Court Opinion

ID: 4576625
Source: CourtListenerOpinion
Date Created: 2020-10-14 18:02:09.60672+00
Date Added: 2024-06-11T13:33:00.808867
License: Public Domain

Filed 10/14/20 Vernon v. Culotti 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   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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

JENNIFER VERNON,                                          B294867

         Plaintiff and Appellant,                         (Los Angeles County
                                                           Super. Ct. No. SC120578)
         v.

ELAINE CULOTTI,

         Defendant and Appellant.

      APPEAL from a judgment of the Superior Court of
Los Angeles County, Nancy L. Newman, Judge. Affirmed in part;
reversed in part with directions.
      Law Offices of Steven Glaser and Steven Glaser for
Plaintiff and Appellant.
      Keleti Law and S. Martin Keleti for Defendant and
Appellant.

                              __________________________
       Elaine Culotti appeals from a judgment after a bench trial
entered in favor of her former business partner Jennifer Vernon.
Culotti and Vernon each owned 50 percent of the membership
interests in House of Rock, LLC (HOR), a marketing company
that promoted home furnishings by showcasing them in luxury
homes owned by Briles-Culotti Partnership (BCP), in which
Culotti was a partner. Culotti contends the trial court erred in
finding she breached her fiduciary duties to Vernon by refusing to
pay for furnishings donated by HOR’s clients, instead claiming
the furnishings were the property of BCP. Culotti argues further
the judgment was based on inadmissible evidence and failed to
include an offset for the rental value to HOR of the showcase
home. Vernon also appeals from the judgment, contending the
trial court erred in denying her request for prejudgment interest.
We agree the trial court erred in denying Vernon’s request for
prejudgment interest. We reverse the judgment as to
prejudgment interest and otherwise affirm.

      FACTUAL AND PROCEDURAL BACKGROUND

A.    BCP Acquires the La Mesa Property
      Culotti is an interior designer and real estate developer
experienced in renovating high-end residential properties for
resale.1 In October 2010 Culotti, her husband Gary,2 and Greg
Briles formed BCP to purchase, remodel, and sell a large estate

1      The background facts are taken from undisputed facts in
the trial court’s statement of decision and trial court exhibits,
except as noted.
2    Because he shares a last name with Culotti, we refer to
Gary Culotti by his first name.

                                 2
located on La Mesa Drive in Santa Monica (La Mesa property).
Their partnership agreement recognized Briles would contribute
more than $7.8 million dollars toward the purchase of the La
Mesa property, while the Culottis would contribute their efforts
to design and manage the renovation. The Culottis would receive
25 percent of the profits from the sale of the property after
payment of expenses and interest on Briles’s investment.
       Culotti and Briles testified the partners understood Culotti
intended to use the renovated La Mesa property as a showcase
for designers and manufacturers to display their furnishings and
fixtures in a high-end setting in coordination with BCP’s listing
of the property. Culotti believed staging the house as a designer
showcase would lead to a faster sale at a higher price than
comparable properties. Renovations began in the summer of
2011 and were completed approximately one year later.

B.     Culotti and Vernon Form HOR
       Culotti and Vernon met at a party in September 2011. At
the time Vernon was a senior vice-president for national
sponsorships at Live Nation, a large events promotion company,
and she had experience in sales, marketing, branding,
sponsorship, and event services. Culotti and Vernon agreed to
form a partnership that would use Culotti’s showcase concept as
a marketing platform to attract third party sponsorships. They
named the business House of Rock because they initially planned
to design the La Mesa property showcase with a rock and roll
theme in a promotional partnership with Rolling Stone magazine.
       Vernon and Culotti formed HOR as a limited liability
company in January 2012, with each of them owning 50 percent
of the membership interests. The HOR operating agreement

                                 3
specified, “Culotti is to manage the banking and finances of the
[c]ompany and to secure, purchase, design, remodel or build
completely the residence being used for each show house,” while
“Vernon is to be the capital raising partner for any and all
sponsors or partners of the [c]ompany or its events. . . . All
advertisement, sales, and promotional packages shall be
cultivated and vetted through . . . Vernon.” The operating
agreement provided the profits earned each fiscal year would be
allocated to the members in proportion to their interest. In early
2012 Vernon quit her job at Live Nation, where she was earning
a base salary of $600,000 per year, to focus on HOR.
       HOR successfully secured sponsorships and promotional
consideration from several dozen manufacturers and vendors, as
well as event sponsors, who agreed either to pay cash to HOR or
contribute goods and services for the decoration of the La Mesa
property.3 In exchange for their contributions, the vendors
expected to receive promotion of their products and services
through parties and charitable events held at the La Mesa
property, as well as media and Internet exposure from those
events and showings of the home.
       HOR’s standard agreements with the vendors provided any
in-kind contributions from the vendors would “become the
permanent property of Owner.” “Owner” was defined as HOR in
the first sentence of the agreements, but the agreements also
stated, “Owner, as owner of the house located [on Mesa Drive]
(the “House”), will extensively renovate, improve and decorate
the House and will allow the House to be used for social events

3     For simplicity, we refer to the companies that made in-kind
contributions as vendors.

                                4
and promotions . . . .” Elsewhere the agreements provided,
“Owner is entering into separate arrangements with various
vendors to provide goods and services to Owner in connection
with the House.” Yet BCP was not a party to any of the vendor
agreements, which were all made with HOR. Each vendor was
required to state the “approximate cash/retail value” of its in-
kind contribution in an attachment to its agreement.
      The in-kind contributions secured by HOR included
bathroom plumbing and fixtures, home automation devices,
ceramic tile, chandeliers, wood and stone flooring, and
electronics. After the completion of the renovation, HOR hosted
approximately 20 events at the La Mesa property between
September 15 and December 6, 2012.

C.    Vernon Sues Culotti, BCP, and Its Partners
      Vernon filed this action on April 13, 2013. The operative
second amended complaint asserted 14 causes of action against
Culotti, Gary, Briles, BCP, and HOR. Three causes of action
proceeded to trial and are the subject of this appeal: a cause of
action for breach of fiduciary duties against Culotti, and causes of
action for unjust enrichment and quantum meruit against all
defendants.4
      The complaint alleged in relevant part that prior to forming
HOR, Culotti failed to disclose to Vernon that Culotti was not the
sole owner of the La Mesa property and Culotti’s primary purpose
in forming HOR was to increase the sales price of the La Mesa
property to benefit BCP. As alleged, all of the goods and services

4     Vernon’s other causes of action were either dismissed on
summary adjudication, abandoned prior to trial (including
derivative claims on behalf of HOR), or withdrawn at trial.

                                 5
contributed by vendors became the assets of HOR, but on
October 2, 2012 Culotti provided public testimony in which she
acknowledged the purpose of HOR was to “flip” the La Mesa
property and for BCP’s partners to profit from the HOR assets.
Vernon’s prayer sought, among other things, a declaration
Vernon was entitled to a share of the HOR assets consistent with
her ownership interest in HOR, damages according to proof,5 and
“interest at the maximum legal rate.” At the time the first
amended complaint was filed, the La Mesa property was listed
for sale for $18.9 million.6

D.   Briles’s Cross-complaint
     On April 16, 2015 Briles and BCP filed a cross-complaint
against Vernon, the Culottis, and HOR.7 Briles’s operative first
amended cross-complaint asserted causes of action for breach of

5     Although the complaint did not specify Vernon’s monetary
damages, it alleged HOR sustained damages in excess of
$1.5 million as a result of Culotti’s misconduct and conversion of
HOR’s assets.
6    There is no evidence in the record when, if ever, the La
Mesa property was sold.
7     After relations among the BCP partners broke down,
multiple lawsuits were filed. On August 27, 2014 Culotti filed a
lawsuit against Briles and BCP. (Culotti v. Briles et al. (Super.
Ct. L.A. County, 2016, No. SC123035) (Culotti v. Briles).) On
April 10, 2015 Briles filed a lawsuit against the Culottis.
(Briles v. Culotti et al. (Super. Ct. L.A. County, No. BC578528).)
Both actions were deemed related to this action and assigned to
Judge Newman. The court ordered the Culotti v. Briles action to
arbitration, and on March 4, 2016 the court affirmed the
arbitration award.

                                 6
an oral or implied contract, fraudulent misrepresentation,
equitable, comparative, and contractual indemnity, and
contribution. The cross-complaint alleged Culotti and HOR
entered into an agreement with BCP to use the La Mesa property
for showcase events. Further, the cross-complaint alleged Culotti
and HOR promised they would arrange for the installation of
furnishings, decorations, and fixtures on the La Mesa property
without cost to BCP, and those goods would be donations for
which BCP had no financial obligation. The increased value to
BCP from these improvements constituted consideration for BCP
allowing HOR to use the La Mesa property rent free.
       On April 27, 2017 Culotti filed a motion for summary
adjudication as to Briles’s cross-complaint, which the court later
granted in part.8 The motion was supported by Culotti’s
declaration in which she testified as to the Culotti v. Briles
arbitration: “I previously asserted in an arbitration brief, filed in
the La Mesa arbitration that I had ‘made a $1,113,646 [“]in-
kind[”] contribution through fixtures provided by [HOR]. These
contributions consisted of electronics, plumbing, fixtures, and
other personal property contributed by third parties to the project
that are now fixtures to be sold with the house, which have
greatly enhanced the value of the [p]roperty. . . . Even if [Culotti]
is not granted full credit for this [“]in-kind[”] contribution, at the
very least, [Culotti] should be granted a 50% credit as she was a

8     The trial court granted summary adjudication in favor of
Culotti on Briles’s cross-claims for breach of contract and
fraudulent misrepresentation. The court had earlier granted a
motion for summary adjudication in favor of Culotti on Briles’s
cross-claim for contribution. Only Briles’s indemnity claims
proceeded to trial.

                                  7
50% partner in HOR; accordingly, at a minimum, the in-kind
contribution would be worth $556,823’.” Culotti continued,
“Except for the mathematical calculations contained within it,
that statement . . . was based on my own personal knowledge, as
to the types of ‘in-kind’ fixture contributions made by third
parties, and upon my experience as a developer and interior
designer as to the value such fixtures added to the La Mesa
[p]roperty.”
      The $1,113,646 amount of “‘[“]in kind[”]’ contributions”
Culotti stated in her declaration was the value of the products
installed at the La Mesa property. The amount matched exactly
the stated cost basis of HOR’s assets in a draft depreciation
schedule Vernon directed HOR’s accountants to prepare in early
2013 in connection with the company’s 2012 tax returns.9

E.    The Evidence at Trial
      A bench trial was held on March 26 and 27, 2018. Vernon
and Culotti testified, and portions of Briles’s deposition testimony
were read into the record. The primary dispute at trial concerned
ownership of the vendors’ in-kind contributions.

       1.    Vernon’s testimony
       Vernon testified that in the fall of 2011, during Vernon’s
initial discussions with Culotti about the HOR concept, they
discussed at length how vendors would provide both products and
cash in exchange for access to the showcase home, and HOR
would benefit from both types of promotional consideration.

9    Ultimately HOR did not file a tax return in 2013, and the
depreciation schedule was never filed.

                                 8
According to Vernon, Culotti represented during these
discussions, prior to forming HOR, that HOR would be paid for
the in-kind product contributions. Vernon admitted she and
Culotti did not discuss the source of payment that would be made
to HOR for the donated products (Vernon believed at the time
Culotti was the sole owner of the property), when the payments
would be made, or whether the payments would be made in a
lump sum or from the proceeds of the sale of the La Mesa
property. Vernon was asked, “[I]n terms of the timing of the
payment, did that matter to you very much?” She responded, “It
didn’t.”
       After the HOR operating agreement was executed in
January 2012, Vernon was largely responsible for obtaining the
vendor sponsorships. Vernon testified her understanding was
that under the agreements the vendor contributions would belong
to HOR and be a source of revenue for the company. Vernon
stated the reason the vendors were required to specify the value
of their contributions in the vendor agreements is that “[w]e
wanted to account for each vendor product in the value so that we
could be reimbursed by the owner . . . [¶] . . . [¶] [of] the house.”
Vernon, who did not draw a salary from HOR, was responsible for
creating an HOR magazine and Web site to showcase the rooms
and products at the La Mesa property. By March or April 2012
Vernon was working on the marketing program and creating a
sales kit for sponsors. She also began planning approximately 20
events at the property and coordinating sponsors.
       Around September 15, 2012, just after HOR’s opening
event, Vernon said to Culotti, “[W]e really need to start looking at
settling . . . the value for the in-kind products. We need to . . . get
paid for those goods. When are we gonna do that?” Culotti

                                  9
responded, “Those are goods that myself and Briles and our
partnership will have the value for, not House of Rock. You will
not receive any value for those goods.” Vernon responded, “that’s
not right,” and explained she found it “incredible” that Culotti
would take this “egregious” position. Vernon claimed she first
made a demand to Culotti for payment for the value of
contributions in an e-mail on November 12, 2012.10
       At trial Vernon claimed she was entitled to at least
$550,000 for the in-kind contributions, based on a total valuation
of the products of $1,113,646 as stated in Culotti’s declaration
and HOR’s 2012 draft depreciation schedule.11 On cross-

10     On November 12, 2012, Culotti sent an e-mail to Vernon in
which she stated, “What I don’t understand is the claim to
installed inventory to the house as anything more than we agreed
to in the beginning.” She added, “The wall paper, tile, plumbing,
lighting and things acquired [b]y me thru our concept require a
pay back of 3 photos, the journal and [t]he opening event. No
other commitments were made to the vendors or to the
development co. [N]o fees back for involvement or commissions.”
She concluded, “The HOR not making money this season does not
mean that we have the right to go to the development company
[(BCP)] to cut our losses.” Vernon responded, “We aren’t in
agreement on HOR assets being given to the development
company in exchange for rent. I have communicated this since
you mentioned it. . . . We should look at the overall business and
discuss.” Culotti disputed that this e-mail constituted a demand
for payment for the in-kind contributions, arguing Vernon’s first
demand was not until March 7, 2013, when Vernon’s lawyer sent
a formal demand letter to Culotti.
11   Vernon testified that in early 2013 she provided the tax
accountants with the vendor agreements, which contained

                                10
examination, Vernon admitted patio furniture from one vendor
totaling $27,000 was returned to the vendor, and she would not
seek compensation for an outdoor kitchen worth $22,903 that was
never installed permanently at the La Mesa property.12

      2.    Culotti’s testimony
      Culotti testified it was always her intent the in-kind
product contributions belonged to BCP in exchange for rent-free
use of the La Mesa property as a showcase, although she also
admitted her showcase concept was intended to help the La Mesa
property sell more quickly and at a higher price. She testified
BCP “would trade rent for its location based on the contributions
that would remain installed. That was the contribution of HOR
to [BCP].” She added, “That was always my intent.” When asked
whether she ever had a discussion with Vernon during the period
from when they just met until the fall of 2012 when they started
to have issues about payment for the contributions, Culotti
responded, “No.” Culotti viewed the products installed on the
property as leasehold assets, and she stated it would make no
sense for Vernon and Culotti to have agreed the La Mesa
property would have to be torn apart to remove the installations.

estimated retail values for the in-kind contributions, for the
accountants to use in generating the depreciation schedule.
12    Culotti also objected to inclusion of $150,000 for electronics
contributed by Sony and $12,000 for Farley interlocking paving
stones because Vernon could not find and produce vendor
agreements or receipts documenting the value of those
contributions. However, the court did not deduct the value of
these items from its award, and Culotti does not assert this as an
issue on appeal.

                                 11
According to Culotti, she told Vernon from “day one,” before
entering into the HOR operating agreement, that the in-kind
contributions would be leasehold assets. Culotti stated her
design company, Porta Bella, procured 90 to 95 percent of the in-
kind contributions. HOR’s business plan was never about
making money from the vendors’ in-kind contributions; rather, it
was about building an online marketing business that would
ultimately allow consumers to purchase showcase products
through the HOR Web site.
       Culotti was examined about the declaration she submitted
in connection with her summary adjudication motion. Culotti
was asked with respect to the statement in her declaration as to
the value of the vendors’ in-kind contributions, “[B]ased on your
own personal experience as an interior designer and a home
remodeler, you are standing by that $1,113,646 valuation stated
in line 11?” Culotti responded, “As a retail value, yes.” Contrary
to what she stated in her declaration, however, Culotti testified
she did not recall taking a position in the arbitration that she
was entitled to recover from BCP 50 percent of the in-kind
contributions, and she denied asking the arbitrator to award her
this category of damages.

       3.     Briles’s deposition testimony
       In the portions of his deposition testimony admitted at
trial, Briles stated he and Culotti discussed her concept of a
Rolling Stone showcase home at the time BCP purchased the
property. Culotti told him any in-kind contributions to the La
Mesa property would be “pure donations” that would remain in
the home at the time of sale. Culotti never told Briles that BCP
would have to pay for the contributions, although he never had

                                12
any further discussions on that topic after BCP was formed in
2010. Briles initially met Vernon socially, and he may have seen
her one or two times after that, but they never discussed HOR
business.

F.     Statement of Decision
       The parties filed written closing arguments following trial,
and on June 22, 2018 the trial court issued a proposed statement
of decision. After considering the parties’ written objections and
responses, the court issued a 13-page statement of decision on
October 3, 2018.
       The trial court found Culotti breached her fiduciary duties
of loyalty and care to HOR by permitting the in-kind
contributions to be given to BCP without compensation for HOR.
The court recognized there was contradictory testimony as to how
the in-kind contributions would be handled: Vernon testified
Culotti represented to her HOR would be paid for the value of the
products, whereas Culotti testified they never discussed the
issue. However, the court found “Culotti to be a less credible
witness than Vernon,” and although there was no written
agreement regarding payment for the contributions, “the court
believes Vernon’s representations that she and Culotti had such
an agreement.”
       The court found Culotti’s position HOR was not the owner
of the vendors’ in-kind contributions was contradicted by Culotti’s
declaration in support of her motion for summary adjudication, in
which Culotti testified she had asserted a position in her
arbitration against Briles that the value of products, or at least
half that value, should be credited to Culotti in the unwinding of
BCP because they constituted a contribution by her (as a 50

                                13
percent owner of HOR) to the partnership.13 The trial court took
judicial notice that the arbitrator in the Culotti v. Briles
arbitration awarded Culotti $531,860 for her 50 percent interest
in the in-kind contributions she had asserted were the property of
HOR.
       Further, the court found Culotti’s testimony that HOR’s
primary business model was to earn money by building online
showrooms to sell home furnishings, not by receiving the value of
contributed products, was not supported by any evidence or
language in the HOR operating agreement. Further, there was
no evidence supporting Culotti’s testimony that 90 to 95 percent
of the in-kind contributions were procured by Porta Bella. To the
contrary, Porta Bella was not a party to or identified in any of
HOR’s vendor agreements.
       The court also ruled in favor of Vernon on her claim for
quantum meruit against BCP and the Culottis.14 The court found
the vendors made in-kind contributions in consideration for
promotional and marketing exposure created by HOR, and the
donated products and the HOR showcase itself increased the
market value of the La Mesa property and enriched BCP.

13     The trial court noted Culotti’s contrary position in the
arbitration and her assertion of that position to seek adjudication
of Briles’s cross-claim in this action might be subject to judicial
estoppel, but “[e]ven if the theory of judicial estoppel, which is to
be used sparingly, does not apply, Culotti has been impeached
and her credibility has been diminished.”
14    The court found Briles had no individual liability for the in-
kind contributions. The court awarded Biles on his indemnity
cross-claims against the Culottis a 25 percent contribution for his
portion of BCP’s damages pursuant to an indemnity provision in
the BCP partnership agreement.

                                 14
Accordingly, “it would be unjust to permit the BCP to retain the
benefit of the vendor product contributions without paying HOR
for procuring the goods from sponsors.”
        The trial court awarded Vernon damages of $531,871
against Culotti, based on a total valuation of the vendor
contributions of $1,063,742. That amount was based on the
$1,113,646 aggregate retail value of the vendor contributions
listed in the draft depreciation schedule and stated in Culotti’s
declaration in support of her summary adjudication motion, less
the value of the outdoor furniture and kitchen that did not
remain at the La Mesa property. The court awarded the same
amount as damages on Vernon’s quantum meruit claim, but
clarified Vernon was entitled only to a single recovery.
        The court denied Vernon’s request for prejudgment
interest, finding there was no agreement for HOR to be paid for
the in-kind contributions by a date certain, and therefore the
damages were not sufficiently ascertainable to support
prejudgment interest. The court rejected as arbitrary Vernon’s
position damages were ascertainable on November 1, 2012, when
all of the products had been installed at the La Mesa property.
        The trial court entered judgment on November 5, 2018.
Vernon timely appealed the award of prejudgment interest in the
judgment. Culotti timely cross-appealed from the judgment.15

15   Vernon states in her opening brief she settled with Briles,
BCP, and Gary, and they are not parties to the appeal.

                               15
                          DISCUSSION

A.     Standard of Review
       “‘“In general, in reviewing a judgment based upon a
statement of decision following a bench trial, ‘any conflict in the
evidence or reasonable inferences to be drawn from the facts will
be resolved in support of the determination of the trial court
decision. [Citations.]’ [Citation.] In a substantial evidence
challenge to a judgment, the appellate court will ‘consider all of
the evidence in the light most favorable to the prevailing party,
giving it the benefit of every reasonable inference, and resolving
conflicts in support of the [findings]. [Citations.]’ [Citation.] We
may not reweigh the evidence and are bound by the trial court’s
credibility determinations. [Citations.] Moreover, findings of fact
are liberally construed to support the judgment.”’” (Tribeca
Companies, LLC v. First American Title Ins. Co. (2015)
239 Cal.App.4th 1088, 1102 (Tribeca); accord, Sav-On Drug
Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 334 (Sav-On
Drug Stores) [“‘[Q]uestions as to the weight and sufficiency of the
evidence, the construction to be put upon it, the inferences to be
drawn therefrom, the credibility of witnesses . . . and the
determination of [any] conflicts and inconsistencies in their
testimony are matters for the trial court to resolve.’”]; see
Vasquez v. LBS Financial Credit Union (2020) 52 Cal.App.5th 97,
109 [substantial evidence standard of review applies to express
and implied findings of fact made by the superior court in its
statement of decision rendered after a bench trial]; Thompson v.
Asimos (2016) 6 Cal.App.5th 970, 981 [same].)
       However, “‘[i]n reviewing a judgment based upon a
statement of decision following a bench trial, we review questions

                                16
of law de novo.’” (Veiseh v. Stapp (2019) 35 Cal.App.5th 1099,
1104; accord, Thompson v. Asimos, supra, 6 Cal.App.5th at
p. 981; see Feresi v. The Livery, LLC (2014) 232 Cal.App.4th 419,
425 (Feresi) [questions concerning the scope of the fiduciary
duties imposed by law on partners is a legal issue subject to de
novo review].)
      Finally, “[w]e apply the abuse of discretion standard of
review to any ruling by the trial court on admissibility of
evidence, including requests for judicial notice.” (Center for
Biological Diversity v. Department of Conservation, etc. (2019)
36 Cal.App.5th 210, 227; accord, In re Social Services Payment
Cases (2008) 166 Cal.App.4th 1249, 1271.)16

B.    Substantial Evidence Supports the Trial Court’s Finding
      Culotti Breached Her Fiduciary Duties to Vernon17
      A member of a member-managed limited liability company
owes fiduciary duties of loyalty and care to the company and its

16    Culotti contends her appeal raises mixed questions of law
and fact and the judgment should therefore be reviewed de novo.
But the gravamen of Culotti’s appeal is that the evidence does
not support the trial court’s finding the parties orally agreed the
in-kind contributions belonged to HOR. We therefore review the
judgment for substantial evidence. With respect to Culotti’s
contention the trial court erred in relying on inadmissible
evidence to calculate damages, we review the court’s evidentiary
determinations for an abuse of discretion.
17    Because we affirm the trial court’s finding that Culotti
breached her fiduciary duties, we do not reach Culotti’s challenge
to the trial court’s holding as to Vernon’s causes of action for
quantum meruit and unjust enrichment, for which the court
ordered duplicative recovery.

                                17
other members. (Corp. Code, § 17704.09, subd. (a).) A member
has a duty “[t]o account to the . . . company and hold as trustee
for it any property, profit, or benefit derived by the member in
the conduct . . . of the activities of [the] company or derived from
a use by the member of [company] property, including the
appropriation of a . . . company opportunity” (id., subd. (b)(1));
“[t]o refrain from dealing with the . . . company . . . as or on
behalf of a person having an interest adverse to the . . . company”
(id., subd. (b)(2)); and to “discharge the duties to [the] company
and the other members . . . and exercise any rights consistent
with the obligation of good faith and fair dealing” (id., subd. (d)).
(Feresi, supra, 232 Cal.App.4th at p. 425 [A member is “obligated
to act with the utmost loyalty and in the highest good faith when
dealing with any member of the LLC, . . . [The member] may not
obtain any advantage over [plaintiff] (or any other member of the
LLC) by even the slightest misrepresentation or concealment.”].)
The trial court found Culotti breached her fiduciary duties of
loyalty and care to Vernon and HOR by claiming the in-kind
contributions were the property of BCP although they were
owned by HOR pursuant to Culotti’s agreement with Vernon.
       Culotti contends the in-kind contributions never belonged
to HOR. But the trial court credited Vernon’s testimony the
parties had an oral agreement HOR would make money from the
vendor contributions by owning the contributed goods, and it
found Culotti’s testimony the parties never discussed the issue
yet always understood BCP would receive the contributions not
credible. We defer to the trial court’s credibility findings.
(Sav-On Drug Stores, supra, 34 Cal.4th at p. 334; Tribeca, supra,
239 Cal.App.4th at p. 1102.) Further, the court’s credibility
determination was supported by Culotti’s admission in her

                                 18
declaration in support of summary adjudication that she had
taken the position in her arbitration with Briles that the in-kind
contributions were a donation from HOR to BCP for which she
was entitled to reimbursement from BCP. Moreover, there was
no evidence supporting Culotti’s assertion HOR’s anticipated
source of revenue was profits from an online catalog and
shopping portal. To the contrary, there was substantial evidence
Vernon, who gave up a large salary in events marketing and
promotions to join HOR, focused her efforts on securing sponsors
and product contributions for the La Mesa property and events
held there to generate income for HOR and its partners.
      Culotti contends it would make no sense for BCP to agree
HOR could keep the benefit of the vendors’ in-kind contributions
because BCP would then receive no consideration for allowing
HOR to use the La Mesa property rent free as a showcase to
launch HOR’s brand. But Culotti testified she expected the HOR
concept would generate publicity and buyer interest in the
La Mesa property and accelerate a sale at a higher price than
comparable homes.18
      Substantial evidence therefore supported Vernon’s position
the parties agreed HOR was entitled to the value of the in-kind

18    Culotti also contends if she had agreed HOR would own the
in-kind contributions, this would have required BCP to rip out
fixtures and return them to HOR. But there is no evidence the
agreement required BCP to tear out the fixtures instead of
paying for their value. Nor does the language in the vendor
agreements defining the “owner” of the fixtures support Culotti’s
position. Although the agreements provide the “owner” would
keep the in-kind contributions, and they define “owner” to mean
the owner of the La Mesa property, the first sentence of the
agreements defines the “owner” to mean HOR.

                                19
contributions. The fact there is evidence on which the trial court
could have found in favor of Culotti does not support a contrary
result because we “view[] the evidence and resolv[e] all
evidentiary conflicts in favor of the prevailing party and indulg[e]
all reasonable inferences to uphold the judgment.” (Vasquez v.
LBS Financial Credit Union, supra, 52 Cal.App.5th at p. 109;
accord, Tribeca, supra, 239 Cal.App.4th at p. 1102.)

C.     Substantial Evidence Supports the Damages Award
       Culotti contends the trial court erred in calculating
Vernon’s damages because it relied on the draft depreciation
schedule and the arbitrator’s award in the Culotti v. Briles action
to establish the value of the in-kind contributions. Culotti also
argues the court failed to offset its award by the La Mesa
property’s rental value. Both contentions lack merit.
       In calculating damages, the trial court relied principally on
Culotti’s declaration in support of her summary adjudication
motion filed in this action, in which she testified she had
previously asserted in the arbitration that she “‘made a
$1,113,646 [“]in-kind[”] contribution [to BCP] through fixtures
provided by [HOR].”’” Culotti testified as to her declaration that,
except for the mathematical calculations, the statement “was
based on my own personal knowledge . . . as to the value such
fixtures added to the La Mesa [p]roperty.” At trial, Culotti
admitted $1,113,646 was an accurate appraisal of the retail value
of the in-kind contributions.19 Culotti’s admissions were

19    Culotti contends the declaration contained an important
qualification in stating the damages estimate was based on
Culotti’s personal knowledge “[e]xcept for the mathematical

                                20
sufficient to establish the retail value of the in-kind
contributions.
       Further, the trial court did not abuse its discretion by
admitting the draft depreciation schedule, for which a sufficient
foundation was provided. Although the schedule was stamped
“draft” and was never filed with the tax authorities, Vernon
testified the schedule listed the retail value of each in-kind
contribution based on the figures provided in the respective
vendor agreements. Moreover, Culotti did not present any
evidence showing the schedule was inaccurate or failed to reflect
the amounts in the vendor agreements, and the trial court
reduced the total amount of vendor contributions by the value of
the items Culotti showed BCP did not retain.
       Culotti also contends the trial court abused its discretion in
taking judicial notice of the fact the arbitrator in the Culotti v.
Briles action awarded Culotti 50 percent of the $1,113,646 total
vendor contributions. But any abuse of discretion was harmless
because this evidence was cumulative of the ample evidence
supporting the trial court’s damages calculation, and there is no
indication the court relied on this fact in calculating the award.20

calculations within it.” But Culotti fails to point to any error in
the mathematical calculations.
20    Culotti’s contention the court improperly applied issue or
claim preclusion likewise lacks merit. Culotti was not precluded
from litigating damages in this action based on her inconsistent
position in the arbitration. Instead, the court calculated damages
based on Culotti’s declaration and trial testimony, and the court
properly considered Culotti’s inconsistent arbitration position to
impeach her credibility.

                                 21
       Finally, Culotti contends the trial court erred by refusing to
offset Vernon’s damages with the value received by HOR for the
rent-free use of the La Mesa property as a showcase. But as
discussed, there was substantial evidence Culotti and Briles
intended and understood that BCP would benefit significantly
from the HOR showcase through a more lucrative sale of the
La Mesa property.

D.     The Trial Court Erred in Denying Prejudgment Interest
       Under Civil Code section 3287, subdivision (a),21 a plaintiff
is entitled to an award of prejudgment interest where damages
are “certain, or capable of being made certain by calculation, and
the right to recover [the damages] is vested in the [plaintiff] upon
a particular day . . . .” The Supreme Court has interpreted this
language to establish three conditions for the recovery of
prejudgment interest: “(1) There must be an underlying
monetary obligation; (2) the recovery must be certain or capable
of being made certain by calculation; and (3) the right to recovery
must vest on a particular day.” (Tripp v. Swoap (1976) 17 Cal.3d
671, 682 (Tripp) [applying three factors in mandamus action],
disapproved on another ground in Frink v. Prod (1982) 31 Cal.3d
166, 180.) “‘“The statute . . . does not authorize prejudgment
interest where the amount of damage, as opposed to the
determination of liability, ‘depends upon a judicial determination
based upon conflicting evidence and it is not ascertainable from
truthful data supplied by the claimant to his debtor.’
[Citations.]” [Citation.] Thus, where the amount of damages
cannot be resolved except by verdict or judgment, prejudgment

21    All further statutory references are to the Civil Code.

                                 22
interest is not appropriate.” (Children’s Hospital & Medical
Center v. Bontá (2002) 97 Cal.App.4th 740, 774; see Olson v. Cory
(1983) 35 Cal.3d 390, 402 [“Generally, the certainty required of
Civil Code section 3287, subdivision (a), is absent when the
amounts due turn on disputed facts, but not when the dispute is
confined to the rules governing liability.”].)
       “[O]ne purpose of section 3287, and of prejudgment interest
in general, is to provide just compensation to the injured party
for loss of use of the award during the prejudgment period—in
other words, to make the plaintiff whole as of the date of the
injury.” (Lakin v. Watkins Associated Industries (1993) 6 Cal.4th
644, 663; accord, Howard v. American National Fire Ins. Co.
(2010) 187 Cal.App.4th 498, 535; see Watson Bowman Acme
Corp. v. RGW Construction, Inc. (2016) 2 Cal.App.5th 279, 293
[“prejudgment interest compensates for the loss of the use of the
money during the period between the assertion of the claim and
the rendition of judgment”].) “Courts generally apply a liberal
construction in determining whether a claim is certain, or
liquidated.” (Howard, at p. 535; accord, State of California v.
Continental Ins. Co. (2017) 15 Cal.App.5th 1017, 1038.)
       Similarly, an award of prejudgment interest under
section 3287, subdivision (a), is not authorized when there is a
factual dispute whether “plaintiff was entitled to interest from
any particular date prior to the verdict.” (Happoldt v. Guardian
Life Ins. Co. of America (1949) 90 Cal.App.2d 386, 405 [trial court
erred in awarding prejudgment interest accruing from the date
plaintiff served a claim on defendant carrier under an accidental
death insurance policy because there was no evidence showing
when the insured notified the carrier the insured’s death was
accidental, which was a condition for payment on the claim]; see

                                23
Cox v. McLaughlin (1881) 76 Cal. 60, 70 [affirming denial of
prejudgment interest where plaintiff’s “services and the material
furnished by him were uncertain as to amount, character, value,
and time of payment, until fixed by a verdict or findings of the
court”].)
       “‘“On appeal, we independently determine whether
damages were ascertainable for purposes of the statute, absent a
factual dispute as to what information was known or available to
the defendant at the time” [citation].’” (State of California v.
Continental Ins. Co., supra, 15 Cal.App.5th at p. 1038; accord,
Collins v. City of Los Angeles (2012) 205 Cal.App.4th 140, 151.)
       Vernon contends she was entitled to prejudgment interest
as of November 12, 2012, the date on which Vernon sent an
e-mail to Culotti objecting to Culotti’s assertion BCP owned the
in-kind contributions, or as of March 7, 2013, the date on which
Vernon’s lawyer sent a demand letter to Culotti for payment.
Vernon argues damages—the dollar value of the total in-kind
contributions listed in the vendor agreements—were
ascertainable by either date and Culotti’s obligation to pay had
accrued as a result of her breach of fiduciary duties on
September 15, 2012, when Culotti first claimed the in-kind
contributions belonged to BCP. Culotti asserts both the amount
of the damages and the date by which payment was due were
uncertain, and therefore the trial court properly denied
prejudgment interest.22 We agree with Vernon that by the time

22     Culotti also contends Vernon waived her right to seek
prejudgment interest because she did not include it in her prayer
for relief in the operative second amended complaint and did not
argue for prejudgment interest in her initial written closing

                               24
of Vernon’s March 7, 2013 demand letter, the amount of the
damages and date by which payment was owed were certain.
       As discussed, the vendor agreements listed the retail value
of the in-kind contributions, which Culotti could have used as
early as September 2012 (when Culotti first claimed BCP owned
the in-kind contributions) to calculate the total value of the in-
kind contributions. However, as of that date Vernon had not
specifically demanded payment from Culotti for the
contributions; instead, she stated more generally, “[W]e really
need to start looking at settling . . . the value for the in-kind
products. We need to . . . get paid for those goods. When are we
gonna do that?” As of September 2012, it was thus uncertain by
when BCP needed to pay for the contributions and whether BCP

argument. As to the first contention, the second amended
complaint included a prayer for “interest at the maximum legal
rate” and sought “such other and further relief as the Court may
deem just and proper.” “A general prayer in the complaint is
adequate to support an award of prejudgment interest. ‘No
specific request for interest need be included in the complaint; a
prayer seeking “such other and further relief as may be proper” is
sufficient for the court to invoke its power to award prejudgment
interest.’” (North Oakland Medical Clinic v. Rogers (1998)
65 Cal.App.4th 824, 829.) Here, Vernon specifically requested
interest in her prayer for relief. As to Culotti’s second contention,
she is correct Vernon did not address prejudgment interest in her
initial closing brief, but she did in her May 11, 2018 response to
Culotti’s closing argument, and Culotti responded to this
argument in her sur-reply brief filed on May 18, 2018. Both
briefs were filed before the trial court issued its proposed
statement of decision on June 22, 2018. Because the parties were
afforded an opportunity to address this issue in the trial court,
we decline to find waiver.

                                 25
could return the fixtures and furnishings HOR claimed it owned
in lieu of payment. Indeed, some of the furnishings were at some
point returned to the vendors, as shown by the trial court’s
deduction from the damages award for the patio furniture valued
at $27,000 returned to one vendor and the reduction of $22,903
for an outdoor kitchen that was not “permanently” installed at
the La Mesa property. In addition, the record does not reflect by
when all of the in-kind contributions listed in the vendor
agreements were installed at the La Mesa property. In posttrial
briefing, Vernon asserted all the in-kind contributions were
installed at the La Mesa property by November 1, 2012, when the
La Mesa renovation was complete and “the HOR events were
taking place.” But there was no evidence to support this
assertion.
       Vernon argues the damages were at least ascertainable by
November 12, 2012, when she made her first demand for
payment in her e-mail to Culotti, in which she stated she and
Culotti “aren’t in agreement on HOR assets being given to the
development company [BCP] in exchange for rent.” But this e-
mail was no more a demand for payment for the in-kind
contributions than the September 2012 discussion, in which
Vernon and Culotti disagreed as to whether HOR or BCP owned
the in-kind contributions.
       However, the March 7, 2013 letter from Vernon’s attorney
to Culotti made clear the value of the claimed contributions
($1,093,242) and a demand Culotti agree to payment for the
value of the in-kind contributions by liquidating HOR and
“divid[ing] the remaining funds [after paying liabilities] evenly
between you and . . . Vernon pursuant to the [operating]
Agreement,” or face a lawsuit for breach of her fiduciary duties

                               26
and fraud. Further, by this date, the last showing of the La Mesa
property had occurred,23 so it is a reasonable assumption the in-
kind contributions had been placed in the La Mesa property, and
there was no evidence any contributions were returned to HOR.
Thus, as of the date of the demand, Vernon’s damages were
“certain, or capable of being made certain by calculation.”
(§ 3287, subd. (a); accord, Tripp, supra, 17 Cal.3d at p. 682.)
       Likewise, the “right to recover [was] vested” in Vernon
when Culotti refused to pay for the in-kind contributions upon a
demand from Vernon. (§ 3287, subd. (a); Tripp, at p. 682.)
Although, as the trial court found, there was no initial agreement
by Vernon and Culotti as to the date Culotti (and BCP) would pay
for the in-kind contributions, the court found Culotti had
breached her fiduciary duties at the time of her September 15,
2012 conversation with Vernon in which she claimed a right to
the in-kind contributions. Had the initial agreement between
Vernon and Culotti set a precise future date for payment for the
in-kind contributions, then arguably the right to recover might
have vested at a future date. But in the absence of any
agreement as to a future date of payment, once Culotti breached
her fiduciary duties on September 15, 2012, upon a demand for
payment, the right to payment was vested in Vernon. Finally, an
award of prejudgment interest from March 7, 2013, after which
the La Mesa property was no longer being used for HOR events,
would serve the purpose of section 3287, subdivision (a), “to
provide just compensation to the injured party for loss of use of
the award during the prejudgment period.” (Lakin v. Watkins

23   Vernon testified HOR hosted events at the La Mesa
property from September 15 to December 6, 2012.

                               27
Associated Industries, supra, 6 Cal.4th at p. 663; accord, Howard
v. American National Fire Ins. Co., supra, 187 Cal.App.4th at
p. 535.)

                         DISPOSITION

      The judgment is reversed as to the denial of prejudgment
interest. The matter is remanded for further proceedings as to
the determination of prejudgment interest. In all other respects,
the judgment is affirmed. Vernon is to recover her costs on
appeal.

                                           FEUER, J.
We concur:

             PERLUSS, P. J.

             RICHARDSON, J.*

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

                                28