derek: “I will not argue your ownership in moms [sic] [h]ouse
. . . its [sic] yours. However, I will not be responsible for any of the expenses
associated with that house. You owe me $60K plus interest for the loan.”
      In closing argument, Derek’s counsel argued that Derk’s claim that he
was entitled to a share of the proceeds from the sale of the house, as an
owner of the property, conflicts with the written title and is barred by the
statute of frauds. Derk’s counsel argued that while the parties’ use of the
word “ownership” was reasonable, as laypersons they should not be held to its
legal meaning. He suggested that the statute of frauds does not apply
because what they “really had was an understanding in an oral contract
about the profits from the house, not the ownership of the house.” The court
rejected Derk’s argument, explaining, “With regard to the house, I would find
plaintiff’s testimony he believed he was an owner credible. He is . . . a
sophisticated man. He knows when he says he is an owner what that means.
And there is no writing. It is barred by the statute of frauds.”
      The court continued, “But beyond that, going to the heart of the matter
with this [bank] account, plaintiff has not proven that he is entitled [to
relief], even if I were not to find the statute of frauds [applied]. . . . [T]he
accounting itself has not been substantiated. [¶] And when you pull out
individual sections, it just makes the rest of the accounting problematic.”
      B. Analysis
      The statute of frauds, located in Civil Code section 1624, reads in
relevant part, “The following contracts are invalid, unless they, or some note
or memorandum thereof, are in writing and subscribed by the party to be

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charged. . . . [¶](3) An agreement. . . . for the sale of real property, or of an
interest therein.”
      On appeal, Derk argues that the court erred in relying on the statute of
frauds because “there were emails between the Brothers” in which Derek
stated that Derk was entitled to Derk’s “share of the profits” as well as to
repayment of the down payment. No citations to the record are provided in
support of this contention, which forfeits the argument. (L.O. v. Kilrain
(2023) 96 Cal.App.5th 616, 620.) Even if we were to overlook the forfeiture
and assume that Derk intended to refer to the two emails discussed above, we
disagree that they establish his entitlement to the down payment or to a
share of the sale proceeds. As the trial court explained in its alternative
ruling, given the manner in which the brothers treated the shared bank
account, it was impossible to trace the source of the funds for the down
payment to either brother, and the reference to receiving one-half the rent in
the December 2014 email is not an agreement to share the proceeds from an
eventual sale. Title was always held by Derek, not Derk. Under section 662,
“The owner of the legal title to property is presumed to be the owner of the
full beneficial title. This presumption may be rebutted only by clear and
convincing proof.” The trial court did not err in finding that Derk failed to
establish a beneficial interest in the property by clear and convincing
evidence. (See Toney v. Nolder (1985) 173 Cal.App.3d 791, 796 [oral
agreement to buy a house as equal partners in derogation of title must be
shown by clear and convincing evidence].) Accordingly, the trial court
properly entered judgment in favor of Derek on this claim.
                                   DISPOSITION
      The judgment is affirmed. Derek is to recover his costs on appeal.
                                              GOLDMAN, J.

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WE CONCUR:

BROWN, P. J.
SMILEY, J.*

* Judge of the Superior Court of California, Alameda County, assigned by the

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

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