Court Opinion

ID: 4579888
Source: CourtListenerOpinion
Date Created: 2020-10-23 02:02:03.740535+00
Date Added: 2024-06-11T13:41:51.662627
License: Public Domain

Filed 10/22/20 Law Offices of Gary Kurtz v. Markowitz CA2/7
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                        SECOND APPELLATE DISTRICT

                                     DIVISION SEVEN

LAW OFFICES OF GARY                                        B291880
KURTZ,
                                                           (Los Angeles County
         Plaintiff and Respondent,                         Super. Ct. No. LC103719)

         v.

PHILIP MARKOWITZ,

         Defendant and Appellant.

     APPEAL from a judgment of the Superior Court of Los
Angeles County, Rupert A. Byrdsong, Judge. Reversed and
remanded with directions.
     Law Offices of Jeffrey A. Cohen and Jeffrey A. Cohen;
Marcus, Watanabe & Enowitz, David M. Marcus and Daniel J.
Enowitz for Defendant and Appellant.
     Gabriel Law Group, Jonathan G. Gabriel, David S. Mayes;
Law Offices of Gary Kurtz and Gary Kurtz for Plaintiff and
Respondent.
                  __________________________
       Philip Markowitz appeals from a judgment after a bench
trial entered in favor of the Law Offices of Gary Kurtz.1 Kurtz,
who provided legal representation to Markowitz and his wholly
owned company Four Star General Properties, LLC (Four Star),
sued Markowitz for breach of contract over unpaid attorneys’
fees. Markowitz contends the trial court erred in entering
judgment for Kurtz because substantial evidence does not
support the court’s finding the parties entered a written
engagement agreement or the court’s determination of damages.
Markowitz also asserts the trial court erred in failing to address
his affirmative defenses in its statement of decision. He further
contends the court erred in excluding from evidence an order
denying sanctions in the action in which Kurtz represented him.
       Substantial evidence supports the trial court’s findings the
parties entered into a written engagement agreement and
Markowitz breached the contract. However, substantial evidence
does not support the trial court’s calculation of damages. The
trial court also erred in failing to address in its statement of
decision Markowitz’s affirmative defense seeking an offset for
Kurtz’s asserted legal malpractice. We reverse and remand for
the trial court to address Markowitz’s affirmative defense of legal
malpractice and to recalculate the amount of damages.

1     We refer to the Law Offices of Gary Kurtz and its sole
practitioner Gary A. Kurtz interchangeably as Kurtz, except
where noted.

                                 2
      FACTUAL AND PROCEDURAL BACKGROUND

A.     Kurtz’s Representation of Four Star and Markowitz in the
       Blue Water Action2
       In the early 2000’s Markowitz partnered with Blue Water
Sunset, LLC (Blue Water Sunset) to form three limited liability
companies (the LLC’s) to invest in a parking facility for freight
trucks. In June 2004 Blue Water Sunset sued Markowitz and the
LLC’s to dissolve the companies and distribute their assets based
on allegations Markowitz misappropriated income and conveyed
the LLC’s assets to Four Star.3 (Blue Water Sunset, LLC v. First
View, LLC (Super. Ct. L.A. County, 2014, No. BC316696) (Blue
Water action).) Four Star was later joined as a defendant. The
trial court in the Blue Water action appointed a receiver, and in
October 2005 the court transferred the property owned by Four
Star into the receivership.
       In December 2005 Markowitz retained Kurtz to represent
Four Star in the Blue Water action. The parties dispute whether
they executed an engagement agreement. It is undisputed,
however, the parties agreed Kurtz would charge an hourly rate of

2    The background facts are taken from the trial testimony
and exhibits. We indicate where the facts are in dispute.
3      On December 2, 2004 Markowitz and the LLC’s filed a
cross-complaint against Blue Water Sunset and its owners
asserting fraud and related causes of action based on allegations
Blue Water Sunset did not make its required initial capital
contribution, did not place assets into the LLC’s, and used the
LLC’s and the lawsuit to defraud Markowitz of half of the value
of the capital and assets he had contributed to the LLC’s.

                                3
$250, and at some point Kurtz began representing Markowitz in
an individual capacity.
       By the middle of 2006, Markowitz had fallen behind in
paying Kurtz’s invoices, and Markowitz was low on cash because
Four Star’s assets and income were tied up in the receivership.
On September 1, 2006 Markowitz wrote in an e-mail to Kurtz,
“When I saw you . . . 3 weeks ago 5K a month was acceptable to
you and I wrote you a check. . . . I’m in a little bit of a bind right
now and would ask I keep the same payment for now. . . . I will
certainly pay all my outstanding balances in full if I have the
means. [¶] . . . When the receivership is lifted I can pay you
$15,000 a month probably in full as I will have an income . . . .”
Kurtz responded, “[It’s] not a big deal if [it’s] a problem right
now. [I] just don’t like to see a bill grow to the point it seems very
difficult to catch up.”
       Over the next two years Markowitz periodically paid
monthly installments of $5,000 or $10,000, and the outstanding
balance continued to grow as the Blue Water action proceeded.
Kurtz accepted this arrangement because he was confident
Markowitz would eventually be able to pay the balance of the
legal bills because even if Markowitz lost the lawsuit, he would
regain control of at least 50 percent of the assets in the
receivership.
       By November 2007 the balance on Kurtz’s invoices
exceeded $85,000, and Kurtz told Markowitz, “I need you to find
some money and make a meaningful payment. [¶] . . . [¶]
[T]hings are tight to the point that I cannot take my kids to [the]
doctors . . . .” Markowitz responded, “[Y]eh you[’]ve been pretty
good about this. [¶] . . . [¶] [A]t any rate I will get you a
substantial check this week ok?” A few weeks later Markowitz

                                  4
wrote, “[Y]ou have it coming and if the receiver gets lifted
there[’]s a chance I can square you before year[’]s end . . . .”
Markowitz made a $15,000 payment at that time and $10,000
payments sporadically in 2008.
       Beginning in June 2008 Kurtz began to charge Markowitz
an hourly rate of $300, which was reflecting in his July invoice,
and in October 2008 Kurtz raised the hourly rate to $350. By
September 2008 the outstanding balance on Kurtz’s invoices had
grown to nearly $100,000. On September 9, a few months before
the date then set for trial, Kurtz texted Markowitz, “[F]rom now
thru trial I am going to need you to up the monthly to 25K. I will
need to spend considerably more time on the case and [will not]
be able to look to other regularly paying matters . . . .”
Markowitz stated he was unable to pay more than $10,000 per
month, and following a series of heated communications,
Markowitz terminated Kurtz around September 19. Markowitz
picked up his client file from Kurtz’s office on or around
October 27. On October 29, 2008 Kurtz substituted out as
counsel for Markowitz and Four Star in the Blue Water action.
       However, the parties shortly reconciled, and on
December 11, 2008 Kurtz substituted back in as counsel for
Markowitz and Four Star in the Blue Water action. Kurtz’s
January 2009 invoice stated, “As discussed, there was a credit
reduction in the amount of $13,168.97 to bring the past due down
to $80,000. You have paid $60,000 towards that amount. The
remaining $20,000 will remain due but not payable until (1)
collection from the Four Star properties (2) collection from a
judgment you have or (3) the end of this action, whichever comes
first. Please keep current on new charges as discussed.” The

                                5
January 2009 invoice and subsequent invoices reflected an hourly
rate of $350.
       After several trial continuances, in late 2009 a 10-day
bifurcated jury trial was held before Judge Rex Heeseman to
determine whether Blue Water Sunset had made the initial
capital contributions required under the LLC’s operating
agreements. Kurtz represented Markowitz at the trial. The jury
delivered a verdict in favor of Blue Water Sunset; however, the
verdict was subsequently vacated based on an affidavit of
prejudice Blue Water Sunset had filed against Judge Heeseman
at the beginning of the trial (but Judge Heeseman had not ruled
on). Kurtz’s December 2010 invoice, which included his trial
work, reflected an outstanding balance exceeding $220,000.
       Over the next two years Kurtz continued to represent
Markowitz in the Blue Water action and other smaller matters,
identified in his invoices as “Markowitz v. Noval,” “Markowitz v.
Peronne,” “Markowitz v. NWA,” “Markowitz v. RIT,” and
“Markowitz v. Four Star.” Kurtz recorded his last billable work
for Markowitz on October 29, 2012. By that time, the
outstanding balance stated on Kurtz’s invoices had grown to
$329,833, and Kurtz began to bill Markowitz for interest at 10
percent per year. Over the course of the eight-year
representation, Markowitz paid Kurtz $324,408.01.
       On December 6, 2012 Markowitz substituted in Michael
Buley to represent Markowitz and Four Star in the Blue Water
action. A new trial on Blue Water Sunset’s initial capital
contributions was held as a bench trial in September 2014. At
the conclusion of Blue Water Sunset’s presentation of evidence,
the trial court (Judge Michael Linfield) granted Markowitz’s
motion for entry of judgment pursuant to Code of Civil Procedure

                               6
section 631.8,4 finding Blue Water Sunset failed to prove it made
its initial capital contribution to any of the LLC’s. Judgment was
entered for Markowitz on December 12, 2014.

B.    Kurtz’s Complaint and Pretrial Proceedings
      Kurtz filed this action on December 31, 2015. The
operative first amended complaint asserted four causes of action
against Markowitz: (1) breach of written contract, (2) breach of
oral contract, (3) quantum meruit, and (4) common count for
account stated. Kurtz prayed for at least $437,043 in damages
plus statutory interest. The complaint attached and incorporated
what it described as a “true and correct copy of the written fee
agreement that was signed by both parties, which copy was on
[Kurtz’s] computer.” The complaint further alleged, “The
original, signed version, was returned to [Markowitz] with his
entire file the first time [Kurtz] withdrew from representing
[Markowitz] and was never returned.”
      The attached engagement agreement was addressed to
Markowitz, but it was undated and unsigned. The agreement
stated as to the scope of the representation, “This agreement
applies to one representation, unless it is extended by a
supplemental agreement in writing. You have asked us to
represent your company Four Star . . . in pending action. This
agreement will extend to other representation unless we agree, in
writing, to a different arrangement.”5 The agreement also stated,

4    All further undesignated statutory references are to the
Code of Civil Procedure.
5     We quote the engagement agreement, which was marked
as exhibit 102 although the exhibit was not admitted. However,

                                7
“My billing rate for your work will be $250.00 per hour for all
time I work on your matters. My rate is subject to modification
by this office with 30-days[’] notice by mail.” The agreement
provided for reimbursement of costs incurred. It also provided,
“If any [billing] statement is not paid within 15 days, the debt
stated therein will accrue interest at annual rate of 10%, and we
will have the right to withdraw as your lawyers.”
       On July 20, 2016 Kurtz filed a response to a section 4546
demand for a bill of particulars, stating the principal balance
owed to him was $335,330, plus 10 percent annual interest of
$115,442 from January 3, 2013, for a total balance of $450,772 as
of July 3, 2016.
       On August 22, 2016 the trial court7 sustained in part and
denied in part Markowitz’s demurrer to the complaint,
dismissing all claims asserted by Kurtz in an individual capacity,
but allowing all causes of action to proceed as asserted by Kurtz’s
law firm. On August 24, Markowitz answered the complaint with
a general denial and asserted 20 affirmative defenses, including
the fifth affirmative defense of “the doctrine of setoff and/or
offset” and the sixth affirmative defense seeking an offset for
Kurtz’s legal malpractice.

Kurtz testified he and Markowitz entered into an agreement that
was identical to exhibit 102, except it reflected the date it was
signed.
6     Section 454 provides that a party “must deliver to the
adverse party, within ten days after a demand thereof in writing,
a copy of the account, or be precluded from giving evidence
thereof.”
7     Judge Frank J. Johnson.

                                8
       On June 28, 2017 the trial court8 granted Markowitz’s
motion for summary adjudication of Kurtz’s second cause of
action for breach of oral contract, but it denied summary
adjudication of the remaining causes of action.
C.     The Evidence at Trial
       A four-day bench trial was held from November 29 to
December 4, 2017. Kurtz, Markowitz, and Buley testified, as well
as André Jardini, an attorney who testified as an expert for
Markowitz on the reasonableness of Kurtz’s legal bills and legal
malpractice issues. The trial court admitted Kurtz’s invoices,
Jardini’s analysis of the invoices, and the parties’
communications. The court excluded the unsigned engagement
agreement, but it allowed Kurtz to review the document and to
testify about its preparation and contents.

       1.    Kurtz’s testimony
       Markowitz was referred to Kurtz by attorney Steven
Sadler. Markowitz asked Kurtz to represent Four Star, although
“later that expanded to [Kurtz] representing him in the Blue
Water [action] as well as a number of other lawsuits.” When
Kurtz was first hired, he “prepared a written [engagement]
agreement for [Markowitz] that covered expressly the Four Star
retention and allowed for him to expand the representation . . . .”
Kurtz agreed to work for an hourly rate of $250, a discount from
his normal hourly rate of $350. Kurtz testified he generated the
engagement agreement at the time of his consultation with
Markowitz, and Markowitz signed it on the same day, “about 45

8     Judge Rupert A. Byrdsong ruled on Markowitz’s motion for
summary adjudication and presided over the remainder of the
action.

                                 9
minutes to an hour later.” Asked how he knew it was the same
day, Kurtz recalled that after meeting in his office, Markowitz,
Kurtz, and Sadler went to lunch at a sushi restaurant next door
and brought the agreement to review it together. After lunch,
they approached Markowitz’s car and “on either the hood or the
roof of [the] car, [Markowitz] signed it sort of with flourish.”
Kurtz testified the agreement Markowitz signed differed from the
unsigned agreement attached to the complaint only with respect
to the date, because Kurtz printed the copy from a word
processing document that was programmed to automatically
update the date.
       Kurtz kept the signed original of the engagement
agreement in a correspondence folder in Markowitz’s client file,
but he believes it was lost after he returned the entire client file
in 31 banker’s boxes to Markowitz in October 2008 at the time of
his first withdrawal as counsel. Asked by the trial judge if Kurtz
made a photocopy of the executed agreement, Kurtz stated he
“didn’t have an opportunity to, because I was being replaced
midstream in action and there was a lot going on[,] so the new
lawyer needed the files before I could make those copies. . . .
Every shred of paper that we could find was boxed up and given
to [Markowitz].”
       Kurtz testified he sent a written notice to Markowitz before
he increased his hourly rate from $250 to $300, and then to $350:
“I sent notice to [Markowitz]. Actually, I sent notice to all clients
who were paying under 350 that I was equalizing my billing in a
lock step approach. It would first increase to 300 an hour, and
then it would increase to 350 an hour. And that was corroborated

                                 10
on my bills.”9 Kurtz testified he no longer had a copy of the rate
increase letter because it too was in the client file transferred to
Markowitz in October 2008. On cross-examination, Kurtz
admitted he could not produce a computer copy of the rate
increase notification letter as he had been able to do with the
unsigned engagement agreement. Further, after Kurtz
confirmed he was certain he sent a letter and not an e-mail to his
clients, Markowitz’s lawyer impeached Kurtz with deposition
testimony in which Kurtz had testified, “I sent out one email that
raised the rates, I think, on a graduated basis, first at $300 an
hour for a period of time and then $350 an hour.”
      Kurtz testified the reason he resumed representation of
Markowitz in December 2008 was because the parties resolved
their billing dispute.10 He explained, “I didn’t want to come back
in and have any loose ends, any disputes. So we went through
carefully the complaints [Markowitz] had . . . . He had been
complaining that he felt strong-armed about the rate
increase. . . . And I think I gave him a credit for everything he
was complaining about, and then with the agreement that the
rate of 350 to go forward was not going to be the subject of any

9     The trial court later sustained a best evidence objection to
similar testimony by Kurtz that he “sent a letter indicating that I
was increasing my rate to equalize all clients in a two-step
process, first to 300 and then to 350.” However, Markowitz’s
counsel did not object to Kurtz’s initial testimony he notified
Markowitz of the rate increase. Moreover, Markowitz’s counsel
cross-examined Kurtz about the letter and adduced similar
testimony Kurtz gave advance written notice.
10    Markowitz’s client file was returned to Kurtz around
January 2009, but Kurtz testified the engagement agreement and
rate increase letter were not included in the returned files.

                                 11
more complaints.” On cross-examination, Kurtz stated he
credited Markowitz $13,168.97 to offset his rate increases prior to
the October 2008 withdrawal, and Markowitz agreed to pay $350
per hour from December 2008.
       In October 2012 Kurtz withdrew for the second time. By
that time he was owed fees and costs in the range of $325,000 to
$330,000, not including interest, which Kurtz had not charged on
Markowitz’s balances prior to the final withdrawal.

       2.     Markowitz’s testimony
       Markowitz testified he hired Kurtz in 2005 to represent
him and Four Star in the Blue Water action. Markowitz stated
he believed “it was just for Four Star at the beginning. It may
have been both. It may have changed. But . . . I own Four
Star . . . .” Markowitz denied ever entering into a written
engagement agreement with Kurtz. He also denied having any
access to or removing any documents from his client file after
Kurtz’s first withdrawal, stating, “I didn’t personally touch the
files. They were done by a courier.” Kurtz never told him any
documents were missing. Markowitz further denied receiving
notice by mail of an increase in Kurtz’s hourly rates, stating he
first learned of the higher rates from the billing statements.11
Markowitz believed Kurtz agreed to return to his original $250
hourly rate but then raised it again within three or four months,
and Markowitz felt he had no choice but to acquiesce because the
trial date was approaching.

11   Asked by the trial court if Kurtz was required to provide
him notice of a rate increase, Kurtz replied, “that’s my
understanding.” Asked for the basis of that understanding,
Kurtz replied, “based on the law, I think.”

                                12
       On cross-examination, Markowitz was shown an e-mail he
sent to Kurtz dated October 16, 2012, in which he stated, “You
have referred to the fee agreement contract I believe I signed in
2005. If I can remind you, I fired you in late 2008 . . . and hired
and substituted in Miles Kavalier for a brief period. I never
signed a new retainer agreement after Miles so it is kind of
underhanded to talk about interest when if there was an
agreement it was paid in full before rehiring you with no written
agreement if you want to get technical.” Asked why he had
written that he believed he had signed a fee agreement contract
with Kurtz in 2005, Markowitz responded, “I did think that I
might have, but then I recalled that I never did sign it, that I
think that [Kurtz] wanted to, but I didn’t agree to all of its terms.
I agreed to the 250 an hour on a $5,000 monthly rate, and that
was it. . . . Let’s put it this way: If I had signed it, I would think
that my attorney should have a copy of it. Okay? Not a blank.
That leads me to believe that I didn’t sign it.” Markowitz
testified as to the monthly cap on fees, “[W]e spoke to each other
and we agreed to have him bill me at 250 an hour, and it was a
$5,000 a month cap. The paper that he put forward that I didn’t
sign, it’s unsigned, doesn’t say $5,000 a month. Yet I paid $5,000
a month. Why doesn’t it say that if that’s the agreement I
signed.”

    3.     Jardini’s testimony
    Jardini, an attorney, testified as an expert witness for
Markowitz on the reasonableness of Kurtz’s billed attorneys’

                                  13
fees.12 Jardini based his opinion on his audit of Kurtz’s legal
invoices, and Jardini prepared a 68-page analysis of Kurtz’s fees.
Jardini determined Kurtz billed Markowitz $658,132.50 in fees
and $27,168.79 in costs in connection with the Blue Water action
between 2005 and November 2012.13 Jardini determined
Markowitz made payments to Kurtz totaling $328,403.01.
       Jardini then calculated a series of adjustments. The
largest adjustment concerned Kurtz’s billing rate: Jardini
determined Kurtz’s total fees would be reduced by $113,333 if
Kurtz’s original hourly rate of $250 applied to the entire
representation.14 Jardini further determined $46,100 in the
billed fees were based on “vague” time entries. Jardini calculated
smaller reductions for overhead that should not have been
charged ($4,263), errors in billing ($1,000), and clerical work
($308). Jardini also made deductions for hours billed in
connection with an attorney disqualification motion ($13,475) and
a fourth amended cross-complaint in the Blue Star action
($5,375), work that Markowitz contends resulted from Kurtz’s
negligence. Finally, Jardini reduced Kurtz’s fees by $4,081 to
reflect a reduction in photocopying charges and mileage
reimbursement, as well as other minor cost adjustments. Jardini
testified that after making these adjustments and accounting for

12    We discuss below Jardini’s testimony about Kurtz’s
asserted legal malpractice.
13    Jardini determined Kurtz also billed Markowitz
approximately $3,000 in connection with two other matters,
described as “Markowitz v. Four Star” and “Markowitz v. RIT.”
The trial court appears to have excluded these fees from the
damages award.
14    We have rounded the calculated amounts.

                               14
payments made by Markowitz, Markowitz owed Kurtz $169,958
in fees and costs.
       On cross-examination, Jardini testified a $350 hourly rate
for Kurtz was not unreasonable. However, Jardini testified an
attorney is precluded from raising hourly rates without advance
written notification to the client. Jardini opined, “[I]t would have
to be a separate writing reflecting an agreement to a different
rate, which I have not seen.”

D.    Statement of Decision
      Following the close of testimony, the trial court directed the
parties to prepare combined closing statements and proposed
statements of decision. Kurtz’s 23-page proposed statement of
decision asserted the trial court should find in favor of Kurtz on
quantum meruit and account stated, noting “the claim for breach
of written contract seeks the same damages as the claim for
account stated and is, therefore, moot.” Kurtz argued the court
should reject Markowitz’s claims for offsets based on Kurtz’s
alleged legal malpractice. Kurtz proposed he be awarded in
quantum meruit $461,155 in fees and costs, which he calculated
by multiplying the total hours billed in the Blue Water action
(2,179.20 according to Jardini) by the “reasonable” hourly rate of
$350, plus costs ($27,218), less Markowitz’s payments ($328,404
according to Jardini). Kurtz also proposed the court order
prejudgment interest commencing November 1, 2012, for a total
of approximately $237,288, less a $3,000 credit off the principal
balance. Alternatively, Kurtz proposed the court award as
damages on account stated $329,458 in principal, less the $3,000
credit, plus approximately $150,000 in interest, for a total of
$495,713.

                                15
       Markowitz’s 21-page proposed statement of decision
asserted Kurtz failed to meet his burden to prove execution of the
engagement agreement to support a cause of action for breach of
written contract, and Kurtz’s claim for account stated failed
because his invoices did not accurately reflect payments and
credits. Markowitz’s proposed statement conceded Kurtz was
entitled to recover the reasonable value of his services in
quantum meruit “subject to defendant’s pleaded defenses,
including offset for damages (including malpractice) and failure
to mitigate. The final amount due must account for
acknowledged mistakes, all payments, made, and what is a
reasonably hourly rate to which the parties agreed.” Markowitz
proposed the court offset his damages by $600,000 in malpractice
damages. Thus, Markowitz argued, the offset exceeded Kurtz’s
claim, precluding any recovery.
       On April 12, 2018 the trial court issued a five-page
proposed statement of decision. The court recognized Kurtz and
Markowitz gave contradictory testimony whether Kurtz executed
the engagement agreement, but it found Markowitz’s testimony
was “unbelievable for several reasons,” including that Markowitz
was a “fairly sophisticated businessman with significant
experience with legal proceedings,” and Markowitz referred in his
October 16, 2012 e-mail to having signed the 2005 written
engagement agreement, yet denied in his testimony he ever
signed it. The court found “by a preponderance of the evidence
that the parties did enter into and execute a written retainer
agreement.”
       The trial court noted that although it did not admit into
evidence the unsigned copy of the engagement agreement, both
parties were shown the draft and testified about it, which

                               16
testimony further supported the court’s finding a written,
executed engagement agreement existed. The court also found
Kurtz’s invoices corroborated his testimony he raised his hourly
billing rate from $250 to $300, and then to $350 during the
course of the representation. Jardini’s and Buley’s15 testimony
established the rate of $350 was reasonable. The court further
found Markowitz had indicated he would pay his balances in full
when he had the means.
       The court concluded Kurtz had proven all the elements of a
breach of contract. Based upon its review of the exhibits and
testimony, it determined Kurtz was entitled to $658,133 in fees,
based on 992 hours billed at $250 per hour, 107 hours billed at
$300 per hour, and 1,080 hours billed at $350 per hour. These
amounts matched the calculations by Jardini (without any
offsets). The court accepted Markowitz’s evidence he had made
payments of $324,408 and found Kurtz incurred costs of $27,218.
Accordingly the court awarded Kurtz $360,943.16 The court
noted, “By finding that plaintiff’s case is a breach of contract
claim, an analysis under a quantum meruit or account stated
theory is unnecessary.”
       On April 23, 2018 Markowitz filed an objection to the
proposed statement of decision including, as relevant here, that
“[t]he Statement does not address [Markowitz’s] defense arising

15   Buley testified he charged Markowitz an hourly rate
between $350 and $400 when he took over representation in the
Blue Water action in 2012.
16    The trial court found Kurtz agreed to waive his claim for
interest on the unpaid balances based on his e-mail to Markowitz
dated October 16, 2012. Kurtz objected, but the court did not
modify this ruling.

                               17
out of [Kurtz’s] professional negligence.” On May 25, 2018 the
trial court adopted the proposed statement of decision as its final
statement of decision without modification. On July 11, 2018 the
court entered judgment for Kurtz for $360,943. Markowitz
timely appealed.17

                          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)

17    Markowitz’s notice of appeal included an appeal from Judge
Johnson’s ruling on Markowitz’s summary adjudication motion.
However, Markowitz has waived this issue by failing to present
any appellate argument on this issue. (People v. Bryant, Smith
and Wheeler (2014) 60 Cal.4th 335, 363 [“If a party’s briefs do not
provide legal argument and citation to authority on each point
raised, ‘“the court may treat it as waived, and pass it without
consideration.”’”].)

                                18
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.’”]; Western
States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559,
571 [“‘When two or more inferences can be reasonably deduced
from the facts, the reviewing court is without power to substitute
its deductions for those of the trial court.’”]; Harry Carian Sales
v. Agricultural Labor Relations Bd. (1985) 39 Cal.3d 209, 220
[“findings based on the credibility of witnesses will not be
disturbed unless the testimony is ‘incredible or inherently
improbable’”].)
       Moreover, “[u]nder the doctrine of implied findings, the
reviewing court must infer, following a bench trial, that the trial
court impliedly made every factual finding necessary to support
its decision.” (Fladeboe v. American Isuzu Motors Inc. (2007)
150 Cal.App.4th 42, 48 (Fladeboe); Ribakoff v. City of Long Beach
(2018) 27 Cal.App.5th 150, 162 [same]; 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 (Thompson) [same].)
       However, “‘[i]n reviewing a judgment based upon a
statement of decision following a bench trial, we review questions
of law de novo.’” (Veiseh v. Stapp (2019) 35 Cal.App.5th 1099,
1104; accord, Thompson, supra, 6 Cal.App.5th at p. 981; see

                                19
Feresi v. The Livery, LLC (2014) 232 Cal.App.4th 419, 425
[questions concerning the scope of the fiduciary duties imposed by
law on partners is a legal issue subject to de novo review].)

B.     Substantial Evidence Supports the Trial Court’s Finding of
       Breach of Written Contract
       1.    Governing law
       “[T]he elements of a cause of action for breach of contract
are (1) the existence of the contract, (2) plaintiff’s performance or
excuse for nonperformance, (3) defendant’s breach, and (4) the
resulting damages to the plaintiff.” (Oasis West Realty, LLC v.
Goldman (2011) 51 Cal.4th 811, 821; accord, Professional
Collection Consultants v. Lujan (2018) 23 Cal.App.5th 685, 690.)
“‘[A] contracting party’s unjustified failure or refusal to perform
is a breach of contract . . . .’” (Cates Construction, Inc. v. Talbot
Partners (1999) 21 Cal.4th 28, 54; accord, JRS Products, Inc. v.
Matsushita Electric Corp. of America (2004) 115 Cal.App.4th 168,
181-182.) “Where the existence of a contract is at issue and the
evidence is conflicting or admits of more than one inference, it is
for the trier of fact to determine whether the contract actually
existed.” (Bustamante v. Intuit, Inc. (2006) 141 Cal.App.4th 199,
208; accord, Carmel Development Co., Inc. v. Anderson (2020)
48 Cal.App.5th 492, 518.) Although interpretation of written
instrument is generally an issue of law, in cases where
“‘ascertaining the intent of the parties at the time the contract
was executed depends on the credibility of extrinsic evidence,
that credibility determination and the interpretation of the
contract are questions of fact.’” (Coyne v. De Leo (2018)
26 Cal.App.5th 801, 822; accord, Warner Constr. Corp. v. City of
Los Angeles (1970) 2 Cal.3d 285, 289.)

                                 20
      2.      The trial court’s finding Markowitz signed the
              engagement agreement is supported by substantial
              evidence
       Markowitz contends there was no evidence of an executed
engagement agreement between the parties. However, Kurtz
testified he witnessed Markowitz sign the engagement agreement
“with flourish” on the hood of the latter’s car after the two had
lunch together to discuss the representation. The trial court
found Markowitz’s contrary testimony he never signed the
written agreement to be unbelievable. 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 finding Markowitz signed the agreement was
supported by substantial evidence. As the court noted,
Markowitz in his October 16, 2012 e-mail to Kurtz referred to
“the fee agreement contract I believe I signed in 2005.” When
impeached with this e-mail, Markowitz’s response was
argumentative: “If I had signed it, I would think that my
attorney should have a copy of it. Okay? Not a blank. That
leads me to believe that I didn’t sign it.” Although Markowitz
points to his testimony he never signed the agreement, we
“‘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, at p. 1102.)

                                 21
      3.      Substantial evidence supports an implied finding
              Kurtz provided written notice of his rate increases
       Markowitz contends that even if there were a written
engagement letter, its terms limited Kurtz’s hourly billing rate to
$250, and Kurtz never gave written notice of an increase in the
rate. Substantial evidence supports the trial court’s finding to
the contrary.
       The unsigned engagement agreement stated Kurtz’s billing
rate would be $250 per hour “subject to modification by this office
with 30days[’s] notice by mail.” Kurtz testified he mailed
Markowitz advance written notice of his plan to raise his hourly
rates in stages from $250 to $300, and then to $350. Markowitz
points to the fact Kurtz was unable to produce a copy of the
letter, and Kurtz testified in his deposition he had e-mailed the
notification. Markowitz testified he did not receive any written
notice. We infer the trial court made an implied finding Kurtz
was more credible, concluding “that the invoices . . . corroborate
[Kurtz’s] testimony that the rate increased.” (See Fladeboe,
supra, 150 Cal.App.4th at p. 48.)
       It is undisputed Markowitz received written notice of
Kurtz’s rate increases by virtue of the invoices he received in July
and October 2008. Kurtz testified, and the January 2009 invoice
corroborates, that Kurtz credited Markowitz for the hourly rate
increases prior to Kurtz’s resumption of representation in
December 2009, but Kurtz then billed Markowitz moving forward
at the $350 hourly rate. Markowitz made payments on the bills
reflecting the $350 rate, for example, a $10,000 payment on
February 20, 2009 and a $6,000 payment on March 19, 2009.
Thus, by the time of Markowitz’s payments on the invoices billed

                                22
at $350 per hour, Markowitz had 30 days’ advance written notice
of the rate increases for which he was ultimately held liable.
       Severson & Werson v. Bolinger (1991) 235 Cal.App.3d 1569
(Severson), relied on by Markowitz for the proposition the
invoices were not sufficient to give notice, is distinguishable. In
Severson, the parties’ engagement agreement did not address
changes in the attorney’s rates, nor could the client determine
from the bills he received that the agreed-upon rates had
increased. (Id. at p. 1573.) The court concluded, “Under these
circumstances, the fee provisions must be construed in [client’s]
favor as to the charges . . . .” (Ibid.) Here, Markowitz was placed
on written notice through a letter (if Kurtz’s testimony was
believed) or Kurtz’s invoices that the rates had increased.

      4.      Markowitz has forfeited the argument he is not liable
              for fees incurred for representation of him in an
              individual capacity
       Markowitz contends Kurtz is precluded from recovering
fees for his representation of Markowitz in an individual capacity
because Kurtz never gave written notice he was expanding the
representation beyond Four Star in the Blue Water action.18
However, Markowitz has forfeited this argument by not raising it
in the trial court. (Johnson v. Greenelsh (2009) 47 Cal.4th 598,
603 [“‘issues not raised in the trial court cannot be raised for the

18     Markowitz also contends Kurtz should be precluded from
recovering fees for his representation of Markowitz in matters
other than the Blue Water action. Based on Jardini’s analysis,
fees invoiced to other matters totaled $3,063 plus $50 in costs,
and the trial court appears to have excluded these amounts from
its damages award.

                                23
first time on appeal’”]; Hanna v. Mercedes–Benz USA, LLC (2019)
36 Cal.App.5th 493, 513 [“‘“As a general rule, theories not raised
in the trial court cannot be asserted for the first time on
appeal . . . .”’”].) “‘“This rule is based on fairness—it would be
unfair, both to the trial court and the opposing litigants, to
permit a change of theory on appeal . . . .”’” (American Indian
Health & Services Corp. v. Kent (2018) 24 Cal.App.5th 772, 789;
accord, C9 Ventures v. SVC-West, L.P. (2012) 202 Cal.App.4th
1483, 1492 [“‘opposing party should not be required to defend for
the first time on appeal against a new theory’”].)
        Nowhere in Markowitz’s trial brief, proposed statement of
decision, or objection to the trial court’s proposed statement of
decision did Markowitz contend Kurtz could not recover for
representing Markowitz in his individual capacity. Further,
there is not an adequate record for our review of this issue
because Jardini did not allocate Kurtz’s fees between his
representation of Four Star and Markowitz individually.

C.    The Damages Award Is Not Supported by Substantial
      Evidence
      Markowitz contends the trial court erred in awarding Kurtz
$360,943 in damages because Kurtz presented evidence his
unpaid invoices totaled $329,833 and Kurtz conceded Markowitz
was entitled to approximately $4,500 in credits. Kurtz counters
that the trial court relied on Jardini’s calculation of the total
hours billed and the hourly rates charged, and “[o]ne possible
reason for the discrepancy in the judgment might be that
Mr. Kurtz’s bills contained mathematical errors, generally in
Markowitz’s favor.” Markowitz has the better argument.

                               24
       In response to Markowitz’s demand for a bill of particulars,
Kurtz stated the principal balance owed to him was $335,330,
which had the effect of limiting Kurtz’s recovery on an account to
the amount specified in the bill of particulars. (Baroni v. Musick
(1934) 3 Cal.App.2d 419, 421 [“The bill of particulars must be
regarded as an amplification of the complaint, and as if it had
been incorporated in the amended complaint. [Citation.]
Plaintiff’s right to recovery was therefore limited to proof of an
express contract for the payment of the fees alleged.”]; see Millet
v. Bradbury (1895) 109 Cal. 170, 172 [“[F]or the purpose of
determining the plaintiff’s right of recovery, or the admissibility
of evidence that may be offered in support of her claim, [the bill of
particulars] is to be regarded as if it had been incorporated into
the complaint as originally filed.”].)
       The balance in the bill of particulars was consistent with
Kurtz’s last invoice dated November 8, 2012, which stated
Markowitz’s outstanding balance was $329,833. At trial Kurtz
testified the invoice “shows the last work I did on the [Blue Water
action]. And a total due as of then.” Kurtz testified that at the
time he withdrew, he was owed “in the 325,000, $330,000 range.”
       Jardini’s unadjusted lodestar analysis, by contrast, does
not constitute substantial evidence of Kurtz’s damages on his
cause of action for breach of contract. The trial court based its
damages award on Jardini’s calculation of the total number of
hours billed and the rate at which the hours were billed. But
Jardini’s analysis did not take account of the credits Kurtz
agreed to give Markowitz. For example, Kurtz credited
Markowitz $13,168.97 as a lump sum in January 2009 to offset
his rate increases in 2008. Kurtz also agreed to a $3,000 credit as
payment in-kind for using Markowitz’s rental property to host a

                                 25
party, which Kurtz admitted was not reflected in his invoices.
Kurtz also conceded in his proposed statement of decision
Markowitz was entitled to a $375 credit for transferring
Markowitz’s client file to Buley. Markowitz is also entitled to a
credit of $1,225 for fees billed in the Beyoncé Knowles litigation
that Kurtz admitted was converted to a contingency agreement.
      Based on the balance stated in Kurtz’s November 8, 2012
invoice ($329,833) and the total undisputed credits ($4,600), the
damages award should have been for $325,233, less any
additional offset, as discussed below.

D.     The Trial Court Did Not Abuse Its Discretion in Excluding
       the Order Denying Markowitz’s Motion for Costs of Proof in
       the Blue Water Action
       Markowitz also appeals from the trial court’s grant of
Kurtz’s motion in limine to exclude from evidence an order
entered by Judge Linfield in the Blue Water action denying
Markowitz’s motion for attorneys’ fees as a costs-of-proof sanction
for Blue Water Sunset’s failure to respond to Markowitz’s
requests for admissions pursuant to section 2033.420, subdivision
(a).19 The court did not abuse its discretion.

19     Section 2033.420, subdivision (a), provides, “If a party fails
to admit . . . the truth of any matter when requested to do so
under this chapter [governing requests for admission], and if the
party requesting that admission thereafter proves the
genuineness of . . . that matter, the party requesting the
admission may move the court for an order requiring the party to
whom the request was directed to pay the reasonable expenses
incurred in making that proof, including reasonable attorney’s
fees.”

                                 26
      1.     Relevant proceedings
      In April 2006, Markowitz (represented by Kurtz) served
Blue Water Sunset with requests for admissions asking it to
admit it had not made initial capital contributions to any of the
LLC’s; Blue Water Sunset failed to respond. As discussed,
Markowitz prevailed in the Blue Water action eight years later on
the basis Blue Water Sunset failed to prove it made its initial
capital contributions. In March 2015 Markowitz (then
represented by Buley) filed a postjudgment motion pursuant to
section 2033.420, subdivision (a), seeking $520,850.08 for Kurtz’s
and Buley’s attorneys’ fees.
      In a six-page minute order, Judge Linfield denied the
sanctions motion on the ground Markowitz had not presented a
signed proof of service showing his requests for admissions had
been served on Blue Water Sunset, which denied ever receiving
them. Judge Linfield’s order further stated, “[E]ven if defendant
could show that the requests were properly served and plaintiff
had failed to respond, the motion would still be denied because
the costs and fees were not reasonably incurred. . . . Normally,
when [one] party fails to respond to [r]equests for [a]dmissions,
the other party moves for an order deeming the [requests]
admitted. Had defendant done so, the issue of whether plaintiff
made the initial contribution—and perhaps this entire case—
could have been resolved years ago. [Markowitz’s] conduct
renders the requested costs and fees unreasonable.”
      The trial court in this case granted Kurtz’s pretrial motion
in limine to exclude Judge Linfield’s order from evidence. The
court reasoned, “[T]here was no analysis as to whether any fees
that Mr. Kurtz invoiced [Markowitz] were not reasonably
incurred, were not properly incurred, [and] no typical lodestar

                               27
analysis as it relates to calculation of fees”; the fact the court in
the Blue Water action denied sanctions “did not and could not
negate the value or recoverability of the legal services provided to
Mr. Markowitz. There’s no privity. The goals are different as it
relates to a retainer agreement”; and Judge Linfield’s finding
“the cost and fees were not reasonably incurred . . . focuses on the
policy behind . . . the fee shifting nature of requests for
admissions. . . . That’s not the same as making a determination
that the invoices that [Kurtz] submitted to Mr. Markowitz were,
per se, unreasonable.”

       2.    The trial court did not abuse its discretion
       We review the trial court’s ruling on an evidentiary motion
in limine for an abuse of discretion. (Mardirossian & Associates,
Inc. v. Ersoff (2007) 153 Cal.App.4th 257, 269 [“As rulings on the
admissibility of evidence, they are subject to review on appeal for
abuse of discretion.”]; cf. Reynaud v. Technicolor Creative Services
USA, Inc. (2020) 46 Cal.App.5th 1007, 1021 [“While we generally
review orders on motions in limine for abuse of discretion, our
review is de novo when the issue is one of law.”].) “[A] trial court
does not abuse its discretion unless its decision is so irrational or
arbitrary that no reasonable person could agree with it.” (People
v. Carmony (2004) 33 Cal.4th 367, 377.)
       Markowitz contends the trial court abused its discretion
because Judge Linfield’s order was admissible based on issue
preclusion to show Kurtz’s fees incurred to prove Blue Water
Sunset failed to make its initial contribution were not reasonably
incurred. But as the trial court explained, whether Markowitz
could recover attorneys’ fees as a sanction against Blue Water
Sunset for failing to respond to requests for admissions has no

                                 28
bearing on whether Kurtz is entitled to recover fees for the work
under a written engagement agreement. Further, Kurtz was not
a party to litigation of the sanctions motion (or at that time in
privity with Markowitz), which is necessary for issue preclusion
to apply. (Samara v. Matar (2018) 5 Cal.5th 322, 327 [Issue
preclusion applies “‘(1) after final adjudication (2) of an identical
issue (3) actually litigated and necessarily decided in the first
suit and (4) asserted against one who was a party in the first suit
or one in privity with that party.’”].) Although the trial court
excluded the Linfield order, it properly allowed Jardini to testify
about whether Kurtz’s failure to follow up on the requests for
admissions to Blue Water Sunset fell below the standard of care.

E.    The Statement of Decision Fails To Address Markowitz’s
      Affirmative Defense He Was Entitled to an Offset for Legal
      Malpractice
      Markowitz contends the trial court erred in failing to
address his affirmative defense of legal malpractice in its
statement of decision. 20 Markowitz is correct.

      1.    Relevant background
      On appeal, Markowitz points to evidence at trial of four
instances of Kurtz’s alleged malpractice. First, Markowitz
contends Kurtz created a conflict of interest by making a courtesy
appearance on behalf of the LLC’s at a case management

20     Legal malpractice may serve as an offset against an
attorney’s claim to recover fees pursuant to section 431.70 even
after the expiration of the statute of limitations for bringing a
legal malpractice claim. (Safine v. Sinnott (1993) 15 Cal.App.4th
614, 618-619.)

                                 29
conference in October 2007. Blue Water Sunset brought a motion
to disqualify Kurtz after the appearance because the LLC’s were
adverse to Markowitz as derivative defendants. The trial court
denied the motion, but the Court of Appeal reversed, holding
Kurtz was automatically disqualified from representing the
LLC’s although he could continue to represent Markowitz and
Four Star. (Blue Water Sunset, LLC v. Markowitz (2011)
192 Cal.App.4th 477, 481, 492.) Jardini testified Kurtz’s
representation of Markowitz (and Four Star) and the LLC’s was
“a mistake” and fell below the standard of care, and Kurtz’s
conduct caused additional fees to be spent on the appeal. But
Jardini acknowledged that at the time of the motion Markowitz
had the option whether to continue to have Kurtz represent him
given how expensive it would have been to start with new
counsel. Jardini testified Markowitz incurred more than $52,000
in attorneys’ fees defending the disqualification motion and
appeal, and although Kurtz gave Markowitz a credit of $35,000,
Jardini opined Kurtz owed Markowitz an additional offset of
approximately $17,000. On cross-examination, Jardini conceded
he may have erroneously included in his calculation some fees
billed to an unrelated disqualification matter.
       Second, Markowitz contends Kurtz failed timely to amend
Markowitz’s cross-complaint in the Blue Water action to include
derivative claims against the LLC’s to seek the return of
Markowitz’s asset contributions. Markowitz testified the trial
court’s dismissal on statute of limitations grounds of a proposed
second amended cross-complaint caused Markowitz to forfeit
claims worth $600,000. However, Kurtz testified he could not
have earlier asserted derivative cross-claims because the LLC’s
had been pursuing the claims directly, and he sought to amend

                               30
the cross-complaint as soon as the LLC’s abandoned the claims.
Jardini initially testified Kurtz’s failure to preserve the cross-
claims fell below the standard of care, but on cross-examination
Jardini admitted he had not analyzed whether the statute of
limitations had expired before Kurtz could have filed derivative
claims.
       Third, Markowitz contends Kurtz’s failure to maintain the
signed proof of service of the April 2006 requests for admissions
concerning Blue Water Sunset’s capital contributions cost
Markowitz hundreds of thousands of dollars that Markowitz
could have recovered as his costs of proof in 2015, or that he
might have avoided spending but for Kurtz’s negligent failure to
bring a motion to have the requests for admissions deemed
admitted. Kurtz testified that filing a motion to deem the
requests for admission admitted would have been pointless
because Blue Water Sunset would simply have served a denial
prior to hearing on the motion. Jardini did not provide an
opinion on whether Kurtz’s conduct was below the standard of
care.
       Fourth, Markowitz contends Kurtz was negligent in
preparing a motion for leave of court to file a cross-complaint in
the Blue Water action against opposing counsel alleging a civil
conspiracy based on bribery of a witness, which was denied for
insufficient evidence. Markowitz paid Kurtz $42,696 in
attorneys’ fees for the motion and an unsuccessful appeal. (Four
Star General Properties, LLC v. Blue Water Sunset, LLC (Sept. 7,
2007, B190185) [nonpub. opn.].) Jardini opined the failure to
obtain leave to file a claim for civil conspiracy against a lawyer
would fall below the standard of care, although he did not

                                31
address Kurtz’s conduct specifically. Further, Jardini did not
calculate the amount of an offset for this work.
      The parties’ respective proposed statements of decision
addressed the issues of malpractice and offset, but the trial
court’s proposed statement of decision did not discuss whether
Markowitz met his burden of proving his malpractice claims. As
discussed, although Markowitz objected that the proposed
statement of decision did not address his affirmative defense of
professional negligence, the court adopted the statement of
decision without modification.

       2.     Governing law
       “When a statement of decision does not resolve a
controverted issue, or if the statement is ambiguous and the
record shows that the omission or ambiguity was brought to the
attention of the trial court . . . prior to entry of judgment . . . , it
shall not be inferred on appeal . . . that the trial court decided in
favor of the prevailing party as to those facts or on that issue.”
(§ 634.) The statement of decision process following a trial
provides the trial court “‘“an opportunity to place upon [the]
record, in definite written form, its view of the facts and the law
of the case, and to make the case easily reviewable on appeal by
exhibiting the exact grounds upon which judgment rests. To the
parties, it furnishes the means, in many instances, of having
their cause reviewed without great expense.” ’ [Citation.] A
proper statement of decision is thus essential to effective
appellate review. ‘Without a statement of decision, the judgment
is effectively insulated from review by the substantial evidence
rule,’ as we would have no means of ascertaining the trial court’s
reasoning or determining whether its findings on disputed

                                   32
factual issues support the judgment as a matter of law.”
(Thompson, supra, 6 Cal.App.5th at p. 982; accord, Estate of Reed
(2017) 16 Cal.App.5th 1122, 1128.)
       “The trial court is not required to respond point by point to
the issues posed in a request for statement of decision. The
court’s statement of decision is sufficient if it fairly discloses the
court’s determination as to the ultimate facts and material issues
in the case.” (Golden Eagle Ins. Co. v. Foremost Ins. Co. (1993)
20 Cal.App.4th 1372, 1379-1380; Thompson, supra, 6 Cal.App.5th
at p. 982.) “When this rule is applied, the term ‘ultimate fact’
generally refers to a core fact, such as an essential element of a
claim. [Citation.] Ultimate facts are distinguished from
evidentiary facts and from legal conclusions.” (Central Valley
General Hospital v. Smith (2008) 162 Cal.App.4th 501, 513.)
“Thus, a court is not expected to make findings with regard to
‘detailed evidentiary facts or to make minute findings as to
individual items of evidence.’” (Thompson, at p. 983.) Further,
“‘[e]ven though a court fails to make a finding on a particular
matter, if the judgment is otherwise supported, the omission is
harmless error unless the evidence is sufficient to sustain a
finding in favor of the complaining party which would have the
effect of countervailing or destroying other findings.’” (Ibid.)

      3.     The trial court must amend the statement of decision
             to address Markowitz’s four malpractice claims
       We agree with Markowitz that the trial court erred in
failing to include any findings in its statement of decision on
Markowitz’s affirmative defense of legal malpractice. Whether
Kurtz committed malpractice, and if so, the amount of any offset,
were the subject of extensive testimony, pretrial and posttrial

                                 33
briefing, and multiple motions in limine. Markowitz and Kurtz
gave conflicting testimony on each of the four issues, and Jardini
testified as to two of the issues that Kurtz’s conduct fell below the
standard of care.21 Jardini testified Markowitz was entitled to
significant offsets, the amount of which he calculated as to three
of the four issues.22 We reject Kurtz’s contention we can infer
from the fact the trial court did not order any offset to damages
that the court made findings against Markowitz on each disputed
issue. In the absence of findings on the controverted issue of
legal malpractice, section 634 bars our implying findings by the

21    Proof of an attorney’s negligence “generally requires the
testimony of experts as to the standards of care and consequences
of breach.” (Lipscomb v. Krause (1978) 87 Cal.App.3d 970, 976;
see Piscitelli v. Friedenberg (2001) 87 Cal.App.4th 953, 985
[“W]here reasonable minds would differ on whether [attorney]
met or breached the requisite standard of care, [expert] testimony
was appropriately presented to the jury.”].) However, “[w]here
the failure of attorney performance is so clear that a trier of fact
may find professional negligence unassisted by expert testimony,
then expert testimony is not required.” (Wilkinson v. Rives
(1981) 116 Cal.App.3d 641, 647-648; accord, Stanley v. Richmond
(1995) 35 Cal.App.4th 1070, 1093.) As discussed, Jardini did not
express an opinion whether Kurtz’s conduct with respect to the
requests for admissions fell below the standard of care. As to
Kurtz’s failure to obtain leave to file a cross-complaint for
conspiracy, Jardini only opined about the subject generally.
Because we are remanding for the trial court to address
Markowitz’s two other malpractice claims on which Jardini
expressed specific opinions, we remand as to all four issues.
22     As to the failure to obtain leave to file a cross-complaint for
conspiracy, Markowitz relied on the invoices setting forth the fees
billed for the work.

                                 34
trial court because we have “no means of ascertaining the trial
court’s reasoning or determining whether its findings on disputed
factual issues support the judgment as a matter of law.”
(Thompson, supra, 6 Cal.App.5th at p. 982.) We do not know, for
example, whether the trial court found Markowitz failed to prove
Kurtz’s conduct was negligent or failed to prove causation or
damages.
       Kurtz contends Markowitz’s objections to the statement of
decision were too general and did not provide specific citations to
the record to support the objections. But Markowitz served a
detailed proposed statement of decision with citations to the trial
court record on each of the issues. Further, Markowitz’s objection
that the proposed statement of decision did not address his
“defense arising out of [Kurtz’s] professional negligence” provided
sufficient notice to the court the statement of decision omitted a
significant issue in the case.23

23    Kurtz also argued for the first time during oral argument
that Markowitz waived any challenge to the sufficiency of the
statement of decision because he failed to comply with the
requirement in section 632 that he request a statement of
decision and “specify those controverted issues as to which the
party is requesting a statement of decision.” But section 632
requires a party to make a request for a statement of decision
within 10 days after the court announces its tentative decision.
Here, the trial court instructed the parties to prepare proposed
statements of decision before the court announced its tentative
decision in its April 12, 2018 proposed statement of decision.
Under these unusual circumstances, it would be unreasonable to
construe section 632 to require Markowitz to have requested a
statement of decision setting forth the controverted issues he had
already addressed in his proposed statement of decision.

                                35
       The proper remedy for an inadequate statement of decision
is to remand with directions to provide a legally sufficient
statement. (See Gordon v. Wolfe (1986) 179 Cal.App.3d 162, 168.)
Accordingly, we remand and direct the trial court to prepare an
amended statement of decision addressing Markowitz’s
affirmative defense of legal malpractice limited to the following
issues: (1) Kurtz’s appearance in the Blue Water action on behalf
of the LLC’s at the October 2007 case management conference,
(2) the unsuccessful motion to file a second amended cross-
complaint, (3) the requests for admissions served on Blue Water
Sunset, and (4) the unsuccessful motion for leave to file a cross-
complaint against opposing counsel.

F.    Kurtz’s Failure To Register as a Law Corporation with the
      State Bar Does Not Void the Engagement Agreement or
      Relieve Markowitz from Paying Fees24
      Finally, Markowitz contends Kurtz is precluded from
recovering attorneys’ fees under the engagement agreement

24     Markowitz also argues for the first time in his reply brief
that the engagement agreement is void because Kurtz failed to
disclose a lapse in his malpractice insurance during the course of
the representation, relying on Hance v. Super Store Industries
(2020) 44 Cal.App.5th 676, 689. In Hance, the Court of Appeal
concluded the trial court abused its discretion in enforcing a fee
agreement where the attorney had failed to disclose to the client
he had no malpractice insurance in violation of the State Bar
Rules of Professional Conduct, rule 3-410. At trial, Kurtz
testified that although he had malpractice insurance at the time
of the initial engagement, he failed to inform Markowitz of a later
lapse. In response to Kurtz’s motion to strike Markowitz’s
argument under Hance, Markowitz contends he did not forfeit the

                                36
because Kurtz failed to register his law practice with the State
Bar of California in violation of Business and Professions Code
section 6160.25 However, even if Kurtz failed to comply with
State Bar corporate registration requirements,26 Markowitz is not
entitled to avoid his payment obligation.

argument because Hance was decided after Markowitz filed his
opening brief, and Markowitz raised Kurtz’s “ethical breach” as
an affirmative defense. Although Markowitz is correct Hance is
the first published opinion to conclude a fee agreement is
unenforceable where the attorney violates rule 3-410, nothing
prevented Markowitz from making this argument in the trial
court or in his opening brief. The only ethical breach Markowitz
raised in the trial court was the argument in his proposed
statement of decision that Kurtz failed to provide written notice
of his rate increases. Because Markowitz failed to raise this
argument in the trial court or in his opening brief, forfeiture
applies, and we grant Kurtz’s motion to strike this argument.
(See People v. Duff (2014) 58 Cal.4th 527, 550, fn. 9, [“the claim is
omitted from the opening brief and thus waived”]; Quiles v.
Parent (2018) 28 Cal.App.5th 1000, 1013 [“‘Failure to raise
specific challenges in the trial court forfeits the claim on
appeal.’”].)
25    Business and Professions Code section 6160 states, “A law
corporation is a corporation which is registered with the State
Bar of California and has a currently effective certificate of
registration from the State Bar pursuant to the Professional
Corporation Act . . . . Subject to all applicable statutes, rules and
regulations, such law corporation is entitled to practice law.”
26    Markowitz raised this contention in a proposed special jury
instruction, prompting Kurtz to bring an oral motion in limine to
exclude reference to whether Kurtz’s law firm was registered.
The trial court granted the motion. Nonetheless, Kurtz was

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      Olson v. Cohen (2003) 106 Cal.App.4th 1209, 1218, cited by
Kurtz, is directly on point. In that case, putative class plaintiffs
sued an unregistered law corporation for rescission of the
engagement agreement and disgorgement of fees paid over two
years. (Id. at p. 1212.) The Court of Appeal concluded in
affirming the trial court’s sustaining of a demurrer, “To require
disgorgement of fees because of a failure to register the
corporation . . . is disproportionate to the wrong.” (Id. at p. 1215.)
The court reasoned, “Incorporation is not undertaken for the
protection of clients. The protections for clients mandated by
laws governing incorporation of law corporations . . . protect
against abuses which might otherwise occur from the use of the
corporate structure. Failure to comply with these requirements
may result in an order to cease and desist or suspension or
revocation of registration.” (Ibid.) Markowitz does not cite any
authority to the contrary.

                          DISPOSITION

       The judgment is reversed. The matter is remanded to the
trial court to address in an amended statement of decision
Markowitz’s affirmative defense of legal malpractice based on
(1) Kurtz’s appearance on behalf of the LLCs in the Blue Water
litigation, (2) the motion for leave to file a second-amended cross-
complaint, (3) the requests for admissions served on Blue Water
Sunset, and (4) the motion for leave to file a cross-claim against
opposing counsel. The court is to reduce the amount of damages

asked and admitted in cross-examination he did not register as a
law corporation with the State Bar.

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from $360,943 to $325,233, less any offset. Each party shall bear
its own costs on appeal.

                                           FEUER, J.
We concur:

             PERLUSS, P. J.

             DILLON, J.*

*     Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.

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